Trump Administration Rescinds Council on Environmental Quality’s Guidelines, Creating Widespread Uncertainty for the National Environmental Policy Act Compliance by Energy and Infrastructure Projects
On February 19, 2025, the Trump Administration issued an Interim Final Rule rescinding the Council on Environmental Quality’s (CEQ’s) regulations setting forth the requirements for compliance with the National Environmental Policy Act (NEPA). The validity of the CEQ’s NEPA regulations has been cast into substantial doubt by two recent court cases and two of President Trump’s executive orders. Publication of that rule in the Federal Register on February 25 sets in motion the elimination of the CEQ’s NEPA regulations as the binding standards for NEPA compliance, a role they have served since 1978. Without these standards, federal agencies and project developers will need to base their environmental reviews on the vague provisions of the statute. Unless Congress steps in to revise the statute itself, this change creates significant uncertainty for major infrastructure projects and project developers.
Why NEPA Matters
Signed by President Nixon on New Year’s Day in 1970, NEPA requires federal agencies to review the environmental impact of discretionary actions (such as issuing permits). In 1978, in response to an executive order issued by President Carter, the Council on Environmental Quality issued regulations that require all federal agencies to complete an environmental impact statement, an environmental assessment, or to determine that the action qualifies for a “categorical exclusion.”
Compliance with NEPA can create significant uncertainty for projects. Preparation of an environmental impact statement can require years to complete, impacting project timelines. Challenges to the sufficiency of NEPA review are common and can add further years of uncertainty to energy and infrastructure projects.
Recent NEPA Decisions, Executive Orders, and the Interim Final Rule
In the past three months, two court rulings and two executive orders preceded repeal of the CEQ’s NEPA regulations.
On November 12, 2024, the D.C. Circuit Court of Appeals ruled in Marin Audubon Society v. Federal Aviation Authority that the CEQ does not have rulemaking authority and therefore, the CEQ’s NEPA regulations were promulgated without Congressional authorization. The court denied requests for en banc review on January 31, 2025. On February 3, 2025, the District Court for the District of North Dakota decided Iowa v. CEQ, adopting the reasoning of Marin Audubon Society and concluding that the 2024 CEQ NEPA regulations were issued without authority and therefore invalid.
In between those two decisions, on January 20, 2025, the Trump Administration issued Executive Order 14154, revoked President Carter’s executive order that first directed CEQ to issue binding regulations implementing NEPA and directed the CEQ to take action within 30 days to propose recission of the CEQ’s NEPA regulations.
Acting within the required 30 days, on February 19 the CEQ issued the Interim Final Rule proposing the rescission of the CEQ’s NEPA regulations. The Interim Final Rule cites President Trump’s Executive Order 14154 as well as the decisions in Marin Audubon Society and Iowa v. CEQ as grounds for the decision. That Interim Final Order was accompanied by a memorandum, directing federal agencies to “[c]onsider voluntarily relying on [the soon-to-be-rescinded] regulations in completing ongoing NEPA reviews or defending against” challenges to project, and not delaying ongoing NEPA reviews while the NEPA procedures are updated.
Significant Uncertainty Ahead
Unless the Interim Final Rule and the decision in Iowa v. CEQ are overturned on judicial review or Congress takes action to clarify the law, the end of the CEQ’s NEPA regulations will lead to significant legal uncertainty for any project that requires federal approvals.
In light of the Interim Final Rule, federal agencies lack clear guidance regarding whether to voluntarily follow the 2020 CEQ NEPA regulations, or whether to rely on the statutory text and any agency-specific NEPA regulations as the basis for their NEPA reviews. The “voluntary” nature of this directive, as well as differences between the level of detail in individual agency NEPA regulations, could result in inconsistent approaches across agencies.
That uncertainty will provide additional grounds for challenges to forthcoming NEPA reviews through litigation, especially if the validity of the Interim Final Rule itself faces a protracted challenge in federal court. Until federal courts establish a new “doctrine” for sufficiency of NEPA review in the post-CEQ NEPA regulations world, the future for NEPA lawsuits will likely be fact- and court-specific, potentially leading to variation between circuits and greater uncertainty for infrastructure projects.
The Future of NEPA Implementation Without CEQ Regulations
On February 19, 2025, the Council on Environmental Quality (“CEQ”) announced an Interim Final Rule rescinding its longstanding regulations implementing the National Environmental Policy Act (“NEPA”) and issued a new Memorandum on the Implementation of NEPA (“Guidance”) to all federal departments and agencies. President Trump directed both actions in his January 20, 2025 Unleashing American Energy Executive Order (“EO 14154”).
The Interim Final Rule, to be published in the Federal Register on February 25, 2025, removes all existing CEQ regulations implementing NEPA from the Code of Federal Regulations, many of which have been in place since 1978.
The Guidance implements the President’s direction in EO 14154 to “expedite and simplify the permitting process” and strives to minimize potential delays and confusion associated with the removal of CEQ’s regulatory framework for consistent NEPA implementation across agencies. The Guidance “encourages” agencies to use the CEQ regulations issued during the first Trump Administration (the “2020 Rule”) as “an initial framework” while agencies revise or establish agency-specific NEPA implementing procedures over the next year, as directed by EO 14154. Until those changes are complete, the Guidance directs agencies to follow existing practices and procedures, with adjustments for consistency with the NEPA statute, EO 14154, and the Guidance. Further, the Guidance directs agencies to “consider voluntarily relying” on CEQ regulations for ongoing NEPA reviews and lawsuits on NEPA reviews completed while the regulations were still in effect.
The Guidance expressly states that “[a]gencies should not delay pending or ongoing NEPA analyses while undertaking these revisions.” Despite this explicit instruction, the dismantling of a regulatory structure that stood for nearly five decades may cause at least short-term NEPA review delays.
Background
NEPA applies to a broad range of actions with a federal nexus, including federal permit applications, federal land management decisions, highway construction, and other federally funded projects. Through the NEPA process, federal agencies must evaluate the environmental and related social and economic effects of their proposed actions. The NEPA statute and regulations remained largely unchanged from the 1970’s until recent revisions to the CEQ regulations made during the Trump and Biden Administrations in 2020, 2022, and 2024, and statutory amendments to NEPA made by the Fiscal Responsibility Act in 2023.
