Compliance or else

By Timothy Sandefur

Published in Irrigation Leader

January 2012

Timothy Sandefur Principal Attorney

Michael and Chantell Sackett bought two- thirds of an acre of Idaho property in 2005, intending to build a new family home. What they got instead was a lesson in the arbitrary power of federal administrative agencies—one that has taken them all the way to the United States Supreme Court.

After patiently obtaining all necessary permits, they began adding fill material to the site to prepare for laying a foundation. That's when an envelope arrived from the Environmental Protection Agency, containing a compliance order that informed the Sacketts that their land was a federal "wetland," and that their construction was in violation of the Clean Water Act. The order instructed them to tear out what they had built, plant native shrubbery, and fence off their property for three years. They were given a five-month deadline, after which they would be fined more than $37,500 per day.

The Sacketts were floored. They had had no reason to think their property was a wetland. Yet when they requested a hearing to challenge the EPA's assertion that their land was subject to federal control, the agency refused. The Clean Water Act, it said, gives property owners no right to a hearing; instead, the Sacketts would have to wait for the EPA to file an enforcement action if and when it chose. Only then could they argue that the agency wrongly asserted authority over their property. Until then, the $37,500 per day toll would continue to run, possibly rising to millions of dollars, and their failure to comply might also be used later as proof of "willfulness" and the basis of criminal prosecution. Thus, the Sacketts faced a devastating choice: obey the order at the cost of tens of thousands of dollars, and give up their dream of building a home—or ignore it and play chicken with the Environmental Protection Agency.

Represented by attorneys at the Pacific Legal Foundation, the Sacketts filed their own lawsuit, arguing that the law did entitle them to a hearing—and if not, that the compliance order scheme violated their constitutional right to due process of law.

Their case was very similar to a 2003 decision by the Eleventh Circuit Court of Appeals, which struck down a similar compliance order mechanism in the Clean Air Act on the grounds that although the orders are "injunction-like" and "lead[] to a host of severe penalties," they are issued unilaterally by a single official, without considering a property owner's side of the story. This made the EPA "the ultimate arbiter of guilt or innocence," and thus "violate[d] the Due Process Clause and the separation-of-powers principle."

But other judges rejected that ruling. In 1995, another Court of Appeals ruled that compliance orders did not give a person a right to a hearing, because that "would undermine the EPA's regulatory authority." The Sixth and Fourth Circuits also rejected any right to judicial review, because "Congress intended to allow EPA to act to address environmental problems quickly and without becoming immediately entangled in litigation." Following these precedents, the Idaho federal court dismissed the Sacketts' lawsuit, and the Ninth Circuit Court of Appeals agreed. A compliance order, it held, was really only a warning, without the kind of legal force that gives rise to due process concerns. After all, the Sacketts aren't required to actually pay the fine until the agency files an enforcement action, at which time they "will have a full and fair opportunity to raise challenges to the validity of the order." The fact that, while the Sacketts wait, the penalties for noncompliance continue to compound, "could indeed create a due process problem," the judges acknowledged. But they went on to reject the "literal" language of the act, and declared that only compliance orders that are ultimately upheld in the enforcement proceeding can serve as the basis for liability.

Under this retailoring of the law, the EPA cannot punish a person without going through the regular judicial proceedings to prove that he or she acted illegally. But not all courts agree, and even if it is correct, this ruling does not protect the Sacketts' due process rights, because it still requires them to risk devastating penalties before having their day in court. As far back as 1908, the Supreme Court held that due process of law is violated if a statute imposes "penalties for disobedience" that are "so enormous . . . as to intimidate" a person "from resorting to the courts to test the validity of the legislation."

However one characterizes compliance orders, they are a terrifying example of the power administrative agencies wield, often without meaningful oversight by elected officials. Rarely can a modest property owner who receives such an order undertake a David-and- Goliath faceoff with the EPA, with its $10 billion annual budget and 17,000 employees. Yet the EPA regards its power to intimidate as central to its mission: the power to issue compliance orders without oversight, say the agency's lawyers, "ensure[s] that the agency [can] act quickly to address environmental problems, without being entangled in defensive litigation." Such an attitude ought to raise the eyebrows of judges concerned with fairness. What the EPA calls flexibility is, in reality, a menacing power over ordinary citizens. The agency issues over 1,000 compliance orders each year, without public oversight, and property owners are given no notice or opportunity to be heard. The Clean Air Act and other environmental statutes allow individual bureaucrats to issue orders on the basis of "any information"—which, as courts have admitted, "presumably includes a staff report, newspaper clipping, anonymous phone tip, or anything else," and is thus "less rigorous than the probable cause standard." Yet rather than applying a skeptical eye to administrative agencies, courts in the past have usually deferred to their judgment. Now that the Supreme Court has agreed to hear the Sacketts' case, there is hope of imposing some concept of checks and balances on the EPA. Administrative convenience should not be an excuse for dispensing with basic principles of the rule of law.

Timothy Sandefur is a principal attorney at the Pacific Legal Foundation. Mr. Sandefur may be contacted by phoning (916) 419-7111 or by e-mail at tms@pacificlegal.org. For more information on the Pacific Legal Foundation, please see its website at www.pacificlegal.org.