Despite the Supreme Court's best efforts to rein them in, federal regulators continue to abuse their authority under the Clean Water Act.
Like many states, Utah has a housing shortage. According to the governor's office, Utah will need to build 840,000 new homes by 2055 to keep up with demand. The recent plights of two developers at the hands of the federal government show just how hard it will be to reach that goal.
About 20 years ago, Lew Swain and Brent Bailey bought an undeveloped parcel of land just outside of Willard, Utah, about an hour north of Salt Lake City. The pair gradually purchased more land around the parcel, eventually amassing 142 continuous acres that they hoped to turn into a 265-home subdivision.
Willard was also keen to see housing built on the property. It gave its blessing for construction to begin, provided that Swain and Bailey pay to upgrade part of the city's water and sewage infrastructure. The two agreed, paying $650,000 to drill a well that would provide water to the subdivision and city through a water line and storage tank they had designed. The developers also poured half a million dollars into engineering, water development, and other studies that were needed to get the project permitted.
However, before they could break ground, federal regulators shut down development with an oft-cited and oft-weaponized regulation: the Clean Water Act (CWA).
The CWA gives federal agencies—in this instance the Army Corps of Engineers—the authority to regulate discharges of pollutants from point sources into "navigable waters." In the case of the Swain and Bailey property, the Army Corps determined that construction would disturb and pollute the Great Salt Lake—the nearest "navigable water," which lies about nine miles to the west.
Now, with the help of the Pacific Legal Foundation (PLF), the developers are suing the Corps in federal court, arguing that it overstepped its authority.
Since its passage in 1972, the CWA has been a source of contention between regulators—who have tried to expand their authority under the law—and property owners. The Supreme Court has reigned in regulators several times, most recently in Sackett v. EPA (2023). In this case, the Court ruled that "navigable waters" under the CWA only included "those relatively permanent, standing or continuously flowing bodies of water," which could be normally described as "streams, oceans, rivers, and lakes." The Court also determined that wetlands could only be regulated under the CWA if they were "indistinguishable" from navigable water and had a continuous surface connection with these waters. This is important for understanding what happens next.
Per the agreement with the city, Swain and Bailey had to place their water and sewer lines on the northwest portion of their property, near a small irrigation ditch and 2.74 acres of wetlands. While the developers "carefully conceived [the lines] to avoid disturbing" the ditch and wetland, "some minor disturbance is unavoidable," according to the suit. Knowing that violating the CWA, even unintentionally, can lead to steep fines or imprisonment, the developers contacted the Army Corps to ensure that the property was not in violation of the law before moving forward.
The Corps happily obliged. Using generous cartography, it created a map that connected this small ditch to the Great Salt Lake, the nearest navigable water. The connection between the two, according to the Army Corps, looks something like this: Water leaves the irrigation ditch and connects with another unnamed ditch. From there, the water flows north, then west under Interstate 15. Then through a series of twists, turns, and an underground siphon that "artificially pipes water upgradient," water eventually arrives in the Willard Bay, a navigable part of the Great Salt Lake.
As the lawsuit points out, "any single molecule of water originating" in the ditch "must travel 46,909 feet (approximately 8.9 miles)—if it ever even reaches Willard Bay via the tortuous pathway identified by the Corps."
The Corps also determined that since the ditch occasionally overflowed into the wetlands on the Swain property, the wetlands were "indistinguishable" and thus regulable under the CWA. This put the developers in violation of the law. The project was halted altogether in April when the Corps withdrew the developers' CWA permit, three years after the pair had initially contacted the agency.
Swain and Bailey "have unfortunately…found themselves sort of caught up in a broader national issue, that being the United States Army Corps of Engineers' steadfast resistance to the Supreme Court's decision in Sackett v. EPA and more broadly, its steadfast resistance to any limitation upon its Clean Water Act authority," Charles Yates, a PLF lawyer who was also a member of the Sackett litigation team, tells Reason.
As Yates describes it, the "spirit of the Sackett decision" was to rein in agencies that had been using the CWA to "contrive some massive connection" to regulate private property. "The entire point of Sackett was to make things simpler for landowners."
However, just because the Supreme Court has issued a decision doesn't mean that federal regulators are following it. In the three years since Sackett, the Army Corps and the Environmental Protection Agency have regularly overstepped their authority under the CWA, which the PLF and other public interest law firms have successfully challenged.
The Trump administration has attempted to rein agencies in with rulemakings. But without buy-in from the regional offices "where we're seeing this obvious attempt to circumvent the Sackett decision," these regulations probably won't have much of an impact, says Yates.
If that's true—and if bureaucrats can use a small ditch to shut down a major housing project—then it's probably time for the lawmakers to stop trying to use rules to rein in these agencies. Instead, they might want to start scrapping the agencies altogether.