Over the decades, courts have developed a robust body of caselaw on the NEPA statute and CEQ regulations. In the last several months, however, two court cases questioned CEQ’s underlying authority to issue binding regulations. In November 2024, a D.C. Circuit panel found the CEQ regulations exceeded CEQ’s authority in Marin Audubon Society v. Federal Aviation Administration, although a majority of the court in denying rehearing indicated that portion of the court’s decision was non-binding dicta. More recently, the District of North Dakota vacated Biden’s 2024 Phase II regulations on the grounds that CEQ lacked rulemaking authority in Iowa v. CEQ.
The Interim Final Rule
The Interim Final Rule rescinds all of CEQ’s NEPA regulations and is expected to be published in the Federal Register on February 25, 2025. The Interim Final Rule does not take a position on CEQ’s prior interpretations of NEPA’s procedural requirements, and CEQ avoided a definitive statement on whether it lacks authority to maintain the NEPA regulations. The Interim Final Rule will be effective 45 days after publication.
CEQ issued this as an “interim final rule,” avoiding the typically required notice and comment rulemaking process. CEQ states that this procedural mechanism was appropriate both because the rule is “procedural” and because there was “good cause” for doing so. Although the Interim Final Rule will be effective April 11, CEQ is allowing a “voluntary” 30-day public comment period, and CEQ committed to “consider[ing] and respond[ing] to comments before finalizing” the Interim Final Rule. This is a procedural process that is vulnerable to litigation under the Administrative Procedure Act.
The Guidance
The Guidance directs agencies to establish or revise their NEPA implementing procedures by February 19, 2026, providing at least 30 days but no more than 60 days for public comment on proposed regulations, to the extent public comment is required. The Guidance offers certain recommendations for agencies as they promulgate and revise their own NEPA implementing procedures, including:
developing clear procedures for reviewing project sponsor-prepared environmental assessments (“EAs”) and environmental impact statements (“EISs”);
ensuring procedures comply with statutory deadlines (two years for EISs and one year for EAs);
limiting alternatives analyzed to those that are “technically and economically feasible” and “meet the purpose and need for the proposed action”;
limiting analyzed effects to those that are “reasonably foreseeable,” regardless of whether those effects can be characterized as “cumulative”;
considering the establishment of “thresholds” for Federal funding that would not constitute a “major Federal action” triggering NEPA review; and
eliminating environmental justice analyses from NEPA reviews, except to any extent otherwise required by law.
The Guidance includes additional recommendations to help promote consistency and predictability in the absence of governmentwide CEQ regulations. The Guidance specifies additional elements that agencies should, at a minimum, include in their procedures. It also requires agencies to consult with CEQ in developing or revising their NEPA procedures. Over the next year, CEQ will host monthly meetings of the Federal Agency NEPA Contacts and NEPA Implementation Working Group required by EO 14154 to share additional guidance and provide assistance to agencies as they work to develop or revise their NEPA procedures.
In the meantime, the Guidance recommends that agencies continue to follow their existing NEPA practices and procedures and voluntarily rely on the CEQ regulations for projects currently undergoing NEPA review and legal challenges.
Implications
The intent of the Interim Final Rule and Guidance, consistent with EO 14154, is to expedite critical project approvals. However, the uncertainty caused by such wholesale changes may have the opposite effect, at least in the near term. These significant changes—in many cases to longstanding regulatory requirements—risk creating confusion at the agency level, which could lead to delays in NEPA reviews. This is especially true in the short-term, where CEQ’s NEPA regulations have been rescinded but agencies have not yet implemented new or revised NEPA regulations of their own. Additionally, inevitable litigation—on the Interim Final Rule itself, on CEQ’s rulemaking authority, or on the agency-specific regulations developed through this process—will further add to uncertainty and confusion. There is a risk that projects may benefit from a potentially faster NEPA review, only to face increased litigation risk after project approval. Moving forward, it will be critically important for project proponents and other stakeholders to engage with relevant permitting agencies and participate actively in the development of agency-specific NEPA implementing procedures.
EPA Reopens, Extends Comment Periods for Proposed PFAS Rule and Notices
On February 21, 2025, the U.S. Environmental Protection Agency (EPA) extended the comment deadline for the January 17, 2025, proposed rule to clarify the timeframe for when companies must first notify a customer that one of its mixtures or trade name products contains a per- or polyfluoroalkyl substance (PFAS) listed on the Toxics Release Inventory (TRI). 90 Fed. Reg. 10043. As reported in our January 22, 2025, blog item, the Biden EPA proposed the rule in response to questions from industry regarding the effective date of supplier notifications for PFAS added to the TRI pursuant to the National Defense Authorization Act for Fiscal Year 2020 (NDAA). Stakeholders questioned whether the supplier notification requirements for such PFAS begin on January 1, when the PFAS are added to the statutory TRI chemical list, or upon EPA completing a rulemaking to include the added PFAS in the Code of Federal Regulations. EPA has reopened the comment period to allow interested parties additional time to review and analyze thoroughly how the proposed rule may impact parties potentially subject to it. Comments are due March 24, 2025.
EPA published a separate notice on February 21, 2025, extending the comment period on the following notices:
Draft National Recommended Ambient Water Quality Criteria for the Protection of Human Health for Perfluorooctanoic Acid, Perfluorooctane Sulfonic Acid, and Perfluorobutane Sulfonic Acid, 89 Fed. Reg. 105041. EPA announced the availability of draft Clean Water Act (CWA) national recommended ambient water quality criteria (AWQC) for the protection of human health for three PFAS for a 60-day public comment period. EPA states that it developed these draft PFAS national recommended human health criteria (HHC) to reflect the latest scientific information, consistent with current EPA guidance, methods, and longstanding practice. Comments are due April 25, 2025.
Draft Sewage Sludge Risk Assessment for Perfluorooctanoic Acid (PFOA) and Perfluorooctane Sulfonic Acid (PFOS), 90 Fed. Reg. 3859. As reported in our January 14, 2025, blog item, according to EPA, the findings show that there may be human health risks associated with exposure to PFOA or PFOS with all three methods of using or disposing of sewage sludge — land application of biosolids, surface disposal in landfills, or incineration. Comments are due April 16, 2025.
