Supreme Court sympathetic to property owner in wetlands dispute

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[March 31, 2016]    By Lawrence Hurley
 
 WASHINGTON (Reuters) - The U.S. Supreme Court on Wednesday appeared likely to rule that property owners can challenge the federal government in court over the need for permits under a national water protection law in a case involving a company's plans for a Minnesota peat mine.

The court heard a one-hour argument in a case balancing property rights and environmental law, in this instance the landmark 1972 U.S. Clean Water Act. A majority of the eight justices appeared sympathetic toward North Dakota-based Hawkes Co Inc, which is fighting an Obama administration finding that its property includes wetlands.

The law mandates that property owners get permits in such situations.

Whether a particular plot of land falls under the law's jurisdiction is important to developers and other property owners because such a finding triggers a lengthy and expensive permitting process.

Hawkes' lawyers argued the company should be able to contest whether it even needs to go through the permit process.

Liberal and conservative justices alike expressed concern about the current arrangement's burden on property owners.

Conservative Chief Justice John Roberts said applicants who disregard a government finding that they need a permit do so at "great practical risk."

Liberal Ruth Bader Ginsburg called the process "very arduous and very expensive." Liberal Stephen Breyer called the government decision that Hawkes needed a permit "perfectly suited for review in the courts."

Only liberal Elena Kagan expressed support for the government, raising concerns about the impact a ruling favoring property owners would have on actions by other government agencies such as the Securities and Exchange Commission.

Property rights advocates said the permitting process can take two years and cost up to $270,000, with owners facing penalties of up to $37,500 a day for noncompliance.

Business groups including the National Association of Home Builders and the U.S. Chamber of Commerce and 29 states filed court papers opposing the Obama administration in the case.

The case follows the justices' unanimous 2012 ruling that property owners facing enforcement action under the Clean Water Act can ask a court to intervene before being forced to comply or pay financial penalties.

The Obama administration last year issued a new regulation defining the scope of federal jurisdiction over bodies of water. A federal appeals court put the rule on hold after it was challenged by 18 states.

Only eight justices participated in the case following Justice Antonin Scalia's February death.

A ruling is due by the end of June.

(Reporting by Lawrence Hurley; Editing by Will Dunham)

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