High court sides with property owners in wetlands case

AP News
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Posted: May 31, 2016 3:17 PM

WASHINGTON (AP) — The Supreme Court is making it easier for landowners to bring a court challenge when federal regulators try to restrict property development due to concerns about water pollution.

The justices ruled unanimously Tuesday that a Minnesota company could file a lawsuit against the U.S. Army Corps of Engineers over the agency's determination that its land is off limits to peat mining under the Clean Water Act.

The ruling is a win for property rights and business groups that said it was unfair for government agencies to decide what land is subject to complex environmental laws without a court ever deciding whether the agency is right.

It was the second time in four years that the high court sided with property owners against the government in a dispute over the right to challenge a designation of protected wetlands.

The Obama administration argued that the Hawkes Company could only contest the finding by seeking a permit, an expensive process that could take years to resolve. The company said it should be able to challenge the order immediately in federal court without having to spend more than $100,000 on a permit or risk hefty fines.

Writing for the court, Chief Justice John Roberts said the Corps' decision was the kind of final decision that carries a risk of major criminal and civil penalties if landowners don't go along. He said property owners shouldn't have to wait for the agency to "drop the hammer in order to have their day in court."

In a separate opinion, three of the court's conservative justices renewed concerns about "the reach and systemic consequences" of the Clean Water Act.

Justice Anthony Kennedy called the law's reach "notoriously unclear" and said it "continues to raise troubling questions regarding the government's power to cast doubt on the full use and enjoyment of private property throughout the nation." He was joined by Justices Clarence Thomas and Samuel Alito.

Some landowners contend that the government has gone too far using the Clean Water Act to regulate isolated ponds or marshes with no direct connection to navigable waterways. Previous lawsuits led to rulings by the Supreme Court in 2001 and 2006 that limited regulators' reach but left many questions unanswered.

The Environmental Protection Agency issued a rule last year to clarify which smaller waterways fall under federal protection, but Republicans have accused the Obama administration of regulatory overreach. It is on hold as federal courts consider legal challenges by states and groups representing farmers and other businesses.

The latest case began when the East Grand Forks, Minnesota, company planned to expand its peat processing operations and asked the Corps for guidance. The agency issued a determination that the property was governed by the Clean Water Act because it affected the Red River of the North about 120 miles away.

The Obama administration said the Corps' determination was more like informal agency guidance that had no legal effect. Justice Department lawyers warned that allowing court challenges before trying to get a permit from the agency would open the floodgates to "piecemeal litigation" over thousands of similar decisions.

A federal appeals court said the company could take its challenge to court without having to seek a permit from the agency.

"Today's ruling marks a long-awaited victory for individual liberty, property rights, and the rule of law," said Reed Hopper, an attorney with the Pacific Legal Foundation who argued the case for Hawkes. He said Kennedy's dissent "does not bode well" for the EPA's new rule.

A Justice Department spokesman declined to comment.

The high court's decision is similar to a 2012 case in which the Supreme Court unanimously sided with property orders in a dispute with the Environmental Protection Agency. The justices said landowners could bring an immediate court challenge to an EPA order that halted construction on property designated as protected wetlands.