Public Engagement in Categorical Exclusions Under NEPA

By Patrick Seroogy

Photo credit: Matt Hecht

Public participation and environmental justice are fundamental to environmental law. The former has been a pillar since the enactment of the National Environmental Policy Act (NEPA) in 1970, which established a federal environmental review framework and enabled members of the public to meaningfully engage in the decision-making process on projects whose adverse environmental impacts may affect them. The latter is the just treatment and meaningful involvement of all people in agency decision-making, with a focus on communities that have historically been disproportionately burdened with adverse human health and environmental risks and hazards. Categorical exclusions (CEs) are actions that are exempted from complicated environmental review under the NEPA process because they are not meant to produce significant environmental impacts.

 CEs are “far and away the most common type of NEPA regulation.” The Government Accountability Office reported in 2014 that the Council on Environmental Quality (CEQ) estimated that about 95% of National Environmental Policy Act (NEPA) decisions are CE determinations. The two other types of NEPA review, Environmental Impact Assessments (EIS) and Environmental Assessments (EAs), represent less than 5% and 1% of NEPA decisions, respectively. CEs exist for the sake of practicality and efficiency. Some actions, such as installing electric vehicle chargers, involve minimal environmental impact, but exempted actions must still be reviewed for potential impact.

Given how common CEs are, public involvement in this agency decision-making is important. NEPA requires agencies to be transparent and informed in their NEPA decisions, and public engagement is not only central to NEPA but also enhances agency decision-making. Recent changes to CE requirements come from the Fiscal Responsibility Act of 2023 (FRA) and the CEQ’s recent regulations, especially the Phase 2 Final Rule, which was published on May 1 and becomes effective on July 1, 2024.

This article reviews the existing laws and regulations and explores changes to public engagement in CEs under NEPA. These changes involve increased emphasis on public engagement and environmental justice. The article discusses the likelihood that the changes instituted by the FRA and the CEQ’s final Phase 1 and Phase 2 rules will be tested in forthcoming litigation.

Background

NEPA requires agencies to assess the environmental impacts of their proposed “actions,” which can range from permitting of power plants to highway construction. The CEQ is the agency in charge of approving Federal agencies’ changes to their NEPA-implementing procedures.

One type of NEPA review that has recently been amended is categorical exclusions (CEs). A CE is an exemption from NEPA review that an agency applies to a category of actions that it has determined normally do not significantly affect the quality of the environment. Absent an extraordinary circumstance that creates potential for a significant environmental impact, a CE-determinative action requires neither the preparation of an EIS nor an EA.

New or revised NEPA procedures, including CEs, require an opportunity for public review. At a minimum, this takes the form of public notice and comment. When an agency proposes a CE, it must (1) consult CEQ on its proposed CE; (2) publish notice of the proposed CE in the Federal Register and provide an opportunity for public review and comment; and (3) consult CEQ on the comments received and its proposed final CE before (4) its final publication in the Federal Register. Agencies must consider the comments they receive on proposed CEs, but are not required to provide notice of applications of CEs once established.

Beyond the minimum notice and comment procedure, agencies must engage with the public and inform the public about their proposed procedure. NEPA requires an agency to make “diligent efforts to involve” the public, solicit information from them, and host opportunities for public involvement such as meetings or hearings. Agencies must also provide notice of these meetings, especially to “interested and likely affected parties.”

New changes to the NEPA process

            NEPA has undergone significant legal change in the past several years. Regarding CEs, the major statutory change is the ability to adopt another agency’s established CE. The recent CEQ Phase 1 Rule and Phase 2 Rule have framed the Biden administration’s NEPA priorities by putting an increased emphasis on meaningful public engagement and environmental justice.

            The FRA codified a Federal agency’s ability to adopt and use another agency’s CE. To do so, the adopting agency must (1) identify the CE listed in another agency’s NEPA procedures that covers a category of proposed actions, (2) consult with the other agency to ensure that the proposed adoption of the CE is appropriate, (3) identify to the public the CE that the adopting agency plans to use for its proposed actions; and (4) document adoption of the CE. Previously, an agency could technically only “benchmark,” or draw from, another agency’s CE to substantiate its own. The Phase 2 Final Rule clarifies that agencies are not required to accept public comment on the CEs they adopt, but they must publish the documentation of both those CEs’ adoption and application.

