NESE Pipeline Litigation: Three Courts, Two Permits, One Timeline

Originally published for customers June 12, 2026.

What’s the issue?

NESE is facing litigation related to two permits across three appellate courts, has completed some limited construction authorized by FERC, and has held a groundbreaking ceremony, but has not yet requested a notice to proceed with full construction.

Why does it matter?

These signals move in different directions, making it harder to track progress and assess in-service risk.

What’s our view?

Limited construction signals progress, but full construction likely awaits clearer signals from the courts. With the Clean Water Act Section 401 challenges moving toward decision and the D.C. Circuit challenge still in briefing through July, NESE appears to have some runway before a late-2027 in-service requires full construction to begin.

NESE pipeline litigation is now advancing on three simultaneous fronts — and each is at a different stage. The Northeast Supply Enhancement Project holds its permits and has broken ground, but has not yet requested authorization to proceed with full construction. Three appellate courts are reviewing challenges to two key permits: FERC’s certificate reissuance in the D.C. Circuit, and Clean Water Act Section 401 certifications from New York and New Jersey in the Second and Third Circuits, respectively. The outcomes — and their timing — are the primary variables shaping whether NESE reaches its stated late-2027 in-service target. Arbo tracks gas infrastructure litigation across multiple projects; NESE is one of the cases advancing toward a decision.

Tracking NESE Pipeline Litigation: A Three-Stage Framework

As discussed in our earlier analysis, NESE’s New Phase — Three Courts, Two States, One Big Question, NESE re-entered litigation on three fronts:

• a challenge to FERC’s certificate reissuance in the D.C. Circuit
• a challenge to New York’s Section 401 certification in the Second Circuit
• two challenges to New Jersey’s Section 401 certification, originally filed in the Second Circuit before being transferred and consolidated in the Third Circuit

Rather than track the full procedural detail of each case, Arbo has simplified the litigation into three comparable stages that can be tracked consistently over time.

Stage 1 — Procedure runs from filing the petition to the first brief, and involves record assembly, interventions, motions, and scheduling. For NESE, that phase took 155 days in the D.C. Circuit, 80 days in the Second Circuit, and 87 days in the Third Circuit (measured from the initial petition filing in the Second Circuit, before the case was transferred).

Stage 2 — Argument begins with the first brief and runs through final briefing and, where scheduled, oral argument. This is the stage where issues and arguments mature. All three NESE cases are currently at different points within this stage.

Stage 3 — Decision begins once the court has what it needs to issue a ruling: completed briefing and, where necessary, oral argument.

At the end of the process, cases generally land in one of three places: uphold, remand, or vacate. An uphold leaves the challenged permit intact. A remand requires additional agency work while often preserving the permit approval. A vacatur throws the permit approval out entirely and creates the greatest risk to construction and project schedules. Vacatur is comparatively rare — courts are generally more willing to remand a decision for additional agency work than to invalidate it outright.

Clam-oring for Data in the Second Circuit

The New York case in the Second Circuit is the most advanced. Final briefs from all sides have been filed, and oral argument was scheduled for June 18, 2026. The dispute, at a high level, is fairly simple. The New York Department of Environmental Conservation (NYSDEC) denied the project’s Clean Water Act Section 401 certification three times, then granted it for the resurrected project based on a more developed record — additional technical information, mitigation measures, and revised estimates of hard clam populations in the affected area.

The most compelling argument petitioners offer is that NYSDEC should have allowed public comment on new data, particularly because they contend it helped justify the change of course and represents a twenty-fold reduction in clam density — from 69.6 clams per square foot to just 3. Petitioners argue NYSDEC changed course without adequately explaining why and relied on information submitted after the close of public comment.

NYSDEC and Transco see the history differently. NYSDEC argues that prior denials were not findings that the project could never comply with water quality standards, but that the Section 401 clock ran out before Transco had fully answered its questions. By 2025, NYSDEC says it had enough information to issue the certification. Transco adds that much of what petitioners characterize as new information was actually clarification of what was already in the record, including the hard clam calculations.

The Second Circuit has a slightly more liberal lean than the Third Circuit — with seven Democratic-appointed and six Republican-appointed judges — though panel composition could vary significantly from case to case.

Murkier Waters in the Third Circuit

The New Jersey case in the Third Circuit has also completed briefing, with final briefs filed on June 3, 2026. No oral argument has been scheduled. The case is less cleanly framed than New York because the permitting history is more complicated.

