A developer comes along and starts to build three big townhouses in your back yard. (His construction crew even digs away some of your dirt.)

So you become a NIMBY -- not in my back yard, you say. You ask questions because the developer seems to have made some slick moves. Apparently to get around zoning requirements, he's filed applications for permits under three names. To grease the path to approval, he's enlisted a congressman to support the project.

You appeal to zoning officials. You let your neighbors know what's going on. You write letters.

Then, one fine day, you get sued. The developer contends that you "maliciously" complained to the city, that you ruined his reputation and made it well nigh impossible for him to sell the houses. The developer wants $21 million.

You might conclude that this is a SLAPP suit -- strategic lawsuit against public participation -- a device that has been outlawed in 18 states. Whatever it's called, Larry and Louise Smith and their neighbors, James Marsh and Mary Ann Snow, find themselves in a high-stakes legal war.

The dispute between residents of Second Street SE on Capitol Hill and the developers of Folger Park North is a doozy. Piled before me are more than 1,500 pages of briefs, transcripts, letters and other evidence of a war that has so far cost each side more than $100,000 in legal fees.

I could fill a dozen columns with the charges and countercharges. You didn't get permits; yes, we did. You should have gotten a variance; okay, we got one now. You stole our land; yes, but then I made it better than it was before.

Developer Alger Stonebrunner drives in from Annapolis every day to supervise construction of the three townhouses at the site of a former Pepco substation on D Street. He knew this wouldn't be an easy project, so he loaded up on political capital. He "went to the mayor's office, went to the [House] D.C. appropriations committee. We wanted D.C. to have someone to answer to on this."

Rep. Randy "Duke" Cunningham (R-Calif.) wrote a letter in support of the project, and one of his staffers visited city officials to talk about it.

"They were flaunting, strutting, waving their connection to a congressman," Larry Smith says. "They never got that this was an offense to a group of Americans whose license plates read, 'No Taxation without Representation.' "

Why involve a congressman from San Diego on behalf of a townhouse project in Southeast? "You just have friends," Stonebrunner says. "We wanted people to be with us as witnesses wherever we went, so they'd be available to sit in a courtroom and say, 'This is how that meeting went.' I needed credible people to witness everything."

Now, the neighbors face the possibility of ruin -- just for speaking out. (The zoning appeals board expects to rule next week on the neighbors' challenge to the building permit.)

"We petitioned our government," says Smith, who has lived on the Hill since 1968 and was counselor to the defense secretary under President Bill Clinton. "There was a series of efforts by us to say to the government, 'Look, they've got to play by the rules.' "

"We're not rich," Smith says. "But this is an old-fashioned, maybe foolish, act of commitment to a principle. Suits like this erode the ability of people to speak up. It just isn't right."

Stonebrunner counters: "We had Realtors walk away from this place because of the hysteria they've caused. Everything else on the Hill sells immediately; these houses have not. People have a fear of buying and getting caught up in a legal battle." The houses, first offered at $2 million each, are off the market while Stonebrunner considers repricing them.

"This isn't about shutting them up," he says, "it's about my flawless history as a builder and the real damages they caused me. They're so far into my pocket now, I'd be a fool not to write another $100,000 check to the lawyers."

Stonebrunner lawyer Selig Solomon grants that "this really does not deserve a trial. I empathize with the neighbors, but my clients have been hurt."

Could this become a "Bleak House," a Dickensian descent into a legal hell that lasts years and bankrupts all?

"Yeah, probably," Solomon says.

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