SUPREME COURT

Big business backs David against EPA's Goliath in wetlands fight

When the Supreme Court hears oral arguments next week in a case about an Idaho couple's fight against U.S. EPA over whether they needed a wetlands permit to build their dream home, it appears at first blush to be a classic David versus Goliath battle.

Mike and Chantell Sackett, from Priest Lake, Idaho, are the underdogs in that scenario, fighting an uphill battle against Washington bureaucrats over whether they have the right to contest in court EPA's order preventing them from constructing their house without a Clean Water Act permit (Greenwire, Sept. 19, 2011).

But the Sacketts have a powerful ally of their own: big business.

Leading the charge is the U.S. Chamber of Commerce, the most powerful business lobby. Also weighing in are the National Association of Homebuilders, National Association of Manufacturers and American Petroleum Institute.

Each has filed amicus briefs with the court, which will hear arguments in Sackett v. EPA on Monday.

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The Sacketts say they did not need a permit and have a right under the due process clause of the Fifth Amendment to contest the order. EPA has threatened to impose severe fines if the Sacketts do not comply.

The business community shares the Sacketts' concerns. Just before the Supreme Court agreed to hear the case last summer, General Electric Co. had filed a petition raising similar questions in the context of a Superfund case, but the justices declined to take it. Even then, court-watchers were curious as to why the court chose one case over the other (Greenwire, July 11, 2011).

In its brief, the U.S. Chamber called the case "especially important" to its members because of EPA's "longstanding pattern and practice of circumventing traditional enforcement mechanisms."

In an interview, Robin Conrad, who heads the U.S. Chamber's National Chamber Litigation Center, said EPA treats businesses exactly the same way as people like the Sacketts.

"The same heavy-handedness that EPA has applied to the Sacketts has been applied countless times to businesses big and small," she added. That is across the board, not just in the context of wetlands disputes, Conrad said.

Even companies that seek clarification from EPA about wetlands jurisdictions can suddenly find themselves hit with a compliance order, she added.

Tom Ward, an attorney for the National Association of Homebuilders, said in an interview that while it might be reasonable to conclude that big developers can navigate the regulatory process more easily than individual landowners like the Sacketts, most of the group's members are not as savvy.

"They are not as sophisticated as everyone thinks they are," Ward added. "Our members end up in very similar situations to the Sacketts.

In fact, most of the association's members build fewer than 10 houses a year, Ward said.

The situation is not helped by the fact that EPA has never -- regardless of whether Republicans or Democrats control the White House -- been open to the idea of people challenging wetlands determinations in court. If it had, there would be case law that would help the courts navigate the issue, Ward added.

Regulatory muddle

Wetlands jurisdiction is notoriously confusing, in part thanks to the Supreme Court, which issued a fractured ruling in a 2006 case, Rapanos v. U.S., that failed to offer lower courts conclusive guidance (Greenwire, Feb. 7, 2011).

As to the wider issue of EPA's use of its compliance authority, General Electric's lawyer, prominent advocate Kathleen Sullivan of the Quinn Emanuel Urquhart & Sullivan firm, has also filed a brief backing the Sacketts, reiterating the arguments the company made last year in the Superfund case about the need for a court hearing to challenge EPA's administrative orders that are issued concerning contamination cleanups.

Like the Clean Water Act, the Superfund law -- officially known as the Comprehensive Environmental Response, Compensation and Liability Act -- does not allow for a "timely and meaningful hearing either prior to or ... immediately after the issuance of an administrative order depriving the recipient of property," the GE brief states.

The Sackett case is a "valuable opportunity for the Court to provide constitutional guidance regarding the fundamental due process principles governing environmental regulatory schemes that authorize agencies to issue unilateral administrative orders," Sullivan wrote.

The U.S. Chamber's Conrad remains bemused as to why the court chose the Idaho case over GE but conceded that "maybe the Sacketts facts look more sympathetic to more justices."

As for EPA, Solicitor General Donald Verrilli addressed the issues raised by the business community in his latest brief when noting that compliance orders "fall within the broad range of communications that agencies use to inform regulated parties of governing legal requirements and existing violations."

Allowing for immediate court review, pre-enforcement "would ultimately disserve the interests of both the government and regulated parties, by discouraging interactive processes that can obviate the need for judicial action," he wrote.

The administration's concerns are shared by Nina Mendelson, a law professor at the University of Michigan Law School, who worries about a situation where deep-pocketed companies "may be able to bog EPA down" in the courts.

"The more costly and cumbersome every enforcement effort is, the fewer violations EPA can pursue," Mendelson said.

Furthermore, existing environmental problems could get worse before they can be addressed because companies would be challenging the orders in court instead of resolving the underlying problem, Mendelson added.

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