Sunday, October 2, 2011
This month begins a term at the U.S. Supreme Court in which the Court will hear two important cases concerning land use. The cases turn on very different doctrinal issues. One concerns rights and remedies under the Administrative Procedure Act. The other involves an actual property issue, namely whether a state has title to a river bed arising out of application of the navigable waterway doctrine. In most ways, the cases could not be more different. Yet they are connected by one common theme. Both cases demonstrate the dangers—to landowners and governments alike—when a government entity is both a party interested in the outcome of a land use dispute and the authority charged with adjudicating the dispute.
The first case is Sackett v. EPA. According to their counsel, the Sacketts planned to build their dream home near (but not adjacent to) a lake in Idaho. They acquired the necessary local permits and received the assurance of the U.S. Army Corps of Engineers that no federal permits were required. They had begun preparations to build when EPA showed up, insisting that the lot was situated on wetlands (the putative wetland area is separated from the lake itself).
As commentators on both the Left and the Right have observed, the factual question whether the Sacketts’ land is part of nearby wetlands is contestable. But the Sacketts have no way of contesting EPA’s contention unless and until EPA seeks enforcement of an order against them in federal court; two lower federal courts ruled that federal law provides no mechanism for a pre-enforcement challenge. As the Sacketts’ counsel pointed out, this situation left the Sacketts with an “unenviable choice.” They could apply for a permit that they believe they are not required to obtain and pay the associated costs. Or they could expose themselves to an enforcement action and the associated fines, which could run over $30,000 per day. Either way, they would incur inordinate expense to build on a lot that they purchased for $23,000.
This Hobson’s choice for the Sacketts rendered EPA the de facto adjudicator of their rights. And had a public interest litigation group not come to their aid, the Sacketts would have been at the mercy of a federal administrative agency that served as investigator, prosecutor, judge, and jury. Because the Court has agreed to hear the Sacketts’ claim not under the Clean Water Act but under the broader Administrative Procedure Act, the implications of the Court’s ruling could reach far. Jonathan Adler has speculated, “While this case focuses on the Clean Water Act’s ACO regime, the cert grant makes clear that it will have broader application to laws that employ similar enforcement mechanisms, including the Clean Air Act and Superfund.”
Does the constitutional test for determining whether a section of a river is navigable for title purposes require a trial court to determine, based on evidence, whether the relevant stretch of the river was navigable at the time the State joined the Union as directed by United States v. Utah, 283 U.S. 64 (1931), or may the court simply deem the river as a whole generally navigable based on evidence of present day recreational use, with the question “very liberally construed” in the State’s favor?
According to the pleadings, the case arose when the State of Montana decided to claim title in riverbeds that had long been used by a private landowner, namely a power company using the river to generate hydroelectricity. Montana became a state in 1889. Two years later, in 1891, a predecessor-in-title to the power company built a dam near Fort Benton, Montana on the Missouri River, apparently believing that this stretch of the river was not navigable, and that the State of Montana therefore had no title in it. More dams were built on the Missouri and Madison Rivers, and the State, no doubt benefiting from this land use, did not object. Indeed, the State participated in the licensing proceedings for some of the dams.
Then, in 2004, the State of Montana, piggybacking on a lawsuit filed by parents of Montana school children, claimed that it had owned title to the riverbeds all along because the contested stretches of river are navigable. The Montana Supreme Court ruled for the State and upheld a judgment of $41 million in back rent.
In this case, the government actor advocating on behalf of the state—the Montana Attorney General—is distinct from the state courts that adjudicated the claim. But the central issue in the case turns on a disputed, mixed question of fact and law. And about this question the Montana state courts showed strikingly little curiosity. Despite 500 pages of expert testimony and exhibits disputing the State’s assertion of navigability, the Montana Supreme Court affirmed the trial court’s entry of summary judgment for the State. The Montana courts appear to have simply accepted the Montana Attorney General’s proposed findings.
It is now increasingly common for states and federal agencies to advocate for particular outcomes of private land use proposals. I intend to explore some of the implications of this trend at length in later posts. But in short, whatever its benefits, this advocacy entails significant costs. And these costs are not borne only by landowners. I will argue that the governmental authorities themselves pay a price, because they risk damaging their reputations as impartial ministers of law.
Update: David Breemer of the Pacific Legal Foundation (PLF) comments below. As I should have noted, PLF is the public interest firm representing the Sacketts.