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Access Unlimited, Trout Limited

Image by Angus Mackie/Creative Commons via flickr

The May issue of Outdoor Life carried an article entitled “Can I Fish This Stream?” It included a map of the U.S. showing 45 states with “limited stream access,” 4 with “pending access litigation,” and 1 with “liberal stream access.” The one was Montana, about which the article’s author opined, “Anglers in other states should be so fortunate.” Not so fast.

Since the original stream access cases in the early 1980s, landowners have claimed that the court and the legislature took property rights without compensation. Not surprisingly, the conflict has torn the social fabric of landowner-sportsman relations in Montana.

What the author failed to note was the unintended consequences of Montana’s law, namely landowners who cannot prevent access have less incentive to preserve habitat. The now infamous Mitchell Slough case in southwest Montana illustrates what can happen. When anglers took the right to control access from landowners and created public access to the reclaimed irrigation ditch paid for by landowner dollars, owners rightfully shut off the flow leaving fish high and dry. Not only did this reduce spawning habitat for trout that previously migrated freely into the Bitterroot River over which public access has never been questioned, it reduced the incentive of other landowners to invest in such reclamation projects.

The Outdoor Life article concludes that “although Montanans were able to ward off impingement of their access rights last fall, it’s not likely that the assaults on stream and river accessibility are over.” Proponents of unlimited access fail to recognize that their assault on landowner rights is also an assault on trout habitat.

Access unlimited, yes; trout unlimited, no.

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Thoughts on Sackett v. EPA

The regulators lost to the regulated yesterday in Sackett v. Environmental Protection Agency. As Ilya Somin notes, the Supreme Court’s unanimous opinion held that property owners and other regulated parties may challenge administrative compliance orders issued by the Environmental Protection Agency under the Clean Water Act. This is a small, yet significant, victory guaranteeing a modicum of procedural protection for those subject to regulation under the CWA.

In this case, the EPA issued an ACO to the Sacketts alleging they had filled wetlands without a federal permit and directing them to take remedial action or face civil penalties. The Sacketts had sought an agency hearing on the matter, but the EPA declined. So the Sacketts went to court. The federal government maintained that judicial review of the ACO was unavailable unless and until the EPA filed a civil enforcement action against them. The U.S. Court of Appeals for the Ninth Circuit concurred, only to be reversed by the Supreme Court.

Writing for the Court, Justice Antonin Scalia explained that an ACO can be challenged as a final agency action under the Administrative Procedure Act, as the order represents the conclusion of the agency’s consideration of the question and is, itself, the source of a binding obligation on the regulated party. The order “has all of the hallmarks of APA finality” and is thus presumptively subject to judicial review. As the CWA does not expressly or impliedly preclude judicial review, and there is no other adequate remedy in court, the Sacketts can have their day in court.

Justice Scalia’s opinion for the Court is quite narrow, and lacks the rhetorical flourishes we’ve come to expect in his environmental opinions. The Court had no occasion to reach the due process issues lurking below the surface of the case – specifically whether the Sacketts would be entitled to some opportunity to be heard, if not in court then before the agency, before they could be subject to fines for violating the administrative compliance order. Although Justice Scalia noted the continuing uncertainty over the scope of federal regulatory jurisdiction under the CWA, particularly with regard to wetlands, his opinion made clear the Court was expressing no opinion as to whether the EPA properly asserted jurisdiction over the Sacketts’ land. Solely at issue was whether the Sackett’s could challenge the EPA’s assertion of jurisdiction and claim that the Sacketts had violated federal law by filling jurisdictional wetlands on their property without first obtaining a federal permit. Justice Ginsburg wrote a brief concurring opinion stressing this point.

