In 2011, the EPA recommended that states impose more stringent conditions for issuing mining permits. EPA may object if the permit, in the agency's view, does not meet state water quality standards or other provisions of the Clean Water Act.
In the appeals court ruling, Judge Brett Kavanaugh said the EPA's recommendation, known as a "final guidance," is not an agency action reviewable by the courts. If an applicant is denied a permit, the applicant may then challenge the denial in court.
In a statement, EPA welcomed the ruling and said it is committed to consistently using its authority under the Clean Water Act to protect the health and environment of Appalachian communities.
The agency says it is working with states, mining companies and the public to enable environmentally responsible mining projects to move forward.
Mary Anne Hitt, director of Sierra Club's Beyond Coal Campaign, said the EPA has a critical role to play in ensuring the safety of Appalachian waterways and that states simply cannot do the job themselves.
Jim Hecker, an attorney at the public interest law firm Public Justice, said lower court decisions that the mining industry "trumpeted as examples of EPA overreach" have now with Friday's decision been reversed and the federal government's decision upheld.
Rep. Shelley Moore Capito, R-W. Va., said the appeals court decision would allow the EPA to delay the permitting process and cost West Virginia jobs.
Capito said as the EPA and Corps operate now, their guidance is not subject to public notice and comment. She said she introduced the Coal Jobs Protection Act to create clear deadlines and transparency on permitting.