RECENT CASES

Sackett v. Environmental Protection Agency

Supreme Court holds that administrative compliance orders issued by EPA under the Clean Water Act are subject to pre-enforcement judicial review; and thus does not reach the constitutional question of whether the absence of pre-enforcement review would violate property owners’ right to procedural due process

Status: Remanded to the District Court for further proceedings.

Discussion & Analysis: In 2007, Mike and Chantell Sackett purchased an undeveloped lot in a residential zone near Priest Lake in Idaho. In preparation for building a home, the Sacketts filled in one-half acre of wetlands on their property with dirt and rocks.

The Clean Water Act (CWA) prohibits the unpermitted discharge of pollutants into the “waters of the United States,” which can include wetlands. When pollutants are discharged without a permit, EPA has several enforcement options. First, EPA can assess an administrative penalty. Second, the agency can bring a civil enforcement action in federal court. Third, EPA can issue an administrative compliance order, which is a document describing the violation and setting forth the time for compliance. The order may be issued “on the basis of any information available.” If the alleged violator fails to comply, EPA may bring suit to enforce the order; administrative compliance orders are not self-enforcing. A federal judge may then assess civil penalties.

EPA issued a compliance order to the Sacketts, alleging they had violated the CWA by dumping fill into jurisdictional wetlands without a permit and directing them to restore the land to its original condition. Additionally, the order encouraged the Sacketts to contact EPA regarding the allegations and warned them that failure to comply with the order could subject them to civil or administrative penalties. The Sacketts requested a hearing from EPA to challenge the jurisdictional determination; the agency declined, and the Sacketts sued. The Ninth Circuit found that the CWA does not authorize courts to review a compliance order until EPA has sought to enforce it. The court further concluded that this absence of pre-enforcement review of CWA compliance orders did not violate the Sacketts’ due process rights.

In a unanimous opinion authored by Justice Scalia, the Supreme Court reversed. First, the Court concluded that EPA’s administrative compliance order was a “final agency action” that is presumptively reviewable under the Administrative Procedure Act. The Court noted that the compliance order had legal consequences—one hallmark of a final agency action—and agreed with the Sacketts’ argument that they had no choice but to comply with an order they believed to be unjustified, as the only alternative was to risk penalties that continued to accrue for each day of noncompliance. Additionally, the Court noted that EPA had determined rights and obligations in the compliance order with finality. Next, the Court determined that the Sacketts had “no other adequate remedy in court,” and agreed that their inability to obtain judicial review until EPA decided to bring an enforcement action essentially foreclosed their access to the courts.

Second, the Court concluded that the Clean Water Act does not preclude pre-enforcement judicial review. The Agency had argued that Congress had given EPA a clear statutory choice to issue a compliance order as an alternative to bringing a civil enforcement action in court. Allowing pre-enforcement judicial review of compliance orders would eliminate this choice, because the subject of the order could compel EPA to litigate. The Court rejected this argument, finding that there are many other important distinctions between a compliance order and a civil action. Further, according to the Court, the fact that compliance orders are not self-executing does not evidence Congress’ intent to preclude judicial review.

By ruling that the CWA does not preclude judicial review of administrative compliance orders, the Court did not need to reach the Sacketts’ constitutional due process argument. (Compare with General Electric Co. v. Jackson, in which the D.C. Circuit held that compliance orders issued by EPA under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA, or Superfund) do not deprive a responsible party of its constitutional right to due process. Because CERCLA does expressly preclude pre-enforcement review of clean-up orders, the General Electric court was required to decide this constitutional question.)

Depending on the extent to which future courts apply Sackett to statutes other than the Clean Water Act, the decision could broadly affect agencies’ abilities to enforce many environmental laws, including those governing water and air pollution control and hazardous waste remediation. Each year, EPA and state environmental agencies issue many compliance orders, which allow agencies to address environmental problems swiftly. The use of compliance orders also encourages regulated parties to communicate and negotiate with agencies, promoting a more iterative and flexible administrative process—and a means of averting costly and time-consuming litigation. Additionally, these orders allow agencies to conserve taxpayer money, because an agency can seek voluntary compliance from a violator or correct its own mistakes before expending considerable funds and staff time on litigation.

The full effects of the Supreme Court’s ruling in Sackett remain unclear. The decision could result in more and earlier lawsuits, a result that could substantially undermine the efficiency and effectiveness of environmental programs. Recognizing that an administrative compliance order could quickly generate a lawsuit, EPA could be discouraged from issuing them, even in situations where environmental damage otherwise could be promptly addressed outside of court. In the wake of Sackett, EPA could decide increasingly to issue less formal notices of violation rather than appealable compliance orders, although it remains unknown how effective this alterative would be in ensuring compliance.

Key Opinion: Sackett v. U.S. Environmental Protection Agency , 131 S. Ct. 309 (2012), reversing 622 F.3d 1139 (9th Cir. 2010).

See Also: General Electric Co. v. Jackson , 610 F.3d 110 (D.C. Cir. 2010) ( rejecting the argument that EPA’s issuance of unilateral administrative orders under CERLCA deprives company of its constitutional right to procedural due process), affirming 595 F. Supp. 2d 8 (D.D.C. 2009), cert. denied , 79 U.S.L.W. 3685 (U.S. June 6, 2011).