When Property Rights, Environmental Laws Collide

The U.S. Supreme Court hears arguments Monday in a case near and dear to EPA haters.

It would seem to be a David-and-Goliath case that pits a middle-class American couple trying to build their dream home against the Environmental Protection Agency. But the couple, Michael and Chantell Sackett, is backed by a veritable who's who in American mining, oil, utilities, manufacturing and real estate development, as well as groups opposed to government regulation.

On one side of the kaleidoscope, this is a case of bureaucratic power run amok. On the other side, it is a trumped-up case aimed at eviscerating the EPA's regulatory powers.

A Dispute Over The Facts

The story begins in 2005 when Chantell and Mike Sackett bought two-thirds of an acre of land for $23,000, located about 500 feet from scenic Priest Lake, Idaho. The lake is a 19-mile stretch of clear water fed by mountain streams and bordered by state and national parkland, with a shoreline dotted with houses, resorts and marinas.

The Sacketts, who own a small excavation company, broke ground on their planned three-bedroom house in 2007. Three days after they began clearing the property and adding fill, the EPA acted on a complaint.

"Three agents showed up and told the worker there to stop work, and that they wanted to see his permit for filling in wetlands," says Chantell Sackett.

She says the couple had done their due diligence to get building permits and that since other houses are nearby, the pair had no idea they needed a permit from the EPA.

That is about where any agreement on the facts in this case ends.

The Sacketts contend their property is not wetlands, and thus that no permit is required under the Clean Water Act.

We've had a hydrologist, a soil [specialist] and a wetlands expert come, and they did their tests, and they know it's not a wetland. But it doesn't matter to the EPA.

"The EPA hasn't even come to the property and done tests," says Chantell Sackett. "We have. ... We've had a hydrologist, a soil [specialist] and a wetlands expert come, and they did their tests, and they know it's not a wetland. But it doesn't matter to the EPA. They just want to be able to say, 'Nope, we're going to now regulate that property, and you can't do anything with it, and if you do, we're going to throw you in jail.' "

The EPA isn't commenting on the case. But environmental groups, after obtaining records under the Freedom of Information Act, have filed a brief in the case with a different version of the facts.

"What they got back from their own expert was, 'Yes, in fact, you have wetlands on your property,' " says Larry Levine, a lawyer with the Natural Resources Defense Council. The expert, says Levine, advised the Sacketts "to hold off on doing anything further until you get things settled with the government."

The Sacketts say that obtaining a permit would have cost hundreds of thousands of dollars, but Levine says there are several ways that individuals like the Sacketts, who have a small project, can easily and cheaply obtain a permit.

What [the Sacketts] got back from their own expert was, 'Yes, in fact, you have wetlands on your property.'

Seven months after the EPA notified the Sacketts that they were illegally filling wetlands, the agency sent the couple a document known as an administrative compliance order. The EPA ordered the couple to remove the fill and restore the wetlands, and noted that they could be subject to fines levied by a federal court. Six months later, the Sacketts filed suit to challenge the compliance order. Two federal courts threw the case out, saying that the order did not itself seek enforcement or penalties and was not a final judgment against the couple.

And that is the heart of this case. Every appeals court in the nation that has ruled on the issue has reached the same conclusion. They have all said that at this stage of a permit dispute, there is nothing to review since the government has not sought enforcement of its order, much less proved a violation of the Clean Water Act in court. Nor has any fine been imposed.

Indeed, the government says it views a compliance order as a warning, noting that this one invited the Sacketts to come in to discuss the dispute and seek resolution.

Property Rights And Anti-Pollution Laws

That characterization is hotly disputed by Damien Schiff of the conservative Pacific Legal Foundation, who is representing the Sacketts free of charge.

"This compliance order is not just a 'please don't fill in the wetlands' letter," Schiff says. "It is an order backed by the power of the federal government that says, 'If you do not comply immediately with this, you will be on the hook for significant civil liability.' "

Schiff notes that the potential fines here could amount to as much as $37,000 a day.

"When the government says you cannot build on your property, that's clearly an infringement of their property rights, of their liberties, and that requires that they have their day in court before the government can force them to do that," Schiff says.

The government agrees that citizens are entitled to a hearing before they can be barred from building on their property — the question is when. At this point, the EPA contends that there is nothing to have a hearing about since no enforcement action has been taken.

Environmental groups fear that a Sackett win would allow major polluters to tie up the EPA in litigation, preventing meaningful enforcement of anti-pollution laws. They also point to similar provisions in other health and safety statutes. Congress, they argue, intended compliance orders and the threat of big fines to force violators to change their ways, and they say that both the EPA and the courts have treated small violators far more benignly than the big polluters who are the major targets of the law.

That is no solace to Mike Sackett.

"It makes you really question how the system works," he says. "You pay taxes to be punished by the same government that you're paying your taxes to, and when they punish people, they do it without any accountability."

A decision in the case is expected later this year.