A Soft Spot for Property Rights

The Roberts Court’s environmental law decisions rarely show much interest in, let alone concern for, the effect of environmental law on business interests. The costs of environmental regulation, while often the subject of intense political debate, do not seem particularly salient to the Roberts Court, with one possible exception. In cases involving the environmental regulation of land use, the Court has expressed concern about the effect such rules have on landowners.

Whereas there is little mention of the potential costs of environmental regulation on businesses in most of the cases discussed in the preceding text, Justice Scalia’s Rapanos plurality expressed concern about “the immense expansion of federal regulation of land use that has occurred under the Clean Water Act.”[1] As interpreted by the Army Corps and EPA, “Any plot of land containing such a channel may potentially be regulated as a ‘water of the United States,’ ” Scalia warned at the outset of his opinion.[2] Not only would such a broad extension of regulatory authority potentially exceed the scope of the CWA, it would also impose substantial costs on private landowners. “The burden of federal regulation on those who would deposit fill material in locations denominated ‘waters of the United States’ is not trivial,” Scalia wrote.[3]

Justice Scalia’s opinion for a unanimous Court in Sackett v. EPA was narrow and restrained by comparison, but also evinces concern for the potential burdens land-use regulation may impose on small private landowners. Michael and Chantell Sackett had purchased a small lot in Bonner County, Idaho, on which they planned to build a single-family home. After work began, the EPA informed them they had violated the CWA by placing gravel on the site without a federal permit. In the EPA’s view, the Sacketts’ land contained jurisdictional wetlands. Yet rather than charge the Sacketts, the EPA issued an administrative compliance order directing the Sacketts to cease construction and undertake specified restoration efforts. Failure to comply, the EPA warned, would expose them to fines of up to $65,000 per day—$32,500 each for violating the CWA and the EPA’s order.

The Sacketts sought to contest the EPA’s claim of jurisdiction, but were denied an administrative hearing. Worse, the EPA maintained that the Sacketts could not seek judicial review of the administrative compliance order either. This was too much for the Court, which readily concluded that the EPA’s administrative compliance order was a final agency action subject to judicial review. As the CWA did not expressly or impliedly preclude judicial review, and there was no other adequate remedy for the Sacketts to pursue, the justices all concluded the Sacketts could have their day in court to challenge the EPA.

Sackett was a narrow opinion, resting squarely on statutory grounds. As in Rapanos, the landowners (represented in each case by the Pacific Legal Foundation) had sought to raise broader constitutional questions, but the Court demurred. Just as the justices avoided the commerce clause questions lurking underneath the challenge to federal jurisdiction in Rapanos, it sidestepped the due process claim raised by the Sacketts—specifically whether the Sacketts would be entitled to some opportunity to be heard, if not in court then before the agency, before they could be subject to fines for violating the EPA’s order.[4]

Although Justice Scalia noted the continuing uncertainty over the scope of federal regulatory jurisdiction under the CWA, particularly with regard to wetlands, his opinion made clear the Court was expressing no opinion as to whether the EPA properly asserted jurisdiction over the Sacketts’ land. Solely at issue was whether the Sacketts could challenge the EPAs assertion of jurisdiction and claim that the Sacketts had violated federal law by filling jurisdictional wetlands on their property without first obtaining a federal permit. Justice Ginsburg wrote a brief concurring opinion stressing this point.[5]

Beyond Rapanos and Sackett property owners have had a fair measure of success in the Roberts Court, although all of their victories have been quite narrow. In Arkansas Game and Fish Commission v. United States, for instance, the Court concluded unanimously that the repeated, albeit temporary, flooding of land could constitute a “taking” that requires compensation under the Fifth Amendment.[6] The government’s contention that such flooding, if only temporary, should be categorically exempt from takings scrutiny made no headway with the court. In PPL Montana LLC v. Montana, the Court unanimously rejected Montana’s effort to claim title to riverbeds upon which hydroelectric facilities had been built so it could charge rent.[7] Property owners also prevailed in Horne v. USDA, where the Court held a takings claim could be raised as a defense to a regulatory enforcement action that the property owners contended could constitute a Fifth Amendment taking.[8] [9] Although this was not an environmental case, Horne illustrates the Court’s latent sympathy for narrow, property-based claims.

Perhaps the most significant victory for private property rights was Koontz v. St. Johns River Water Management District.107 Various regulatory agencies routinely condition development permits on the performance of mitigation, such as the restoration or conservation of ecologically sensitive lands. In two prior decisions, the Supreme Court had held that there must be a “nexus” and “rough proportionality” between the conditions imposed and the permitted activity.[10] In Koontz, the Court clarified that this prohibition on the imposition of “unconstitutional conditions” on permit approvals applies equally to permit denials as to conditional approvals. A contrary rule, Justice Alito noted for a unanimous Court, would enable regulatory agencies to evade this limitation.[11]

Somewhat more controversially, and by a 5-4 split, the Court also concluded that the “nexus” and “rough proportionality” requirements apply equally to financial exactions as to the imposition of easements or surrenders of property. According to Justice Alito’s opinion for the Court, it does not matter whether the proposed use of property is burdened by the imposition of a use condition, such as commitment to forego development on part of the property or engage in ecological restoration, or by the imposition of a financial obligation to fund equivalent conservation efforts. Either way, the property owner’s ability to use her land is burdened by the conditional requirement. Although this restriction on government-imposed permit conditions is already enforced in many states, the dissenters and some commentators fear such a rule would unduly benefit developers at the expense of land-use agencies and their conservation goals.

