Legal fight over a ditch puts 265-home Utah project at risk

A narrow irrigation ditch runs along the edge of a 142-acre former farm near Willard, about 50 miles north of Salt Lake City.

Beside it sits a 2.74-acre patch of wet ground. Both features are now at the center of a federal lawsuit.

Federal regulators say the ditch connects to the Great Salt Lake, which would protect the entire parcel under the Clean Water Act.

Residential developers call that connection a legal stretch.

Willard Land, which wants to build 265 homes, sued the U.S. Army Corps of Engineers on Tuesday. The company challenges the agency’s decision to claim jurisdiction over the ditch and wetland. It wants a federal judge to throw out that finding.

“The Clean Water Act gives the Army Corps of Engineers limited authority to regulate navigable waters – not total control over every drainage ditch and damp parcel of land in the country,” Charles Yates, an attorney with Pacific Legal Foundation representing the developer, said in a statement. “Federal agencies cannot expand their authority beyond the limits Congress set and the Supreme Court has enforced. When Congress draws a line, lower courts and agencies must follow it.”

This case shows how environmental rules can and do collide with housing economics. Federal water protections matter, but developers say jurisdictional uncertainty and lengthy permit processes can kill approved projects. When that happens, homes go unbuilt, infrastructure stalls, and compliance costs raise prices on projects that survive.

It also comes as Utah grapples with a housing shortage like many states. Lawmakers had sought to pass housing lot reform to encourage starter home construction. But the measure failed.

A similar fight is playing out in Mississippi

Willard Land’s case is not an outlier. A federal court in Mississippi’s Southern District is weighing a nearly identical dispute involving Ward Gulfport Properties. The company is challenging the Corps’ finding of a continuous surface connection between onsite wetlands and a neighboring creek, plus a relatively permanent tributary, in Gulfport.

The development plan has been in the works for more than a decade. Ward Investments first partnered with Gulfport in 2015 to seek permits for a 524-acre mixed-use project along Turkey Creek, south of Interstate 10 and west of U.S. Highway 49. The plan envisions commercial, retail, business-park, industrial, residential and recreational space, plus a town center and public trails.

Gulfport residents raised alarms early. At a 2015 public meeting, environmental organizers and hundreds of North Gulfport residents voiced concerns. They said filling in 432 acres of wetlands would cause flooding along Turkey Creek.

The Mississippi court already dismissed the developers’ claims covering one parcel for lack of subject-matter jurisdiction. Remaining claims involve a different parcel. Ward Gulfport’s complaint argues that a 2023 Supreme Court ruling undercuts the Corps’ findings there.

That ruling came in a lawsuit against the EPA. It narrowed the definition of “waters of the United States” under the Clean Water Act. On July 31, the court paused the remaining claims, despite the developers’ objection, until the Corps finishes a new rule redefining protected waters.

Pacific Legal Foundation isn’t involved in the Mississippi case. But the nonprofit represented Michael and Chantell Sackett in that same Supreme Court case. The firm has made the ruling it won a central part of its Utah case.

A ditch that could sink 265 homes

In the Utah lawsuit, developer H. Lewis Swain and contractor Brent Bailey planned 265 homes on the site. Their project, called the Old Farm Subdivision, won approval from Willard City after years of local review. That approval came with strings attached.

Engineers designed water and sewer lines connecting the project to city systems. Those lines would also serve other nearby properties. Rights-of-way problems, however, forced a route change near the ditch and wetland.

In April 2025, the Corps issued its ruling. It found that 1,502 feet of the ditch, called Ditch 1, qualifies as a federally regulated water. The adjacent wetland qualified too.

That finding triggered a new requirement. Developers needed a Clean Water Act permit before touching either feature. Permits like that take years and can cost hundreds of thousands of dollars.

Disputing the path

Willard Land disputes the Corps’ science and its legal theory. Company lawyers say the ditch isn’t meaningfully connected to the Great Salt Lake. They call the Corps’ hydrologic link too attenuated to apply.

Court filings trace the water’s alleged path in detail. It flows through culverts, canals and an underground siphon. Eventually, it dissipates into a wildlife management area before possibly reaching the lake.

That route covers roughly 8.9 miles. Willard Land argues it contains too many breaks to satisfy federal law. Company lawyers point to the same 2023 Sackett ruling their firm won, which narrowed federal water jurisdiction.

Developers also raise a narrower legal argument. They say the ditch never served as a highway for interstate commerce. Without that history, they argue, it can’t count as a navigable water.

Timeline records show years of delay. Willard Land first sought a jurisdictional ruling in March 2022. Corps officials didn’t decide until three years later.

After the ruling, E.K. Bailey Construction applied for a permit. Corps officials withdrew that application in April, citing incomplete paperwork. Willard Land calls the withdrawal an effective denial.

Company records show significant money already sunk into the project. Roughly $650,000 went toward drilling a well. Another $500,000 covered engineering, wetland studies and related costs.

Corps officials have not yet responded in court. Willard Land’s claims remain untested allegations at this stage.