Supreme Court Affirms Right to Challenge Government Power Grabs in Sackett v. EPA; Justice Alito Cites CEI Amicus Brief

Rejecting the arguments of the Obama administration, the Supreme Court has just held that EPA “compliance orders” can be challenged in court if they are arbitrary and capricious — for example, if they are based on an erroneous bureaucratic interpretation of what a “wetland” is, that results in dry land improperly being declared an unusable wetland. In his concurring opinion, Justice Alito explained one reason why such judicial review is needed: the EPA uses vague, inconsistent standards when it declares seemingly-dry land to be a wetland. As he pointed out, citing CEI’s amicus brief, “far from providing clarity and predictability, the agency’s latest informal guidance advises property owners that many jurisdictional determinations concerning wetlands can only be made on a case-by-case basis by EPA field staff. See Brief for Competitive Enterprise Institute as Amicus Curiae 7–13.”

The EPA has a practice of issuing “compliance orders” to property owners telling them to stop using their land and restore it to its prior condition, under penalty of $37,500 a day in fines, and declaring in such orders that such land is a federally protected wetland. It then waits months or years before actually suing the property owner for the fines, which accrue daily, potentially adding up to millions in fines. But in the meantime, it insists that the property owners can’t challenge its claim that their property is a non-usable wetland in court. If they want to take issue with its claim that their property is a “wetland,” they have to wait until the EPA sues them later on to collect those fines, after they’ve racked up potentially millions in fines under the compliance order.  The order doubles the fines that a judge can impose on the property owners when the EPA ultimately sues them, although if the judge later finds the land was not in fact a “wetland,” he can refuse to impose the fines. (In the absence of a “compliance order,” the maximum fine for developing a wetland is $37,500 a day; the compliance order adds another $37,500 per day, bringing the total to $75,000 per day.  Federal law has a broad and counterintuitive notion of what is a “wetland”: for example, in one court ruling, the government was allowed to declare a property to be a “wetland” even though it appeared dry, since water occasionally passed from it into a roadside ditch that in turn flowed into another ditch that flowed into a creek).

There is no clear legal test for what a wetland is, since the last time the Supreme Court tried to come up with a definition in the Rapanos case, the judges split 4-1-4 on how to define it, splitting three ways in three different opinions each of which had a different test for what a wetland is. The EPA has seemingly flouted even the few principles shared among a majority of the Supreme Court justices (the four-justice plurality and Justice Kennedy’s concurrence), in its vague and manipulable guidance as to what is a wetland.  In light of the huge fines that can be imposed on property owners, and the breadth and ambiguity of the EPA’s concept of “wetland,” which includes much land that seems like dry land to a layman, denying property owners the right to immediately challenge an EPA “compliance order” effectively forces them to do whatever the EPA said, even if the EPA’s position was arbitrary and capricious. But that’s what federal appeals courts, at the urging of the EPA and the Obama administration, did: they denied property owners any right to challenge the EPA upon receiving a compliance order. The case, Sackett v. EPA, involved the Sacketts, a family of would-be homeowners who had purchased land for a home in a residential subdivision in Idaho:

“In 2005, Chantell and Michael Sackett purchased less than two-thirds of an acre of land near Priest Lake in northern Idaho for the modest sum of $23,000. They were nearby small-business owners and wanted to become homeowners. They planned to build a three-bedroom home. The property was located in a platted residential subdivision with water and sewer hookups and was bordered on either side by existing homes. There were community roads in both the front and back of the property.

“The couple was savvy enough to have conducted regulatory due diligence before they purchased the land. The previous owner informed them he had consulted the U.S. Army Corps of Engineers regarding any building restrictions. There were none. After buying the property, the Sacketts applied for and received all of the pertinent local permits to build a residential dwelling as local zoning ordinances permit. In the spring of 2007, they began preparing the lot for construction.”

So far, so good, right? Wrong. Somebody at the EPA decided, incorrectly, that the Sacketts’ private property was actually a wetland, so only the federal agency could decide what, if anything, would ever be done on the lot. The bureaucrats then ordered the Sacketts to remove foundation work that had been completed, plus much more. The EPA’s decree . . . directed the Sacketts “to plant new vegetation and specified what to plant (‘native scrub-shrub, broad-leaved deciduous wetlands plants and seeded with native herbaceous plants’) and how to plant (‘approximately 10 feet apart’). Additionally, they were ordered to fence the property, monitor plant growth for three growing seasons and to permit unfettered access to the property by EPA agents.”  [The cost of doing these things was more than the value of the land itself]

Through it all, the EPA fined the Sacketts $37,500 daily for noncompliance with its order (the fines totaled nearly $40 million as the case was argued Monday). Worst of all, EPA claimed in federal district and appellate courts that respecting the couple’s due process rights by granting them judicial review of the order would be a “disservice” to the agency.

As Justice Alito noted, the Administration’s position would gut constitutional guarantees of due process: “if the owners want their day in court to show that their lot does not include covered wetlands, well, as a practical matter, that is just too bad. Until the EPA sues them, they are blocked from access to the courts, and the EPA may wait as long as it wants before deciding to sue. By that time, the potential fines may easily have reached the millions. In a nation that values due process, not to mention private property, such treatment is unthinkable.”