Background
Transcontinental Gas Pipe Line Company proposed the Northeast Supply Enhancement Project, which would expand its interstate natural-gas system and require construction of a pipeline segment beneath New Jersey’s Raritan Bay. Installing the segment would involve dredging contaminated bay sediment, potentially releasing substances including 4,4’–DDE, mercury, and PCBs. Because the project required federal approval, Transco also needed a state water-quality certification under Section 401 of the Clean Water Act.
The New Jersey Department of Environmental Protection denied an application in 2019 partly because Transco had not adequately demonstrated compliance with state water-quality standards. After Transco supplied contaminant modeling and proposed monitoring measures, NJDEP issued a certification in November 2025. Environmental organizations petitioned for review, arguing that NJDEP arbitrarily reversed course, improperly postponed essential monitoring and corrective-action terms, inadequately explained compliance with state standards, and denied the public a meaningful opportunity to comment.
The Court’s Holding
The Third Circuit granted the petitions, vacated the certification, and remanded to NJDEP. The court rejected the claim that NJDEP had arbitrarily reversed its 2019 denial because the later application contained additional contaminant modeling and technical materials, making the administrative records materially different.
The court nevertheless held that NJDEP acted arbitrarily and capriciously by leaving material monitoring and adaptive-management terms unresolved without requiring agency approval of the final plans before dredging could begin. NJDEP also failed to adequately explain why contaminant modeling at a 500-foot boundary demonstrated compliance throughout affected waters, how predicted 4,4’–DDE levels comported with the applicable human-health criterion, or why turbidity monitoring alone would assure compliance with standards for toxic contaminants. In addition, NJDEP incorrectly attributed to a state marine-resources office conclusions about surf-clam recovery that the office had not made. Because those defects required vacatur, the court did not decide the public-participation claims.
Key Takeaways
- A Section 401 certification may defer some implementation details, but material compliance terms cannot be left to later plans that the agency need not approve before regulated work begins.
- An agency relying on modeling and proxy measurements must explain how they demonstrate compliance with the particular pollutants and water-quality criteria at issue.
- A certification cannot survive arbitrary-and-capricious review when the agency’s stated factual rationale mischaracterizes evidence in the administrative record.
Why It Matters
The decision clarifies the limits of conditional water-quality certifications for federally regulated infrastructure projects. Although the Third Circuit did not require every monitoring threshold or corrective measure to appear in the certification itself, it distinguished permissible later refinement under a mandatory approval process from leaving essential safeguards unresolved before construction.
The ruling does not permanently bar the NESE project or require NJDEP to deny certification on remand. NJDEP may supplement its reasoning, seek further analysis, issue a new or revised certification, or reach a different result, while also addressing any deficiencies in the opportunity for public participation.