Jackson ruled in March that the EPA exceeded its authority in January 2011 when it revoked a Clean Water Act permit that the U.S. Army Corps of Engineer had issued for the project years earlier. In siding with St. Louis-based Arch Coal, she declared the permits for the 2,300-acre Spruce No. 1 mine in Logan County remain valid.

“We’re hopeful the appellate court agrees with Judge Jackson’s well-reasoned opinion regarding the EPA’s unprecedented action,” Arch spokeswoman Kim Link said. The EPA used its veto power for only the 13th time since 1972 to overturn a permit the Corps had already issued. It was the first time the EPA had acted on a previously permitted mine, and the agency said at the time it reserves that power “for only unacceptable cases.”

The Sierra Club, Ohio Valley Environmental Coalition, Coal River Mountain Watch and West Virginia Highlands Conservancy urged EPA to appeal, arguing the agency must be able to fully protect the region’s waters. “We’re glad to see the EPA’s decision to stand up to the coal industry and continue defending the basic right of everyday Appalachian families to clean water,” said a joint statement from Earthjustice, the Sierra Club, and four Appalachian regional environmental advocacy groups.

At stake for Arch and the community are a $250 million project and more than 250 jobs. Though the mine has seen extremely limited production, the venture has been delayed by lawsuits since it was permitted.

EPA ruled that destructive and unsustainable mining practices would cause irreparable environmental damage and threaten the health of communities nearby. But the EPA’s assertion that it has the right “to unilaterally modify or revoke a permit that has been duly issued by the corps” is incorrect and unreasonable, the Judge ruled. “This is a stunning power for an agency to arrogate to itself when there is absolutely no mention of it in the statute,” Judge Jackson said.

U.S. Rep. Shelley Moore Capito (R-W.Va.) said the court’s ruling is clear, and EPA “won’t take no for an answer” because it has a “radical, anti-coal agenda. Judge Jackson’s ruling, which called the EPA’s action arbitrary, capricious and illegal, “could not be a clearer sign that West Virginians have been unnecessarily subjected to an overreach of federal power,” said Capito.