Supreme Court Decision Underscores Growing Concern Over Regulatory Overreach

Given the harassment and everyday burdens that federal bureaucrats subject small businesses and families to, it seems obvious that decisions could be challenged by the basic process of judicial review. This right, however, was apparently not entirely evident.

The Supreme Court on Tuesday ruled unanimously in favor of property owners in a decision that weakens the EPA’s authority under the Clean Water Act. The ruling in United States Army Corps of Engineers v. Hawkes Co., Inc gives landowners and businesses the right to go to court when federal regulators trample their rights to property and due process.

Hawkes Case Background

In Hawkes, a Minnesota mining company sought permission to harvest moss for landscaping. Hawkes argued that since the property sat 120 miles away from the nearest river, with no bodies of water connecting the land to the nearest river, it was reasonable to conclude that the “swampland” was not subject to Clean Water Act jurisdiction under the Waters of the United States Act.

Hawkes’ seemingly logical reasoning was rejected by the trial court, holding that the landowner could choose to either abandon the business, pay over $270,000 for an unnecessary permit, or operate without a permit, risking daily fines of up to $37,500 as well as the possibility of imprisonment.

This decision was appealed by Hawkes. Reversing the decision of the lower court, the U.S. Eighth Circuit Court of Appeals held that due process requires that landowners have the opportunity to challenge a regulatory decision before being subject to financial and legal consequences.

The EPA and the Corps appealed to the U.S. Supreme Court. The Court upheld the ruling in a decision that emphasized landowner’s right to a day in court while issuing a firm precaution against the regulatory state.

EPA Claims Regulatory Authority under Clean Water Act

In a breath-taking assertion of administrative power, the EPA used the Waters of the United States Act to drastically expand its regulatory authority under the Clean Water Act to include areas of essentially dry land. WOTUS can now include occasionally wet areas such as ditches or even a puddle in someone’s backyard.

The EPA’s hyper-inflation under the Water of the United States is perhaps the largest power-grab by any federal regulatory agency. The EPA circumvents judicial authority and claims the power to “rule by regulation” when it exercises its unreviewable discretion to classify land as one of the “waters of the United States.”

Court Condemns Regulations as Unpredictable and “Notoriously Unclear”

In a separate opinion written by Justice Kennedy on behalf of himself and Justices Thomas and Alito, the Court’s decision was highlighted as a criticism of regulatory overreach.

Justice Kennedy concurred, “…the reach and systemic consequences of the Clean Water Act remain a cause for concern. As Justice Alito has noted in an earlier case, the Act’s reach is ‘notoriously unclear’ and the consequences to landowners even for inadvertent violations can be crushing.”

The opinion criticizes federal regulations as being often unpredictable: “An approved Jurisdictional Determination (JD) gives a landowner at least some measure of predictability, so long as the agency’s declaration can be relied upon.”

Regulators Evade Constitutional Rights to Property, Due Process

It seems unfair that agencies have developed an ad hoc reliance on enforcement actions to impose regulations without regard to the fair notice provision of the due process clause.

United States Army Corps of Engineers v. Hawkes Co., Inc. perfectly demonstrates that unpredictable regulatory decisions, when combined with vast discretionary authority, create the perfect storm for the suppression of our constitutional rights.