In the case of Fri, Acting Administrator, Environmental Protection Agency v. Sierra Club et al., 1972, the Supreme Court ruled in favor of the Environmental Protection Agency (EPA). The Sierra Club had filed a lawsuit against EPA's approval of a sewage treatment plant without preparing an environmental impact statement as required by Section 102(2)(C) of National Environmental Policy Act (NEPA). However, it was determined that NEPA did not apply because construction on the project began before January 1st, 1970 - which is when NEPA took effect. Furthermore, since no federal agency has control over non-federal projects once they have started and there are no major Federal actions left to occur for this project; therefore section 102(2)(C) does not apply. The court also rejected Sierra Club’s argument that EPA's grant constituted "major Federal action" triggering NEPA requirements because such grants were made under Title II of Water Pollution Control Act Amendments which predates enactment of NEPA.

In the dissenting opinion for FRI, Acting Administrator, Environmental Protection Agency v. Sierra Club et al., 1972, it was argued that the majority's decision to uphold the EPA's interpretation of "source" in relation to pollution control regulations was incorrect. The dissenters believed that this interpretation allowed large industrial complexes to avoid stricter pollution controls by considering each individual unit within a complex as a separate source of pollution rather than viewing the entire complex as one source. They contended that this approach undermined the intent and effectiveness of air quality standards set forth in Clean Air Act Amendments (CAAA) because it permitted higher levels of overall emissions from these complexes than would be allowable if they were considered single sources. Furthermore, they expressed concern about potential harm to public health and environmental integrity due to increased pollutants released into atmosphere under such an interpretation.