Sackett v. EPA
Jonathan H. Adler • January 9, 2012 8:10 am
Today the Supreme Court hears oral argument in Sackett v. EPA, a challenge to the federal government’s claim that landowners (and other regulated entities) may not obtain pre-enforcement review of an administrative compliance order under the Clean Water Act. I previewed the case before. Here is how the WSJ reports on the case this morning:
Based on “any information”—even a newspaper article or an anonymous tip—the Environmental Protection Agency can issue an administrative compliance order directing a property owner to stop discharging pollutants or restore a damaged wetland. The government says such directives, similar to stop-work orders by local zoning inspectors, allow it to respond rapidly to prevent environmental damage.
But business groups contend that the EPA acts as a judge and jury, forcing property owners either to comply, often at great expense, or risk penalties of up to $37,500 a day if the agency later obtains a court ruling to enforce its directive.
Challengers say that by issuing compliance orders without first giving property owners a chance to contest them in court, the EPA skirts the federal law and the Fifth Amendment guarantee of due process.
The NYT editorializes on the case today as well, suggesting that the Sacketts must lose because (gasp) their position might benefit corporations.
This case goes far beyond the Sacketts’ right to fill in their lot without a permit. If the Supreme Court allows them to seek pre-enforcement review, it will be handing a big victory to corporations and developers who want to evade the requirements of the Clean Water Act.
One fact the NYT (and many commentators) ignore is that allowing pre-enforcement review of administrative compliance orders does not relieve regulated parties of the obligation to comply with such orders. Judicial review does not automatically stay enforcement of the order, so allowing regulated entities their day in court does not necessarily entail allowing them to continue to engage in allegedly polluting behavior. It does, however, prevent agencies from using enforcement leverage to force compliance with rules that may not even apply. In the Sacketts’ case, for instance, the whole question is whether their land is subject to federal regulation in the first place. Granting pre-enforcement review does not automatically entitle them to continue building their house, but it does prevent the EPA from piling on penalties before the jurisdictional question is answered.
The briefs for the case are on SCOTUSBlog, and here’s an article in Regulation by PLF attorney Tim Sandefur, advocating the Sacketts’ position.
volokh.com
A weak defense of EPA (UPDATED) Analysis
With a federal government lawyer conceding almost every criticism leveled at the way the U.S. Environmental Protection Agency compels landowners to avoid polluting the nation’s waterways, the Supreme Court on Monday seemed well on its way toward finding some way to curb that agency’s enforcement powers. Their task was made easier as Deputy U.S. Solicitor General Malcolm L. Stewart stopped just short of saying that EPA was just as heavy-handed as its adversaries — and several of the Justices — were saying.
Perhaps the most telling example: when several of the Justices expressed alarm that a homeowner targeted by EPA’s efforts might face a penalty of as much as $37,500 each day of alleged violation, Stewart made it clear that the fine actually might be doubled, to $75,000 a day, although he tried to recover by saying that was only “theoretical,” and that he did not think that EPA had ever taken that step.
The argument in Sackett, et al., v. EPA (docket 10-1062) did not appear to portend a slam-dunk loss for EPA during the first half of Monday’s argument, when the lawyer for an Idaho couple faced quite rigorous questioning about whether the couple had exercised options that might have been open to them to avert the dire consequences of EPA enforcement. But the tenor of the session changed abruptly as soon as the line of argument chosen by EPA’s lawyer, Stewart, unfolded.
It all came to something of an explosive verbal climax when Justice Samuel A. Alito, Jr., suggested that the scheme that Stewart had outlined would be considered by the ordinary homeowner as something that “can’t happen in the United States.” Alito ticked off the situation: the homeowner planned to build a house on a lot, the lot was found to have “a little drainage problem,” the homeowner was soon told by EPA that “you have wetlands,” that steps had to be taken to alleviate the environmental threat, that “you have to let us on your premises,” that every day “you face $75,000 in penalties,” that the homeowner cannot go to court to make a challenge, and that, if there is a court case, it won’t occur “until we choose.”
Stewart did not dispute the recitation even in that accusatory fashion, and could only answer that such an order from EPA would not have been “the first communication” from EPA to the homeowner, since the agency would try earlier to alert property owners of their obligations under the law.