90 Fed. Reg. 10078. EPA states in each Federal Register notice that comments previously submitted need not be resubmitted as they are already incorporated into the public record and will be considered in the final action as appropriate. Where appropriate, EPA may consider further extending the comment periods.
Healthcare Preview for the Week of: February 24, 2025 [Podcast]
Can the House Pass a Budget Resolution This Week?
The House is back from recess, so both chambers of Congress are in session this week (although the House is out again on Friday).
With 18 days left to pass a budget before the March 14, 2025, deadline, the focus this week is on whether the House can pass a budget resolution. There may be a budget resolution vote on Tuesday evening, but this timing could shift if Republicans are not able to get enough support. House Republicans have a 218 – 215 majority, meaning they can only afford to lose one vote.
President Trump has endorsed having “one big, beautiful bill” that includes a permanent extension of the 2017 tax cuts, as opposed to the Senate’s approach of two separate reconciliation bills.
On February 13, 2025, the House Budget Committee approved a budget seeking at least $880 billion in mandatory spending cuts to programs overseen by the House Energy and Commerce Committee. The Medicaid program is a likely target to provide a significant portion of those savings. Some Republicans have started to raise concerns about the level of potential funding cuts to Medicaid because of the impact such cuts would have on constituents and providers in their districts and across their states.
Outside of budget discussions, the House Energy and Commerce Health Subcommittee will hold a hearing on pharmacy benefit managers. The Senate will hold hearings for several of President Trump’s cabinet nominees, including nominees for deputy secretary of the US Department of Homeland Security, deputy director of the Office of Management and Budget, director of the Office of Science and Technology Policy, and federal trade commissioner. Senate committees will also hold hearings on combatting the opioid epidemic and the HALT Fentanyl Act.
The Medicaid and CHIP Payment and Access Committee also meets this week and will cover topics such as state supplemental and directed payments, substance use disorder, and the prior authorization process.
Today’s Podcast
In this week’s Healthcare Preview podcast, Debbie Curtis and Rodney Whitlock join Maddie News to discuss the status of the reconciliation process in the House, including the debate on Medicaid, and the looming March 14 government funding deadline.
President Trump Executive Order on Supervision of ‘Independent’ Agencies
Amidst a blitz of executive action, on February 18, President Donald Trump signed an executive order entitled “Ensuring Accountability for all Agencies” (Executive Order) exerting more direct control over “independent regulatory agencies.” President Trump cited the “often-considerable authority” of these independent regulatory agencies as the rationale for needing this additional supervision and control. Furthermore, due to perceived congressional inaction, the Executive Order, coupled with previous ones,[1] forms another part of President Trump’s deregulatory agenda and his efforts to have the executive speak with one voice.
Among other things, the Executive Order requires independent regulatory agencies to submit draft regulations and strategic plans to the president and the Office of Management and Budget (OMB) for review. Additionally, OMB will review independent regulatory agencies’ actions for consistency with the president’s policies and these agencies must establish a White House Liaison to presumably report to the president, although the duties of this position are not defined.
This post sets forth more details on the requirements of the Executive Order, highlights its potential impacts for independent agency regulation and discusses whether the Executive Order could be subject to challenge.
Requirements of the Executive Order
The Executive Order requires all independent regulatory agencies to submit for review all proposed and final significant regulatory actions to the Office of Information and Regulatory Affairs (OIRA) within OMB before publication in the Federal Register. Broadening agencies subjected to regulatory review, the Executive Order references the definition of “independent regulatory agency” from 44 U.S.C. § 3502(5), which includes the Commodity Futures Trading Commission (CFTC) and Securities and Exchange Commission (SEC), among 20 total agencies and a catchall provision to include any other similar agency designated by statute as a federal independent agency or commission.[2] There is a carveout for the Board of Governors of the Federal Reserve System and the Federal Open Market Committee regarding actions related to monetary policy. OIRA currently engages in a limited review of proposed and final rules by independent regulatory agencies. The Executive Order expands the scope of OIRA’s review.
OMB Establishment of Performance Standards and Management Objectives
The Executive Order empowers the director of OMB to provide guidance on the Executive Order’s implementation and how independent regulatory agencies should structure their submissions. The deadline for these agencies to submit their regulatory actions is either 60 days from the Executive Order or upon completion of the OMB guidance.
OMB Review of Independent Regulatory Agencies’ Activities and Spending
Pursuant to the Executive Order, OMB will continually review independent regulatory agencies’ obligations for consistency with the president’s policies and priorities. The review process will enable the president to make possible adjustments to agency operations and regulatory actions. For example, OMB review could be used to steer independent regulatory agencies to prohibit or limit spending on particular activities, functions, or projects to the extent that such prohibition or limitation is consistent with US law.
Additional Coordination and Consultation With the Executive Office of the President
The Executive Order requires independent regulatory agency chairpersons to regularly consult with and coordinate policies and priorities with OMB directors, the White House Domestic Policy Council and the White House National Economic Council. There is no further detail on how often these meetings are expected to occur. Additionally, the Executive Order requires each agency to have a White House Liaison, who will presumably shepherd the communications between the agency and the president.
This requirement is a divergence from precedent as no longer can chairpersons set their own strategic plans; they must submit their agency strategic plans developed pursuant to the Government Performance and Results Act of 1993 to the director of OMB for clearance prior to finalization.
Centralizing All Executive Branch Interpretations of the Law
Under Section 7 of the Executive Order, the president and attorney general will set forth all official executive branch interpretations of the law. Executive branch employees including agency general counsel, when acting in their official capacity, are prohibited from presenting any legal interpretation as the official position of the United States if it conflicts with the legal opinions of the president or the attorney general. This restriction applies to all actions, including issuing regulations, providing guidance and advocating positions in litigation.
