Incorporation-by-Reference Conditions and Reasoned Predictions of Compliance Defeat a Stay of Virginia’s Water Quality Certification

1. Introduction

In Dan River Basin Association v. Virginia Department of Environmental Quality, No. 26-1220 (4th Cir. June 11, 2026), a coalition of environmental organizations (Dan River Basin Association, Sierra Club, Appalachian Voices, Center for Biological Diversity, and Wild Virginia) petitioned for review of the Virginia Department of Environmental Quality’s (“VDEQ”) issuance of a state water quality certification for the Southgate Project, a proposed pipeline associated with Mountain Valley Pipeline, LLC (“MVP”).

The court’s published opinion addresses only a motion for stay pending review—i.e., whether to pause the certification’s effect while the merits are litigated. The key issues were whether petitioners showed a strong likelihood of succeeding on claims that (1) VDEQ irrationally discounted MVP’s past noncompliance on a related pipeline project, and (2) the certification unlawfully omitted conditions that VDEQ viewed as necessary to protect water quality.

MVP, Duke Energy Carolinas, LLC, and Duke Energy Progress, LLC intervened to defend the certification. The case is a companion to Sierra Club v. N.C. Dep't of Env't Quality, No. 26-1044 (4th Cir. June 11, 2026), which involved a parallel stay request concerning North Carolina’s certification for the same project.

2. Summary of the Opinion

The Fourth Circuit (Wynn, J., joined by Gregory and Thacker, JJ.) denied the stay. Applying the stay framework of Nken v. Holder, 556 U.S. 418 (2009), the court held that petitioners failed to make the requisite strong showing that they were likely to succeed on the merits—the “most critical” factor at this stage.

Two holdings were central:

  • Predictive compliance judgment upheld at the stay stage: Even accepting that MVP’s Virginia-specific history of violations on the “Main Pipeline” was relevant, VDEQ supplied a comparatively detailed explanation distinguishing the Southgate Project from the prior project and identifying additional monitoring and inspection mechanisms. The court found this sufficient (at least preliminarily) under arbitrary-and-capricious review.
  • Conditions may be satisfied via incorporation by reference: Petitioners argued the certification did not require compliance with erosion/sediment and stormwater plans and the S&S agreement. The court concluded the certification’s condition requiring compliance with the “Joint Permit Application” and “additional information materials” effectively incorporated those commitments, undermining petitioners’ likelihood of success.

The court also rejected petitioners’ attempt to leverage an alleged flaw in a Geosyntec report, emphasizing VDEQ’s primary reliance on other studies (USGS and VCU) and cautioning against “flyspecking” tangential materials under a deferential standard.

3. Analysis

3.1. Precedents Cited

Nken v. Holder, 556 U.S. 418 (2009)

The opinion explicitly anchors the stay analysis in Nken v. Holder, quoting the requirement that the movant must make a “strong showing” of likelihood of success. Nken supplies the governing multi-factor framework, but the Fourth Circuit’s application underscores that, even where other stay factors “tilt modestly” toward the movant, a weak merits showing can be dispositive.

Appalachian Voices v. State Water Control Bd., 912 F.3d 746 (4th Cir. 2019)

The court invoked Appalachian Voices v. State Water Control Bd. to identify the operative standard of review: Administrative Procedure Act review (arbitrary-and-capricious) for Virginia’s certification in this federal proceeding. Notably, the panel flagged an unresolved doctrinal question—whether state administrative-law standards might be more appropriate when reviewing state agency actions—but declined to address it because the parties did not dispute APA review on the stay motion.

Mountain Valley Pipeline, LLC v. N.C. Dep't of Env't Quality, 990 F.3d 818 (4th Cir. 2021)

Cited in a footnote, Mountain Valley Pipeline, LLC v. N.C. Dep't of Env't Quality is used to highlight the court’s prior skepticism about applying federal APA standards to state agency decisions, referencing earlier dicta and leaving the issue “for another day.” The citation situates this case within an ongoing Fourth Circuit conversation about the proper lens for federal appellate review of state-issued water quality certifications.

