On March 21, 2012, the Supreme Court unanimously held that EPA administrative compliance orders issued under the Clean Water Act (CWA) are subject to pre-enforcement judicial review. The decision itself was narrowly drawn, concluding that CWA compliance orders are “final agency action” entitled to judicial review under the Administrative Procedure Act (APA). While the court decided based on statutory grounds and declined to rule on the issue of due process, the undercurrents of the opinion and surrounding commentary suggest much more is at stake.
The decision has been praised by some as a victory for the “little man.” Justice Alito, in his concurrence, framed the case as “ordinary Americans entirely at the mercy” of the EPA, who simply want their day in court.
In 2007, Idaho landowners Chantell and Michael Sackett began building a home on their property near Priest Lake. Six months later, they received an administrative compliance order from the Environmental Protection Agency (EPA) stating that they had violated the CWA by filling part of their property, a designated a wetland, without a permit. The compliance order carried civil penalties of potentially up to $75,000 per day for violating the CWA and the compliance order. After being denied a hearing to challenge EPA’s jurisdiction over the parcel of land, the Sacketts sought injunctive and declaratory relief. When their case was dismissed, the Sacketts appealed to the 9th Circuit, which found that the compliance order was not subject to pre-enforcement judicial review.
The Supreme Court has passed up other opportunities to hear similar issues. Just last year they declined to hear a D.C. Circuit case, General Electric Co. v. Jackson, concerning pre-enforcement judicial review of unilateral administrative orders (UAOs) issued under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA). The Supreme Court may not have taken the case in part because CERCLA, unlike the CWA, explicitly bars judicial review of UAOs prior to enforcement. Of course, the Sacketts also happen to make much more sympathetic plaintiffs than General Electric. And at least for Justice Alito, the fact that “ordinary Americans” were up against an overbearing agency is key to the decision of ultimately limiting EPA enforcement power.
Of course pre-enforcement judicial review now applies not only to individuals like the Sacketts, but all other entities regulated under the CWA including everything from manufacturing, mining, and oil and gas extraction facilities to municipal governments, to animal feedlots. It applies not only to compliance orders regarding the filling of wetlands, but those regarding the discharge of pollutants into navigable waters and surface water quality. It should not come as a surprise, then, that amicus briefs were submitted in support of the Sacketts by General Electric, the American Petroleum Institute, and the National Association of Manufactures, just to name a few.
The majority insists that despite judicial review, compliance orders may still “remain an effective means of securing prompt voluntary compliance in those many cases where there is no substantial basis to question their validity.” The question of when a “substantial basis” exists, however, may not always be a clear one.
First, as seen in the Sackett case itself, the definition and designation of wetlands is often uncertain. The Sacketts contend that their property is not on a wetland and that they had no reason to believe it is. The National Resource Defense Counsel claims that based on the information obtained from a FOIA request, the Sacketts had been visited by EPA officials shortly after they began construction and were told they were on a wetland. They say the Sacketts then hired their own expert who confirmed the property was a wetland, and the EPA presented the Sacketts with an after-the-fact permit application to continue construction.
Compounding this uncertainty is the possibility that even when judicial review of a compliance order results in finding a violation, it might be contested a second time after EPA brings an enforcement action. While individuals like the Sacketts would generally not have the resources to engage in such lengthy litigation, other industries regulated under the CWA do.
In addition, perhaps the Sacketts had other options. They could have requested a formal determination of whether a permit was required. They could have then applied for an after-the-fact permit, and if it was rejected, sought review.
If the EPA finds compliance orders too risky to issue what avenues for enforcement remain? They could issue a warning letter, which would give the advantage of providing notice of a violation, but is likely to do little to persuade voluntary compliance. They can also engage in civil litigation, but the process is slow and does little to deter an ongoing violation.
This unanimous decision comes in the midst of sharp criticism of the EPA by members of Congress, GOP Presidential candidates, industry, and agriculture. It shows a clear concern for the reach of EPA power and the agency’s ability to intimidate the average American homebuilder into compliance. However, the Court glossed over the impact of pre-enforcement judicial review on the EPA’s ability to effectively regulate average American big industry.
— Anna Hill is an Executive Editor for MJEAL. She can be reached at firstname.lastname@example.org.
The views and opinions expressed in this blog are those of the authors only and do not reflect the official policy or position of the Michigan Journal of Environmental and Administrative Law or the University of Michigan.
 Sackett v. Envtl. Prot. Agency, No. 10-1062, at *10 (U.S. March 21, 2012) available at http://www.supremecourt.gov/opinions/11pdf/10-1062.pdf.