Canyon Club Inc. is building an 18-hole golf course and 71-home development along the Snake River 17 miles south of Jackson, Wyo.
The Greater Yellowstone Coalition of Bozeman, Mont., and the Jackson Hole Conservation Alliance unsuccessfully sued to stop construction to force a more rigorous environmental review.
On Thursday, they asked the 10th U.S. Circuit Court of Appeals to find that the Army Corps of Engineers improperly issued the permits.
Of particular concern are bald eagles that nest in the area and the fact that wetlands have been filled in, said Tim Preso, an attorney with Earthjustice, which represents environmental groups.
Bald eagles are considered threatened under the federal Endangered Species Act, though proposals are pending to remove all protections because their numbers have increased.
The conservationists claim Army engineers didn't look at a broad enough spectrum of development options as required under federal environmental law.
Lawyers for the Corps of Engineers and the Jackson-based developer countered that the public was involved throughout the process.
The golf course is nearly complete, although financial problems and lawsuits by contractors have stalled the work. No homes have been built.
Copyright 2003 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.