A report in Canadian Business said the lawsuit was filed Tuesday by attornies representing the Sierra Club and Montana Environmental Information Center.
The surface mine currently produces about 12 million tons of coal per annum.
According to the news service, the plaintiffs allege the state Department of Environmental Quality director Richard Opper has shown a “pattern of neglect” by approving at least ten mine proposals without guaranteeing protection of water supplies.
Attorney Shiloh Hernandez said it was important water protection was a prerequisite for the Rosebud expansion approval.
“DEQ hasn't been enforcing this for a decade and we're concerned they won't adequately protect neighbouring ranches, water and property before they allow the expansion of the Rosebud mine,” he reportedly said.
Opper said he was disappointed with the lawsuit because the state had offered to commence discussions with parties last November.
“We tried to get together with them to talk it through before they made a decision to sue us," he told the news service.
“I don't think that's a great way of doing business.”
Westmoreland attorney Jennifer Grafton was reported to be reviewing the lawsuit.