D.C. Circuit Invalidates CEQ's NEPA Regulations on Separation-of-Powers Grounds, Vacates Air Tour Management Plan
The D.C. Circuit held that Council on Environmental Quality regulations implementing NEPA were ultra vires because CEQ traced its rulemaking authority to a presidential executive order rather than congressional delegation, violating separation-of-powers principles. The court further ruled that FAA and National Park Service acted arbitrarily and capriciously by using existing interim flight levels as the environmental baseline for assessing a commercial air tour management plan over four national parks.
Background
Environmental organizations petitioned for review of the Federal Aviation Administration's and National Park Service's approval of an air travel management plan governing commercial tourist flights over four national parks. The agencies approved the plan without conducting environmental analysis under the National Environmental Policy Act (NEPA), prompting the Marin Audubon Society and other petitioners to challenge the decision. The case raised fundamental questions about the validity of longstanding NEPA implementing regulations and the proper baseline for environmental impact analysis.
The Constitutional Challenge to CEQ Regulations
In a sweeping holding with implications far beyond aviation law, the D.C. Circuit ruled that the Council on Environmental Quality's regulations implementing NEPA—codified at 40 C.F.R. § 1500.1 et seq.—were ultra vires and thus invalid under constitutional separation-of-powers principles. According to the court's holding, CEQ traced its rulemaking authority not to Congress but to an executive order of the President. The court emphasized that an executive order is not "law" within the meaning of the federal constitutional provision granting legislative powers to Congress. The court further held that even when parties acquiesce in an agency's regulatory authority, the Court of Appeals retains the independent power to identify and apply the proper construction of governing law, especially when the proper construction is that a law does not govern because it is not in force or is not legally binding.
The Baseline Problem
Beyond the constitutional issue, the court held that the agencies' substantive NEPA analysis was arbitrary and capricious. The FAA and Park Service had used the existing level of flights under interim operating authority as the baseline for assessing environmental effects. The court found this approach fundamentally flawed, holding that the agencies' treatment of existing level of flights under interim operating authority as baseline for NEPA analysis was arbitrary and capricious. However, the court rejected petitioners' claim that the agencies acted arbitrarily by changing their original decision to prepare an environmental assessment, finding that the agencies' mere change of original decision to prepare environmental assessment was not arbitrary and capricious. The court also held that preparation of environmental assessments for other parks did not make lack of one for the parks in issue arbitrary and capricious.
Remedy and Practical Implications
The court granted the petition, vacated the air tour management plan, and remanded the matter to the agencies. The decision was not unanimous—Senior Circuit Judge Randolph filed an opinion concurring in part, while Chief Judge Srinivasan filed an opinion dissenting in part. The case has since been distinguished by National Treasury Employees Union v. Vought in August 2025, as indicated by KeyCite's yellow flag warning. The ruling's invalidation of CEQ regulations on separation-of-powers grounds represents a significant development in administrative law with potential ramifications extending well beyond the specific context of air tour management plans over national parks.