MORGANTOWN, W.Va. -- The U.S. Chamber of Commerce and nine other business groups say an appellate court should uphold a federal judge's ruling that the Environmental Protection Agency overreached when it retroactively vetoed water-pollution permits for one of West Virginia's largest mountaintop removal mines. The National Mining Association, National Association of Manufacturers and others argue EPA's revocation of Clean Water Act permits years after they were issued effectively prevents such permits from ever being considered final. That, they say, could have a chilling effect on new construction and economic development nationwide. "When project proponents are faced with such uncertainty ... they will make fewer investments," the chamber and its allies contend. EPA's action in West Virginia "dramatically changed the calculus for every entity that currently holds, or needs to acquire" such permits. The West Virginia Department of Environmental Protection also filed a friend-of-the-court brief Wednesday in the District of Columbia appellate court, urging affirmation of a March ruling in the EPA's ongoing battle with St. Louis-based Arch Coal over Spruce No. 1. Secretary Randy Huffman says EPA is undermining the state's power to regulate its own waters and to oversee mine operations. Its action "frustrates the state's regulatory program, and upsets the delicate balance of cooperative federalism" outlined in the Clean Water Act, he argues. Meanwhile, a third brief argues that EPA's action amounts to an illegal and unconstitutional "taking" of land. That argument is raised by The United Company of Bristol, Va., a privately held firm that invests in oil, natural gas, coal, real estate and golf courses. 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. This March, Judge Amy Berman Jackson ruled that EPA had overstepped its authority by revoking a permit that had been thoroughly reviewed and properly issued by the corps. Her ruling was panned by environmentalists and widely praised by coalfields politicians, both Democrats and Republicans who regularly complain of a so-called "war on coal" by the Obama administration. On Thursday, U.S. Sens. Joe Manchin, D-W.Va., and Pat Toomey, R-Pa., said they would introduce new legislation to rein in the EPA, calling it an "overzealous agency" that has lost several similar battles with states and coal operators. Manchin said the bill would "guarantee the proper balance between states and the federal government in a way that protects water quality while also supporting economic growth and job creation." It would also "clarify that Congress intended states to have the primary responsibility in overseeing their land and water resources, not the EPA." Mountaintop removal is a highly efficient but destructive form of strip mining that blasts apart mountain ridge tops to expose multiple coal seams. The resulting rock and debris is dumped in streams, creating so-called valley fills. Spruce No. 1 would have buried nearly 7 miles of streams. It was only the 13th time since 1972 that the EPA had used the veto authority and the first time it had acted on a previously permitted mine. EPA said it reserves the power for rare and unacceptable cases, but Jackson declared the action "incorrect and unreasonable." EPA appealed, arguing that while one section of the Clean Water Act lets the corps issue permits for the dumping of fill material, another gives EPA the unambiguous right to "prohibit, deny, restrict or withdraw specification of fill disposal sites." That power was created in a legislative compromise the EPA says was intended to let the agency do its job and prevent unacceptable environmental damage. The EPA says it can invoke that authority before, during or after the corps' permitting process. Arch, however, argues EPA has no such power, and that the wording of the law makes a clear difference between authority to issue a "permit" and authority to create the "specifications" under which those permits are issued. In supportive briefs, the chamber and its allies say the Section 404 permit process is "painstakingly detailed" in corps regulations, and that lets investors make reasonable cost projections for new projects. "An adverse ruling in this case would change all of that," they argue, accusing the EPA of trying to "carve out a role for itself as unfettered overseer of every Section 404 permit." State regulators say Jackson's ruling should also be upheld because the EPA's action dramatically and improperly expands its role in the mining regulatory system. Huffman noted the DEP has fought the EPA and prevailed in other cases where it tried to usurp state authority, pointing specifically to a battle over the EPA's attempt to set a regionwide water quality standard for surface mine discharges. A federal judge ruled in that case, too, that EPA "overstepped its own statutory authority and infringed on that of the state regulatory authorities," he said. "EPA needs to play by the rules and follow the law."