A federal district court judge has invalidated the Army Corps of Engineers permit for a controversial 1,500-acre reservoir in Virginia's King William County that environmental groups and the Mattaponi Indians have been fighting for years.

It's the third time the project has been killed; the two previous times, the project was successfully revived by supporters.

In a March 31 ruling, U.S. District Court Judge Henry Kennedy Jr., agreed with environmental groups who charged that the Corps' acted inappropriately when it determined the project, which would drown more than 400 acres of wetlands, was the "least damaging practical alternative" to meeting future water needs of Newport News and surrounding municipalities.

If approved, the project would be largest loss of wetlands ever permitted in the mid-Atlantic region since the Clean Water Act was passed in 1972.

Kennedy said that, over time, the estimated future water needs for the region had dropped sharply while the cost of building the reservoir mushroomed to more than $200 million. Nonetheless, the Corps never updated old analyses of alternatives, which had found other options to be inadequate or too costly.

"Before determining that a project that would flood 403 acres of functioning wetlands is the least-damaging practicable alternative, the Corps must do more than give vague explanations about the potential adverse effects of, or political opposition to, other alternatives," Kennedy said in his decision. "It must explain fully, based on analysis adequate to the task, why other alternatives are either impracticable or more damaging."

As a result, he said, the Corps acted "arbitrarily and capriciously" when it determined the reservoir, and the associated loss of wetlands, was the least damaging practical alternative to meet the region's water needs.

The judge also faulted the Corps for failing to provide evidence to support its contention that the project would not "cause or contribute to significant degradation of wetlands and water quality" in the area. He also said the Corps failed to adequately address the potential impact that salinity increases would have on aquatic life in the Mattaponi River, which would result as water was withdrawn to fill the reservoir.

Kennedy also faulted the EPA for not vetoing the permit, even though agency scientists thought the project would have unacceptable impacts on shellfish beds, wildlife and fisheries. Instead, the EPA regional administrator chose not to veto the permit based on "a whole range of other reasons completely divorced" from the impact of the permit. As a result, the EPA's decision was "arbitrary and capricious" the judge ruled.

Environmentalists and the Mattaponi Indians have battled the reservoir, which would be built on a tributary of the Pamunkey River, for years because of its impacts on wetlands, streams and fisheries and because it would inundate dozens of Native American archaeological sites.

"This is a strong ruling by the court that the environmental costs of the proposed reservoir far outweigh the benefit," said Deborah Murray, senior attorney for the Southern Environmental Law Center, which represented environmental groups in the case. "We're extremely pleased."

Allen Jackson, the chief deputy city attorney for Newport News, said his office was continuing to review the decision. The Corps, the EPA or Newport News would have 60 days from the March 31 decision to file an appeal.

The city has worked toward building the 12.2-billion-gallon reservoir for about two decades. Since 1989, the project's estimated cost has grown from $75 million to $289 million.

The challenge was brought by the Alliance to Save the Mattaponi, Chesapeake Bay Foundation, and the Virginia Chapter of the Sierra Club.

Opponents have unsuccessfully challenged state permits for the project. This was their first federal challenge.

Project Timeline

1984: The Norfolk District of the Corps of Engineers publishes a Water Supply Study that projects the Lower Peninsula of Virginia will need 40 million gallons a day of additional water by 2030.

1987: Newport News organizes the Regional Raw Water Study Group to develop a plan to meet future water needs.

1993: Newport News, on behalf of the study group, seeks permits from the Corps and the Virginia Department of Environmental Quality for a reservoir on Cahoke Creek, a tributary of the Pamunkey River. The reservoir would be filled with water pumped from the Mattaponi River.

1994: The Corps issues a draft Environmental Impact Study for the project, which is revised in 1995, with a final study issued in 1997.

1999: The Corps' Institute for Water Resources re-examines the future water projections and concludes the water shortfall would be closer to 24 million gallons a day by 2040.

2001: The Corps' Norfolk District recommends against issuing a wetlands permit saying "it is not reasonable to build such an environmentally damaging project to satisfy a need that may never materialize." Then-Gov. Jim Gilmore appeals the decision to the Corps' North Atlantic Division.

2002: The Corps' North Atlantic Division determines that the reservoir is the "least damaging practicable alternative" to meet the region's long-term water needs.

2003: The Virginia Marine Resources Commission denies a permit for the water intake on the Mattaponi River based on studies indicating it was in the midst of the state's most productive shad spawning area.

2004: Under heavy political pressure, the VMRC reverses its decision and approves the permit with restrictions on when water could be withdrawn from the Mattaponi River.

2005: The Corps issues a wetlands permit for the reservoir. Although the projected shortfall for 2040 was now 15.9 million gallons a day, the Corps says the project is the least damaging practical alternative. The EPA chooses not to veto the permit.

2009: The U.S. District Court for the District of Columbia invalidates the Corps' permit, saying it acted "arbitrarily and capriciously" in approving it.