Sierra Club v. State Water Control Bd., 898 F.3d 383 (4th Cir. 2018)

The opinion cites Sierra Club v. State Water Control Bd. to show that parties have previously argued for Virginia-law review (including a “substantial-evidence” framework) rather than APA review. Here, the case functions as doctrinal background: the panel acknowledges the debate without resolving it, signaling that litigants may continue pressing this issue in future merits cases.

Sierra Club v. W. Va. Dep't of Env't Prot., 64 F.4th 487 (4th Cir. 2023)

The court cited Sierra Club v. W. Va. Dep't of Env't Prot. chiefly for contextual comparison—project size and prior pipeline construction experience—supporting the panel’s evaluation of how much weight to give to MVP’s past compliance record.

Sierra Club v. N.C. Dep't of Env't Quality, No. 26-1044, slip op. (4th Cir. June 11, 2026)

The companion opinion is not merely parallel authority; it is structurally incorporated into the court’s reasoning here. The panel explicitly stated it denied this stay motion “for essentially the same reasons” as in the North Carolina case, while still addressing Virginia-specific record features (e.g., VDEQ’s more detailed explanation, Virginia violations, longer in-state segment). Together, the two opinions create a matched set of Fourth Circuit stay decisions emphasizing stringent merits-showings.

3.2. Legal Reasoning

A. The stay standard: likelihood of success dominates

The opinion is a clear application of Nken: regardless of alleged environmental harms and time sensitivity, the panel treats likelihood of success as a gating requirement. The court noted that the remaining factors may “tilt modestly” in petitioners’ favor, but they “do not outweigh” the insufficient merits showing. This is doctrinally important because it operationalizes the “strong showing” requirement in the context of challenges to state water quality certifications for major infrastructure.

B. Predictive judgments and past violations: deference plus explanation

Petitioners’ core theory was that MVP’s prior violations during construction of the “Main Pipeline” made VDEQ’s prediction of future compliance arbitrary and capricious. The court accepted the relevance of that history—indeed, more so than in the North Carolina companion case—because: (1) Virginia had direct enforcement experience with violations, and (2) the Virginia segment was longer than North Carolina’s.

But the court emphasized VDEQ’s explanatory record and treated that as the critical distinction:

  • VDEQ attributed many past issues to “2018 precipitation levels” and reasoned that, even if repeated, erosion would be limited because Southgate traverses “flatter terrain” and MVP would implement enhanced weather monitoring.
  • VDEQ relied on “continuous iterative improvements” MVP made over the Main Pipeline’s multi-year construction, stating those were “generally incorporated” into the approved S&S agreement.
  • VDEQ identified oversight mechanisms—daily third-party inspections funded by MVP and continuous USGS monitoring at specified stream crossings.
  • VDEQ highlighted project differences (smaller diameter pipe, less challenging terrain, shorter distance than the Main Pipeline) to support a reasoned inference of “better outcomes.”

The panel framed petitioners’ argument as insufficiently engaging these distinctions. At the stay stage, that failure mattered: the court found VDEQ’s explanation “appear[ed] to provide a rational explanation” for predicting compliance, making success on an arbitrary-and-capricious theory unlikely.

C. Agency reliance on studies: rejecting “flyspecking” of tangential materials

Petitioners attacked VDEQ’s citation to a Geosyntec report, alleging a specific misinterpretation regarding Teels Creek’s score. The court’s response contains an important administrative-law nuance:

  • First, it recharacterized VDEQ’s use of the report as “supplemental”, emphasizing that VDEQ described USGS and VCU as the “two critical studies” and only referenced Geosyntec in passing.
  • Second, it resisted an approach that would require “flyspecking every line” of tangentially relied-upon material under a deferential standard.
  • Third, even on the alleged error, the court observed that VDEQ had already recognized Teels Creek’s post-construction decline and explained why it was not dispositive—also noting that Virginia and West Virginia use different scoring systems and thresholds.

The result is a practical rule for stay litigation: unless the challenged study is central to the agency’s reasoning, litigants face a steep uphill climb to convert alleged technical imperfections into a strong likelihood of success on arbitrary-and-capricious review.

