High court appears to back landowners in clean water cases

WASHINGTON Mon Jan 9, 2012 4:32pm EST

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WASHINGTON (Reuters) - The Supreme Court appeared to support giving companies and landowners the right to a court hearing before they must comply with an order under the clean water act, which could sharply curtail a key Environmental Protection Agency power.

During arguments on Monday, both conservative and liberal justices sharply questioned a U.S. government attorney who maintained that companies or individuals must first fail to comply with an EPA order and face potentially costly enforcement action before a court can review the case.

An Idaho couple is challenging in the Supreme Court a 2007 EPA order that mandated that they take specific steps after being found to have filled a wetland with dirt and rock as they began to build a new vacation home.

The couple, who denied their property had ever contained a wetland, complained they were being forced to comply with an order without the benefit of a court hearing.

Their challenge was supported by the U.S. Chamber of Commerce, the National Association of Manufacturers, the National Association of Home Builders and by General Electric Co. The court in June rejected a similar GE challenge to the EPA compliance orders.

The Supreme Court case comes with the EPA already under heavy fire from election-minded Republicans, who accuse the federal agency of embarking on the most ambitious clean air regulations in decades.

Conservative Justice Samuel Alito pressed Deputy Solicitor General Malcolm Stewart on the government's position that a court challenge could not be brought until the EPA sued to enforce a compliance order.

Most ordinary homeowners would say that "this kind of thing can't happen in the United States," Alito said, adding that the EPA's conduct may be considered even more "outrageous" because it can always change its mind in such a case.

FINES CAN REACH $37,500 A DAY

Liberal Justice Stephen Breyer told Stewart he had the impression the government was fighting some 75 years of practice that presumes judicial review of orders from regulatory agencies such as the EPA.

"This is not a warning," Breyer said. "This is an order."

Stewart defended the agency's practices and said one way to get into court was to seek a determination of whether the land really was a wetlands as part of the federal government's permit process.

Liberal Justice Elena Kagan told Stewart she found it a "strange position" that the EPA compliance order was not final.

Under the law, failure to comply with an EPA order can result in fines of as much as $37,500 a day.

Arguing on behalf of the Idaho landowners, Chantell and Michael Sackett, California lawyer Damien Schiff said they had never been offered meaningful judicial review of an EPA compliance order from four years ago.

Chief Justice John Roberts questioned whether the amount of the fine itself might be coercive, forcing compliance.

Schiff agreed and said the fines might have a "significant extortion impact."

But Justice Anthony Kennedy questioned how far the Supreme Court should go in a ruling and said government agencies often threaten citations when people fail to comply with the law.

"Health inspectors go into restaurants all the time and say: 'Unless you fix this, I'm going to give you a citation.' Fire inspectors, the same thing," he said.

A ruling in the case is expected by the end of June.

The Supreme Court case is Sackett v EPA, No. 10-1062.

(Reporting By James Vicini. Editing by Kevin Drawbaugh and Todd Eastham)

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