Designation lowered property value, company claims

By MATEUSZ PERKOWSKI

Capital Press

A timber company in California can sue the U.S. Environmental Protection Agency over a regulatory designation that allegedly reduced its property value.

The 9th U.S. Circuit Court of Appeals has ruled that Barnum Timber has legal standing to challenge the EPA's decision to classify a creek on its land near Eureka, Calif., as an "impaired water body."

The ruling overturns a federal judge's dismissal of the case in 2008.

Damien Schiff, an attorney for Barnum Timber, said the 9th Circuit's opinion may have repercussions for other people or companies that have been comparably harmed.

"There is nothing speculative that environmental regulation reduces the value of property," he said. "I would think property owners with similar evidence would be able to sue on a similar basis."

An attorney representing the EPA in this case could not be reached for comment.

Under the Clean Water Act, states must report "impaired water bodies" to the EPA and then work with the agency to reduce pollution levels in those bodies.

Barnum Timber disputed the science behind an "impaired" designation that California applied to a creek running through its land due to alleged sediment pollution.

The classification is associated with heavier forestry regulations, which effectively lowered the parcel's value, the company said.

Barnum Timber sought to have the designation removed because it was "arbitrary and capricious."

A federal judge refused to let the litigation proceed, however, because the restrictions affecting the parcel were imposed by California -- not the federal government.

In a 2-1 majority opinion, a panel of 9th Circuit judges has reversed that decision, finding that Barnum's lawsuit met the three major criteria for standing in federal court:

* The company demonstrated an "injury in fact," based on declarations of forest land appraisers who said the property fell in value.

* There's a "causal connection" between that value drop and the EPA's approval of the creek's designation as an impaired water body.

* The court would be able to "redress" the injury to Barnum by ordering the EPA to remove the creek from its list of impaired water bodies.

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