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SUPREME COURT:

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

Lawrence Hurley, E&E reporter

Greenwire: Friday, January 6, 2012

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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.

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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