This level of coordination and determination already occurs when, for example, a case is pending before the Supreme Court and the Department of Justice seeks the views of independent regulatory agencies in determining the government’s litigation position before the court. The Executive Order suggests that such coordination will potentially expand to include agency positions taken before district and appellate courts, as well as legal positions taken as part of an agency’s rulemaking. It may also slow the pace of regulatory and enforcement action of independent regulatory agencies to account for the additional time to engage with other parts of the executive.
Possible Court Challenge?
Congressional statutes grant the president authority to issue executive orders to help them implement federal laws. Article II of the Constitution prohibits the president from making laws; the president has authority only to enforce and implement laws. When an executive order is written too broadly, it can be found, in certain situations, to be seen as the president exercising legislative powers that are strictly reserved for Congress.
Federal courts have the authority to strike down presidential executive orders for two reasons: (1) where the president lacks authority to issue the order; and (2) the order is prima facie unconstitutional in substance. In the past, executive orders have been challenged via statutory and constitutional grounds.[3] However, federal courts have been cautious to overstep into the powers of another branch.
The Executive Order’s directive regarding independent regulatory agencies is unprecedented because past presidents have explicitly excluded these agencies from similar oversight. For example, President Reagan’s Executive Order 12291 and President Clinton’s Executive Order 12866 both required regulatory review for certain agencies but notably exempted independent regulatory agencies from most of these mandates.[4]
Impact on Independent Regulatory Agencies
Historically, even though the president appoints the commissioners, the CFTC and SEC have operated with some degree of autonomy from the president. This aligns with how independent regulatory agencies were conceived by Congress; to have some protection from direct presidential control. The Executive Order seeks to more directly influence the regulatory agenda of independent agencies.
Indeed, President Trump is asserting broad powers to remove Senate-confirmed members of multimember boards. President Trump has removed members of the National Labor Relations Board (NLRB) and the Equal Employment Opportunity Commission (EEOC). The Supreme Court has recently found that other limitations on the president’s removal power violate the Constitution. In a 2020 case, Seila Law LLC v. CFPB, the Court found that the limitations on the president’s ability to remove the director of the Consumer Financial Protection Bureau (CFPB) violated the Constitution’s separation of powers. In that case, the Court did not explicitly address removal protections for multimember commissions like the CFTC and SEC. Although last year the Supreme Court denied certiorari on a case regarding the Consumer Product Safety Commission (CPSC) that raised these issues, it may get another opportunity based on President Trump’s recent actions. The outcome of such a case could have a significant impact on the president’s ability to directly control independent regulatory agencies.
In the meantime, the Executive Order and the president’s agenda may increase the president’s influence on enforcement actions and investigations, as independent regulatory agencies could give additional weight to broader presidential policies in their decisions to prosecute civil wrongdoing or pursue investigations. This new dynamic may prompt registrants to closely monitor new executive orders to anticipate shifts in enforcement priorities.
As independent regulatory agencies oversee self-regulatory organizations (SROs), such as the SEC and Financial Industry Regulatory Authority (FINRA), changes in agency priorities could affect SRO operations. Although SROs typically focus on technical and operational matters, an independent regulatory agency’s shift to align its policies with the president’s agenda may introduce political considerations into market regulations that were previously apolitical.
An independent regulatory agency’s programs and initiatives that are misaligned with the president’s policies face additional risk under the Executive Order for reduced funding or elimination. As these activities become more visible to the Trump administration, they may face increased scrutiny, potentially impacting budgeting and long-term planning.
Conclusion
The Executive Order’s purpose of expanding presidential oversight over independent regulatory agencies raises several legal questions. The Executive Order contemplates additional interaction between independent regulatory agencies and OMB, with an increased emphasis on implementing the president’s priorities. The Executive Order, along with the anticipated litigation over the president’s removal power, may serve to reshape the relationship between independent regulatory agencies and the president.
Footnotes
[1] UNLEASHING PROSPERITY THROUGH DEREGULATION, The White House (Jan. 31, 2025), https://www.whitehouse.gov/fact-sheets/2025/01/fact-sheet-president-donald-j-trump-launches-massive-10-to-1-deregulation-initiative/.
[2] “Independent regulatory agency” includes the following: the Board of Governors of the Federal Reserve System, the Commodity Futures Trading Commission, the Consumer Product Safety Commission, the Federal Communications Commission, the Federal Deposit Insurance Corporation, the Federal Energy Regulatory Commission, the Federal Housing Finance Agency, the Federal Maritime Commission, the Federal Trade Commission, the Interstate Commerce Commission, the Mine Enforcement Safety and Health Review Commission, the National Labor Relations Board, the Nuclear Regulatory Commission, the Occupational Safety and Health Review Commission, the Postal Regulatory Commission, the Securities and Exchange Commission, the Bureau of Consumer Financial Protection, the Office of Financial Research, Office of the Comptroller of the Currency, and any other similar agency designated by statute as a Federal independent regulatory agency or commission. 44 U.S.C. § 3502(5).
[3] Federal Judicial Center, Judicial Review of Executive Orders, Fed. Jud. Ctr., https://www.fjc.gov/history/administration/judicial-review-executive-orders (last visited Feb. 23, 2025).
[4] President Reagan’s Executive Order 12291 authorized OIRA to review regulatory actions of Cabinet departments and independent agencies, excluding independent regulatory agencies, requiring cost-benefit analyses for major rules. President Clinton’s Executive Order 12866, replacing it in 1993, maintained the exclusion of independent regulatory agencies and narrowed OIRA’s review to specific rule types. See Exec. Order No. 12,291, 3 C.F.R. 127 (1981), reprinted as amended in 5 U.S.C. § 601 app. at 431 (1982) and Exec. Order No. 12,866, 3 C.F.R. 638 (1994), reprinted as amended in 5 U.S.C. § 601 app. at 557 (1994).
Red State AGs Sue New York State in Challenge to Climate Change Superfund Act
In December 2024, the State of New York enacted the “Climate Change Superfund Act,” which would impose retroactive fines on fossil fuel producers for greenhouse gas emissions that contribute to climate change. (New York was actually the second state to enact such a law; Vermont had implemented a similar law earlier in the year, and a number of other liberal states are contemplating such laws.) This law has now been challenged in court by a coalition of attorneys-general from conservative states, led by Texas (the other states are Alabama, Arkansas, Georgia, Idaho, Iowa, Kansas, Kentucky, Louisiana, Mississippi, Missouri, Montana, Nebraska, North Dakota, Ohio, Oklahoma, South Carolina, South Dakota, Tennessee, Utah, West Virginia, and Wyoming), who argue that this law is unconstitutional because, among other things, it infringes upon issues that are solely within the purview of federal law (e.g., the Clean Air Act), and not subject to regulation by individual states.
