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Delaware’s port expansion plans are at risk after a Pennsylvania judge sided with Philly ports in lawsuit.

When the state of Delaware announced in May it would spend nearly $200 million to build the $635 million Edgemoor container terminal at the Port of Wilmington, it said the investment could create nearly 6,000 new jobs. But a recent court decision invalidating key permits could jeopardize the entire project. The state is partnering with private port operator Enstructure on the new facility.

U.S. District Judge Mark Kearney of the Western District of Pennsylvania ruled that the U.S. Army Corps of Engineers “arbitrarily and capriciously departed from its own procedures” in issuing the permits and ordered a closer, more in depth review of the project.

The Philadelphia Regional Port Authority (Philaport) and ports affiliated with Holt Logistics Corp., whose affiliates operate terminals in Philadelphia and South Jersey, sued the U.S. Army Corps of Engineers after it had approved Delaware expansion plans. They argued that the new Edgemoor port would divert shipping to Delaware from Philadelphia.

Holt Logistics CEO Leo Holt said Delaware wants to take advantage of the main channel deepening channel it once tried to thwart after it was completed with no cost to the First State.

“I think it’s actually a lot of effrontery to come up with a plan and sort of thumb your nose at the [non] federal sponsor, which was the state of Pennsylvania,” he said. “Delaware actually went to court to stop the [main] channel deepening.”

A spokesperson for outgoing Gov. John Carney said he’s disappointed by the court ruling.

“Quite frankly, we’re frustrated with the impediments that have been put in place by our competitors in Philadelphia,” Director of Communications Emily Hershman said. “While the state of Delaware was not involved in this case, we know the teams are already working quickly to get the permits back on track and move this important project forward.”

The Diamond State Port Corporation, the entity that manages the port for the state, held a special board meeting last week to discuss the judge’s ruling. However, most of the meeting was held in executive session, outside of public view.

Board Chair and Delaware Secretary of State Jeffrey Bullock said during open session he was still confident of the plan.

“This project has a huge amount of support in the state of Delaware,” he said. “We are not going to be intimidated by people from out of state who are acting in their own self interest.”