U.S. top court to decide federal water permit dispute

By Lawrence Hurley

WASHINGTON (Reuters) - The U.S. Supreme Court on Friday agreed to decide whether property owners can challenge the federal government in court when told they need sometimes costly permits required under a national water protection law.

The court will hear an appeal brought by the Obama administration, which is contesting a lower court ruling that said Hawkes Co Inc could file a lawsuit over whether it needs a permit to open a peat mine in Minnesota.

Whether a particular plot of land falls under the jurisdiction of the landmark 1972 U.S. Clean Water Act is of major importance to developers and other property owners because a finding that it does triggers a lengthy and expensive permitting process.

The scope of federal authority over bodies of water under the broadly written clean water law has long been contested by property owners and influential business groups like the National Association of Home Builders.

In 2006, the Supreme Court failed to resolve some of the confusion when it issued a fractured decision on what exactly constitutes "waters of the United States" under the Clean Water Act.

The new case addresses the separate question of when property owners can contest a finding by the federal government that a property falls under Clean Water Act jurisdiction.

Once the government determines that a property is covered by the law, property owners can either proceed through the permitting process, go ahead without a permit and face possible fines of $37,500 a day, or abandon their plan to develop the land.

Property rights advocates say the permitting process can take two years and cost up to $270,000.

The latest case follows a 2012 ruling in which the court ruled unanimously that property owners facing potential enforcement action over failure to obtain a Clean Water Act permit can ask a court to intervene before being forced to comply or pay financial penalties.

Separately, the Obama administration this 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.

The Supreme Court will hear arguments in the new case in the spring with a ruling due by the end of June.

The case is U.S. Army Corps of Engineers v. Hawkes, U.S. Supreme Court, No.15-290.

(Reporting by Lawrence Hurley; editing by Mohammad Zargham and Andrew Hay)

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