It can show up in your mail one day: an administrative complaint from the Environmental Protection Agency. Maybe you cleared weeds on your property; maybe your business is involved in construction or installations; maybe someone called the regional EPA office on you. Now you’re being threatened with a civil penalty: You could be on the hook for hundreds of thousands of dollars.
You can try to fight it. But the reality is most of these complaints end in settlements—because once the EPA starts an administrative proceeding against you, you’re stuck in the agency’s in-house adjudication where the EPA’s own employees decide your fate.
A Chicago Story
Roger and Cheryl Janakus sell doors and windows at their Chicago-area superstore. They opened the business in 1983 after Roger, who worked as a general contractor, saw a need for showrooms where contractors and homeowners could easily browse door and window options.
The Janakuses don’t do installations themselves: They refer customers to factory-trained installation companies they trust. These companies handle the home inspections, measurements, and installations of purchased doors and windows. Roger and Cheryl don’t take a finder’s fee or cut from these companies.
The EPA regulates the renovation of older homes—that is, homes constructed before 1978, which is about half of all homes in the country. Companies that do these renovations are supposed to get an EPA certification. They’re also, according to the EPA, supposed to “post signs clearly defining the work area,” cover the ground with plastic sheeting, give residents an EPA pamphlet about lead hazards, and obtain written acknowledgements from residents that they’ve received the pamphlet.
In April 2023, Roger and Cheryl received a complaint from the EPA. The agency accused the couple of subcontracting window installations in seven older homes without an EPA certification and failing to obtain written acknowledgement that residents received the EPA pamphlet.
The agency judges the case it prosecutes, which is as unfair as it sounds. It’s no wonder the EPA has high win rates in its own tribunals.
“This is an administrative proceeding to assess a civil penalty,” the EPA complaint began. It accused Roger and Cheryl’s company of eight separate regulatory violations. (One violation for not having the EPA certification. And seven violations for not obtaining written acknowledgement from residents about the pamphlets; each home counts as a separate violation.)
The complaint—which was 102 pages, including attachments—noted Roger and Cheryl could receive a penalty of up to $46,989 per violation.
In other words, the couple was looking at a possible $375,000 fine—for paperwork violations. The EPA never claimed that lead or any other dangerous substance was mishandled.
The Evolution of the EPA’s Power
Things didn’t always work this way.
When the EPA was created in 1970, if it wanted to impose a fine on someone, it had to refer the matter to the U.S. Attorney General’s Office for adjudication in a normal, federal court.
But over the years, Congress started allowing the EPA to impose its own fines through in-house administrative proceedings—where the EPA operates in the shadows, outside the judicial branch. The agency expanded its in-house adjudication powers in the nineties, adding new administrative law judges to its staff so it could handle more enforcement in-house.
Today, the EPA can impose fines on any alleged regulatory wrongdoer without an independent judge signing off. Every year, the EPA sends hundreds of complaints to individuals and businesses around the country about their alleged violations of environmental regulations.
A PLF study found that in 2022, EPA administrative fines totaled almost $40 million.
A Narrow Escape
Once you get an EPA complaint, there’s not an easy way to fight it.
You can request a hearing—but the hearing will be held at the EPA’s office and overseen by an EPA administrative law judge. If you don’t like the judge’s decision, you can appeal; but the appeal is handed over to the Environmental Appeals Board, which is, once again, comprised of EPA employees.
In other words, the agency judges the case it prosecutes, which is as unfair as it sounds. It’s no wonder the EPA has high win rates in its own tribunals.
Represented by Pacific Legal Foundation, Roger and Cheryl sued the EPA in federal court to challenge the EPA’s authority to impose fines through in-house proceedings.
“The Constitution does not vest the ‘judicial power of the United States’ in the Executive Branch,” our complaint against the EPA argued. “Only courts of law, through the exercise of judicial power, may issue judgments and deprive private parties of private rights.”
The Janakuses’ lawsuit might have succeeded—but the EPA offered to settle the matter if the Janakuses paid a small fine. The Janakuses did not admit to any wrongdoing, but they agreed to waive their right to contest the allegations and the ability to seek judicial review. The couple, faced with the alternative of $375,000, settled.
The case is now closed.
Who Will Be Next?
Other Americans across the country have stories similar to Roger and Cheryl’s—and many are openly confused by how a regulatory agency can impose fines through such an unjust process. A couple years ago, the owner of a Colorado motorsports shop spoke out in media interviews after he received a letter from the EPA accusing him of selling illegal automative products. The letter said if he didn’t pay an $18,000 penalty within 30 days, the penalty would increase to as much as $180,000.
“I was dumbfounded by it,” the owner said in one interview. “These are products the entire industry has used.” The fine would make it hard for him to make payroll. “I didn’t understand the basis,” he said. “I didn’t go to any trial or talk to anybody. It was just: You did this, and it’s this much. Like, whoa, wait a minute!”
This is the hard reality of EPA administrative adjudication: It wields heavy fines as punishment but lacks the due process of a judicial proceeding. And thanks to the EPA’s reach over private property and businesses, almost anyone could be a next target.