            The second significant change is heightened public engagement. The Phase 2 Rule mandates agencies to “conduct early engagement with likely or affected interested members of the public.”[1] This is reflected in the terminological change from public involvement to public engagement and the addition of the phrase “meaningful” when the CEQ describes public engagement. It underscores CEQ’s directive that NEPA review is not a “check-the-box exercise” and that the engagement that agencies conduct should be undertaken “with appropriate planning and active dialogue or other interaction with stakeholders in which all parties can contribute.”[2] This language broadens the scope of outreach and public involvement which an agency is expected to perform, including for CEs.

This broader scope of public involvement is further accomplished with the Phase 2 Rule loosening requirements on public comments instituted by a 2020 CEQ rule. Then, comments had to be “as detailed as necessary to meaningfully participate and fully inform the agency.”[3] The regulation had already always required comments to be “as specific as possible,” so the 2020 language was deemed unnecessarily burdensome.

Additionally, the Phase 2 Rule – following up on the CEQ Phase 1 Rule restoring cumulative effects analysis after the 2020 rule revoked it – adds the clause “individually or in the aggregate” to the CE’s definition. These adjustments create heightened requirements for what agencies need to consider when establishing a CE.

The third and final significant change is the increased emphasis on and consideration of environmental justice (EJ), including engagement with communities for whom EJ is a particular concern. This comes from two executive orders: the Clinton Administration’s Executive Order (E.O.) 12898 and the Biden Administration’s E.O. 14096.[4] Together, these E.O.’s require every Federal agency to make environmental justice a part of its mission. In particular, the latter requires agencies to conduct NEPA reviews that provide “opportunities for early and meaningful involvement in the environmental review process by communities with environmental justice concerns potentially affected by a proposed action, including when establishing or revising agency procedures under NEPA.”[5]

The CEQ Phase 2 Final Rule strongly reflects this policy mandate by seeking to revise CEQ’s regulations to more strongly consider EJ-related impacts. The CEQ views an emphasis on public engagement with EJ communities “to be important because agencies have not always meaningfully engaged with them and such communities have been disproportionately and adversely affected by certain Federal activities.”[6]

Will these changes give rise to litigation?

            NEPA exists as a “common law statute.” Notwithstanding Congress’ amendments and CEQ’s recent regulations, NEPA’s interpretation largely remains determined by the courts that flesh out NEPA’s corners and functionality, as they do with common law. Court cases are not decided quickly, and this article predates applicable litigation that may provide answers.

            Perhaps the most significant premise for litigation will be the emphasis on early and meaningful public engagement. With Phase 2 engendering this broader public scope, courts may weigh public involvement more heavily given it is inherent to the NEPA review process.^[7] Currently, a court’s conclusion of insufficient public engagement by an agency in a CE already likely constitutes arbitrary and capricious conduct.^[8] A lack of any public notice at all likely violates NEPA and a lack of any consultation with affected parties does the same. For policy directives such as “meaningful public engagement,” judicial review of actions can become more of a balancing of harms involving some idea of “public interest” than a hard requirement to fulfill.^[9]

Consideration of EJ mirrors this scope, even though EJ issues are non-controlling in court cases.^[10] A court held that a NEPA decision did not pass muster and violated NEPA’s “hard look” requirement when it had a “bare-bones” EJ analysis concluding a community with EJ concerns would not suffer disproportionate harm.^[11] As with NEPA, the EJ executive orders do “not create a private right of action, but an agency’s consideration of [EJ] issues may be reviewed under the APA’s arbitrary and capricious standard.”^[12]

Public engagement and consideration of EJ may also provide “ammunition” for environmental organizations or other litigants who are concerned with NEPA and/or advocating for communities with EJ concerns. The appropriate level of public involvement to which agencies should adhere may heighten from these changes, whereas previously, insufficient or “bare-bones” provision of public participation and EJ may have invalidated where agencies fail only the bare minimum.

This article also anticipates that at least some litigation will arise over the lack of opportunity for public review in the FRA’s CE adoption language, which includes only public notice. As with any other statute, courts are loathe to read substantive requirements not already present in NEPA (or CEQ regulations).^[13] Nevertheless, future strategic litigation may test this provision.