Justice Alito’s concurring opinion stressed the continuing regulatory uncertainty to which private landowners are subject under the Clean Water Act. The statute’s reach is “notoriously unclear,” and yet landowners can face substantial fines if they fail to obtain the requisite federal permits before modifying wetlands on their land. According to Alito, the Court’s decision in Sackett offers landowners “ a modest measure of relief” in that it now ensures that landowners may seek judicial review of an agency order directing them to cure CWA violations or face additional fines. Yet according to Alito, the burden on landowners remains substantial.

the combination of the uncertain reach of the Clean Water Act and the draconian penalties imposed for the sort of violations alleged in this case still leaves most property owners with little practical alternative but to dance to the EPA’s tune.

According to Alito, real relief will only come when Congress or the agencies provide a “reasonably clear” jurisdictional rule defining what constitute “waters” subject to federal regulatory control.

For 40 years, Congress has done nothing to resolve this critical ambiguity, and the EPA has not seen fit to promulgate a rule providing a clear and sufficiently limited definition of the phrase. Instead, the agency has relied on informal guidance. But far from providing clarity and predictability, the agency’s latest informal guidance advises property owners that many jurisdictional determinations concerning wetlands can only be made on a case-by-case basis by EPA field staff.

Despite repeated losses in the Supreme Court, the EPA and U.S. Army Corps of Engineers have yet to make any serious effort to delineate the scope of their regulatory jurisdiction. The latest guidance, issued in response to Rapanos, is no exception. This virtually assures the question of CWA regulatory jurisdiction will come before the Supreme Court yet again, and the ability of the Sacketts and other regulated landowners to challenge ACOs should only accelerate the process.

Here are my prior posts on the Sackett case:

UPDATE: At Legal Planet, Richard Frank assesses the case.  His conclusion:

Some will argue that the availability of judicial review to contest administrative orders issued by EPA under the Clean Water Act will hamper federal enforcement efforts in the future.  That’s due in significant part to the fact that the vast majority of federal actions to enforce the CWA take the form of such orders, rather than formal administrative hearings or federal litigation that are more costly, resource-intensive and time-consuming for EPA.

Be that as it may, my own opinion is that Scalia and the Court got this one right.  The Sackett decision’s statutory analysis seems compelling, and the equities of this particular David-and-Goliath saga fall rather strikingly in favor of the Sacketts.  I don’t often find myself in agreement with Justice Scalia, but I confess that I do here.  One of Scalia’s closing observations in Sackett particularly resonated with me: “there is no reason to think that the Clean Water Act was uniquely designed to enable the strong-arming of regulated parties into `voluntary compliance’ without the opportunity for judicial review–even judicial review of the question whether the regulated party is within the EPA’s jurisdiction.”

Originally posted at The Volokh Conspiracy.

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Valentin Abe is spawning fish farmers in Haiti, lack of formal property rights be damned

by Tate Watkins

“Everything here in Haiti,” says Dr. Valentin Abe, “takes time.” Which is a comment as insightful as it is tautological.

Abe (pronounced AH-bay), originally from Côte d’Ivoire, first came to Haiti in 1997 on a six month contract to assess potential aquaculture sites. He’d recently earned a PhD in aquaculture from Auburn University, and before he knew it the contract spiraled into two years. He’s been working with fish farmers in Haiti ever since.

In 2005, he started Caribbean Harvest, a program that turns terra farmers into aqua farmers using startup aquaculture kits and fingerlings from Abe’s hatchery in Croix-des-Bouquets, in the outskirts of the capital. Potential fish farmers rely mainly on donations to provide startup costs, but the idea is that once a farmer has a kit—two cages, 2,400 fingerlings for each cage, and feed—his operation will sustain itself once the first harvest goes to market. The 150 or so farmers Abe works with have had varying degrees of success so far.

Haiti’s lack of formal property rights—the Hernando de Soto-backed international property rights index doesn’t even bother to include the country—has been cited ad infinitum, especially during the reconstruction tumult since the earthquake two years ago. But Abe and his partner farmers have had surprisingly few property rights-related problems when it comes to the waters that hold their fish.

“In the lakes and reservoirs,” he says, “[farmers] do the monitoring, provide security for the cages themselves. They do all the work.”

