Defenders Stops Environmental Groups' Smart Growth Proposal

December 13, 2002

Washington, [D.C.] - Today a U.S. District Court Judge held that the federal
government must justify the environmental burdens it is seeking to impose on
small business loan applicants as part of a settlement proposed by

The settlement, to which the U.S. Small Business Administration has agreed,
would bring to an end a lawsuit filed by two
environmental groups who claim the SBA's small business lending program
causes "urban sprawl. "

Defenders of Property Rights intervened in this
case on behalf of the National Black Chamber of Commerce and the Small
Business Survival Committee challenging the proposed settlement agreement on
grounds that it would create such a tremendous burden upon those seeking
loans, the entire small business-lending program would essentially be shut

"Today is a big win for small business owners seeking their piece of the
American Dream," said Nancie G. Marzulla, President of the Washington, D.C.
- based legal foundation Defenders of Property Rights. "We are thrilled the
judge thwarted the government's attempt to create these extraordinary
burdens, and is forcing them to justify a legal cause for their desire to do
so," said Nancie Marzulla.

In their lawsuit, Forest Conservation Council and Friends of the Earth claim
that a small business loan of $300,000 should be considered a "major
governmental action," thereby requiring the small business owner to comply
with the National Environmental Protection Act-an environmental statute that
only applies to the federal government. By the terms of the proposed
settlement, a small business loan applicant would be held responsible for
the same expensive and lengthy procedures as those required to build federal

"This lawsuit is at the core of one's freedom of choice about where to live
and conduct one's business activities, rights secured in part by the Fifth
Amendment's protection of private property rights," said Nancie G. Marzulla.
"Defenders stands on guard for those business owners in our society who are
trying to create a better life for themselves and all Americans."

Defenders of Property Rights
1350 Connecticut Avenue, NW
Suite 410
Washington, D.C. 20036
Fax: 202-822-6774
Toll-free: 866-630-9787


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