On August 29, 2006, a federal court heard arguments over whether the Departments of Interior, Commerce, and Agriculture followed the law when they published the implementing rules for the hydropower provisions of the Energy Policy Act of 2005.

Plaintiffs American Rivers, America Outdoors, American Whitewater, Idaho Rivers United, Friends of the River (CA), Upper Chattahoochee Riverkeeper (GA), and Trout Unlimited filed a complaint in December 2005 against the Departments. In their complaint, the groups made two claims:

First, the Departments failed to follow the Adminsitrative Procedures Act (APA) when they finalized the rules before issuing notice and soliciting public comments. The "interim final" rules requested comments on major outstanding issues such as burden of proof, but also made the rules effective immediately, leaving significant questions unanswered.

Second, the Departments impermissibly applied the Energy Policy Act retroactively to advanced licensing cases. Laws may not be applied retroactively unless Congress specifically directs, and in this case, Congress was silent and Plaintiffs' legal rights were harmed.

In Court on August 29th, Earthjustice lawyer Jan Hasselman argued that the federal government overreached its legal authority, and as a result, rivers across the country have suffered. The Departments were represented by John Most with the Department of Justice. Most of Judge Marsha Pechman's questions were directed toward the contractual nature of settlements.

At the end of the hearing, Judge Pechman announced that a decision would issue in two weeks time.