Irrespective of the legal merits of either New York’s law or the attorneys-generals’ challenge, this development is nonetheless significant as demonstrating–yet again–the increasing gulf between blue states and red states with respect to state policy concerning climate change and related issues. There are now a number of separate legal fronts where opposing coalitions of states are ranged against one another, each seeking to implement its preferred policy. And this increasing divergence among the states has rendered the regulatory landscape even more complex for companies that operate nationally, with a geographic footprint on both sides of the divide. In the absence of a national consensus developing over climate change policy, it seems unlikely that even coherent and powerful federal action could completely overcome this divide–to the detriment of any company or individual seeking to navigate through these turbulent waters.
Texas Attorney General Ken Paxton and a coalition of 21 attorneys general have filed a federal lawsuit challenging New York’s new law that would force fossil-fuel companies to pay billions for emitting greenhouse gas. And some experts predict similar litigation against other states. According to the lawsuit, the New York law titled the Climate Change Superfund Act would retroactively fine coal, natural gas and oil producers $75 billion for emissions. New York Gov. Kathy Hochul signed it into law on Dec. 26, 2024, with funds due in 2026.
www.law.com/…
Greenwashing Lawsuit Against Lululemon Dismissed by Federal Court
On February 18, 2025, Judge Bloom (S.D. Fla.) dismissed a lawsuit against Lululemon, the athleisure company, that centered upon allegations of greenwashing. Specifically, the plaintiffs here had contended “that Lululemon made a number of direct environmental claims about the company’s products and actions that are false, deceptive and/or misleading.” However, the judge found these allegations lacking and dismissed the case for lack of standing due to a failure to plead injury, since “Plaintiffs’ allegations fail to tie any aspect of Lululemon’s statements to the purported price premium that Plaintiffs paid for Lululemon’s products.”
This conclusion by the federal district court is highly significant and will likely impact the growing number of greenwashing actions filed in various courts. In particular, the court’s holding that, in the context of greenwashing, “blanket assertions are insufficient to constitute an economic injury, and therefore Plaintiffs lack Article III standing” may erect a significant barrier to the many greenwashing lawsuits that “fail[] to allege a factual connection between the value of [Company’s]products and [Company’s] representations.” In other words, a greenwashing lawsuit will not succeed based upon generalized allegations that a company is not upholding its environmental commitments or otherwise making improper claims of sustainability but rather will require a specific link between the alleged greenwashing and the economic injury suffered by plaintiffs. This will likely be harder to establish in many, if not most, cases, and so may enable defendants to dispose of greenwashing lawsuits at an early stage in the litigation–e.g., at the motion to dismiss stage, as occurred here.
Lululemon Athletica Inc. has escaped a proposed class action accusing it of misleading the public into thinking the company is environmentally friendly, after a Florida federal judge tossed the suit because the consumers couldn’t make a price-premium connection. [] Judge Beth Bloom granted Lululemon’s motion to dismiss, finding that the buyers lacked standing because they did not adequately link their claims of overhyped environmental statements to any kind of economic injury. The lawsuit “does not allege that there was any deceptive act or unfair practice regarding the products sold to plaintiffs,” Judge Bloom said. “Indeed, the ‘deception’ plaintiffs purportedly relied on amounts to nothing more than goals and promises contained in a press release or on Lululemon’s website. … Plaintiffs’ allegations fail to tie any aspect of Lululemon’s statements to the purported price premium that plaintiffs paid for Lululemon’s products.”
www.law360.com/…
How to Summarize Government Work in Five Easy Bullets
It was reported this weekend that all federal employees received an e-mail from the Office of Personnel Management (OPM) telling employees to report “five bullets about what you did last week.” The e-mail also states that failure to do so would be interpreted to mean that the employee is offering their resignation. This is reported as part of the drive to shake up or reform, review, or rebuke the federal workforce. Whatever one speculates about motivation, this will likely be taken by many as a threat, but the e-mail reportedly does not have details about how any of the five points will be evaluated.
With this context, I would politely offer some suggested “bullets” as a former federal employee. My own career included different jobs over time at the U.S. Environmental Protection Agency’s (EPA) Office of Prevention, Pesticides, and Toxic Substances (OPPTS) — now known as the Office of Chemical Safety and Pollution Prevention (OCSPP). I started my federal career as a GS-4 summer intern in the pesticide program and had different positions, eventually leaving government service as a Schedule C political appointee as Assistant Administrator of OPPTS. I left government service in 2001.
With that range of positions in the Office, from a low-level employee in the organization to a much higher one, I offer some suggestions, in bullet form, describing generally the EPA work in words I believe would be applicable to what is “done” by employees in most every position in that Office. Most bullets are probably applicable across other federal programs and offices.
I have pondered how a federal employee can summarize the past or any week in simple bullet form. Since the reported e-mail does not include details about how granular the report should be, the following bullets describe the work of employees in OCSPP, applicable generally from my first job there in 1975 until the present time.
Suggestions for “five bullets”:
I complied fully and faithfully with my oath of office. (“I do solemnly swear that I will support and defend the Constitution of the United States against all enemies, foreign and domestic; that I will bear true faith and allegiance to the same; that I take this obligation freely, without any mental reservation or purpose of evasion; and that I will well and faithfully discharge the duties of the office on which I am about to enter. So help me God.”)
I performed tasks and assignments to implement the laws and regulations that govern the official duties of my program and agency.
I performed the duties outlined and required by my job classification in my position of record.
I followed the law and regulations regarding confidentiality of data and information sharing with outside parties that are part of my work.
I performed these assignments during work hours at my duty station as outlined in my personnel records (Standard Form 50 — Notification of Personnel Action).
