Strong Likelihood-of-Success Required to Stay a State Clean Water Act §401 Certification; Application Commitments May Be Enforceable When Incorporated by Reference

I. Introduction

Case: Sierra Club v. North Carolina Department of Environmental Quality, No. 26-1044 (4th Cir. June 11, 2026).
Court: United States Court of Appeals for the Fourth Circuit.
Posture: Petition for review of a North Carolina Clean Water Act (“CWA”) § 401 water quality certification (“Certification”), coupled with a motion for a stay pending review.

The dispute arises from the “Southgate Project,” a proposed natural gas pipeline extension of the Mountain Valley Pipeline (“Main Pipeline”). After years of litigation concerning the Main Pipeline, Mountain Valley Pipeline, LLC (“MVP”) revised the Southgate Project—shortening its route and reducing the in-North Carolina segment to roughly 5.2 miles. North Carolina’s Department of Environmental Quality (“NCDEQ”) issued a new § 401 Certification in November 2025. Environmental organizations (Sierra Club, Appalachian Voices, and 7 Directions of Service) petitioned for review and sought to stay the Certification while the merits are briefed.

The central issues for the stay motion were:

  • Whether Petitioners made the required strong showing that they are likely to succeed on the merits of their challenge to NCDEQ’s Certification; and
  • Whether alleged defects in NCDEQ’s reasoning—especially regarding MVP’s compliance history and the Certification’s conditions—warranted the extraordinary remedy of a stay pending judicial review.

The Fourth Circuit denied the stay, emphasizing that even if irreparable harm, equities, and public interest lean toward petitioners, the stay cannot issue without a strong likelihood of success on the merits.

II. Summary of the Opinion

Judge Wynn (joined by Judges Gregory and Thacker) denied Petitioners’ motion for stay pending review. Applying the traditional four-factor test for stays, the court found the last three factors (irreparable injury, harm to others, and public interest) modestly favored Petitioners, but held that Petitioners failed to satisfy the “most critical” factor: a strong showing of likelihood of success on the merits.

On the merits preview, the panel addressed two principal arguments:

  1. Compliance prediction: Petitioners argued NCDEQ irrationally predicted MVP would comply with water quality requirements despite MVP’s violation history during Main Pipeline construction. The court held Petitioners did not make a strong showing under the deferential APA standard because the cited history involved other states, different enforcement regimes, and a much larger project; and the hearing officer identified North Carolina-specific measures and enforcement mechanisms supporting the compliance prediction.
  2. Missing conditions: Petitioners argued the hearing officer relied on conditions not included in the Certification (stormwater plan compliance, coordination with another pipeline, HQW-suitable controls). The court held Petitioners did not make a strong showing that these were absent because Condition 2 incorporated “plans and specifications” by reference, and the Certification also stated the project would comply if conducted in accordance with the “application” and “supporting documentation.” MVP’s commitments to those measures appeared in the application materials and NCDEQ and MVP repeatedly represented that these commitments were incorporated by reference.

The court stressed its ruling was limited to the request for preliminary relief and did not predetermine the ultimate merits.

III. Analysis

A. Precedents Cited

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

Nken supplies the modern framework for stays pending review and the opinion’s central admonition: the first two factors are “the most critical,” and the moving party bears the burden of justifying the extraordinary remedy. The Fourth Circuit used Nken to anchor two propositions:

  • A stay is discretionary and extraordinary, not a matter of right; and
  • Absent a strong showing on likelihood of success, favorable showings on other factors usually cannot carry the day.

2. Sierra Club v. U.S. Army Corps of Eng'rs, 981 F.3d 251 (4th Cir. 2020) (per curiam)

This case is cited for the Fourth Circuit’s formulation of the four-factor test (quoting Nken) and as a comparator for how environmental harms, equities, and public interest can favor challengers. The panel echoed that those factors may lean toward petitioners in environmental disputes, but reiterated that the stay analysis is ultimately gated by likelihood of success.

