Supreme Court ruling against EPA could impact property development in Mississippi

The decision in Sackett v. EPA reins in an expansive definition of ‘wetlands’ that was used to limit property development, opening the door to new economic activity in states like Mississippi.

In May of this year, the U.S. Supreme Court issued an opinion limiting the Environmental Protection Agency’s interpretation of its own authority under the Clean Water Act (CWA). The decision, Sackett v. EPA, could play a significant role in speeding property development in water-rich states like Mississippi.

The Lawsuit

The suit was filed by a family in Idaho. In 2004, Chantell and Mike Sackett purchased a piece of property in Priest Lake, Idaho for $23,000. The couple intended to build a home there. After they began dirt work on the property, the Sacketts received notice from the EPA that they were in violation of the Clean Water Act and needed to restore the property to its original condition. They were threatened with fines of over $40,000 per day.

The EPA argued they could not build on their property because of an “adjacent wetland.” The “adjacent wetland” in question was a ditch on the other side of the road from the Sacketts’ property that fed into a non-navigable creek, which then fed into Priest Lake.

The CWA prevents discharge of pollutants, including dirt, into what is considered “navigable waters of the United States.” The interpretation of what those waters are have been expanded by the EPA and Army Corps of engineers to include some bodies of water that are non-navigable but have a “significant nexus” to navigable water. These have also included “adjacent wetlands.”

With this expansion most of the water in the country has become subject to federal jurisdiction.

The Sacketts’ suit resulted in a 16-year legal battle. The fight culminated with the High Court’s decision in May.

According to Christopher Green, Professor of Law and Jamie L. Whitten Chair in Law and Government at the University of Mississippi, The High Court’s opinion will urge the EPA and Army Corps of Engineers to come up with a rule that is clearer.

“They’ve [EPA and Corps] basically been on the same page since the 70’s and have always tried to regulate as much as they can,” said Green on prior use of the CWA.

He pointed out that two major components of the Supreme Court’s opinion look at “navigable bodies of water” and what “adjacent” means. Essentially the Court determined that must mean the body of water is touching or indistinguishable from.

“Basically, Congress has to be very clear if they want to give the EPA this kind of authority,” said Green. “If there is a fuzzy boundary to a line the administrators have a lot of power. Sometimes it can be looked at as a delegation to a person who will make the call and give them the power.” 

The High Court’s Ruling

Justice Samuel Alito wrote the majority opinion for the Court, which found that the EPA’s interpretation of wetlands was much to broad and not supported by congressional authorization.

Alito explained that “waters” described “streams, oceans, rivers, and lakes” and for a property be regulated as an “adjacent wetland,” it must have a continuous surface connection to one of those bodies of water. Meaning it must be impossible to tell where the wetland ends and the body of water begins.

The Court ultimately concluded that the Sackett’s property was not an “adjacent wetland” under the Clean Water Act. 

Justice Clarence Thomas in his concurring opinion also pointed out what he called “a serious expansion of federal authority that has simultaneously degraded State’ authority and diverted the Federal Government from its important role as guarantor of the Nation’s great commercial highways into something resembling a ‘local zoning board.’”

While Justices Sotomayor, Kagan, Kavanaugh and Jackson agreed that the CWA should not apply to the Sackett’s lot, they believed the new test would leave some long-regulated wetlands not covered under the CWA because they are adjacent.

“Sackett struck a huge blow to the EPA’s power,” said North Mississippi Developer Stewart Rutledge who echoed similar sentiments as Green on the government’s interest in this issue.

“The US government has a legitimate interest in protecting our nations navigable waters, including a limited number of surface waters, such as wetlands. But, being administrative (un-elected) agencies, the EPA and Corps of Engineers have tried for years to give themselves the broadest and most subjective power possible over ‘waters of the United States,'” said Rutledge.

He went on to add that the recent decision by the Supreme Court in the Sackett case has finally addressed this overreach. Ultimately, the Sackett case reduced the federal agencies’ ability to regulate private property owners.

What Comes Next?

The next step is for the Army Corps of Engineers to draw up new guidelines for communities and developers to follow regarding these areas.

For developers in Mississippi, particularly the coastal counties, they say they are anxious to see what new guidelines the Corps put in place.

“It’s not that we want to get rid of it [natural environments], it just allows us to be optimistic about economic development. We are happy to preserve them.” said Mary Henson, Deputy Director of the Jackson County Economic Development Foundation.

Henson said complying with certain environmental standards is nothing new for coastal Mississippi. Jackson County is the largest industrialized county in the state.

However, when there are issues or unclear guidelines it creates problems for developers and the name of the game is staying in the game, she says. Because the Supreme Court did away with the nexus test, that will likely impact tributaries in the coast area.

“I think people are anxious because a lot of projects are sitting at the Corp waiting for their interpretation prior to this happening. They couldn’t do anything prior to the ruling,” said Henson. 

Under the previous interpretation of the law Henson said she is not aware of any projects in the Jackson County area that have been prevented, but some do incur a large amount of additional costs to comply with the CWA.

Those costs can often include land purchase, mitigation, mitigation credits and an overall scope of the project.

“The environmental groups are doing what they believe they should do and they have deep pockets. Is this forever and done, I don’t know that it is,” said Henson.

Rutledge quoted Milton Friedman “Hell hath no fury like a bureaucrat scorned.”

“Although Sackett on its face should, in theory, free up a great deal of development activity in Mississippi, the EPA has been putting people in jail for wetlands violations for years and they are not going to give up this unchecked power easily,” said Rutledge.

Rutledge pointed out that federal power never voluntarily decreases, instead it seems to always be increasing and growing. He referenced Justice Thomas words regarding the EPA’s ever-growing authority under the Commerce Clause and says it is a product of a century old pattern.

 He urged developers to be cautious moving forward but said the regulatory revisions already made are a start. “When the Army Corps comes out with what they are doing, the developers who don’t want to be subject to federal control have to decide how much of an administrative change this is,” said Green.”