Sacketts prevail: Supreme Court rules in favor of landowners

Cheyenne – At the 10th Annual Wyoming Water Law and Energy Conference on April 19 in Cheyenne, Cheyenne attorney Harriet Hageman gave an update on issues pertaining to water law and natural resources issues at both the state and the U.S. Supreme Court level.
    One of the first cases she mentioned was the Sackett vs. Environmental Protection Agency (EPA) case, one part of which was decided by the Supreme Court on March 21, 2012.
    “The Sackett case was a unanimous Supreme Court decision, and the fact that all nine judges came together against the EPA sends a strong signal as to what is going on with the agency at this time,” said Hageman.
    The case had to do with the Clean Water Act (CWA), which prohibits the discharge of any pollutant by any person into navigable waters of the United States. Hageman said the EPA uses either a compliance order or a civil enforcement action to enforce the CWA. In addition, the EPA may also charge an amount not to exceed $37,500 per day for each day of violation.
    “When dealing with the EPA and the CWA and violations, the hammer the EPA has in terms of pursuing individuals is pretty extreme,” said Hageman, who says compliance orders invariably include a fine of $37,500 per day, and not usually any less. “And typically they don’t issue an order on the second or third day of violation – it’s years and years later.”
    In addition, Hageman said the EPA claims the amount of the fine can double to $75,000 per day when the agency issues a compliance order and the person who received the order fails to comply.
    “Compliance usually requires restoring whatever stream or wetland was allegedly impacted to the standards of the EPA,” explained Hageman.
Court allows judicial review
    The Sackett case began when the Idaho couple received a compliance order from the EPA, which stated that their residential lot near Priest Lake contained navigable waters in the form of wetlands.
    “The Sacketts own a small acreage in Bonner County, Idaho, which is separated from Priest Lake by several lots containing permanent structures. In preparation for construction they filled in their property with dirt and rock, and that’s when they received the compliance order from the EPA, with findings and conclusions that the land contained wetlands adjacent to Priest Lake,” explained Hageman. “The EPA said the Sacketts were discharging a pollutant, and issued an order requiring them to remove the fill material.”
    Hageman said the Sacketts argued that the EPA had no jurisdiction, but there was no place for them to go with their argument.
    “When the EPA issues a compliance order, even when there are mandatory requirements to restore a stream or wetland to whatever condition is necessary, the agency argues there is no allowance for judicial review of that compliance order,” said Hageman. “That is a mandate with which you must comply, or else face a civil action lawsuit against you with millions of dollars in fines.”
    However, on March 21 the Supreme Court found that the Administrative Procedures Act does provide for judicial review of the compliance orders.
    “As someone who represents entities, irrigation districts and landowners, the idea that compliance orders are subject to judicial review is an incredibly important development,” noted Hageman. “I’ve fought with the EPA for many years over compliance orders, and when I represent a client in those circumstances the benefits are often diminishing returns – the longer you fight the EPA, the more you expose your client to being bankrupt through fines.”
    Hageman said it’s the lower federal courts below the Supreme Court that have fostered that position.
    “In this case, the Supreme Court noted the particulars of this case flow from a dispute about the scope of navigable waters subject to the EPA’s enforcement regime, and what does come within the jurisdiction of the CWA, but that issue could not even be raised as a defense by the Sacketts until they fully complied with the compliance order,” explained Hageman. “The EPA puts our landowners in a difficult position, because they can’t get to a jurisdictional determination as long as there is a compliance order.”
Sacketts make progress
    The case has not been decided in its entirety, as the Supreme Court only considered whether a dispute challenging the compliance order itself can be brought to court. Previously district courts had ruled in favor of the EPA.
    “The government had argued that Congress passed the CWA to respond to inefficiencies in remedies to address water pollution,” stated Hageman. “They said there should be no remedy for interim resolution, or the ability to go to court, because the EPA was simply trying to protect the waters of the United States, but the Supreme Court found that simply was not the situation.”
    In fact, Hageman said the Supreme Court was “incredibly troubled” by the due process aspects of the case.
    “The expediency of the situation does not trump the Constitution,” she said.
    “The government warned that the EPA is less likely to use the orders if they’re subject to judicial review, and I find that admission astoundingly shocking,” she commented. “I don’t think that was an argument that set well with the Supreme Court.”
    “This is an incredibly important case, because it does place parameters on the EPA’s authority to go after landowners, irrigation districts and water users,” stated Hageman. “One of the battles I’ve had while representing landowners is that when I attempt to respond to a compliance order – even in circumstances where there may be a violation – there is very little room for negotiations. It’s a ‘my way or the highway’ approach that really does violate the due process clause of the U.S. Constitution and the Constitution of the State of Wyoming.”
    The Sackett case has been remanded by the lower district courts.
    “The issue will now be tried as to whether there is jurisdiction in this case,” said Hageman. “We may see a Sackett two, three or four, or the EPA may recognize that this is something that should be quickly resolved.”
    Christy Martinez is managing editor of the Wyoming Livestock Roundup and can be reached at christy@wylr.net.