Property Rights

The EPA Has Spent 15 Years Blocking This Couple From Building a Home. Will the Supreme Court Come to the Rescue?

Michael and Chantell Sackett say they shouldn't have to spend years—and hundreds of thousands of dollars—just getting permission to build on their suburban lot.


After a decade and a half of litigation and federal regulatory changes, the U.S. Supreme Court may soon decide whether Michael and Chantell Sackett can build a home for themselves on a vacant lot they own in a suburban subdivision next to Priest Lake in Northern Idaho.

Their lot has sat untouched since 2007. That was when the Environmental Protection Agency (EPA) told the Sacketts that their property contained wetlands regulated by the Clean Water Act. The couple, said the agency, must get a federal permit before continuing with construction or pay daily fines of up to $75,000.

Those demands prompted the Sacketts to sue in 2008. They argue that their landlocked property—which is separated from Priest Lake by a road and a completed row of houses—is not subject to the Clean Water Act. Therefore, they shouldn't need to go through the long, expensive federal permitting process just to build a home.

Last week, the Supreme Court announced that it would take up the Sacketts' case, raising hopes that the justices will secure their rights and the rights of countless other property owners who are currently left guessing whether they too are subject to the Clean Water Act's onerous requirements.

The Sackett's case "gives the court the opportunity not just to issue a clear majority rule but a rule that can be readily applied by laymen," said Damien Schiff, a lawyer with the Pacific Legal Foundation, which is representing the Sacketts.

"It's unusual to have a statute that can require significant expenditure of time and resources and consultants just to figure out if you're even regulated, and also imposes significant penalties if you end up violating it," he says, noting the maximum daily civil penalty the EPA can apply for non-compliance with the Clean Water Act is just under $60,000.

That there is still so much uncertainty around the extent of the Clean Water Act, which Congress passed in 1972, speaks to just how technical cases involving the law can be.

At issue for the Sacketts is whether their property contains "navigable waters" regulated by the law.

That's a vague term. The Sacketts had no reason to assume it applied to them when they first purchased the property in 2004. Their lot was, after all, a landlocked residential-zoned piece of land in a mostly built-out subdivision. Local officials, too, were quick to issue them permits to build a home.

Nevertheless, just a few days after the Sacketts started construction, inspectors with the EPA told the couple that pools of water on their property were, in fact, protected navigable waters and that they would have to obtain a permit from the Army Corps of Engineers if they wanted to move ahead with construction.

Trying to get that federal permit is a daunting prospect. The Sacketts' petition to the Supreme Court notes that the average time to obtain a permit from the Corps is two years and costs some $250,000 in consulting costs. "Even when obtained," reads the suit, "a permit can result in significant changes to the applicant's intended operations and may substantially limit the use of the property."

That's obviously a significant burden for the Sacketts. They say they shouldn't have to shoulder it, given that their soggy-but-landlocked property doesn't have any navigable waters on it. In 2008, they sued the EPA.

So, what exactly is a navigable water?

The Clean Water Act itself defines the terms as "the waters of the United States, including the territorial seas." The term "territorial seas" is further defined in the law, but "the waters of the United States" is not.

That ambiguity has given federal bureaucrats a lot of room for interpretation when crafting regulations implementing the Clean Water Act. The scope of those regulations has grown from covering just waters that were "navigable in fact," like rivers and lakes, to include intrastate streams, ponds, and wetlands whose destruction could impact interstate commerce.

The expanding scope of Clean Water Act regulations has also produced an escalating number of legal challenges from property owners.

Stretching out these disputes is a 2006 Supreme Court ruling on the Clean Water Act in which a majority of justices agreed that some wetlands were indeed outside the scope of EPA regulation. Fatefully, however, the court couldn't muster a majority opinion on which wetlands those might be.

That ruling involved a lawsuit from Michigan developer John Rapanos, who was sued by the EPA over his efforts to build a shopping center on what the agency said were protected wetlands. (Rapanos was also represented by the Pacific Legal Foundation.)

The resulting 2006 decision in Rapanos v United States did establish some limits on what could count as regulated navigable waters. The problem is no one is sure what those limits are.

Then-Justice Antonin Scalia wrote a plurality opinion, joined by three other justices, finding that wetlands were only subject to the Clean Water Act's requirements when they had a "continuous surface connection" to traditional navigable bodies of water. Justice Anthony Kennedy wrote a broader opinion arguing that wetlands were regulated by the Clean Water Act if they had a "significant nexus" to a more traditional navigable body of water.

The result of this mixed decision has been a tangle of contradictory lower court rulings and ever-changing federal regulations all trying to apply that 2006 Rapanos decision. Neither has given property owners any clear guidance on when they have to ask the federal government for permission to use their property.

The Sacketts have argued that Scalia's plurality opinion should be the controlling standard. And because the water on their property lacks a continuous surface connection to another body of water, they say they should be free from EPA clean water regulations.

In an August 2021 opinion, the U.S. Court of Appeals for the Ninth Circuit rejected their argument. The court instead said that Kennedy's opinion should be the controlling standard. It further ruled that the Sacketts' property—by virtue of being some 30 feet from a small stream that runs into Priest Lake—had a significant nexus to a navigable water. The couple, therefore, have to get that expensive federal permit.

In September 2021, the Sacketts appealed to the Supreme Court to take up their case. Their petition argues that the significant nexus test that's been applied to their property is confusing and nearly impossible for normal property owners to understand. The split opinion in Rapanos only muddies the water more, they say.

Their petition also argues that Congress has failed to clarify its own law, and that that inaction has led to even more confusing attempts by regulatory agencies to clarify the extent of the Clean Water Act.

That includes the 2015 Waters of the United States (WOTUS) rule issued by the Obama administration. That regulation quickly attracted lawsuits from developers and property owners arguing it was much too broad and restrictive. Subsequent federal court decisions blocked the implementation of Obama's WOTUS in 27 states but allowed it to go into effect in another 22 states. (No one could figure out if the rule applied to New Mexico or not.)

In a last-ditch effort to clear up what ditches the Clean Water Act regulated, the Trump administration scrapped the WOTUS rule and issued its own slightly narrower Navigable Waters Protection rule in early 2020. But federal courts blocked that rule too.

The Biden administration is currently in the process of reviving and updating the pre-2015 "waters of the United States" regulations—the same regulations that the Sacketts were accused of violating.

This regulatory seesaw, says Schiff, is just another reason why the Supreme Court needs to weigh in with a clear ruling on the extent of federal clean water act regulations.

The Sacketts themselves are also looking for some closure. The couple has already won one Supreme Court case in 2012 over whether they even had the right to sue the EPA. They hope a second ruling will secure their ability to build their home at last.

"Our property is still vacant, and our rights are still violated," the couple said in a statement. "We hope that the Supreme Court will hear our case and settle the navigable waters question once and for all. It's high time to finish the job we started—to end our personal nightmare and ensure that no other Americans suffer the same predatory government."

Watch Reason's 2012 video on the Sacketts' first Supreme Court challenge.