Following a 2019 denial, the New Jersey Department of Environmental Protection (NJDEP) identified three issues Transco would need to address if it reapplied: public need for the project, a preferred access road, and water quality monitoring and adaptive management during dredging activities. When Transco reapplied in 2020, it revised the access road design and submitted the monitoring and adaptive management plans NJDEP had requested. Yet when NJDEP denied the application later that year, the denial rested solely on public need — after New York had rejected its own Section 401 certification.

Petitioners argue NJDEP approved essentially the same project in 2025 without adequately explaining why the project now complies with water quality standards, and without adequate public review. NJDEP counters that there was no unexplained reversal: in its view, the 2025 application had materially evolved, it consistently applied its regulations throughout, and issued a certification only after determining the application complied with applicable standards. Transco further explains that the 2025 certification reflects years of revisions that address the deficiencies identified in prior denials — through revised project components, additional analysis, permit conditions, monitoring plans, and supplemental public comment before NJDEP issued its certification.

Most arguments ultimately flow from the same threshold question: did NJDEP change its position, or did the application change enough to justify a different result?

The D.C. Circuit: Procedural Challenge, Lower Vacatur Risk

The D.C. Circuit case presents less project-stopping risk than the Section 401 litigation because the core arguments are procedural. Final briefing is scheduled to conclude on July 27, 2026, after which the court will determine whether oral argument is necessary.

Petitioners argue FERC could not simply dust off a certificate that had expired and should have required Transco to start over — new application, new market need determination, new environmental review. FERC argues it updated an existing record rather than revived a stale one. In its view, years of prior analysis remained valid and could be supplemented with current information rather than discarded. On need, FERC points to long-term contracts for all of the project’s capacity, along with reliability and supply diversity benefits. On environmental review, FERC argues that updated information did not present a “seriously different picture” than the one already evaluated in its original environmental impact statement.

FERC’s reissuance of the NESE certificate was a procedural first — background on that authorization is in our earlier analysis of NESE’s return. Even if petitioners succeeded on the reissuance challenge, FERC could likely move through another authorization process relatively quickly and incorporate updated environmental analysis. Unlike many pipeline cases where market need becomes more speculative over time, NESE remains fully subscribed, making the underlying demand case harder to attack.

That may also help explain the project’s current construction posture. Requesting a notice to proceed with full construction would likely trigger immediate stay requests tied to the pending Section 401 litigation. If schedules allow, there is value in waiting — each brief filed, panel assigned, and oral argument held narrows the uncertainty before construction begins. The Section 401 litigation may provide meaningful signals before the federal certificate challenge is fully mature.

What Comes Next

NESE has its permits and a stated late-2027 in-service target. All three cases are now entering the phase where briefing, panel assignment, and oral argument begin sharpening actual litigation risk. The Second Circuit is closest to a decision, with oral argument already scheduled. The Third Circuit has completed briefing and could issue a decision without oral argument. The D.C. Circuit remains in Stage 2 at least through July 27.

The pattern is a project moving carefully — not stalled, but not running. That posture is consistent with a construction timeline that can absorb some additional court-driven delay without missing 2027, provided the Section 401 decisions arrive reasonably soon and without vacatur. Arbo will continue tracking all three cases as new briefs, panel assignments, oral arguments, and decisions provide additional visibility into project risk and timing.

Frequently Asked Questions

What are the three courts hearing NESE litigation?
The D.C. Circuit is reviewing FERC’s certificate reissuance; the Second Circuit is reviewing New York’s Clean Water Act Section 401 certification; and the Third Circuit is reviewing New Jersey’s Section 401 certification.

Which NESE court case is closest to a decision?
The Second Circuit is most advanced — final briefs have been filed and oral argument was scheduled for June 18, 2026. The Third Circuit completed briefing on June 3, 2026, with no oral argument scheduled. The D.C. Circuit concludes briefing on July 27, 2026.

What would a vacatur mean for NESE construction?
Vacatur of either Section 401 certification would invalidate the permit approval entirely, creating the greatest risk to construction and project schedules. Courts more commonly remand decisions for additional agency work rather than vacate them outright.

Why hasn’t NESE requested a notice to proceed with full construction?
Requesting a notice to proceed would likely trigger immediate stay requests tied to the pending Section 401 litigation. Waiting for additional visibility from the courts — each brief filed, panel assigned, and oral argument held — reduces that risk before full construction begins.

If you would like to discuss NESE construction timing and pipeline litigation risk, please contact us.