A month ago, I wrote about the Supreme Court’s decision to take a close look at the EPA and the lack of due process afforded to property owners who run afoul of arcane regulations, regarding wetlands in this specific case.  Sackett v EPA pits an Idaho couple who wanted to build their dream house on property they bought for that purpose, and which had been zoned and properly permitted for it as well — until the EPA declared it “wetlands” and insisted that the Sacketts had to dismantle their construction at their own expense.  Thanks to the convoluted rules of the EPA, the Sacketts couldn’t challenge the ruling in court unless the EPA decided to let them, and the EPA could fine them $32,500 a day while they argued it out.

Oral arguments started last week at the Supreme Court, and ABC News reported yesterday that the EPA came in for some rough treatment at the hands of Justice Samuel Alito:

JUSTICE ALITO: Mr. Stewart, if you related the facts of this case as they come to us to an ordinary homeowner, don’t you think most ordinary homeowners would say this kind of thing can’t happen in the United States? You don’t — you buy property to build a house. You think maybe there is a little drainage problem in part of your lot, so you start to build the house and then you get an order from the EPA which says: You have filled in wetlands, so you can’t build your house; remove the fill, put in all kinds of plants; and now you have to let us on your premises whenever we want to. You have to turn over to us all sorts of documents, and for every day that you don’t do all this you are accumulating a potential fine of $75,000. And by the way, there is no way you can go to court to challenge our determination that this is a wetlands until such time as we choose to sue you.

MR. STEWART: Well, the first thing I would say is as a matter of standard EPA practice the compliance order would not be the first communication from the agency that would alert the landowner to the belief that there was a violation. The record in this case does not make clear whether that agency practice was followed in this case, but EPA’s typical practice is to alert landowners through prior communications that a violation is existing.

JUSTICE ALITO: Well, so what? Somebody from the EPA says we think that your backyard is a wetlands, so don’t build. So what — what does the homeowner do, having bought the property. Well, all right, I’m just going to put it aside as a nature preserve?

MR. STEWART: At the time that that sort of letter is issued, there is no compliance order and there is no impediment to an after-the-fact permit. That is, at that point the landowner could ask for a permit.

But actually the biggest hit to the argument came from Justice Stephen Breyer, one of the court’s liberals, who forced the EPA’s attorney to acknowledge the catch-22 that the EPA has built to keep people like the Sacketts from gaining their due process:

JUSTICE BREYER: How can they bring an action — I would like some clarification here. The Corps’s regs say the Corps will accept an after-the-fact permit. I mean one after — if they applied tomorrow, the day after getting this order, you would run up against the reg, which says we won’t give you any after the fact, we won’t even consider this matter, until any required initial corrective measures are made. And then, just to be safe, they say that no permit application will be accepted unless the Corps determines that concurrent processing of an after-the-fact permit application is clearly appropriate, “clearly.” So I looked at those two things and said: Of course you can’t apply to the Corps of Engineers; they are not going to accept it unless you have a very unusual case. So I expect you to tell me why I’m wrong about that, if I am, or how many after-the-fact permit applications has the Corps of Engineers accepted. Maybe there are a lot.

MR. STEWART: It’s not precluded, but I would agree with you: It’s very unlikely that without complying with the order -­

JUSTICE BREYER: All right, I agree. If we agree then, look, for 75 years the courts have interpreted statutes with an eye towards permitting judicial review, not the opposite. And yet — so here you are saying that this statute that says nothing about it precludes review, and then the second thing you say is that this isn’t final. So I read the order. It looks like about as final a thing as I have ever seen. So tell me why I am wrong on those two points.

And this is where the rest of the court began to chime in:

MR. STEWART: Well, we are not arguing that the statute precludes all judicial review. That is, the question whether the Clean Water Act applied to this tract could have been keyed up for a court in either of two ways.

JUSTICE BREYER: You’re arguing on the final part -­

JUSTICE KAGAN: You are arguing that the presumption of reviewability does not apply.

MR. STEWART: To this particular order.

JUSTICE KAGAN: And that seems a very strange position. Why would the presumption of reviewability not apply?

MR. STEWART: First because the order doesn’t express the final — the agency’s final view both in the sense that it invites the Sacketts to provide further comment –

JUSTICE GINSBURG: But they asked for a hearing. Didn’t they ask EPA for a hearing on whether their lands fell within the statute? They did ask for a hearing and the EPA said no.

MR. STEWART: EPA said no to a formal hearing, but I think that would be characteristic agency practice.

Yes, it’s that characteristic practice than denies due process and intimidates people into silence and compliance, whether or not they’ve actually violated any regulations at all.  Later in the transcript, Scalia explicitly lays out how the EPA can avoid any kind of review:

JUSTICE SCALIA: So they can just dispense with this compliance order and tell the Sacketts: In our view, this is a warning; we believe you are in violation of the act; and you will be subject to — you are subject to penalties of 37.5 per day for that violation; and to remedy the violation, in our judgment, you have to fill in and you have to plant, you know, pine trees on the lot. It could do that.

MR. STEWART: They could use the letter for that mechanism. And -­

JUSTICE SCALIA: And there would be no review of that.

MR. STEWART: We would certainly argue there would be no review of that.

It sounds as if the EPA may be fighting a losing battle in Sackett, and that could have wide-ranging implications in agency law for the US.  It’s also quite an eye-opener for those unfamiliar with the lack of recourse available for citizens who run afoul of agencies like the EPA, and a pretty good indication of why American capital hesitates to invest in American economic expansion.  Let’s hope that the Supreme Court uses Sackett to restore the proper role of due process in agency law.