Only Court Access Can Curb Regulatory Overreach

Todd   Gaziano
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Posted: Jan 29, 2016 12:01 AM
Only Court Access Can Curb Regulatory Overreach

*Editors Note: Written with Co-Author Reed Hopper

This spring, the Supreme Court will hear argument in a case that will be of immense practical importance to tens of millions of American landowners. It will decide whether they have access to court to challenge federal officials who erroneously or maliciously declare that their property contains wetlands subject to strict federal regulation under the Clean Water Act (CWA).

 Thirty states and many private parties (including our Foundation) are also suing to overturn the newest CWA regulation by the U.S. Army Corps of Engineers and Environmental Protection Agency expanding their jurisdiction over navigable “waters of the United States.” But invalidating that regulation (in due time) wouldn’t change federal control over individual landowners much without court access to challenge applications of the Act. The agencies have not been deterred from repeatedly claiming jurisdiction over virtually all waters and much of the land in America, despite the express language of the CWA, prior Supreme Court rulings, and constitutional limits on federal power. Unless Congress amends the Act or the courts go much further than in the past in striking down the current regulation, the agencies will assert much the same overbroad jurisdiction over millions of acres that are bone dry most of the year.

 The CWA’s outer reach is terribly important, but the case to be decided this spring, U.S. Army Corps of Engineers v. Hawkes Co., raises a more basic principle of individual liberty: what recourse do landowners have when federal agencies render final (but disputed) determinations that private property has wetlands regulated by the CWA? According to the Obama administration, landowners first must spend hundreds of thousands of dollars and many months or years seeking a federal permit from the same officials who misapplied the law to their land.

 The Supreme Court unanimously rejected the above approach to deny court access to a couple building their rural Idaho home in Sackett v. EPA (2012), but the administration stubbornly refuses to apply that result in analogous situations. A win for Hawkes would provide much broader relief from abusive regulatory rulings and procedures under the CWA.

 Hawkes Company and its affiliates are family-run enterprises in Minnesota that want to expand their peat processing operation onto adjoining land. In a highly questionable, years-long process, agency bureaucrats concluded that a portion of the land was a “water of the United States” because it had some wetlands supposedly adjacent to other waters that occasionally flow “directly or indirectly” into unnamed tributaries that then flow into the Red River of the North 120 miles away. Even after an agency reviewing officer found that the determination lacked substantial justification, the Corps stuck to its guns and the wetlands designation was finalized. As is typical, the Corps seeks to stop the courts from reviewing its determination, at least until the companies go through a lengthy permit process with the same agency.

 One of the most important aspects of Anglo-American law is that when individuals are harmed or threatened by the government they can apply to a neutral judge to resolve the matter. This is our cherished “day in court,” and it is a fundamental aspect of our due process of law. If a crime is alleged, the defendant’s right to a “speedy” trial is constitutionally guaranteed. If individuals are harmed by an agency’s final regulatory ruling, it shouldn’t require years to challenge that in court either.

 Landowners had no realistic access to court to challenge wrongful wetlands determinations for many years, but that began to change with the Sackett case. Mike and Chantell Sackett were preparing a foundation for their home in a residential neighborhood in Idaho when they received an inexplicable CWA “compliance order” from the EPA to restore their supposed wetlands, re-plant vegetation, and apply for a federal CWA permit or face tens of thousands of dollars per day in fines. EPA then tried to block the Sacketts’ access to court to challenge its wetlands determination. In Sackett v. EPA, which our Foundation argued, the Supreme Court ruled 9-0 that the EPA wetlands determination was subject to judicial review. In short, the Sacketts deserved their day in court to determine whether their lot contained wetlands before they had to apply for a federal permit to build their home.

 The Army Corps effectively makes the same site-specific jurisdictional determinations under the CWA before development activity occurs. That determination is likewise final and also prevents an owner from using the supposedly regulated portion of land without a federal permit, at least without risking fines and criminal prosecution. Yet the government argues in Hawkes that the Corps’ final wetlands determinations are not subject to judicial review since it doesn’t issue fines with them. Instead, the government insists that a landowner must apply for a federal permit to use his land, which often costs hundreds of thousands of dollars and years to obtain—and which might eventually contain onerous conditions or not be granted at all.

 Under the Supreme Court’s holding and reasoning in Sackett, no one should be required to undergo the costly and time-consuming permit process prior to challenging final agency jurisdictional determinations in court. As Justice Alito rightly observed in hisSackettconcurrence, the government’s catch-22 theory leaves landowners “at the mercy” of agency officials. When federal agencies assert jurisdiction over private lands under the CWA, landowners are left with the Hobson’s choice of (1) abandoning all use of valuable land, (2) trying to obtain a federal permit with potentially ruinous delays and costs (often more than $270,000, excluding potential mitigation costs and requirements), or (3) proceeding to use the land without permission, risking possible fines of $37,500 per day and a heightened chance of criminal prosecution and incarceration for any alleged CWA violations.

 If landowners have no reasonable access to court to challenge agency overreaching or error, the third option is no real alternative. No one would advise risking criminal prosecution just to get to court. The U.S. Eighth Circuit Court of Appeals said that scheme was a travesty of justice in itsHawkes ruling earlier this year. That decision finally provided landowners some practical safeguard against abusive or erroneous enforcement of the Act. The High Court should now make that safeguard apply throughout the land.

 The EPA’s and Corps’ asserted authority over “waters of the United States” impacts many millions of landowners across America. The Corps issues tens of thousands of jurisdictional determinations each year, severely limiting or prohibiting private use of land. Experience shows that officials whose decisions are insulated behave differently from those whose decisions may be challenged.

 Boiled down to its essence, Hawkes is about whether landowners have a meaningful right to a “day in court” to challenge federal authority over their land. Reasonable people know that agency attempts to significantly burden and delay access to a neutral judge are untenable. Not only is court access without further delay the only fair result (due process of law requires no less), but the judiciary and the public at large are increasingly coming to understand that only such a neutral tribunal can prevent agency regulatory overreaching.