By VICKI SMITHMORGANTOWN, W.Va. (AP) â¿¿ The U.S. Environmental Protection Agency had the legal authority to retroactively veto a water pollution permit for one of West Virginia's largest mountaintop removal coal mines years after it was issued, a federal appeals court ruled Tuesday. The U.S. Court of Appeals for the District of Columbia reversed a lower court's ruling in a case that has economic implications across coal country and potentially the nation. The case goes back to U.S. District Court for further proceedings. The appellate court directed Judge Amy Berman Jackson to address the coal industry's argument that the EPA's action was an "arbitrary and capricious" violation of the Administrative Procedure Act, an issue she has not previously ruled on. The holder of the permit, St. Louis-based Arch Coal, said it was disappointed in the ruling, but downplayed it as being "related to procedural aspects" of the case. But U.S. Rep Nick Rahall, D-W.Va., warned the ruling could "open the floodgates to disrupting coal mining in West Virginia and elsewhere" and "upend the traditional balance that has existed between the states and the federal government in the permitting process." He vowed to reintroduce the Clean Water Cooperative Federalism Act, which made it through the Republican-controlled House last year, to the bar EPA "from using the guise of clean water" to hinder the industry. In January 2011, the EPA revoked a permit that the U.S. Army Corps of Engineers had issued four years earlier to Arch and its Mingo Logan Coal Co. subsidiary. The EPA concluded that destructive and unsustainable mining practices at the 2,300-acre Logan County mine would cause irreparable environmental damage and threaten the health of communities nearby. Jackson later ruled that EPA had overstepped its authority by revoking a permit that had been thoroughly reviewed and properly issued by the corps.