Legal Showdown Over Pipeline Expansion: Environmental Groups Sue the EPA, Testing the Bounds of Cooperative Federalism

Introduction

On May 23, 2025, a coalition of leading environmental organizations—including the Natural Resources Defense Council (NRDC), Sierra Club, Earthjustice, and the Center for Biological Diversity—filed suit against the U.S. Environmental Protection Agency (EPA), challenging its approval of the Calumet–Midwest Pipeline Expansion Project (hereafter “Calumet Expansion”). The expansion would add 85 miles of new 42-inch trunkline and uprate three compressor stations, traversing sensitive wetlands in the Mississippi Alluvial Plain and the Illinois River watershed. The plaintiffs argue that the agency violated its statutory obligations under the Clean Water Act (CWA) and the National Environmental Policy Act (NEPA), as well as the cooperative-federalism principles enshrined in the CWA’s Section 401 certification process.

This litigation occurs at the intersection of multiple legal frameworks. Under NEPA, the EPA and the lead federal permitting agency—the Federal Energy Regulatory Commission (FERC)—must prepare an Environmental Impact Statement (EIS) analyzing reasonably foreseeable environmental consequences. Section 401 of the CWA empowers states and authorized tribes to certify or deny federal permits for projects potentially discharging pollutants into “waters of the United States.” Cooperative federalism underpins the CWA: states may impose conditions more stringent than federal minimum standards, but federal agencies retain ultimate permitting authority when states fail to act within specified deadlines.

At stake is the tension between national energy infrastructure objectives—ensuring reliable natural gas delivery amid rising demand—and the protection of waterways and wetlands critical to biodiversity, flood control, and water quality. The plaintiffs’ thesis posits that the EPA’s decision reflects an erosion of environmental safeguards in favor of expedited project approvals, testing long-standing precedents on administrative discretion and state-federal collaboration. “When federal agencies sidestep thorough environmental review, they not only breach statutory mandates but also undermine public trust in democratic governance,” warns Professor J.B. Ruhl of Vanderbilt Law School, a leading expert on environmental federalism. This case, therefore, serves as a crucible for examining the evolving contours of administrative law, federalism, and environmental protection.

Legal and Historical Background

National Environmental Policy Act (NEPA)

NEPA (42 U.S.C. § 4321 et seq.), enacted in 1970, requires federal agencies to prepare detailed EISs for “major Federal actions significantly affecting the quality of the human environment.” The EIS must consider direct, indirect, and cumulative impacts, reasonable alternatives, and include a public comment period. NEPA’s procedural mandate aims to foster informed agency decision-making and public participation. In Robertson v. Methow Valley Citizens Council (490 U.S. 332, 1989), the Supreme Court held that NEPA does not mandate particular substantive outcomes but requires “a fully informed and well-considered decision”l.

B. Clean Water Act Section 401 Certification

Section 401 (33 U.S.C. § 1341) empowers states or authorized tribes to grant, deny, or condition water quality certifications for any federally licensed or permitted project that may result in discharges to U.S. waters. Following the Supreme Court’s decision in Sackett v. EPA, 598 U.S. 651 (2023), clarifying the scope of “waters of the United States,” EPA and the Army Corps of Engineers proposed revised definitions, prompting legal challenges over jurisdictional reach.

Historically, Section 401 served as a vital check allowing state environmental agencies to safeguard local water quality beyond federal minima. Under the Trump administration, EPA issued guidance narrowing states’ review authority to point-source discharges only, a decision the Biden EPA reversed in September 2024, restoring a broader state/trial veto power over pipelines and other infrastructure.

C. Federal Energy Regulatory Commission (FERC) and Pipeline Approvals

Under the Natural Gas Act (15 U.S.C. § 717 et seq.), FERC issues certificates of public convenience and necessity for interstate natural gas pipelines. FERC must incorporate NEPA and CWA compliance into its permitting process. In Hoopa Valley Tribe v. FERC (913 F.3d 1099, D.C. Cir. 2019), the court held that FERC must consider tribal interests and climate impacts when evaluating pipeline expansions.

D. Cooperative Federalism and Prior Challenges

Cooperative federalism under the CWA fosters shared regulatory authority. The Trump-era narrowing of Section 401 drew lawsuits from states and tribes, leading to litigation in Louisiana v. EPA (W.D. La., case No. 2:23-cv-01714) and subsequent appeals. Historically, environmental groups have successfully leveraged Section 401 to delay or halt pipeline projects, as with the Dakota Access Pipeline protests culminating in the Standing Rock litigation (e.g., Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers).

“Section 401 is the linchpin of water quality protection in America,” observes Professor Ann Carlson of UCLA School of Law, who has chronicled citizen-suit provisions and federalism in environmental law.

III. Case Status and Legal Proceedings

The lawsuit, filed in the U.S. District Court for the District of Columbia (Case No. 1:25-cv-0956), names EPA Administrator Michael Regan and FERC Commissioners as defendants. The complaint alleges:

1. NEPA Violation: The Final EIS issued by FERC in April 2025 fails to analyze the cumulative greenhouse gas emissions linked to increased natural gas throughput and lacks a reasonable range of alternatives, including a no-expansion option and renewable energy investments.
   
2. CWA Section 401 Violation: EPA’s reversal of the 2020 narrowing guidance improperly construes Section 401, exceeding statutory authority and failing to adequately justify the policy shift through notice-and-comment rulemaking.
   
3. Administrative Procedure Act (APA): Defendants acted arbitrarily and capriciously, deprived plaintiffs of due process, and failed to consider important public comments, violating the APA (5 U.S.C. § 706).
   