While the Roberts Court has shown sympathy to landowners in several cases, the Court has not always favored property owners’ claims. In John R. Sand & Gravel Co. v. United States, for instance, the Court held that the statute of limitations governing takings claims against the federal government in the US Court of Federal Claims is “jurisdictional,” and bars suit even if waived by the government.[12] Just as this decision made it more difficult for private firms to file takings claims against the government, the Court also made it easier for the government to seek royalty payments from private firms developing resources in the federal estate. In BP America Production v. Burton, the Court unanimously held that the standard six-year statute of limitations for government contract actions did not apply to administrative payment orders for offshore gas royalty underpayments issued by the Minerals Management Service.[13] [14]

The Court also tilted the playing field against landowners or resource users seeking redress against the federal government in Wilkie v. Robbins.112 In this case, a private landowner sued Bureau of Land Management employees for allegedly seeking to coerce him into giving the government an easement across his land. The landowner alleged a pattern of egregious conduct, ranging from selective enforcement of federal regulations to tortuous interference with his business and intrusion upon the privacy of his guests, all aimed at getting him to cede a property interest. This pattern of conduct, he alleged, should give rise to a Bivens action, or other legal remedies in federal court, as the government should not be able to retaliate against a landowner for refusing to cede his constitutionally protected property rights.

The Court rejected the landowner’s claim, refusing to allow for a Bivens-like action in an area where such actions had not been recognized before. Although this case involved a ranch owner, rather than a large corporation, it was closely watched by industries that use or rely upon federal lands. Several trade associations, including the Public Lands Council and various cattlemen’s associations, filed amicus briefs on the landowner’s behalf fearing that a decision for the government could strengthen the hand of government agencies vis-a-vis resource- dependent industries that operate on federal lands. Whatever sympathy the Court has for landowners was, in this case, outweighed by the Court’s reluctance to expand private causes of action in federal court.

In Stop the Beach Renourishment, Inc. v. Florida Department of Environmental Protection the Court unanimously rejected landowner claims that the Florida Supreme Court has effected a “judicial taking” by declaring the state, rather than the property owners, owned newly dry land along the waterfront recovered as a result ofbeach renourishment projects.[15] This claim failed, all the justices agreed, because the Florida Supreme Court’s decision did not result in the taking of private property, as the coastal landowners did not have a valid claim to the newly dry lands.

Although the Court rejected the landowners’ specific claims, six of the eight justices participating joined opinions concluding that judicial takings may occur, and violate the Fifth Amendment. Writing for four justices, Justice Scalia argued that the Fifth Amendment’s Takings Clause is implicated by any state action that converts private property into public property, without regard for which branch of state government is responsible.[16] Justice Kennedy, joined by Justice Sotomayor suggested that judicial takings claims should be analyzed as potential due process violations, rather than as violations of the Takings Clause.[17] Nonetheless, Justice Kennedy concluded that state court decisions that effectively take private property by changing settled legal precedents would be subject to constitutional challenge. Thus six of the eight justices who participated in the case gave landowners hope that future judicial takings claims could be successful.[18]

  • [1] Rapanos v. United States, 547 U.S. 715, 722 (2006).
  • [2] Id.
  • [3] Id. at 719.
  • [4] For a more complete discussion of some of the due process issues, see Jonathan H. Adler,Wetlands, Property Rights, and the Due Process Deficit in Environmental Law, 12 Cato Sup. Ct. Rev.139 (2012).
  • [5] Sackett, 132 S.Ct. at 1374-75 (Ginsburg, J., concurring).
  • [6] Arkansas Game and Fish Comm’n v. United States, 133 S. Ct. 511 (2012).
  • [7] PPL Montana, LLC v. Montana, 132 S. Ct. 1215 (2012).
  • [8] Horne v. USDA, 133 S. Ct. 2053 (2013).
  • [9] Koontz v. SaintJohns River Water Mgmt., 133 S. Ct. 2586 (2013).
  • [10] See Nollan v. California Coastal Comm’n, 483 U.S. 825 (1987); Dolan v. City of Tigard, 512U.S. 374 (1994).
  • [11] Koontz, 133 S. Ct. at 2594-95.
  • [12] John R. Sand & Gravel Co. v. United States, 552 U.S. 130 (2008).
  • [13] BP Am. Prod. Co. v. Burton, 549 U.S. 84 (2006).
  • [14] Wilkie v. Robbins, 551 U.S. 537 (2007).
  • [15] Stop the Beach Renourishment, Inc., v. Florida Department of Environmental Protection, 560U.S. 702 (2010).
  • [16] Id. at 713-15.
  • [17] Id. at 736 (Kennedy, concurring in part and in judgment).
  • [18] Justice Stevens was recused.
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