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Court Determines Disruptive Wetlands are Similar to Releasing Harmful Chemicals
Posted in Litigation

A landowner who turned a neighbor’s property into wetlands may have to pay the neighbor damages, a recent Indiana Court of Appeals decision determined. Lake Erie Land Company bought a tract of former farmland in 1997. Over the next few years, the company intentionally converted the property into federally protected wetlands by removing the property’s drainage systems and raising the local water level. Unfortunately, a neighboring property owned by B&B was also converted. B&B operated a concrete crushing and recycling facility on the adjacent land until the Army Corps of Engineers ordered B&B to halt its operations—which interfered with the newly developed wetlands environment. Lake Erie, meanwhile, had hoped to sell replacement wetlands “credits” to businesses whose planned development on other land would impact pre-existing wetlands. B&B sued for damages, but the trial judge ruled in favor of Lake Erie before the matter reached a jury. On appeal, a panel of judges had to determine if creating wetlands was more like diverting rainwater—which is a legal act, even if it harms a neighbor—or more like releasing harmful chemicals onto adjacent land—which is not.

The court concluded that the chemical analogy was more appropriate, as Lake Erie had rendered B&B’s land useless “for any purpose other than perhaps hunting and fishing.” The court also emphasized that B&B received no warning of the danger to its business until the Army Corps delivered a cease-and-desist letter. Therefore, B&B should have an opportunity to recover for its losses. As this case demonstrates, land and water disputes can often be won or lost on complex legal issues. Bingham McHale can help. Our Litigation Practice Group has the experience necessary to handle complex disputes, and our Environmental and Natural Resources Practice Group can help avoid such problems before they arise.

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