The Sierra Club and Friends of the West Shore sued the agency over an update to the Tahoe Regional Plan.
They argued that the plan, which passed in 2012, would intensify development around the lake and harm the environment.
US District Judge John Mendez ruled against the environmental groups’ claims. TRPA says the court's decision could not have come at a more critical time.
It says environmental restorations will accelerate under the new plan.
Earthjustice, which represents the environmental groups, says the court’s decision will result in more urbanization without ensuring effective storm water runoff controls are in place.