Mingo Logan Coal argued that, because the EPA did not consider the costs associated with revoking the permit, the agency’s decision was “arbitrary and capricious.”

Writing for the majority, Judge Karen Henderson wrote, “The EPA’s ex-post withdrawal is a product of its broad veto authority under the CWA, not a procedural defect.”

However, both the majority and Judge Brett Kavanaugh, who wrote the dissent, agreed that EPA does need to consider the costs associated with revoking a permit if evidence is presented clearly to the agency. Typically, EPA is not obligated to consider costs in making permitting decisions under the CWA. For the first time, a court has ruled that, in fact, the agency must do so in certain cases, says Mike Kennedy, general counsel for the Associated General Contractors of America.

In 2013, the appeals court ruled that the EPA had the authority to withdraw the permit under the CWA but remanded the APA questions to the lower court. Arch Coal, the parent company of Mingo Logan, appealed to the Supreme Court, but the court denied the company’s request.

Larry Liebesman, a former Justice Dept. attorney and a senior adviser with Dawson Associates, a Washington, D.C., consulting firm, says the case “further affirms” that the EPA has broad authority to veto CWA permits at any time.

A spokeswoman for Arch Coal said the firm is “disappointed” in the ruling and is considering future options.

Liebesman says it is possible that the company could ask for the full appeals court to hear the case, “but those are very rarely granted, so that is a long shot.”