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

The 2021 Mountain Valley Pipeline decision forms essential procedural and doctrinal context:

  • It explains the state role under CWA § 401 and situates North Carolina’s earlier denial (which the Fourth Circuit vacated).
  • It supplies the opinion’s articulation of arbitrary-and-capricious review: an agency action stands if the agency provides an explanation showing a rational connection between facts found and choice made.
  • It notes the unresolved question whether state-law review standards might apply, while observing North Carolina’s standards are “materially identical” to the APA—an observation the panel adopts again here.

4. Nat'l Audubon Soc'y v. U.S. Army Corps of Eng'rs, 991 F.3d 577 (4th Cir. 2021)

Nat'l Audubon is invoked for the level of deference owed under arbitrary-and-capricious review, particularly when agencies resolve technical factual disputes, balance competing interests, or make complex predictions within their expertise. The panel used this to reinforce that NCDEQ’s predictive judgment about future compliance warrants heightened judicial restraint at the stay stage.

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

Petitioners relied heavily on Sierra Club v. W. Va. Dep't of Env't Prot., where the Fourth Circuit (on full merits review) held West Virginia acted arbitrarily and capriciously by failing to provide a reasoned explanation for concluding MVP would comply in the future despite extensive past violations in the same state on the same project. The panel distinguished that precedent on multiple grounds:

  • Posture: Sierra Club (2023) was a merits decision, not a preliminary stay ruling.
  • Record alignment: The violations there were numerous and in the same jurisdiction and permitting system at issue, creating a direct conflict between the compliance prediction and record evidence.
  • Non-per-se rule: The 2023 case expressly rejected a per se bar based on past violations; it required a reasoned explanation, not automatic denial.

By contrasting the present case—different states, different standards/enforcement, a substantially smaller North Carolina segment—the panel narrowed the reach of Sierra Club (2023) for stay purposes, without disavowing its merits holding.

6. Sierra Club v. Va. Elec. & Power Co., 903 F.3d 403 (4th Cir. 2018)

The panel cited this case for a practical interpretive point: where the parties to a permit share an understanding of what the permit requires and how it will be enforced, that shared understanding can support enforceability and interpretation. The citation bolstered the court’s comfort with NCDEQ’s and MVP’s consistent representations that application commitments were incorporated by reference through Condition 2.

7. Appalachian Voices v. U.S. Dep't of the Interior, 78 F.4th 71 (4th Cir. 2023)

This case appeared primarily as background on Congress’s intervention stripping jurisdiction over certain Main Pipeline disputes. The panel emphasized that such jurisdiction-stripping does not apply here and that the court has jurisdiction to review the state Certification under the Natural Gas Act.

B. Legal Reasoning

1. The stay standard does real work: the “strong showing” requirement is decisive

The court’s key operational move is methodological: it does not treat the stay test as a balancing free-for-all. Even after acknowledging that environmental harms and public interest can favor challengers, the court insisted that a stay pending review requires a strong showing of likely success. This frames the remainder of the opinion as a disciplined “merits preview” under a highly deferential standard.

2. High deference under arbitrary-and-capricious review shapes the likelihood-of-success inquiry

The merits “likelihood” analysis is filtered through APA deference. The panel underscores:

  • The presumption of validity for agency action;
  • Particular deference where the agency is making technical or predictive judgments;
  • The reviewing court’s limited role: ensuring a rational connection between facts found and choices made.

3. Compliance prediction: limiting the trans-jurisdictional use of past violations at the stay stage

Petitioners’ first argument effectively sought to export MVP’s compliance failures on the Main Pipeline (particularly in West Virginia and Virginia) into a conclusion that North Carolina’s “reasonable assurance”/compliance finding lacked rational basis. The court resisted this in two ways:

  • Distinguishing facts: Different states and enforcement regimes matter. The court treated “who enforces” and “under what standards” as part of the predictive calculus; past violations elsewhere are relevant but not necessarily determinative.
  • Agency explanation, even if succinct, can be enough: The hearing officer cited specific measures (e.g., dedicated environmental inspector during in-stream work, compliance with North Carolina’s Stormwater Design Manual, pre-construction meeting, reporting obligations, enforcement program). The court deemed that sufficient—at least to defeat a “strong showing” of arbitrariness at the stay stage.

Importantly, the court did not hold that out-of-state violations are irrelevant; rather, it held Petitioners had not yet shown NCDEQ’s reasoning was so deficient, given the changed circumstances, that it was likely unlawful under deferential review.