If all those involved in the current attempt to “shake up” the civil service can credibly claim to have “done” these five things in the past week, the entire effort would not only be less controversial but also more successful.
PFAS Lawsuit Against Industrial Users of PFAS Highlights Risks
We have written numerous times over the past several years regarding the risks posed to current and historical corporate users of PFAS (whether knowingly or unknowingly), even as the stagelight focused most brightly for some time on risks from federal regulatory actions with respect PFAS. A PFAS lawsuit against industrial users of PFAS filed this month, though, provides further support for the notion that the greatest risks to corporations from PFAS lies in lawsuits likely to be filed against them in coming years for environmental pollution and personal injury. The City of Savannah, Georgia took legal action against numerous companies for contamination of its water systems. While some of the defendants include PFAS manufacturers, several defendants are alleged to be prior users of PFAS that discharged PFAS-contaminated effluent into waterways. This case should be at the forefront of corporate concern for PFAS risks as risk assessment and diligence programs are conducted in earnest.
PFAS Lawsuit Against Industrial Users
The lawsuit was filed by the City of Savannah against several PFAS manufacturers, as well as PFAS users, for discharge of PFAS into local waterways. Notably, the defendants from the “PFAS Users” group include coating resins, polymerization, paper, packaging, fabric coating, metal finishing, surfactants, textiles, roofing, insulation, and radiator manufacturing companies, among others. The defendants are alleged to have caused or contributed to the discharge of PFAS chemicals found in the city’s drinking water. Savannah is seeking compensatory damages from the defendants to pay for filtration and associated remediation technology. Savannah is also seeking punitive damages in the complaint.
Significance of Lawsuit for All Manufacturers
The lawsuit is notable for several reasons, one if which is that the defendants may not have used PFAS intentionally in its products or processes, yet the companies may still be liable for pollution damages from an unintentional and perhaps unknowing use of PFAS. A common refrain from companies assessing PFAS risks is that “we do not and did not use PFAS, so these risks do not apply to us.” The Savannah lawsuit shows otherwise, as even unknowing use of PFAS (or PFAS that gets into manufacturing processes as a contaminant) may be liable for class action lawsuit damages.
Further, while discovery has not yet begun, it is likely that many of the named defendants were historically permitted to discharge effluent into the waterways now alleged to be contaminated with PFAS. Of course, prior to the past couple of years, no regulatory entity set PFAS effluent discharge levels, nor was testing for PFAS prior to discharge required in many circumstances. Nevertheless, despite the legality of the discharges under permitting strictures, the companies nevertheless find themselves embroiled in PFAS litigation for pollution.
The lawsuit highlights the risks that we have predicted for several years to companies that have not manufactured PFAS, but rather have used PFAS in their manufacturing process or have used chemical mixtures that may have been contaminated with PFAS. The historical nature of such uses will not shield companies from litigation, and it is critical that manufacturing and industrial companies examine current and historical uses, assess legacy insurance policies, and conduct a full risk assessment to understand the business disruption potential that PFAS might have on their company.
Restoring Western North Carolina’s Infrastructure: NCDOT Receives $250 Million in Federal Emergency Relief Funds
The Federal Highway Administration (FHWA) has announced an immediate allocation of $352.6 million in Emergency Relief funds to support recovery efforts following the devastation caused by Hurricane Helene in September 2024.
Of this funding, the North Carolina Department of Transportation (NCDOT) will receive $250 million to repair damaged roadways and bridges, including Interstate 40. Another $32.6 million will be split between the U.S. Forest Service and the National Park Service to make repairs along the Blue Ridge Parkway and other roadways located in national forests.
The Impact of Hurricane Helene
Hurricane Helene left a trail of destruction across the Southeast, including widespread flooding, landslides, and structural damage to roadways and bridges. Western North Carolina, known for its mountainous terrain and vital transportation routes, was particularly hard-hit. The storm caused severe washouts, rockfalls, bridge collapses, and pipe failures, creating hazardous conditions and disrupting travel.
The cumulative cost of federally eligible damage is still being assessed, but early estimates suggest the total will exceed $4 billion. In response, federal, state, local, and tribal agencies have mobilized to restore accessibility and safety to the affected areas.
Emergency Relief Funds: A Lifeline for Infrastructure Recovery
The FHWA’s Emergency Relief program plays a crucial role in providing financial assistance to repair and reconstruct damaged transportation infrastructure after natural disasters. The program’s “quick release” funding mechanism ensures that states receive immediate support for urgent repairs, reducing delays in reopening critical routes.
The newly allocated $250 million for NCDOT will be directed toward repairing damage along North Carolina’s roadways, including I-40, a key transportation corridor linking North Carolina to Tennessee.
Challenges and Considerations for Construction Professionals
While the federal funding is a significant step toward recovery, construction professionals working on these repair projects must navigate several key challenges:
State and Federal Procurement Requirements – Public contracts for federally funded infrastructure projects come with strict guidelines. Even though these projects are state-managed, they often require compliance with federal laws and regulations. Contractors need to ensure they are complying with all applicable laws and requirements, which may include:
The Federal Acquisition Regulation;
The Build America Buy America Act;
Davis-Bacon Act wage standards;
Minority business participation mandates; and
Bonding and insurance requirements, among others.
Licensing Concerns – If you are an out-of-state contractor interested in performing work in Western North Carolina as part of the state and federal disaster relief effort, it is critical that you understand and comply with North Carolina’s licensing laws.
Looking Ahead: A Resilient Future for North Carolina’s Infrastructure
The infusion of federal emergency relief funds into North Carolina’s transportation network is a welcome development for residents, businesses, and the construction industry. As the state embarks on the challenging task of rebuilding, collaboration among government agencies, engineers, contractors, and legal professionals will be essential to achieving a resilient and efficient transportation system.
For construction firms and industry stakeholders, the recovery efforts present both opportunities and responsibilities. With careful planning, regulatory compliance, and strategic risk management, North Carolina can emerge from this disaster with stronger, more sustainable infrastructure that serves future generations.
