Sackett v. EPA – Supreme Court Allows Pre-Enforcement Review of Clean Water Act Compliance Orders

On March 21st, the United States Supreme Court unanimously ruled that the Sackett family has a right to challenge a pre-enforcement compliance order from the Environmental Protection Agency (EPA) before EPA initiates a formal enforcement action in Sackett v. EPA.

The Sacketts own about a half-acre vacant parcel of land in Idaho.  In early 2007, they filled the parcel with dirt and rock in preparation for building a house.  Later that year, EPA issued an administrative compliance order against the Sacketts alleging that the parcel of land is a wetland subject to the Clean Water Act (CWA) and that the Sacketts violated the CWA by filling in the land without obtaining a permit.  EPA ordered the Sacketts to return the land to its former condition or face over $30,000 in penalties per day for failure to comply.

After EPA refused to hear the Sacketts’ challenge to the order, the Sacketts brought an action against EPA in the United States District Court for the District of Idaho seeking an injunction against EPA and declaratory relief.  However, the district court dismissed the action on the grounds that it did not have subject-matter jurisdiction (i.e., the right to consider that type of case).  The court concluded that the CWA precludes judicial review of compliance orders before EPA has initiated an enforcement action in federal court.  The Ninth Circuit agreed.

The Ninth Circuit found that allowing pre-enforcement review would require EPA to litigate all compliance orders in court, even though Congress gave them the choice of either issuing a compliance order or bringing a civil action.  Additionally, the court found that because no sanctions can be imposed for non-compliance until EPA brings an enforcement action in court, a party would have an opportunity to challenge EPA’s action.  The court found that its ruling did not violate the Sacketts’ right to due process, especially given that any penalties are subject to judicial review and may only be imposed for violation of the CWA and not the compliance order per se.

The Supreme Court (as it often does) reversed the Ninth Circuit.

In an opinion by Justice Scalia, the Supreme Court found that EPA’s compliance order was a final agency action reviewable under the Administrative Procedure Act (APA).  In addition to governing the process by which government agencies can issue new regulations, the APA establishes procedures for judicial review of agency action (such as by EPA) by an aggrieved party.  The decision turned on whether the compliance order was “final.”  The Supreme Court found that the compliance order met the requirements of a final agency action because EPA determined the Sacketts’ “obligations” and “legal consequences flow” from the issuance of the order and the order “marks the consummation of the agency’s decision making process.”

The Supreme Court also rejected EPA’s argument that judicial review under the APA is improper because the CWA impliedly precludes judicial review.  As noted by the Court, the APA creates a presumption in favor of reviewing agency actions.  The Court rejected EPA’s argument that because the CWA provides EPA with the choice of either taking an administrative action or a judicial action it impliedly precludes judicial review of a compliance order under the APA.  The Court ultimately found in favor of review, stating that “APA’s presumption of judicial review is a repudiation of the principle that efficiency of regulation conquers all.”

Justice Ginsberg wrote a short concurrence clarifying that the decision only found that the Sacketts could challenge EPA’s authority to regulate their land, but not the “terms and conditions” of the compliance order.  In his concurrence, Justice Alito lambasted how the reach of the CWA is “notoriously unclear.”  He urged that Congress should “provide a reasonably clear rule regarding the reach of the Clean Water Act.”

This decision is important for what it does and does not hold.  EPA will have further incentive to make sure that there is no substantial basis to question the validity of their compliance orders because they may be challenged in court.  While EPA in the past may have seen compliance orders as an effective means to obtain voluntary compliance, under questionable circumstances they will probably be less likely to issue an order.  However, the decision does not go as far as finding that all environmental compliance orders may be challenged pre-enforcement.  The decision is confined to a challenge of an order brought under the CWA.  With respect to other environmental statutes, EPA will likely continue to argue preclusion.  Finally, as Justice Alito aptly points out, there continues to be no certainty as to the scope of the CWA as it pertains to private property owners.  So, while the Sacketts of the world will have the right to challenge EPA’s jurisdiction, they still have no clear guidance as to the CWA’s reach.

The Sacketts were represented by the Pacific Legal Foundation (PLF).