The argument that a homeowner — or a business firm, for that matter — could face a double penalty was raised early in the argument Monday by Damien M. Schiff, a lawyer for Chantell and Michael Sackett, the Priest Lake, Idaho, couple that has been fighting with EPA for four years over their plans to build a home on a lot they own — a lot that EPA says has wetlands on it. Schiff, continuing his legal team’s emphasis upon the personal plight of a couple supposedly of modest means, said the couple could be fined the maximum — $37,500 per day if they were found to violate federal environmental law itself, and a separate $37,500 if they took actions that violate EPA’s compliance order against them. Schiff said that EPA had conceded that in its brief in the case.
It appeared to come, however, as a surprise to the Justices. And, at one point, Chief Justice John G. Roberts, Jr., intimated that Schiff was exaggerating the threat to his clients, since, Roberts said, the fine might actually be only $10 a day, not the maximum.
But when Schiff, in answer to the Chief Justice, sought to make a separate challenge to other obligations under the compliance order, even without fines, Scalia suggested that he stay on the fines. “So, you know, sufficient unto the day the evil thereof. We don’t have to consider more difficult cases.”
Indeed, as Schiff’s argument unfolded, he did not appear to be generating much sympathy for clients like his, since much of the argument was a detailed exploration of what processes they might have available to challenge EPA, and the prospect — described by some Justices as rather dim — that they could defeat EPA even if they did have court review of their challenge. Indeed, as the Sacketts’ lawyer prepared to take his seat, the character of the case had moved well away from his preferred David vs. Goliath contest, into a somewhat dull exploration of administrative law, even though Schiff now and then would bring up again the $37,500 figure and the threat of “ruinous” financial penalty.
Apparently, however, Schiff had gotten the attention of the Justices on the issue of the double penalty, and that prompted Deputy Solicitor General Malcolm Stewart, as he began his response, to concede the possibility of double penalties. He said it had been put in the EPA brief “as an exercise of our duty of candor to the Court.” He said it was “theoretical,” not “practical.” When Justice Stephen G. Breyer noted that the compliance order issued to the Sacketts had mentioned only $37,500, not double that, Stewart said that was all that the order needed to say.
Soon, Chief Justice John G. Roberts, Jr., said he was confused, asking whether there were double penalties? Stewart said it was a legal possibility, but he knew of no case in which it had been done. The Justices, though, were now fully engaged on the double penalties, and other members of the Court pressed Stewart on it. Justice Alito, for example, got an admission from Stewart that the government had not adopted a policy to rule it out. “So,” said Alito, “‘it’s more than theoretical.” And when the government lawyer continued to say double fining had not been done, Justice Scalia remarked sarcastically, “I’m not going to bet my house on that.”
When Stewart tried to defend himself by saying that the Sacketts had not even been aware of the double penalty prospect before reading the government’s brief, Justice Anthony M. Kennedy offered his own sarcastic thrust: “They were getting a good night’s sleep before they read your brief?” The audience laughed.
What had clearly happened, in the opening moments of Stewart’s argument, was that the threatened plight of the Sacketts had come fully into prominence again, and the government was exactly where Schiff had sought to put it: on the defensive. Stewart might have wished that he had chosen another way to open his side of the argument.
But the circumstances actually deteriorated further for EPA and its lawyer. As Stewart answered other questions about how EPA’s compliance orders actually work, his responses sometimes simply produced more sarcasm. Scalia, for example, said “Well, that’s very nice” when Stewart said the Sacketts had been advised that they could tell EPA if they thought some of its demands were “infeasible.” Scalia continued: “That’s very nice, when you have received something called a compliance order, which says you are subject to penalties of 32.5 for every day of violations.” ($32,500 was the former maximum penalty per day; it is now $37,500, as other comments during the argument made clear.)
Scalia warmed to the subject, suggesting flatly that the agency had been “high-handed,” demanding things of the Sacketts that simply were not required by the law.
It was Justice Alito, though, who completed Stewart’s embarrassment, with the devastating critique that began this way: “Mr. Stewart, if you related the facts of this case as they come to us to an ordinary homeowner, don’t you think most ordinary homeowners would say this kind of thing can’t happen in the United States?”
A good deal of time remained in the argument, but it seemed virtually over at that point. Schiff was obviously pleased; when his time for rebuttal came up, he he offered to waive it if the Court had no more questions. There were a few, but there was nothing in them to bail out the EPA’s compliance order.
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