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'Little guy' fight over property rights reaches high court

By Bill Mears, CNN Supreme Court Producer
updated 4:19 PM EST, Mon January 9, 2012
STORY HIGHLIGHTS
  • NEW: Justice Elena Kagan questions whether Chantell and Mike Sackett took the best course
  • The high court looks at an Idaho couple's experience with environmental regulations
  • Most homeowners "would say this can't happen in the United States," Justice Alito says
  • The Sacketts want a trial before a court to avoid the lengthy and costly permit process

Washington (CNN) -- Chantell and Mike Sackett call their legal challenge against federal regulators a "David vs. Goliath" fight over property rights.

"We did everything right," Mike Sackett told CNN about the permit process to build their "dream home" in rural Idaho. What happened next in the couple's run-in with the Environmental Protection Agency he says was "literally terrifying."

The Supreme Court displayed wide support for the Sacketts during a spirited hour of arguments Monday.

"If you related the facts of this case -- as they come to us -- to an ordinary homeowner," said Justice Samuel Alito, "don't you think most ordinary homeowners would say this kind of thing can't happen in the United States?"

What happened has become a six-year fight pitting business and property rights groups against many in the environmental community. The stakes could be huge in the long-standing tensions over the balance between commercial and private development and maintaining clean air, water, and soil.

The Sacketts bought a small parcel of about two-thirds of an acre in the Idaho Panhandle in 2005, near the shores of the resort community of Priest Lake. They hoped to build a three-bedroom home, surrounded by neighbor's houses, and had obtained a county permit. Gravel had already been laid for the foundation when EPA officials told them their land was a wetland, barring any development.

They were ordered to immediately "restore" the land back to its natural state, or risk fines of up to $37,500 a day.

At issue before the high court is whether the Sacketts have a right to have a "timely and meaningful" hearing before a court to challenge a Clean Water Act wetlands-restoration order of a federal agency. About 3,000 administrative compliance orders are issued each year by the EPA.

A federal appeals court agreed with the agency the couple's only remedy was to go through a lengthy wetlands permit process, which the Sacketts say would cost thousands more than the property is worth.

The EPA still maintains the land is a wetland, and that the couple passed up the chance to work with federal officials for an "after-the-fact" permit, which may have resolved the situation quickly and cheaply, a remedy the government says it uses often for individual homeowners.

But in arguments, a Justice Department lawyer struggled under a verbal onslaught of skepticism from a majority of justices.

After hearing Deputy Solicitor General Malcolm Stewart makes his point, Justice Antonin Scalia replied, "I'm not going to bet my house on that."

A key sticking point was whether the homeowners' due process rights were violated when they were prevented from getting an injunction -- stopping any government enforcement until a court could hear the claims. Stewart repeatedly said the Clean Water Act blocked -- or "precluded" -- any judicial review of compliance orders.

"You are talking about a huge upheaval," said Justice Stephen Breyer. "For 75 years the (federal) courts have interpreted statutes with an eye towards permitting judicial review, not the opposite. And yet you are saying that this statute 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."

Chief Justice John Roberts put it more bluntly, saying the rule overwhelmingly favors the government to decide with finality.

"You hope you have a sufficient basis" to order compliance, he told the government lawyer. "And because of the administrative compliance order, you're really never going to be put to the test, because most landowners aren't going to say: I'm going to risk the $37,500 a day (fine). All EPA has to do is make whatever finding it wants, and realize that in 99% of the cases, it's never going to be put to the test."

Justice Elena Kagan suggested the Sacketts may not have exhausted all the preliminary administrative remedies to determine whether their property had wetlands, which might have saved them time and money. She said instead of dealing just with the EPA, the Army Corps of Engineers was prepared to make the necessary permits possible. The Sacketts' lawyer, Damien Schiff of the Pacific Legal Foundation, said that would not have resolved the pending compliance order from the EPA.

"So why does that matter?" replied Kagan, skeptically. "You're getting review of the question that you care about, which is the question whether you have wetlands on your property. And if they said you don't have wetlands on your property, here's a permit, your problems are finished."

Defining "wetland" and the potential impact on drainage and "discharging pollutants" from nearby land has long been a tricky, subjective process. Federal regulators for decades have had the authority to protect water quality, even when land is not directly adjacent to streams, rivers, swamps, lakes, and oceans. The Sacketts property did not border Priest Lake, but the EPA determined gravel on the lot amounted to a pollutant into "waters of the Untied States."

The high court in 2006 failed to reach a standard that would have redefined current wetlands mitigation laws, the laws now confronting the justices and the Sacketts.

"We're here to stand up for the property rights and the constitutional rights of all Americans," Mike Sackett told CNN. "We felt blindsided by the EPA, and we remain determined to fight."

The case is Sackett v. Environmental Protection Agency (10-1062). A ruling is due by spring.

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