Property Rights Foundation of America®

from Proceedings of the Second Annual New York Conference on Private Property Rights (PRFA, 1996)

Environmental Bounty Hunting
Michael S. Greve, Ph.D.
Executive Director, Center for Individual Rights, Washington, D.C.

Thank you very much for that very generous introduction. I thank Carol for inviting me here and all of you for attending. This is really for me personally a very moving spirit.

When you listen to Jim Bovard, you live in Washington, D.C., and you follow the presidential debates, you can't hope but think, how is this has happened to the country. It seems to have really lost its soul and its heart. It's very good to know that there are some people who are fighting back and are at least not going to give up without a good fight.

I've been invited here to talk about environmental bounty hunting, the so-called "citizen suits."

What are citizen suits?

The "citizen suit" is technical term. What it means are lawsuits by plaintiffs who have no rights of their own and are not seeking in the litigation to redress injuries that were done to them in particular.

These plaintiffs don't represent themselves. Instead, they claim to represent the public at large, or, as is sometimes said, they act as private attorneys general. They sue either the government or they sue other private parties.

Every major environmental statute authorizes such suits by any citizen. The effects are really unique to environmental law. You can't find similar instruments elsewhere in American law or, for that matter, in European law.

Private enforcement actions of the type I've described are universally recognized to be bad and dangerous in other areas of the law, and environmental law, as I will explain, illustrates some of the dangers.

Why then do we have private citizen suits on behalf of the government in environmental areas?

Two arguments are usually made in behalf of these suits. One is public participation. Citizen suits are a way for the public to participate in environmental policy.

The second argument that is generally made on behalf of these suits is that the government will not fully enforce the law unless private citizens assist the government or force the government to fully enforce the law. Therefore we need these private actions.

There are serious problems with both of these justifications, and I'll consider them in turn.

The key problem with the public participation argument is this: The public or concerned citizens don't participate in these matters at all. The people who do the participating are organized environmental groups. Citizen suits are basically a vehicle to give these groups, the Sierra Club, the Natural Resources Defense Council, the Environmental Defense Fund, added leverage.

We allowed these groups to play government in these cases on the pretense that they really represent the public in some more meaningful way in some sense, than the government represents the public. But you really have to ask yourself, who exactly wanted or elected the Environmental Defense Fund or some lawyer from the NRDC. What you really allow these groups to do is to bring the force of the law to bear on other private citizens in the name of the government without any kind of democratic control or oversight or accountability, and that is generally a very bad and dangerous thing.

Turning to the second justification that is generally advanced on behalf of these cases: Full enforcement of the law is warranted and therefore we need private citizens to step in.

The first argument against that kind of justification is the potential for abuse. Imagine the following:

The tax code is not fully enforced. The IRS looks only at a very small sample of private tax returns. Suppose we did something along the following lines. We said private tax returns are public, anybody will have access to them, and anybody out there will be allowed to sue any other private citizen and force that citizen to prove that he or she paid his or her taxes in full. Most people would find that intuitively disturbing and very tyrannical, because nothing will prevent your estranged uncle from dragging you into court and forcing you to defend yourself.

There's all kinds of potential for abuse, which is precisely why we don't have such suits.

Now it is precisely analogous actions that are authorized under environmental law.

Your environmental records, or records of any kind of property, publicly held, are on record at the EPA. They're accessible to the public and, whatever the document, can form the basis of a lawsuit against you.

The second problem with these actions is with the argument that we really need full enforcement because full enforcement of the law is a good idea.

But of course full enforcement of the law is never a very good idea.

Observe speed laws. Consider where I live; the full enforcement of speed limits would mean that nobody ever gets to work. The full enforcement of the tax code would mean that life as we know it would come to an end. Under the Clean Water Act, you are not permitted to mix a Scotch and water, or, for that matter, to make coffee, because the water may have travelled in waters of the United States, and any additive, any additional substance is a discharge. If you don't have a permit, it's a violation, technically speaking.

With laws like that, you obviously don't want full enforcement, which means that you have to give the enforcers, whoever they may be, some appropriate incentives to direct their enforcement energies against the right targets, to direct their enforcement energies in ways that will actually produce some good. How do we do this with public enforcers? Well, the way we do that is we don't give them enough money to go after every violation. We cut their moneys.

The very same Congress that puts things like the Clean Water Act on the wall, and says, "Zero discharge, that's our goal," then turns around and refuses to give the EPA enough money to go after each violation. And the reason why Congress does that is that it is aware that if the Clean Water Act were fully enforced, well, life on this planet would be forced to come to an end.

How do you control private enforcers? Well, you can't control their budgets. Their budgets after all are their budgets. The way that we pretend to do it, is that we say that the private enforcement action brought by these environmental groups shall be altruistic. There shall be no private gain in these actions. And since there is no private gain and there are no possibilities for rewards, the private enforcers actions will look to nothing but the environmental effects of their enforcement actions in picking issues and among enforcement targets. That's the theory.