The Haitian constitution provides that “water resources are the domain of the state; the right to property does not extend to any springs, rivers, or water courses.” But in practice, informal customary law reigns, and farmers provide their own enforcement.

Land, however, is a different story.

“We’re trying to locate land and go build a processing plant,” says Abe. “The owner of the land, we know that he’s the owner of the land, but he doesn’t have the proper documentation because land has been handed down from generations, from father to son. So they’ve never felt the need to do the paperwork on the land, and we cannot build infrastructure on land that doesn’t have titles.”

Abe plans to build the fish processing plant near Lake Azuéi, Haiti’s largest lake and the site of many of Caribbean Harvest’s farmers. Eventually, he also wants to build fish ponds, a more efficient way to farm. But he faces the same hurdles when it comes to securing proper title for land on which he wants to build ponds. He guesses that it will take six months at best just for all parties to acquire the proper paperwork.

For now, he waits.

Tate Watkins is a freelance writer based in Washington, D.C. He writes about economic development, foreign aid, and immigration, among other things. Currently in Port-au-Prince, Haiti. Visit his website here. Photo via Caribbean Harvest.

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Q&A with Todd Zywicki on Takings Law and Public Choice

PERC’s latest visiting fellow is Todd Zywicki, the Foundation Professor of Law at George Mason University and senior scholar at the Mercatus Center. He teaches is the area of contracts, bankruptcy, and law and economics. He is the co-editor of the Supreme Court Economic Review and a frequent commentator on legal issues in print and broadcast media. He blogs at The Volokh Conspiracy.

Todd is a 2011 PERC Lone Mountain Fellow researching the political economy of Takings law. We thank him for taking the time to answer our questions. See more of PERC’s ongoing Q&A series here.

Q: You work is heavily influenced by Gordon Tullock and his contributions to the study of spontaneous orders and methodological individualism. How might Tullock’s work be applied to environmental policy and law?

A:  Tullock’s central insight is that the cost of government policy is not just the misallocation of resources—using resources for lower rather than higher-valued uses. There is an additional cost—the resources that people use seeking preferential treatment from the government. He refers to these as “rent-seeking” costs and they can be quite large. The lessons for environmental policy and law are important: whenever decisions about resource use are moved from the world of private property and contract to the public domain, there will inevitably be rent-seeking costs as well. Thus, even if government makes wise decisions in the end (which it often does not), there will still be the costs of operating the system. And those costs can be large.

Q: While you are at PERC you have been working on a project exploring the political economy of the “Takings” law. Can you offer a brief overview of the government’s eminent domain or Takings power?

A:  The Takings power permits the government to seize private property for public use so long as it pays “just compensation” for the property taken. This enables the government to seize property to build roads, schools, etc.

Q: You have pointed out that law and economic analysis has been invoked to justify increased discretionary power for the government to take private property for public use such as in the case of Kelo v. New London. What is missing from this analysis?

A:  In Kelo many law and economics scholars have posited that the challenges confronting a private developer seeking to assemble many parcels of land in order to build an office building are identical to those of the government when it wants to build a school or post office. The underlying problem, it is claimed, is a hold out problem that landowners might try to hold out for a premium price, thereby killing the project. I argue that the situations are not analogous. In particular, when building an office building there are many similar alternative sites where the building might be constructed and so as a result the developer can shop among many different parcels of land, thereby eliminating the hold out problem.  Governments might have less ability to do that (or perhaps not). So I argue that even if one supports allowing the government to use the Takings power to overcome hold out problems, that does not support using the power for private developers in a case like Kelo. Moreover, there is a second point—to the extent that there are not comparable substitutes in Kelo it is only because the City of New London, in that case, gave Pfizer a bunch of subsidies and benefits to encourage development there. As a result, Pfizer felt compelled to build in New London. But that is merely an artificial distinction among different parcels of land that should not justify using the Takings power to later overcome the hold out problem that prior intervention creates. [Read more…]