The CEQ has No Clothes: The End of CEQ’s NEPA Regulations and the Future of NEPA Practice
On February 20, 2025, the White House Council on Environmental Quality (CEQ) posted a pre-publication notice on its website of an Interim Final Rule that rescinds its regulations implementing the National Environmental Policy Act (NEPA), which, in one form or another, have guided NEPA practice since 1978. CEQ simultaneously issued new guidance to federal agencies for revising their NEPA implementing procedures consistent with the NEPA statute and President Trump’s Executive Order 14,154 (Unleashing American Energy). The Interim Final Rule was submitted for publication in the Federal Register on February 19, 2025 and will become effective 45 days after it is published. This action represents the final blow to CEQ’s NEPA regulations, coming in the wake of two recent federal court decisions in the past few months that foreshadowed their impending demise. In light of those court decisions, CEQ is unlikely to issue new regulations, even under a future presidential administration, without express congressional authorization.
Background
NEPA generally applies to discretionary actions involving federal agencies, including projects carried out by a federal agency itself or by private parties that receive a permit or financial assistance from a federal agency. When NEPA is triggered, it requires a federal agency to analyze the environmental impacts of the project before making a decision to carry it out or issue an approval that may also include conditions or mitigation requirements. NEPA is a procedural law and does not mandate a specific outcome or require that the project proponent mitigate any identified environmental impacts.
NEPA, which was enacted in 1970, is a rather barebones statute. NEPA practice has long been governed by CEQ’s NEPA regulations, which were first promulgated in 1978 after President Carter issued Executive Order 11,991 (Relating to Protection and Enhancement of Environmental Quality) earlier that year directing CEQ to replace its earlier nonbinding guidance. Many common features of NEPA practice — such as environmental assessments, categorical exclusions, programmatic environmental documents, supplemental environmental documents, lead and cooperating agencies, required analysis of a no-action alternative, and required analysis of mitigation measures — are directly tied to CEQ’s 1978 NEPA regulations (some were eventually codified by Congress’s 2023 amendments to NEPA). Agencies could also develop their own NEPA implementing procedures consistent with CEQ’s regulations. Except for one relatively minor amendment in 1986, CEQ’s NEPA regulations did not change between 1978 and 2020, and a large body of case law resulted as courts evaluated agencies’ compliance with the regulations. CEQ substantially revised its regulations during the first Trump administration (in 2020) and during the Biden administration (in 2021 and 2024). For the past nearly 50 years, federal agencies, courts (including the Supreme Court), and NEPA practitioners have largely accepted CEQ’s authority to issue binding regulations without objection.
Recent Court Decisions
Two recent federal court cases challenged the longstanding assumption of CEQ’s authority. First, as we previously reported, in November 2024 the U.S. Court of Appeals for the D.C. Circuit found that CEQ lacked authority to issue binding regulations. (Marin Audubon Society v. Federal Aviation Administration, No. 23-1067 (D.C. Cir. Nov. 12, 2024).) On January 31, the full D.C. Circuit denied a petition for rehearing en banc, with a majority of the judges issuing a concurring statement explaining that the earlier decision’s “rejection of the CEQ’s authority to issue binding NEPA regulations was unnecessary to the panel’s disposition” and, impliedly, not part of the court’s holding.
Then, on February 3, in a different case, a federal district court in North Dakota issued a decision expressly holding that CEQ lacked authority to issue binding regulations. (Iowa v. CEQ, No. 1:24-cv-00089 (D.N.D. Feb. 3, 2025).) That case was brought by Iowa and a coalition of 20 other states to challenge CEQ’s regulations issued in May 2024. The court’s decision closely followed the D.C. Circuit’s analysis in Marin Audubon and came to the same conclusion: CEQ does not (and never did) have the authority to issue binding regulations. The court reasoned that CEQ, which was established by NEPA, was authorized by statute only to “make recommendations to the President.” Thus, based on constitutional separation-of-powers principles, President Carter’s 1978 Executive Order could not legally confer regulatory authority on CEQ in the absence of congressional authorization.
Because the court found that CEQ had no regulatory authority, it vacated the challenged 2024 regulations. Notably, although the court’s conclusion about CEQ authority supported vacatur of all CEQ NEPA regulations, it vacated only the 2024 regulations that were challenged in the case before it, leaving “the version of NEPA in place on June 30, 2024, the day before the rule took effect.” The court noted, however, that “it is very likely that if the CEQ has no authority to promulgate the 2024 Rule, it had no authority for the 2020 Rule or the 1978 Rule and the last valid guidelines from CEQ were those set out under President Nixon.”
The court concluded: “The first step to fixing a problem is admitting you have one. The truth is that for the past forty years all three branches of government operated under the erroneous assumption that CEQ had authority. But now everyone knows the state of the emperor’s clothing and it is something we cannot unsee. . . . If Congress wants CEQ to issue regulations, it needs to go through the formal process and grant CEQ the authority to do so.”
CEQ’s Recission of its NEPA Regulations
Meanwhile, CEQ’s NEPA regulations were concurrently under fire from the executive branch. On January 20, President Trump issued Executive Order 14,154 (Unleashing American Energy), which was largely targeted at removing perceived barriers to domestic fossil fuel production and mining, including federal environmental permitting processes. To that end, Section 5 of the Executive Order revoked President Carter’s 1978 Executive Order directing CEQ to issue binding regulations and directed the chairperson of CEQ to, by February 19, (1) propose rescinding all CEQ NEPA regulations and (2) issue new guidance to federal agencies for implementing NEPA. CEQ has now done as directed.
The Interim Final Rule proposes to rescind the entirety of CEQ’s regulations. It will go into effect 45 days after it is published in the Federal Register to give the public an opportunity to submit comments, which CEQ will “consider and respond to” prior to finalizing the rule. In the preamble to the Interim Final Rule, CEQ states it has “concluded that it may lack authority to issue binding rules on agencies in the absence of the now-rescinded E.O. 11191.” While CEQ considers the revocation of the Carter Executive Order to constitute an “independent and sufficient reason” for rescinding the NEPA regulations, it also agrees (contrary to its longstanding and customary practice) that “the plain text of NEPA itself may not directly grant CEQ the power to issue regulations binding upon executive agencies.”
