Last month, in a little noticed but very important ruling, a federal judge tossed out a Corps of Engineers permit that would have approved the largest wetlands destruction impact in the mid-Atlantic states -- and scolded the Environmental Protection Agency for not doing its job under the Clean Water Act.

As the folks at Inside EPA pointed out recently, the judge ruled that the agency "is obligated to veto a permit if the project is likely to result in 'adverse effects' " to wetlands. The ruling, they noted, "could give EPA and activists new leverage to block or amend so-called dredge-and-fill permits likely to cause water quality harms."

The permit was for a controversial $289-million project called the King William Reservoir. Legal battles over the 13-billion gallon reservoir have been going on for 20 years, notes the Virginian-Pilot. Even the Corps had turned it down once, in 2001, deciding that a project that wiped out about 430 acres of wetlands and eliminated 21 miles of free-flowing streams would be too destructive.

However, says the Chesapeake Bay Foundation, "then-Virginia Governor Jim Gilmore objected, bumping the decision to higher Army Corps officials, and with the recent Bush Administration's retreat on wetlands protection across the nation, the Corps reversed itself and issued Newport News the permit in 2005."

The EPA decided not to veto the permit -- not because the reservoir had no adverse impacts, but because a veto would tie up agency resources and would probably wind up in court anyway. Sure enough, opponents of the reservoir took their case to federal court.

So last month U.S. District Judge Henry H. Kennedy Jr. ruled that the Corps had been "arbitrary and capricious" in reversing its decision and approving the wetlands permit. He found that the city of had inflated its need for the reservoir and had never shown that the final plan was the least destructive to the environment, as required under the Clean Water Act. (The ruling overturning the permit has apparently killed the project, according to the Newport News Daily Press.)

More importantly, though, Judge Kennedy ruled that the EPA's decision not to veto the permit was wrong because he didn't focus on the impact to the environment, which EPA's own officials had called "ecologically ruinous," according to the Pilot.

In his ruling, the judge wrote that "it is clear that the Administrator’s decision not to veto the permit was not based on his determination that the permit would not likely have unacceptable adverse effects, but on a whole range of other reasons" that had nothing to do with the goals of the Clean Water Act.

As we write in "Paving Paradise", the EPA has been extremely reluctant to use its power to veto wetland permits. In the 35 years between 1972 and 2009, the EPA has used its veto power only 12 times. The last time the EPA vetoed a project in Florida was in 1988 -- 21 years ago.

“It’s a very big deal to use the veto,” former EPA Administrator William K. Reilly told us. “People do everything to avoid it. . . . It’s a lightning bolt.”

"But the veto has gone unused for so long that this lightning bolt has lost all its juice, we wrote. "As a result, the EPA no longer has much influence over the Corps’ permitting decisions." One Florida EPA official told us the Corps "knows we're a paper tiger."

Now, though, a federal judge has given the tiger back its teeth -- and a command to use them to protect the nation's wetlands and waterways from pollution.