WASHINGTON (AP) — The Supreme Court on Wednesday seemed likely to make it easier for private landowners to challenge in court a government designation of property as protected federal wetlands.
The justices heard arguments in a case involving a Minnesota company that says it has no effective means to contest a decision from the Army Corps of Engineers that a peat bog is off limits to mining under the Clean Water Act.
The case has garnered attention from property rights and business groups concerned that government agencies can essentially say what land is subject to complex environmental laws without a court ever deciding whether the agency is correct.
The Hawkes Company, Inc. wants to challenge the Corps' decision in federal court. But the Obama administration says Hawkes must first go through a costly agency permitting process that could take years to resolve.
Most justices appeared sympathetic to the company. Justice Stephen Breyer said the agency's determination that the land falls under the Clean Water Act has legal consequences that can be reviewed in court. He said the company was presented with two options: spend $150,000 to try and get an exception, or do nothing and possibly violate the law, risking hefty fines and even prison.
"Those sound like important legal consequences that flow from an order that, in respect to the agency, is final," Breyer told Justice Department lawyer Malcolm Stewart.
Stewart argued that the Corps' determination was more like informal agency guidance that has no legal effect. He insisted that the company would have faced the same options even if it had never asked the Corps for its view in the first place. Stewart warned that a ruling against the agency would open the floodgates to "piecemeal litigation" because the Corps makes thousands of similar decisions every year.
But Chief Justice John Roberts seemed concerned that federal agencies could exert "extraordinary leverage" over companies without ever going through the formal enforcement process.
"It is a way for them to exercise their authority without effective judicial review," Roberts said.
The case began when the company sought to expand its peat processing operations to a nearby parcel of land. The company asked the Corps for guidance and the agency determined that part of the land was subject to federal wetland regulation because it had an impact on the Red River of the North 120 miles away.
A federal appeals court sided with the company, saying it could file a legal challenge in court without first going through a lengthy permitting process through the agency.
Arguing for the company, Reed Hopper called the Corps' decision a "binding determination" that was the official view of the agency.
He said the dispute is similar to a 2012 case in which the Supreme Court ruled unanimously that property owners had an immediate right to challenge an Environmental Protection Agency order that halted construction on property the agency had designated protected wetlands.
Justice Elena Kagan appeared to share the government's concern that a win for the company could discourage other federal agencies from offering informal legal guidance if those decisions are subject to immediate review in the courts.
But Justice Sonia Sotomayor seemed likely to rule against the government.
"Please don't panic," she told Stewart, the Justice Department lawyer, at one point. "But assuming we disagree with you that that should be appealable, what's the narrowest way to write this that the government would like?"