Justices Suggest Support for Landowners in Wetlands Case

The U.S. Supreme Court is shown March 29, 2016 in Washington.

Photographer: Win McNamee/Getty Images

U.S. Supreme Court justices signaled they are likely to side with landowners in a case that could streamline the federal approval process for people seeking to develop wetlands.

The court Wednesday weighed a dispute over a proposed peat-mining operation on 530 acres in Minnesota. The property owners and a mining company are fighting a decision by the U.S. Army Corps of Engineers that the land is subject to federal regulation.

The government says it issues tens of thousands of similar decisions every year, and the question is whether they can be challenged right away in federal court. Justices from across the ideological spectrum indicated during an hour-long argument session that they would allow immediate appeals.

The Obama administration argues that a landowner can’t sue until a permit application is rejected or the owner faces a federal enforcement action for proceeding without a permit.

Justice Ruth Bader Ginsburg called that a “very arduous and very expensive” process. She and other justices suggested that the Corps’ so-called jurisdictional determination was a significant enough event that an immediate appeal made practical and legal sense.

Hawkes Co., the mining business fighting the case, says pursuing a permit could take years and cost hundreds of thousands of dollars. The other option, proceeding without a permit, would expose the company and its officers to fines of as much as $37,500 a day and even incarceration, the company says.

‘Important’ Consequences

“Those sound like important legal consequences,” Justice Stephen Breyer said.

Hawkes has already begun the permit application process but put it on hold after the Corps requested hydrological studies that the company says could cost $100,000.

Land is subject to the Clean Water Act if it contains wetlands connected to a river, lake or other major waterway. Under regulations adopted by the Corps, property owners may ask regulators whether their land meets that test before deciding whether to apply for a permit.

The Obama administration says a jurisdictional determination is an intermediate step and not the type of final agency action that lets an individual or company go to federal court.

Justice Elena Kagan offered some support for that position. She said she was concerned that a ruling against the Corps might undermine the ability of the Securities and Exchange Commission, the Federal Communications Commission and other agencies to provide informal advice about the type of conduct that might violate the law.

‘All Over’

“This appears to happen all over the place around the federal government,” said Kagan, who once served as the Obama administration’s top Supreme Court lawyer.

The administration, however, won few other backers. Justice Sonia Sotomayor at one point even asked a Justice Department lawyer how he would prefer to lose.

“Please don’t panic,” she told the lawyer. “But assuming we disagree with you that that should be appealable, what’s the narrowest way to write this that the government would like?”

Business groups including the Chamber of Commerce and the National Association of Homebuilders are backing Hawkes in the case, as are property-rights advocates.

The case is Army Corps of Engineers v. Hawkes Co., 15-290.

(Updates with excerpts from argument starting in fifth paragraph.)

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