CEQ Guidance to Federal Agencies Regarding NEPA Implementation
At the same time CEQ proposed to rescind its NEPA regulations, it also issued guidance to federal agencies for implementing NEPA going forward and for revising or establishing their own NEPA-implementing procedures, consistent with the NEPA statute and Executive Order 14,154. That guidance recommends agencies “continue to follow their existing practices and procedures for implementing NEPA” while they work on their new procedures and “should not delay pending or ongoing NEPA analyses while undertaking these revisions.” As to these pending or ongoing NEPA reviews, CEQ advises agencies to “apply their current NEPA implementing procedures” and “consider voluntarily relying on” the soon-to-be rescinded regulations.
The guidance also proposes a path forward to agencies to follow in drafting new procedures. It “encourages agencies” to use the 2020 NEPA regulation revisions as a framework and advises that agencies should consider the following:
Prioritize project-sponsor-prepared environmental documents for expeditious review.
Ensure that the statutory timelines established in section 107 of NEPA will be met for completing environmental reviews. (Generally, one year for a completion of an environmental assessment and two years for an environmental impact statement.)
Include an analysis of any adverse environmental effects of not implementing the proposed action in the analysis of a no action alternative to the extent that a no action alternative is feasible.
Analyze the reasonably foreseeable effects of the proposed action consistent with section 102 of NEPA, which does not employ the term “cumulative effects.”
Define agency actions with “no or minimal federal funding” or that involve “loans, loan guarantees, or other forms of financial assistance” where the agency does not exercise sufficient control over the subsequent use of such financial assistance or the effect of the action to not qualify as “major Federal actions.”
Not include an environmental justice analysis, since Executive Order 12,898, which required all federal agencies to “make achieving environmental justice part of its mission” was separately revoked by Executive Order 14,173.
CEQ has set a 12-month timeframe for federal agencies to complete the revision of their NEPA procedures. Agencies must consult with CEQ while revising their implementation procedures and CEQ will hold monthly meetings of the “Federal Agency NEPA Contacts and the NEPA Implementation Working Group” as required by Executive Order 14,154 to coordinate revisions amongst the agencies. Within 30 days of the guidance memorandum, agencies must develop and submit to CEQ a proposed schedule for updating their implementation procedures.
NEPA Practice in the Near Future
Going forward, agencies, project applicants, and NEPA practitioners should rely upon the NEPA statute (as amended by the Fiscal Responsibility Act in 2023) as primary authority. For projects with ongoing or pending NEPA review, applicants should expect federal agencies to continue to apply their existing NEPA practices and rely on the soon-to-be rescinded regulations, except to the extent they are inconsistent with Executive Order 15,154 or the NEPA statute (and in that regard, they will need to be closely evaluated on an individual basis). Case law also will need to be closely analyzed to determine whether courts’ holdings in prior cases were predicated on the statute itself (and therefore, still have binding or persuasive authority, depending on the court) or were based on CEQ’s regulations (in which case they should no longer have any authority). CEQ’s guidance is expressly non-binding, but should also be considered.
In a twist of irony, the rescission of CEQ’s NEPA regulations could lead to greater delays in environmental reviews and permitting (including for fossil fuel production and mining projects favored by Executive Order 14,514), at least in the near term. CEQ’s regulations created uniform procedures that applied to all federal agencies, which was particularly helpful for complex projects that require approvals from multiple federal agencies. Without uniform regulations, each individual agency might now impose its own requirements on the NEPA process. This could result in greater challenges coordinating environmental reviews and permitting among multiple agencies, although CEQ will likely attempt to harmonize implementation procedures as it reviews agencies’ proposals. In addition, permitting delays are expected as agency staff adjust to the new landscape and determine how to comply with NEPA without reliance upon CEQ’s regulations. Staffing shortages resulting from the Trump administration’s efforts to reshape the federal workforce are also likely to additionally exacerbate these problems.
Relatedly, this term, the Supreme Court is considering its first NEPA case since 2004 (Seven County Infrastructure Coalition v. Eagle County) involving the scope of impacts that agencies must consider. Because the case involves the NEPA statute rather than its implementing regulations, the rescission of CEQ’s regulations is unlikely to affect the decision. Oral argument was held in December, and a decision is expected this spring. We will continue to track developments related to this decision.
March 14, 2025, Looming as Important Date for Congressional Republicans and President Trump, and May Provide Leverage to Democrats
March 14, 2025, looms as an important deadline in the middle of President Trump’s first 100 days in office, a milestone often used to evaluate the effectiveness of a new President. March 14 is the day that the American Relief Act, 2025 (Public Law 118-158), which provides temporary funding for the federal government, expires. The law was enacted during the 118th Congress and signed into law by President Biden. At the time, some questioned whether having government funding expire during President Trump’s first 100 days in office was a good idea. Now, Republicans, who control the White House, Senate, and House of Representatives, need to pass legislation to avoid a government shutdown on March 15, and may need Democratic support to do so. The question is, at what cost?
Government funding is not the only thing that expires March 14, 2025. The National Flood Insurance Program was extended through March 14, 2025, and will also expire if not extended, as will Temporary Assistance for Needy Families (TANF), which provides benefits to families in need. Congress also needs to raise the debt limit, but not necessarily within this same timeframe.
Simultaneous with figuring out how to fund the federal government for the remainder of Fiscal Year 2025, the Republican-led Congress also is working on legislation to enact President Trump’s priority issues, including extending the 2017 tax provisions, providing money for border security, and addressing immigration. Making matters more challenging, leadership in the House of Representatives and Senate are taking sharply different approaches to developing such legislation. Adding one more degree of difficulty to this legislative effort, House Republicans in the last Congress needed Democrats to vote for the legislation for it to pass. What is unknown this time is whether Democrats will vote in sufficient numbers with Republicans to fund the government and, if so, what concessions they will be able to gain from Republicans to secure their support.
I wrote in December that slim majorities will test Republican unity in the 119th Congress. The looming March 14, 2025, deadline combined with the desire to pass legislation to enact President Trump’s priorities early in 2025, present an interesting test of Republican unity, and may present out-of-power Democrats with sufficient leverage to gain concessions to win their support. The next few weeks will provide a fascinating look at what to expect for the remainder of the 119th Congress.