4. Conditions: incorporation by reference can defeat a “missing condition” theory—at least preliminarily

Petitioners’ second argument depended on establishing that certain protective measures were not actually conditions of the Certification. The panel focused on Condition 2 (“plans and specifications … incorporated by reference”) and the Certification’s opening language referencing the “application” and “supporting documentation.” Because MVP’s application materials contained commitments regarding stormwater standards, coordination with another pipeline, and HQW-suitable controls, and because both NCDEQ and MVP repeatedly represented those materials were incorporated, the panel found Petitioners had not made the necessary strong showing.

The court explicitly left for merits briefing Petitioners’ more technical counterargument that “plans and specifications” is a term of art limited to engineering designs, and their related reliance on North Carolina contract principles. But for preliminary relief, the court treated the Certification’s text plus the parties’ shared understanding as sufficient to deny a stay.

C. Impact

1. Stay motions challenging state § 401 certifications face a sharpened merits gate

The immediate precedential effect is procedural but substantial: in high-stakes infrastructure litigation, challengers often can show irreparable environmental harm and invoke the public interest. This opinion emphasizes that those factors do not substitute for the “strong showing” on the merits. Expect future panels and litigants to cite this case to argue:

  • Environmental risk, standing alone, does not justify halting a project without a strong merits showing; and
  • Stay briefing must be merits-forward, not merely harm-forward.

2. Agencies may rely on state-specific enforcement mechanisms to support predictive compliance findings

The opinion signals that an agency can rationally distinguish adverse compliance history from other jurisdictions by pointing to differences in:

  • Regulatory regimes and standards;
  • Enforcement programs and oversight practices;
  • Project scale and scope.

For challengers, the lesson is that citing past violations elsewhere may be insufficient unless they can show why those violations are predictive despite state-specific safeguards or why the state’s reliance on its program is contradicted by record evidence akin to the contradiction found in Sierra Club v. W. Va. Dep't of Env't Prot..

3. Drafting and litigation consequences: incorporation-by-reference clauses matter

Condition 2’s incorporation by reference becomes a practical template point. Permitting agencies and applicants may view this decision as support for structuring certifications to incorporate application commitments, which can:

  • Expand enforceable obligations without listing each condition in full; but also
  • Create interpretive fights over the scope of “plans and specifications” and what materials are incorporated.

For future cases, merits litigation may hinge on the precision of incorporation language and the administrative record identifying exactly which documents are incorporated.

IV. Complex Concepts Simplified

  • Stay pending review: A temporary court order that pauses the effect of an agency decision while the court considers the case. It is extraordinary relief; the applicant must satisfy a demanding test.
  • Likelihood of success on the merits (strong showing): Not just “plausible,” but a robust preliminary demonstration that the applicant is likely to win when the court fully decides the case.
  • Irreparable harm: Harm that cannot be adequately fixed later by money or undoing actions—often alleged in environmental cases because some ecological impacts are hard to reverse.
  • CWA § 401 certification: When a project needs a federal permit/license and may discharge into waters, the state can certify compliance with water-quality requirements and impose conditions.
  • Arbitrary and capricious (APA): A deferential standard. Courts do not decide whether they agree with the agency; they decide whether the agency reasonably explained itself and connected the record to its decision.
  • Incorporation by reference: A drafting technique where a legal document makes other documents part of it (and potentially enforceable) without repeating them word-for-word.

V. Conclusion

Sierra Club v. North Carolina Department of Environmental Quality reinforces a pragmatic but demanding rule for interim relief: even where environmental harms and public interest considerations point toward caution, a stay pending review will not issue without a strong merits showing—especially under the highly deferential arbitrary-and-capricious standard.

On substance, the decision signals two notable guideposts for future § 401 certification disputes in the Fourth Circuit: (1) states may defensibly distinguish an applicant’s past violations in other jurisdictions when making compliance predictions, so long as they provide a rational, state-specific explanation; and (2) incorporation-by-reference clauses in certifications can, at least preliminarily, defeat “missing condition” challenges where application commitments are clearly treated by the parties and agency as incorporated and enforceable.