When Property Rights, Environmental Laws Collide In a case before the Supreme Court on Monday, a couple seeking to build their dream home say the Environmental Protection Agency put a stop to their plans after accusing them of building on wetlands. Is it a case of bureaucratic power run amok, or a trumped-up case aimed at eviscerating the EPA's regulatory powers?


When Property Rights, Environmental Laws Collide

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Monday, the U.S. Supreme Court hears arguments in a case that's significant to critics of the Environmental Protection Agency. It looks a bit like David and Goliath, pitting the middle-class American couple against the EPA. But that couple, Michael and Chantell Sackett, is backed by a veritable who's who in American mining, oil, utilities, manufacturing and real estate development, and by many groups opposed to government regulation. NPR legal affairs correspondent Nina Totenberg reports.

NINA TOTENBERG, BYLINE: On one side of the kaleidoscope, this is a case of bureaucratic power run amok; on the other side, it's a trumped up case aimed at eviscerating the EPA's regulatory powers. The story begins in 2005 when Chantell and Mike Sackett bought two-thirds of an acre of land for $23,000 located about 500 feet from scenic Priest Lake. The Idaho lake is a 19-mile stretch of clear water fed by mountain streams and bordered by state and national parkland, with a shoreline dotted with houses, resorts and marinas. The Sacketts, who own a small excavation company, broke ground on their planned three-bedroom house in 2007. Three days after they began clearing the property and adding fill, the EPA acted on a complaint.

CHANTELL SACKETT: Three agents showed up and told the worker there to stop work and that they wanted to see his permit for filling in wetlands.

TOTENBERG: Chantell Sackett says the couple had done its due diligence to get building permits and since other houses are nearby, the couple had no idea they needed a permit from the EPA. That is about where any agreement on the facts in this case ends. The Sacketts contend their property is not wetlands, and thus that no permit is required under the clean water act.

SACKETT: The EPA hasn't even come to the property and done tests to prove that it's not a wetlands. We have. We've had a hydrologist, a soil scientist and a wetlands expert come. And they know it's not a wetlands. But it doesn't matter to the EPA. They just want to be able to say, no, you can't do anything with it, and if you do, we're going to throw you in jail.

TOTENBERG: A coalition of environmental groups, after obtaining records under the Freedom of Information Act, has a different version of the facts. Here's Larry Levine, of the Natural Resources Defense Council:

LARRY LEVINE: What they got back from their own expert was, yes, in fact, you have wetlands on your property. You have wetlands surrounding your property; and as an expert, I advise you to hold off on doing anything further until you get things settled with the government.

TOTENBERG: The Sacketts say that obtaining a permit would have cost them hundreds of thousands of dollars. But environmental lawyer Levine says there are several ways that individuals like the Sacketts, who have a small project, can easily and cheaply obtain a permit.

Seven months after the EPA notified the Sacketts that they were illegally filling wetlands, the agency sent the couple something called an administrative compliance order. It ordered the couple to remove the fill and restore the wetlands, and it noted that failure to comply could result in fines levied by a federal court.

Six months later, the Sacketts filed suit to challenge the compliance order. Two federal courts threw the case out, saying that the order did not itself seek penalties and was not a final judgment against the couple. And that is the heart of this case.

Every appeals court in the nation that has ruled on this issue has reached the same conclusion. They have all said that at this stage of a permit dispute, there is nothing to review since the government has not yet even sought enforcement of its order, much less proved a violation of the law in court. Nor has any fine been imposed.

Indeed, the government says it views a compliance order as a warning, noting that this one invited the Sacketts to come in to discuss the dispute and seek resolution.

DAMIEN SCHIFF, ATTORNEY, PACIFIC LEGAL FOUNDATION: This compliance order is not just a: Please don't fill in the wetlands letter.

TOTENBERG: Damien Schiff, of the conservative Pacific Legal Foundation, is representing the Sacketts for free.

FOUNDATION: It's much more than that. It is an order backed by the power of the federal government that says: If you do not comply immediately with this, you will be on the hook for significant civil liability.

TOTENBERG: Schiff notes that the potential fines here could amount to as much as $37,000 a day.

FOUNDATION: When the government says you cannot build on your property, that's clearly an infringement of their property rights, of their liberties. And that requires that they have their day in court before the government can force them to do that.

TOTENBERG: The government agrees that citizens are entitled to a hearing; the question is when. And at this point, says the government, there's nothing to have a hearing about since no punitive action has been taken.

Environmental groups fear that a Sackett win would allow major polluters to tie up the EPA in litigation, preventing meaningful enforcement of anti-pollution laws. And they point to similar regimes in other health and safety statutes. Congress, they argue, intended compliance orders and the threat of big fines to force violators to fix the problem. And they say that both the EPA and the courts have not treated small violators severely.

That's no solace to Mike Sackett.

MIKE SACKETT: It makes you really question how the system works. You pay taxes to be punished by the same government that you're paying your taxes to. And when they punish people - and we're not the only ones - they do it without any accountability.

TOTENBERG: A decision in the case is expected later this year.

Nina Totenberg, NPR News, Washington.

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