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The Texas Tribune:

One steamy day in late July, the dirt roads at Hearts Bluff are too rain-soaked to drive on. So the ranch's caretaker, a leather-skinned East Texan named Ronnie Carroll, hops on a four-wheeler to give a tour of the property.

He warns that there won’t be much to see. He’s right. Around the ranch, overgrown vegetation, which the uncharacteristically wet summer has kept brilliant green, mostly obscures the lethargic Sulphur River and its muddy banks. A cool breeze, the only evidence of nearby water, occasionally cuts the oppressive humidity.

Bobby and Billy Lide, two brothers from Mexia, bought these 4,000 acres of neglected farmland outside of Mount Pleasant to create a wetlands preserve and launch what they thought would be a fail-safe, ecologically friendly business venture. Instead, they've found themselves in the midst of a protracted property-rights dispute with the state of Texas, which wants to submerge their land in 80 feet of water.

The land lies squarely within the 67,000-acre footprint of the controversial Marvin Nichols Reservoir, which the state has marked as an essential supply of water to the Dallas Fort-Worth area in the coming years. The Lides purchased Hearts Bluff solely to create a wetlands mitigation bank, which would allow them — in what could be a hugely profitable enterprise — to sell credits to the government and private developers looking to build over wetlands. Section 404 of the Clean Water Act allows developers to fill in wetlands as long as they offset their adverse impact by preserving other wetlands nearby. The first mitigation banks were established in 1983.

The Army Corps of Engineers, the federal agency that regulates both the development of wetlands and mitigation banks, denied the Lides' permit in 2008, saying it conflicted with the state’s plans for Marvin Nichols. Now the brothers are asking the Texas Supreme Court to take up their lawsuit, which charges that the state interfered in the process and, in so doing, unconstitutionally destroyed the value of their property. They're also suing the Army Corps separately in federal court over the permit rejection.

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Handicapping the high court

Their prospects at the high court don’t look good, according to Jim Harris, an attorney with Dallas-based Thompson & Knight who’s specialized in environmental and land use issues for more than 30 years. For one thing, he says, the state hasn’t taken away an existing right, only one the Lides hoped to attain. For another, it wasn’t the state that actually denied the permit — it was the corps, something the appellate court noted in its opinion. No matter what the state might have done behind the scenes, he says, the appellate court “didn't want to get into the factual situations into how much arm-twisting is enough to suck the state into it.”

Attorney Jim Harris of Thompson & Knight in The Texas Tribune article

However inequitable the final decision may be in the Lides’ case, Harris says, the Supreme Court will likely be reluctant to open the door to other takings-claim plaintiffs in cases where there’s no direct connection to the governmental agency being sued; judges often view the law through a broader lens. “Sometimes it's better to have a clear rule even though it may be unfair in given situations," he observes, “just so there's certainty as people move forward.”

Of course, tell that to Bobby Lide and he’ll insist the state’s connection to the denied permit is clear: "The corps told me, ‘If they don't need Marvin Nichols … then you can have your mitigation bank. If it is in the plan, then you are not going to get your mitigation bank.'"

For now, Hearts Bluff is a commercial fish and game ranch. Bobby says they’ll continue to make improvements there. He comforts himself with the prospect that if Marvin Nichols ever does get built, it won’t happen in his lifetime. Some estimates put the project's cost at $2.2 billion. If 2015 comes and the reservoir remains in the state water plan, he thinks it will take at least another 30 years to actually build it.

Meanwhile, Jacobson says, the Lides will be “just sitting there and watching the weeds grow."

http://www.texastribune.org/texas-courts/texas-supreme-court/denied-wetlands-permit-raises-property-rights-issu/

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