D. “Missing conditions” claim defeated by incorporation-by-reference

Petitioners’ second theory was that the certification unlawfully omitted conditions that VDEQ itself deemed critical—namely compliance with erosion and sediment control and stormwater management requirements, including the S&S agreement and site-specific plans.

The court’s reasoning turns on incorporation by reference:

  • The certification required MVP to conduct activities “as described in the Joint Permit Application” (April 2025) and “additional information materials” received through October 2, 2025.
  • The April 2025 application stated that construction “must comply with” the S&S agreement and site-specific erosion and stormwater plans approved under VDEQ regulations.
  • The S&S agreement was adopted on August 1, 2025, and thus fell within the “additional materials” incorporated by the certification.

Importantly, the court also credited repeated representations by VDEQ and MVP that MVP is bound by those commitments. On that record, the panel concluded petitioners had not shown a strong likelihood of success on the “missing conditions” claim—at least for purposes of a stay.

The court declined to decide waiver/forfeiture arguments in this “preliminary posture” and noted petitioners raised certain attacks on incorporation “for the first time in reply,” leaving those issues for merits briefing.

3.3. Impact

Although confined to stay relief, the opinion is likely to influence how parties build and attack records in future certification disputes. The practical impacts include:

  • Higher bar for emergency relief: Petitioners challenging water quality certifications should expect courts to require a tightly record-grounded merits argument at the stay stage, not broad attacks based on prior compliance history alone.
  • Agency drafting strategy: State agencies may view this opinion as endorsing robust, comparative explanations (terrain, scope, design differences, updated controls, monitoring/inspection conditions) to defend predictive compliance determinations.
  • Validation of incorporation-by-reference conditions (at least preliminarily): Agencies can reduce vulnerability to “omitted conditions” arguments by expressly incorporating applications, plans, and associated materials—provided the incorporated documents clearly impose the claimed obligations.
  • Litigation focus on “central” versus “supplemental” materials: Challengers will likely need to show that a disputed study or report was material to the agency’s decision, not merely cited, to meaningfully advance arbitrary-and-capricious claims—especially when seeking immediate stays.
  • Unresolved standard-of-review question remains live: By again flagging (but not deciding) whether state-law standards should govern review of state agency decisions, the Fourth Circuit preserves an avenue for future doctrinal development.

4. Complex Concepts Simplified

  • Stay pending review: A temporary court order pausing the effect of an agency decision while a legal challenge proceeds. It is not a final ruling on whether the agency ultimately wins or loses.
  • “Strong showing” of likelihood of success: Under Nken, it is not enough to show a plausible argument; the moving party must persuasively demonstrate it is likely to win on the merits.
  • Arbitrary and capricious (APA) review: A deferential standard asking whether the agency gave a rational explanation based on the record, not whether the court would have decided differently. Courts generally uphold reasoned predictions even if reasonable people could disagree.
  • Predictive judgment: An agency’s forecast about future compliance or impacts. Courts often defer when the agency explains its forecast and ties it to evidence (e.g., terrain differences, improved practices, monitoring).
  • Incorporation by reference: A legal drafting method where a permit/certification makes another document’s requirements binding by explicitly referring to and adopting that document.
  • Waiver/forfeiture (administrative context): Arguments may be lost if not raised at the proper time in the agency process. The court here did not resolve that issue because it denied the stay on other grounds.

5. Conclusion

Dan River Basin Association v. Virginia Department of Environmental Quality reinforces two practical principles for emergency litigation over state water quality certifications in the Fourth Circuit: (1) a stay is unlikely without a record-specific, strong merits showing under deferential arbitrary-and-capricious review, particularly where the agency supplies a detailed explanation distinguishing prior noncompliance; and (2) certification “conditions” may be satisfied—at least for stay purposes—through clear incorporation by reference of applications and technical plans that impose enforceable compliance commitments.

While the ultimate legality of VDEQ’s certification awaits full merits review, this opinion signals that challengers seeking immediate injunctive relief must confront the agency’s stated rationale head-on and demonstrate material (not merely arguable) flaws in the agency’s reasoning or conditioning structure.