On Monday, January 9, 2012, the Supreme Court heard argument in a case challenging the Environmental Protection Agency’s issuance of administrative compliance orders under the Clean Water Act, 33 U.S.C. §§ 1251 et seq. (the “CWA”). Sackett v. United States Environmental Protection Agency, No. 10-1062.
Chantell and Mike Sackett bought a vacant lot near Priest Lake, Idaho, intending to build their home there. The lot is zoned residential and is located in a platted subdivision, with sewer and water hookups. Surrounding lots already have homes built on them. The Sacketts applied for and obtained the necessary building permits from the local authorities. Once they began laying gravel, however, they were hit with a compliance order from the EPA. The order declared the Sacketts’ property to be “wetlands,” and charged the Sacketts with discharging pollutants into the waters of the United States, absent a permit, in violation of 33 U.S.C. § 1311(a). In the order, the EPA required the Sacketts to return the property to its prior condition and to seek a wetlands permit – costs that, according to the Sacketts, would add up to tens of thousands of dollars, many times the $23,000 they paid for the property. Failure to comply with the order could result in fines of up to $37,500 per day.
The Sacketts tried to challenge the wetlands finding – both before the EPA and in federal court under the Administrative Procedure Act, but their challenges were rejected. The district court in Idaho concluded that the CWA precludes judicial review of compliance orders before the EPA has started an enforcement action in federal court, and granted the EPA’s motion to dismiss. Sackett v. EPA, No. 08-CV-185-N-EJL, 2008 WL 3286801 (D. Idaho Aug. 7, 2008). The Ninth Circuit affirmed. Sackett v. EPA, 622 F.3d 1139 (9th Cir. 2010). In other words, the only way in which the Sacketts could obtain judicial review of the order would be to violate the order and then raise their arguments in any enforcement action brought by the EPA.
Arguing on behalf of the Sacketts, Damien Schiff of the Pacific Legal Foundation stated that his clients’ inability to seek relief from the courts when the EPA issues a compliance order under the CWA amounts to a denial of due process. The majority of the justices seemed sympathetic with his argument. Justice Stephen Breyer, for example, later commented that not allowing judicial review of administrative actions would represent a “huge upheaval” of federal practice, because “for 75 years the courts have interpreted statutes with an eye towards permitting judicial review, not the opposite.” Justice Elena Kagan, however, suggested that the Sacketts had not exhausted all of their administrative remedies and could have obtained a wetlands permit from the Army Corps of Engineers. Mr. Schiff disagreed, stating that having to go through the wetlands permit process before a second agency was not an adequate remedy.
Deputy Solicitor General Malcolm Stewart argued for the EPA, and stuck to the EPA’s position that the Sacketts’ property is a wetland and that the CWA precludes any judicial review of compliance orders. The Court did not appear to be persuaded. In particular, Justice Anthony Scalia and Justice Samuel Alito sharply criticized the EPA’s argument. Justice Alito remarked at one point that “most ordinary homeowners would say this kind of thing can’t happen in the United States,” adding later that the EPA’s conduct is even more “outrageous” because it can change its mind at any time after issuing the compliance order.
The case is being closely watched by industry and public interest groups alike. Fifteen different amicus briefs have been filed, fourteen of them in favor of the Sacketts – including briefs filed by the Chamber of Commerce, the State of Alaska and various trade and industry groups. The media is describing the case as a fight between the “little guy” and big government. We’ll find out if David or Goliath wins this fight when a decision is issued this spring. The Court’s decision could impact not only CWA enforcement authority, but possibly also review of compliance orders issued under other federal environmental statutes.
Carmen R. Toledo is a partner at King & Spalding in Atlanta, Georgia.