Conclusion

The issue and intersection of CEs, public engagement, and EJ are important because government decisions, without adequate and effective review, can cause adverse human health and environmental impacts. Environmental review which incorporates a comprehensive set of factors, including and especially public engagement and EJ, improves agency decision-making and enhances the well-being of people and nature. Litigation over new NEPA developments has proceeded for as long as NEPA has existed, and it fleshes out the wrinkles in decision-making which materially affects people’s lives. With these heightened requirements, the outcome of future litigation will determine the efficacy of these EJ and public engagement principles. Hopefully, these changes will contribute to environmental review positively as part and parcel of the government-wide emphasis on EJ protections.

*This article draws from material taught in and a paper written in a course, Environmental Impact Assessment, taught by Professor Lee Paddock here at GW Law. The author received permission from Professor Paddock to use this material for a published article.

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[1] National Environmental Policy Act Implementing Regulations Revisions Phase 2, 89 Fed. Reg. 35442, at 35484 (published May 1, 2024) (effective July 1, 2024) (“CEQ Phase 2 Final Rule”).

[2] Id. at 35483.

[3] Id. at 35512.

[4] Exec. Order No. 12898, 59 Fed. Reg. 7629 (1994) (“Federal Actions to Address Environmental Justice in Minority Populations and Low-Income Populations”); Exec. Order No. 14096, 88 Fed. Reg. 25251 (2023) (“Revitalizing Our Nation’s Commitment to Environmental Justice for All”).

[5] Id. at 25255 (emphasis added).

[6] CEQ Phase 2 Final Rule, supra note 1, at 35452.

^[7] See Citizens for Better Forestry v. U.S. Dep’t of Agric., 341 F. 3d 961, 970–71 (9th Cir. 2003) (in connection with completion of EA, the “wholesale neglect of the regulations’ mandatory inclusion of the public in the process results in a procedural injury. Moreover, it undermines the very purpose of NEPA, which is to ‘ensure… that federal agencies are informed of environmental consequences before making decisions and that the information is available to the public’”) (internal citations omitted).

^[8] See Los Padres Forestwatch v. USFS, 776 F. Supp. 2d 1042, 1050 (N.D. Cal. 2011) (“the failure to provide any public notice [of a CE’s establishment] and to perform any consultation [with interested or affected parties] likely amounts to arbitrary and capricious action on the part of” the USFS).

^[9] Compare Sierra Club v. Bosworth, 510 F. 3d 1016, 1032-33 (9th Cir. 2007) (“The balance of equities and the public interest favor” remedy to the plaintiff because the USFS had an “[in]adequate record of decision” for its CE, due to in part to the agency failing to provide a “well-reasoned explanation” showing that responses to the CE “do not suffice to create a public controversy”) (internal citations omitted) with Friends of the Inyo v. USFS, 2023 WL 2432814, at *10 (E.D. Cal. Mar. 8, 2023) (an agency action that is excluded under a CE during the required scoping period, and then later found to fall under an additional CE, does not require additional public comments so long as the action does not expand CEs beyond their original purpose; “if an agency were required to solicit and review public comments every time a comment led to any change in its thinking about categorical exclusions, the agency could be forced into a vicious cycle of renotice and revision”).

^[10] Latin Americans for Soc. & Econ. Dev. v. Fed. Highway Admin., 756 F. 3d 447, 477 (6th Cir. 2014) (noting that “while environmental justice issues are a consideration in an agency’s decision-making, they are not controlling”).

^[11] Standing Rock Sioux Tribe v. U.S. Army Corps. of Eng’rs, 255 F. Supp. 3d 101, 140 (D.D.C. 2017).

^[12] NAACP Erie Unit 2262 v. Fed. Highway Admin., 648 F. Supp. 3d 576, 591 (W.D. Penn. 2022) (citing Coliseum Square Ass’n v. Jackson, 465 F. 3d 215, 232 (5th Cir. 2006)).

^[13] See, e.g., Los Padres Forestwatch, 776 F. Supp. 2d at *10 (holding that plaintiffs’ argument that scoping of a specific CE is required fails because USFS regulations require scoping of a project rather than a CE’s applicability, and a court cannot impose a requirement “not found in any relevant statute or regulation”) (citing The Lands Council v. McNair, 537 F. 3d 981, 991 (9th Cir. 2008).

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