Supremes Hear Arguments in Landmark Wetlands Cases

The Supreme Court heard arguments yesterday on the Rapanos and Carabell wetlands cases, which challenge the Feds’ overly expansive interpretation of the Clean Water Act. At the heart of the issue lies the question of whether the Fed’s power to regulate “navigable waters” extends to wetlands and small streams. The broad interpretation of “wetland” has effectively allowed the Feds exercise significant power in the traditionally state and local domain of land use and development regulation. From the Washington Post:

As enacted in 1972, the landmark environmental legislation gave federal regulators the power to control the discharge of pollutants into “navigable waters.” On the theory that what gets dumped upstream eventually winds up downstream, the government has interpreted that phrase to include not only large lakes and rivers, but also their smaller tributaries and wetlands near those tributaries. The Bush administration, backed by environmental organizations and more than 30 state governments, says that any narrower interpretation would cripple the Clean Water Act. States alone could not do the job, the administration argues. . . . . But property owners, backed by homebuilders, developers, farmers, ranchers and some water districts from the arid West, say that view would federalize every drop of water in the country, effectively putting Washington in control of development miles away from any recognizably navigable waters. One such property owner is John Rapanos of Michigan, who filled in 54 acres of wetlands, some of which were 20 miles from the nearest navigable water, without asking for a permit. Rapanos has been slapped with a $185,000 fine and three years’ probation as a result. He also faces civil penalties. His lawyer, M. Reed Hopper of the Pacific Legal Foundation, a property-rights organization, told the justices yesterday that “this is a case of agency overreaching,” in which the federal government “had claimed jurisdiction over an entire watershed from the remotest trickle” on up.

To the layperson, this may sound like an arcane issue, but the outcome of the Court’s rulings on these cases will have significant economic implications. Shikha and I had a column on this topic in Monday’s Washington Times. Here’s an excerpt:

Setting aside the serious constitutional issues involved, what are the economic costs of such federal mandates? Existing federal wetland regulations already cover 111.5 million acres of land — an area that is bigger than the state of California. According to the United States Department of Agriculture, if the government were to compensate landowners (which, of course, it doesn’t) for the development potential they have lost or stand to lose on just this land, it would have to cough up $162.6 billion. This is equal to the combined 2005 profits of the top 15 Fortune 500 companies. It is also more than three times the value of the total exports of India’s information technology industry, much reviled in recent years for “stealing” American jobs due to outsourcing. It is not possible to wipe out this kind of value and not have ripple effects throughout the economy.

And Case Western law professor Jonathan Adler offers a rebuttal to those who argue that a ruling against the feds would result in ecological havoc and destruction:

An amicus brief filed by the Environmental Law Institute (ELI) argues that the Court should uphold the federal regulation of the Carabells’ and Rapanos’ wetlands because states cannot be trusted to protect the environmental resources within their borders. According to ELI, without federal regulation states will engage in “destructive interstate competition,” and slash environmental safeguards in a short-sited effort to attract industrial development. Yet the history of wetland protection efforts suggests otherwise. Federal regulation of wetlands did not begin until 1975. State wetland regulation had begun over a decade earlier, when Massachusetts adopted the first statewide wetland conservation measures. Other states quickly followed suit. Instead of a “race to the bottom,” the historical record suggests a “race to the top,” as the pattern of state regulation prior to 1975 was precisely the opposite of what “destructive interstate competition” should have produced. Many states were eager to protect their environmental resources, and they were not going to wait for the federal government to do it. There is further evidence that states learn from the environmental innovations of their neighbors. That is, when one state adopts environmental measures, neighboring states are often likely to follow suit. Today states remain on the cutting edge of wetland protection, developing innovative conservation strategies. Were federal regulatory power curtailed, there is good reason to believe that many states would step forward to fill the void, much as some enacted explicit protections of isolated waters after the Court’s decision in SWANCC. Equally important, there is more than one way to save a bog. Various non-regulatory programs and private conservation efforts have proven enormously successful at restoring wetlands and related ecosystems and protecting them from destruction. In short, federal regulation is not all that stands between America’s wetlands and their destruction.

Excellent point. Stay tuned for more on this topic as we get closer to the final ruling.