In practice, however, it never works that way. It is extremely hard for any private enforcer, or any enforcer, public or private, to tell what are the environmental effects of any given enforcement action. That is quite clear.

You'd say, well, somebody's violating his permit. Yeah, maybe he's violating his permit, but maybe the permit violation doesn't do any harm. Somebody else may be living within permit boundaries, or acting within permit boundaries, but still the actions are very, very harmful. That's been two aspects of the way our environmental laws are written.

As Jim Bovard pointed out to you, it's easy with cocaine, heroin and marijuana; those are illegal. It's very, very hard in the environmental area, where you're never quite certain what are the actual effects of enforcing the law here rather than there against A rather than B under circumstances C rather than circumstances D.

And under the conditions, the private enforcers will invariably look to the costs and the rewards of any given enforcement actions to themselves in picking and choosing enforcement action. How costly is this for us to litigate? What are the rewards for us in litigating this case and enforcing the law under these circumstances?

That is why almost all citizen suits to this day have been brought under the Clean Water Act. For various technical reasons, that is the act that makes it cheapest to bring enforcement actions. All other statutes make it somewhat harder and somewhat more expensive on private enforcers.

It is not because the Clean Water Act is under-enforced. Quite the contrary. This is when, for instance, environmental citizen suits are usually with disturbing frequency, brought over paperwork violations.

The reason is that paperwork violations are very, very easy to prove. You either handed in your report on time or you didn't. And if you didn't, you're getting hammered. It's much, much harder to prove that there's been some actual effect of some real world violation.

So, too, with the rewards. Technically speaking, there are not supposed to be private rewards under environmental citizen's suit provisions.

There are, however, penalties, $25,000 per day, per violation usually, which are supposed to be paid into the federal treasury if the private enforcer wins. What usually happens is that the Natural Resources Defense Council says to the private defendant, "Tell you what, we could nail you for 25,000 bucks per day per violation payable to the treasury. That would amount to, say, $2,000,000 just to pick a number out of a hat. It's much better for you, it's much better for us, if we settle on a private bribe payable to some friends of ours in the amount of say, $1,000,000. You pay only $1,000,000, on top of which that's tax deductible because it goes to a non-profit organization. It's much better for us because we have the money. And in case after case private corporations settle on precisely these terms.

This avenue was invented by the Natural Resources Defense Council, which set up a place called the Open Space Institute in its own offices (it's called a shell) to be a repository for settlements obtained in private enforcement cases. And the Open Space Institute goes around and buys up land anywhere in New York. It doesn't have anything to do with the environmental violations or the purpose for which the case was brought in the first place. It's just cash on hand and it has to go someplace and it goes into land purchases.

After 25 years of citizen enforcement there is zero evidence that citizen suits have done any good for the environment.

They've certainly, however, been good for environmental advocacy groups.

What can be done about this? Well, there's almost nothing can be done in legislatures. The corporations don't really pay any attention to this. Legislatures are befuddled; as soon as anybody says "public participation," "environmental group participation," they say, "okay, okay, okay." They are exceedingly reluctant to alienate groups over something as arcane as these provisions. And the environmental groups themselves, of course, will fight tooth and nail to preserve these special privileges they're granted under the law. It doesn't do you any good to point out that it's a racket. Of course it is.

But, precisely because it's a special interest racket that's so obvious, what you can do, I think, are two things. Public exposure, I think, is extremely useful. Several years ago there was a Sierra Club activist in New Jersey who exposed these things, for no better reason than that she was getting nervous.

The Public Interest Research Group, Ralph Nader's group in New Jersey, won a lot of these cases, collected millions of dollars, and the Sierra Club was in with the perks in some of these cases. She discovered that nobody knew where these millions of dollars went. She went to the Legislature and said, "I'm all in favor of these suits, or I used to be in any event, but there has to be some accountability. There's a scandal waiting to happen."

The Sierra Club hit her back. They got her fired as a lobbyist, and denounced her in public and on and on and on. But as a matter of public perception, I think, she'd won that part. These were sums demanding accountability, and the New Jersey courts have been somewhat more circumspect since then. It was certainly very embarrassing to them.

I think the private property rights movement and its friends over the past decade have managed to discredit environmental groups. Credibility is the only currency these groups really have and the more of these scams you expose, the more you deprive them of their currency.

The other piece of good news is that you can fight back against these suits, at least within limits. As far as federal statutes, federal civil suits, are concerned, the Supreme Court has handed down a 1992 case called Lujan v. Defenders of Wildlife, which basically declared the citizen suits provisions, as written, unconstitutional. Not that Congress has paid any attention to that; but it does mean that defendants in citizen suit corporations frequently have constitutional defenses against the suits. For reasons mentioned, corporations don't often utilize these defenses. They find it much, much cheaper to settle.

What is really needed is for some defendant in one of these cases to stand up and fight, and push and push and push. So what we're looking for is a few good defendants who have the courage and the nerve to stand up to this abuse.

Thank you.

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