A family-owned contracting business that claims the U.S. Environmental Protection Agency (EPA) unfairly fined it for failing to disclose lead hazards is challenging the in-house adjudication system the agency used to fine it.
The legal complaint disputing $375,000 in penalties was filed in the case of Ro Cher Enterprises Inc. v. EPA in the U.S. District Court for the Northern District of Illinois.
Ro Cher Enterprises is owned by Roger and Cheryl Janakus, who opened their Door and Window Superstore in 1983, selling doors and windows from their Chicago-area retail store and showroom.
On Dec. 22, the company filed for a preliminary injunction, its attorney, Oliver Dunford of the Pacific Legal Foundation (PLF), told The Epoch Times. PLF is a national public interest law firm based in Sacramento, California, that fights government overreach.
The court has been asked to issue an order to enjoin the EPA “from continuing its unlawful in-house administrative action against Ro Cher, so that Ro Cher can litigate its constitutional challenges in court,” according to court documents.
PLF said the EPA accused the Janakuses of violating the federal Toxic Substances Control Act (TSCA). Because of lead exposure risks, the remodeling and renovation of homes constructed before 1978 is regulated by the statute. Renovation companies have to be certified by the EPA and are required to provide owners and occupants of homes with informational pamphlets about the dangers of lead exposure. Companies can be fined close to $47,000 per violation.
But Door and Window Superstore is not a renovation company—it sells doors and windows and helps its customers find renovators. Although the Janakuses refer these renovators to their customers, the workers are not employees of their company.
Despite their lack of connection with the renovating work performed on seven residences and the alleged failure to disclose the lead hazards, the EPA claimed Door and Window was the “general contractor” for the renovations, a claim the Janakuses deny.
The EPA filed an administrative enforcement action claiming that Door and Window was the “general contractor” for the renovations concerned. The agency does not claim that renovation work resulted in the mishandling of lead or any other toxic material.
Despite no allegations of actual lead exposure or lead-related harm, the EPA wants to penalize Door and Window “for these purely ‘paper’ violations with $375,000 in penalties,” according to PLF.
Apart from the issue of whether the company is liable under the TSCA, PLF argues the legal problem is that the EPA’s in-house system of adjudication runs afoul of the U.S. Constitution.
The system is stacked against Ro Sher, Mr. Dunford told The Epoch Times in an interview.
“Primarily, the problem is that the agency in this situation is both the prosecutor and the judge and the appellate court.
“If we lose in front of the administrative [law] judge, who is an EPA employee, then we appeal to what’s called the Environmental Appeals Board, which is made up of more EPA employees.
“And then the EPA Administrator can review certain things, but the board in its discretion can allow the Administrator to review, and only after that administrative process is done, can Ro Sher then petition a real court for review.
“But even there, the process is in favor of the agency, and that’s because all of the factual determinations will have been made by the agency, and the court can review only to see … whether or not the facts, as found by the agency, are okay, so the court doesn’t do any independent or any new fact finding,” Mr. Dunford said.
“It just takes the facts as found by the agency. And then also, in many cases, the courts defer to the legal conclusions made by the agency. And so a party like Ro Sher not only has to spend the time and expense of going through the administrative process, but not surprisingly, agencies rule for themselves most of the time. And then when you finally get into court, the court defers in most cases to the agency, and so you’re never really given a true trial by an independent court.”
A 2017 article in the Villanova Law Review reported that the U.S. Securities and Exchange Commission wins 90 percent of cases in its own hearings but has just a 69 percent success rate against defendants in federal court.
The Janakuses also argue in their legal complaint that the EPA’s system of in-house tribunals is unconstitutional because the administrative law judges and members of the appeals board were not “properly appointed to office … [and] therefore lack the authority to carry out the functions of those offices, and their actions are void.”
“EPA’s claims against Ro Cher must be adjudicated … in front of an independent, life-tenured judge,” the complaint states.
The in-house proceeding also violates Ro Cher’s Fifth Amendment right to due process of law, its Seventh Amendment right to a jury, and its Eighth Amendment right not to be fined excessively.
Administrative law judges “wield tremendous power to make final, binding legal judgments that can destroy lives—like the Janakuses’ proposed $375,000 penalty. Because this power is so significant, the Constitution permits only politically accountable officials—those nominated by the president and confirmed by the Senate—to wield it,” PLF said.
The EPA responded to a request for comment from The Epoch Times by saying it “cannot comment on pending litigation.”
