The U.S. Supreme Court on Jan. 9 heard oral arguments in a wetlands case that could have ramifications for the construction industry.
The case pits an Idaho couple, Chantell and Michael Sackett, who planned to build a new home on a tract they had bought, against the Environmental Protection Agency, which issued a compliance order directing the couple to restore wetlands on that property. As they listened to the arguments by each side, several of the justices appeared to be sympathetic toward the Sacketts.
A ruling in favor of the Sacketts would undermine EPA’s ability to control pollution and the destruction of wetlands through compliance orders, argued Malcolm Stewart, the deputy assistant solicitor general who represented the EPA.
The Sacketts, represented by Sacramento attorney Damien Schiff, contend they should have been able to get a formal hearing with the EPA, which the agency refused to offer. EPA's compliance order told the Sacketts to restore the wetlands on their property or, if the agency moved to take a formal enforcement action, pay potentially $37,500.
Schiff said that when confronted with such steep penalties, property owners usually have no choice but to follow the directions of the compliance order.
Justice Samuel Alito asked Stewart, “Don’t you think most ordinary homeowners would say this kind of thing can’t happen in the United States?” Chief Justice John Roberts asked Stewart what he as a homeowner would do if confronted with a similar dilemma.
Justice Stephen Breyer noted that he understood EPA’s concerns in the case but added, “I’m not saying they're right.” Breyer also said, “For 75 years the courts have interpreted statutes with an eye toward permitting judicial review, not the opposite.”
Construction groups say their firms often find themselves in a position similar to the Sacketts'. They say that when EPA determines a property contains wetlands and issues an order to block the site from being filled, firms typically opt to comply with the orders rather than face large penalties. But the EPA usually takes a broad interpretation of what constitutes a wetland, says Tom Ward, assistant vice president for litigation for the National Association of Home Builders, which filed a friend-of-the-court brief supporting the Sacketts.
Ward says there is no administrative hearing process for challenging EPA compliance orders. As a result, Ward says, firms “end up complying … it’s too costly to question it.”
Nick Goldstein, the American Road and Transportation Builders Association assistant general counsel, says some firms simply give up on projects rather than put themselves at the center of wetlands jurisdictional disputes with the EPA.
But Larry Levine, the Natural Resources Defense Council senior attorney, says, “There is more to the story than the version that the Sacketts were offering.” The couple had opportunities before the compliance order was issued to seek a wetlands permit from the Corps of Engineers; while that permit could have allowed them to build on their property, the Sacketts refused to take that action, Levine says. The Sacketts also hired a consultant who told them the property contained wetlands, essentially agreeing with the EPA, Levine adds.
Levine says compliance orders “are an important mechanism that Congress gave to the EPA" to resolve environmental concerns promptly. If property owners and builders could challenge every compliance order issued, it would severely undermine EPA’s ability to protect America’s waterways, he says.
A decision in the case, Sackett v. EPA, is expected by the end of June.
