ELR Citation: ELR 21022
No(s). 91-2750 (4th Cir. Mar 24, 1993)

The court holds that the Administrator of the U.S. Environmental Protection Agency (EPA) properly assessed Class II penalties against a landowner charged in an administrative complaint under the Federal Water Pollution Control Act (FWPCA) with reimpounding freshwater tidal wetlands without an FWPCA §404 permit, and the landowner's Seventh Amendment rights were not violated by the lack of a jury trial in the administrative proceedings. The landowner knowingly discharged fill material into "waters of the United States" in violation of the FWPCA in the process of constructing a new embankment inside an old, deteriorated dike. Various state and federal agencies objected to the project, and after the U.S. Army Corps of Engineers (Corps) denied the landowner's §404 permit application, the landowner proceeded to construct the new embankment on the assumption that a §404 nationwide permit authorized the work. Subsequently, the landowner failed to comply with an EPA cease-and-desist order and restoration plan, and an administrative law judge imposed a $125,000 fine, which was made final on appeal to EPA's chief judicial officer.

The court first notes that at the time of EPA's administrative complaint in 1986, the Agency's sole means of recovering a civil penalty was through proceedings in a federal district court, and that if matters had remained in this posture, the landowner's current jurisdictional challenge would have merit. Two additional circumstances, however, subject the landowner's actions to EPA's jurisdiction. Congress amended the FWPCA in 1987 to authorize the EPA Administrator to assess civil penalties after conducting proceedings in accordance with the Administrative Procedure Act. Here, the administrative complaint charged a continuing violation for each day the pollutant remained in the wetlands without a permit. The court holds that because the landowner's violations continued long after the 1987 amendment, the EPA Administrator had subject matter jurisdiction over the landowner's violations of the FWPCA and this court has jurisdiction to review the Administrator's assessment.

The court holds that the Seventh Amendment does not prohibit the assessment of a civil penalty against the landowner without the intervention of a jury, because the dispute involves statutory public rights. Generally, the Seventh Amendment does not apply to disputes over statutory rights. The U.S. Supreme Court, in Tull v. United States, 17 ELR 20667, although not deciding whether Congress may assign enforcement of the FWPCA to an administrative agency without the intervention of a jury, noted precedent holding that the Seventh Amendment is not applicable to administrative proceedings.

Finally, the court holds that the Administrator's imposition of the maximum penalty was not an abuse of discretion. The Administrator concluded that the landowner's knowledge of the circumstances of his attorney's opinion about whether the dike repair could proceed under a §404 nationwide permit and his consistent refusal to comply with the Corps and EPA's orders did not prove good faith. A private party making a discharge under the assumption that the discharge is allowed under a nationwide permit bears the risk of liability for rectifying the harm done if the discharge is not permitted. Thus, EPA's denial of the landowner's claim of good-faith reliance on his attorney's advice was not an abuse of discretion.

Counsel for Petitioner
Dove W. Green Jr.
Green & Sasser
P.O. Box 1506, Conway SC 29526
(803) 248-5707

Counsel for Respondent
Jon M. Lipshultz
Environmental and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Before ERVIN, Chief Judge, PHILLIPS, Circuit Judge, and BUTZNER, Senior Circuit Judge.