On May 30, 2025, the court granted a preliminary injunction hearing to assess the potential for irreparable harm to water resources. Amicus briefs have been filed by 12 Democratic attorneys general supporting the environmental groups, while the American Petroleum Institute and 8 Republican-led states filed briefs urging denial of relief, arguing that energy security goals outweigh speculative environmental harms.

FERC filings indicate that the agency will defend its EIS methodology, citing reliance on EPA’s Social Cost of Carbon metrics and consultation with state environmental agencies. EPA’s motion to dismiss is pending, arguing that Section 401 challenges must be brought in state courts per the CWA’s citizen-suit provision timing requirements.

Viewpoints and Commentary

Progressive / Liberal Perspectives

Progressive advocates frame the litigation as a necessary defense of environmental integrity and community health. “This case epitomizes the fight to uphold our foundational environmental laws against administrative backsliding,” asserts Teresa Branch, Senior Attorney at Earthjustice, emphasizing due process and the precautionary principle. The NRDC’s Travis McGowan argues that the EPA reversal undermines state prerogatives and tribal sovereignty, noting that “local communities bear the first and worst impacts of pipeline spills and wetland destruction”.

Democratic lawmakers in Congress have decried the decision. Senator Sheldon Whitehouse (D–RI) stated, “Expanding fossil fuel infrastructure in the midst of a climate emergency flies in the face of science and basic environmental justice”. Environmental justice groups highlight disproportionate impacts on low-income and Indigenous communities along the pipeline corridor, invoking Title VI of the Civil Rights Act to argue that EPA failed to assess civil rights implications.

Conservative / Right-Leaning Perspectives

Republican officials and industry proponents defend the expansion as vital for energy reliability and economic growth. “This pipeline extension will ensure consistent natural gas supplies and stabilize consumer energy costs,” contends Rep. David McKinley (R–WV), a longtime supporter of Appalachian pipeline projects. The American Petroleum Institute’s Jack Gerard characterized the lawsuit as “a politically motivated attempt to thwart commonsense energy infrastructure”.

Conservative legal scholars caution against judicial overreach. “Courts should respect agency expertise and refrain from substituting their judgment for technical NEPA and CWA determinations,” argues Professor Jonathan Adler of Case Western Reserve University, emphasizing Chevron deference principles. Section 401 has become a backdoor environmental veto divorced from Congress’s intent”, advocating statutory reform to limit state review authority.

Comparable or Historical Cases

1. Dakota Access Pipeline Litigation (2016–2020): Standing Rock Sioux and allied tribes successfully used Section 401 to block the pipeline’s river crossing permit in South Dakota. The U.S. District Court for the District of Columbia vacated the Army Corps’ easement in Standing Rock Sioux Tribe v. U.S. Army Corps of Engineers, prompting a supplemental EIS and decades-long litigation.
   
2. Sabal Trail Expansion (2017): In Hoopa Valley Tribe v. FERC, the D.C. Circuit held FERC must consider tribal historic preservation concerns and climate impacts, leading to stricter EIS requirements for pipeline segments crossing sensitive tribal lands.
   
3. GTN Xpress Project (2023): The D.C. Circuit’s unanimous panel upheld FERC’s segmented NEPA analysis for the Gas Transmission Northwest (GTN) expansion, rejecting environmentalists’ calls for cumulative impact consideration. That decision illustrates judicial deference trends in pipeline cases.
   

“These precedents highlight the judiciary’s evolving stance on environmental review: rigorous NEPA enforcement in tribal contexts but deference when agencies articulate technical justifications,” observes Professor Richard Lazarus of Harvard Law School.

Policy Implications and Forecasting

In the short term, a successful injunction could delay construction, causing cost overruns and supply disruptions during peak summer demand. The litigation underscores potential EPA-FERC coordination breakdowns, prompting Congressional inquiries and oversight hearings.

Long-term, the case may redefine Section 401’s scope, influencing future infrastructure permitting. A broad reading favoring state and tribal veto power could empower local environmental regulation but risk fragmented national energy policy. Conversely, a narrow judicial interpretation could curtail cooperative federalism, centralizing authority in federal agencies.

Policy researchers at the Brookings Institution warn of strategic gridlock: “If every state wields Section 401 as a sword, national infrastructure projects may become untenable”. The Cato Institute’s Robert Bryce counters that “robust state review prevents regulatory capture and ensures local voices aren’t steamrolled by big energy interests”.

Internationally, the decision will reverberate in climate diplomacy. Delay in U.S. fossil fuel infrastructure approvals supports global decarbonization goals, while expedited expansions risk undermining U.S. credibility ahead of COP negotiations.

Conclusion

The environmental groups’ suit against the EPA over the Calumet Expansion crystallizes the central tension between federal environmental safeguards and national energy priorities. This litigation tests cooperative federalism’s resilience, administrative deference doctrines, and democratic accountability in permitting processes.

“At its heart, this case asks whether our environmental statutes serve as meaningful guardians of public health or mere checkboxes for political expediency,” reflects Professor Jody Freeman of Harvard Law School.

Balancing energy security with environmental protection demands careful calibration. Should courts side with the EPA and FERC, state and tribal review under Section 401 may recede, streamlining future projects but risking local environmental oversight. A ruling for the plaintiffs would reinforce robust environmental review but could embolden veto-style federalism, complicating national infrastructure planning.

For Further Reading

1. Fight For Your Right of Way – Legal Battles Could Hinder Feedgas for New LNG Terminals
2. Pipeline conflicts, coalitions, and strategic action: A review of the literature
3. Pipeline battle shows how legal strife is clogging US energy development
4. Energy Transfer Faces Allegations of Anti-Competitive Practices in Louisiana Pipeline Dispute
5. TC Energy’s Coastal GasLink seeks C$1.2 billion from pipeline contractor over delays