On March 21, a unanimous U.S. Supreme Court overturned a decision of the 9th Circuit Court of Appeals that had the effect of subjecting private property owners to the whims of federal bureaucrats without recourse in the court system. It is a victory for property owners against the forces of regulatory fiat. This has huge implications for farmers and real foodies.
In Sackett v. EPA, both the district court and the 9th Circuit Court of Appeals had disallowed private property owners from bringing a court action to challenge an order issued by the Environmental Protection Agency (“EPA”) because the agency’s order wasn’t considered ”final,” despite the fact that the order itself threatened dire consequences to the landowners for non-compliance – up to $75,000 per day. This case highlights the follies of two of the most notorious federal governmental entities – the 9th Circuit Court of Appeals, which is affectionately called the “9th Circus” by those who follow their oft-overturned rulings, and the Environmental Protection Agency, which is in the running for the most-ironically-named-federal-agency award. But, I digress.
The facts of this case are fairly simple. The Sacketts owned a small lot in Idaho on which they wanted to build a home. In preparation for building, they filled in part of their lot with dirt and rock. Their property was in some proximity to a lake, but was separated from it by several other “improved” lots (lots containing permanent structures). Nonetheless, the EPA determined that the Clean Water Act (“CWA”) governed their activity and issued an administrative compliance order (“ACO”) telling them they had done a bad, bad thing – oh, and to stop right away or face extremely stiff monetary penalties.
The Sacketts sought an EPA hearing on the matter, which the EPA refused to hold. All the while, the agency held over the Sacketts’ heads the threat of up to $75,000 per day in penalties for non-compliance with its order. The EPA had nothing but time on its hands, while the Sacketts were facing over $1 million in fines for every two weeks of non-compliance with the EPA’s edict. Facing the possibility of incurring an enormous cost to either remedy the supposed error or pay a penalty for not doing so – without even having a hearing – the property owners sought refuge in the court system. In other words, in the face of the EPA telling the Sacketts to put up or shut up, the Sacketts decided to sue. I like their style.
Both the trial-level court and the appellate court agreed with the EPA that judicial review of the EPA’s order was not available unless and until the EPA filed a civil enforcement action against the Sacketts. The courts determined that, until that point, the EPA’s was not a ”final” order for purposes of judicial review. Did I mention that the order itself threatened up to $75,000 per day in sanctions for failure to comply with it?
Thankfully, the U.S. Supreme Court took the case and issued a 9-0 ruling in favor of the property owners and against the EPA’s heavy-handed tactics. Two justices (Alito and Ginsburg) wrote concurring opinions explaining their own reasoning in a bit more detail, which is not at all uncommon. This is still a 9-0 decision because all justices agreed with the outcome – i.e., Sacketts win; EPA loses.
Justice Alito’s concurring opinion is particularly helpful to understanding what was at stake here:
The position taken in this case by the Federal Government—a position that the Court now squarely rejects—would have put the property rights of ordinary Americans entirely at the mercy of Environmental Protection Agency(EPA) employees.
In other words, with no ability for review of a decision made by some bureaucrat – who is, no doubt, king or queen of his or her own particular hill - the stage is set for this world leader pretend to make some property owners’ life miserable, with no oversight.
Justice Alito also described the particular problems with allowing such unbridled power over enforcement of this particular law:
The reach of the Clean Water Act is notoriously unclear. Any piece of land that is wet at least part of the year is in danger of being classified by EPA employees as wetlands covered by the Act, and according to the Federal Government, if property owners begin to construct a home on a lot that the agency thinks possesses the requisite wetness, the property owners are at the agency’s mercy. The EPA may issue a compliance order demanding that the owners cease construction, engage in expensive remedial measures, and abandon any use of the property. If the owners do not do the EPA’s bidding, they may be fined up to $75,000 per day ($37,500 for violating the Act and another $37,500 for violating the compliance order). And 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.
So, we have an ambiguous law, HUGE stakes for the property owner, AND no oversight for the determinations of low-level bureaucrats. What could possibly go wrong? Thankfully, the Court recognized this and ruled in favor of the landowners.
Unfortunately, the Court’s decision was determined on statutory – not constitutional – grounds. This means that it does not provide for application of the due process clause of the U.S. Constitution to these administrative decisions (that’s the clause in the 5th Amendment that provides that the government cannot deprive us of life, liberty or property without due process of law). Just to be clear, it is not that the court rejected a due process argument; instead, it raised that issue itself when it granted certiorari but because it was able to determine the case on statutory grounds, it decided not to take the further step of determining it on constitutional grounds. This is not at all uncommon and is well within the discretion of the Court. That said, Justice Alito explained the problem property owners are left with after this ruling: “the combination of the uncertain reach of the Clean Water Act and the draconian penalties imposed for the sort of violations alleged in this case still leaves most property owners with little practical alternative but to dance to the EPA’s tune.”
Despite this, Sackett v. EPA is still a very important decision for private property owners, including especially local food producers who are often targeted by bureaucrats for their less conventional methods. Bureaucrats tend to attack that which they do not understand. The Court’s decision upholds the principle that more than just bureaucratic whim should be behind decisions to impinge on property owners’ rights in the name of whatever greater good a bureaucrat may hide behind. It may also lay the foundation for future challenges to administrative rulings of other agencies. Perhaps even a due process challenge. I’d love to be in the courtroom for that hearing. Heck, I’d love to argue it.
- The Real Food Lawyer