Press Release

Army Corps is sued for illegally halting homebuilding project

Tinley Park, IL; July 23, 2015: Federal Clean Water Act (CWA) officials have illegally halted
the ongoing development of a 100-acre residential project in Tinley Park, in Southwest Chicago,
by wrongly asserting authority over the property — as federally controlled “wetlands” — in
violation of their own regulations that exempt the land from CWA coverage because it was
previously farmland.

So argues a lawsuit filed by Pacific Legal Foundation (PLF), a national watchdog organization
for property rights and balanced environmental regulations. Donor-supported PLF represents the
property’s owner, the Gallagher & Henry development company, free of charge, as with all PLF
clients. Gallagher & Henry is a second generation Chicago area family-owned home builder
which recognizes and fulfills wetlands regulations appropriately deemed jurisdictional but has
been challenging the Corps’ claim of jurisdiction in this particular matter since January of 2007.

In claiming that it has regulatory power over the Gallagher & Henry property, the U.S. Army
Corps of Engineers is violating the “prior converted cropland” rule that exempts property from
CWA coverage if it was devoted to agricultural use as of December 1985. This exemption
continues to apply even if the property is subsequently put to a non-agricultural use, such as the
residential development that has been underway on the Gallagher & Henry site since 1996.

The only way that the “prior converted cropland” exemption is lost is if use of the property is
“abandoned” for at least five years. As PLF’s lawsuit points out, the use of the Gallagher &
Henry property has never been abandoned. It was fully devoted to agricultural use up until 1996;
then, the residential project began, under a comprehensive plan to develop the entire property in
stages.

Corps contorts a regulation, to impose Clean Water Act on property that is properly exempt

The Corps has denied the “prior converted cropland” exemption to the Gallagher & Henry
property by employing a distorted, and legally impermissible, interpretation of “abandonment.”
In essence, the regulators have declared that Gallagher & Henry “abandoned” the bulk of their
100 acres because the plan called for staged development of the site, instead of immediate
homebuilding throughout the property.

“The Corps is contorting its own regulations, to claim power over property that clearly isn’t
supposed to be covered by the Clean Water Act,” said PLF Senior Staff Attorney Theodore
Hadzi-Antich. “This narrow, contorted reading of the prior converted cropland exception
threatens to expand federal control to many properties that are supposed to be exempt.
Essentially, the regulators are saying that a property is ‘abandoned’ if there is a change in use that
is introduced in stages. But it is often the case that staged development is the only practical way
to introduce a new use of agricultural property.

“In short, the regulators have punched a broad loophole through the prior converted cropland
rule. This kind of bureaucratic power play is not legally permissible. Unelected regulators
cannot unilaterally rescind or redefine the regulations that govern the scope of their authority.
Our lawsuit isn’t just about the property rights of Gallagher & Henry; ultimately it is about
whether Clean Water Act bureaucrats are going to be accountable to the law and to recognized
regulatory and administrative processes.”

About Pacific Legal Foundation
Donor-supported PLF (www.pacificlegal.org) is a watchdog organization that litigates for limited
government, property rights, individual rights, and a balanced approach to environmental
regulations, in courts nationwide. PLF represents all clients free of charge.

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