The Supreme Court ruled 5-4 Monday that regulators may have misinterpreted the federal Clean Water Act when they refused to allow two Michigan property owners to build a shopping mall and condos on wetlands they own.

At the same time, justices could not reach a consensus on whether government can extend protections for wetlands miles away from waterways.

The decision is the first significant environmental ruling for the high court headed by new Chief Justice John Roberts, and justices were so fractured that the main opinion by Justice Antonin Scalia only had the votes of four justices.

Click here to read the ruling (pdf).

Roberts, one of those four, said that the result was so confusing that "lower courts and regulated entities will now have to feel their way on a case-by-case basis."

The court voided rulings against June Carabell and John Rapanos, who wanted to fill wetlands they owned near Lake St. Clair in Macomb County, Michigan. Carabell wanted to build condos on wetlands she owns about a mile from the lake. Rapanos wanted to put a shopping mall on his property, which is about 20 miles from the lake.

Instead of ruling in the property owners' favor, as they requested, justices said lower courts must reconsider whether ditches and drains near wetlands are waterways.

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The court's four most conservative members wanted a more sweeping ruling, clearing the way for development of land unless it was directly connected to waterways.

The court's four most liberal members said that such a ruling would reject three decades of practice by the Army Corps of Engineers and threaten the environment.

In the middle was Justice Anthony M. Kennedy.

In a sign of the division, justices spent nearly half an hour explaining their votes from the bench Monday. After Scalia announced the decision, Kennedy and Justice John Paul Stevens both took turns detailing their positions.

Kennedy wrote his own opinion to explain why he was not joining the main opinion. "Important public interests are served by the Clean Water Act in general and by the protection of wetlands in particular," he said. Scalia's opinion, Kennedy said, "seems unduly dismissive of the interests asserted by the United States in these cases."

Scalia had said the Corps of Engineers misinterpreted the term "waters of the United States."

"In applying the definition to `ephemeral streams,' `wet meadows,' storm sewers and culverts, ... man-made drainage ditches, and dry arroyos in the middle of the desert, the Corps has stretched the term `waters of the United States' beyond parody," he wrote.

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