Small Business to EPA: We're Drawing a Line in the Sand--Without a Permit!

Date: July 13, 2015

Jack Mozloom, 202-406-4450 or 609-462-5610 (cell)
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National Federation of Independent Business (NFIB) brings lawsuit against massive new waters regulation, argues that the agency overstepped its authority and failed under the law to perform mandatory economic impact analysis

Washington, DC (July 13, 2015) – The National Federation of Independent Business (NFIB) today announced a lawsuit to block the Environmental Protection Agency (EPA) and the Army Corps of Engineers from enforcing a controversial new rule that would regulate every trickle of water in America—no matter how small—as part of an audacious power grab that could destroy hometown businesses and local economic development.

“The EPA and the Army Corps have rewritten the Clean Water Act in an effort to expand their power and—in the process—have completely ignored their obligation to seriously consider small business impacts,” said Karen Harned, Executive Director of the NFIB Small Business Legal Center, a non-profit foundation that defends the legal rights of small business owners.  “These are runaway bureaucracies that have the power to destroy family businesses and local economies with shock-and-awe penalties $37,500 per day.  And we’re here today to stop them.”

The EPA earlier this year finalized regulations, recently approved by the White House, which greatly expand federal authority over private property under the Clean Water Act.  The Act, passed under the Nixon Administration, explicitly confines federal environmental oversight to “navigable waterways,” like rivers and bays.  It left it up to the states to set environmental regulatory standards for protection of all other waters.  Under the new “Waters of the United States” Rule, EPA and the Army Corps of Engineers have boxed out the states, asserting federal oversight over much smaller bodies of water, including farmers’ ponds, irrigation ditches, local creeks and streams and even land that is dry through most of the year.

The EPA says that the rule is necessary to protect local drinking water.  The EPA already imposes stringent regulatory standards designed to protect drinking water, however. Moreover, the waters that EPA now seeks to regulate are already heavily regulated at the state and local levels.

“This is an obviously specious rationale,” said Harned.  “It imagines that federal bureaucrats and environmental activists have a stronger interest in safe drinking water than the state and local officials whose families, neighbors and constituents are actually drinking the water.” 

Harned stressed that Congress, controlled by Democrats for much of the past 30 years, could have amended the Clean Water Act to expand federal jurisdiction if it had wanted Washington to be involved in local decisions involving private property.  “This is another example of the EPA getting impatient with the American people and their elected representatives and simply assuming the power that it wants,” said Harned.  “It doesn’t work that way under the Constitution.”

Also outrageous, according to Harned, is the EPA’s refusal to perform a small business impact analysis, which is required under the Regulatory Flexibility Act (RFA). The RFA requires federal agencies to consider alternatives whenever a proposed regulation will have a significant adverse impact on small business.

“In this case the EPA flatly refused to obey the law,” said Harned.  “By its own estimates the new rules will have an enormous impact on the economy.  How does it then argue that the impact won’t directly affect small business, which is half the economy?”

NFIB, along with the Chamber of Commerce, filed a lawsuit late last week in the Federal District Court for the Northern District of Oklahoma.  Harned said that she expects the case to eventually reach the U.S. Supreme Court, which recently struck down a similar regulation because the EPA failed to perform a mandatory economic impact analysis.

“We think we have an even stronger case here,” said Harned.  “With the mercury case the EPA half-heartedly attempted to estimate the cost of the regulation after they finalized.  The Supreme Court ruled against them.  In this case the EPA didn’t bother with the pretense.  It outright denied that it had an obligation to perform the analysis.

“In view of the Court’s recent decision, the EPA is on very thin ice.”

Harned recently discussed the lawsuit in front of the Supreme Court. Watch her talk about:

Why the NFIB is suing the federal government.

How much the new regulations could cost small businesses.

How the Supreme Court has ruled in previous Clean Water Act cases.

What law the EPA ignored in crafting the new rule.

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