Sackett v. Environmental Protection Agency (March 21, 2012, No. 10–1062) 566 U.S. ____ 

Background

The Sacketts own a 0.63-acre undeveloped parcel near Priest Lake in Idaho. In 2007, they graded and filled a portion of their property as preparation for building a home. Shortly thereafter, EPA officials served the couple with an administrative compliance order advising them that their parcel constituted wetlands subject to federal permit jurisdiction under section 404 of the Clean Water Act.  The order directed the Sacketts to restore the lot to its original condition without delay; and threatened them with substantial fines of up to $75,000 per day for non-compliance with the CWA and administrative order.

The Sacketts sought a meeting with EPA regulators to address their contention that the property was not wetlands subject to the CWA because it was separated from Priest Lake by several lots containing permanent structures. After they were denied the meeting, the Sacketts filed suit in federal district court to challenge the EPA’s wetlands classification. The district court dismissed their lawsuit, holding that EPA administrative compliance orders issued under the CWA do not constitute final agency action subject to judicial review. The Ninth Circuit affirmed and the U.S. Supreme Court granted certiorari. 

Supreme Court’s Decision

The Supreme Court unanimously reversed the decision and held that the administrative compliance order issued by the EPA constituted a “final agency action” subject to judicial review under the APA, and nothing in the CWA explicitly bars such review.

Beginning with the “final agency action” analysis, the Court explained that the APA provides for judicial review of final agency action for which there is no other adequate remedy in a court and the compliance order here had  “all of the hallmarks of finality.” Citing the “final agency action” rules from Bennett v. Spear (1997) 520 U.S. 154, 178, the court found that the EPA “determined” “rights or obligations” through the compliance order by requiring the Sacketts to restore their property according to an agency-approved plan and to give the EPA access.  Also, the order had legal consequences which exposed the Sacketts to double penalties in future enforcement proceedings and severely limited their ability to obtain a permit for their fill from the Army Corps of Engineers.  Further, the Court held, the order’s issuance marked a “consummation” of the agency’s decision-making process because the EPA’s findings in the compliance order were not subject to further agency review. 

The Sacketts also had no other adequate remedy in a court because a civil action brought by the EPA ordinarily provides judicial review in such cases, but the Sacketts could not initiate that process and each day they had to wait for EPA to bring such an enforcement action, they would accrue additional potential liability.  Applying for a permit and then filing suit under the APA if that permit was denied also would not provide an adequate remedy for the EPA’s action. 

Next, the Court held that there was nothing specific in the CWA that precluded judicial review.  Noting that the presumption in the APA favoring judicial review of administrative action can be overcome by inferences of intent drawn from the statutory scheme as a whole, the Court found that nothing in the Clean Water Act either explicitly or impliedly precludes pre-enforcement review.  As a result, the court held that pre-enforcement review of the EPA’s administrative order was appropriate.

The Court emphasized that that it was not deciding whether the Sacketts would win their court case, but only that they had the right to challenge the compliance order.   Therefore, it remanded the case back to the lower court. 

Justice Ginsberg issued a concurring opinion, noting that although the Court’s decision allowed the Sacketts to “immediately litigate” the question of “EPA’s authority to regulate their land under the Clean Water Act,” it did not resolve the question of whether the Sacketts could challenge the “terms and conditions” of the compliance order.  Justice Alito also wrote a separate concurrence in which he criticized federal wetlands regulators and policy stating that the “combination of the uncertain reach of the Clean Water Act and the draconian penalties imposed for the sort of violations alleged in this case still leaves most property owners with little practical alternative but to dance to the EPA’s tune.”  He challenged Congress to create a “reasonably clear rule regarding the reach of the Clean Water Act.”

Conclusion

To obtain judicial review of administrative orders issued under the CWA, property owners no longer need to wait until an agency chooses to sue them to enforce the order.  Rather, as Sackett makes clear, they have the right under the APA to sue as soon as they receive the order to which they object.  Although this case specifically addresses an order issued under the CWA, the Court’s holding could arguably apply to other federal environmental statutes as long as they do not explicitly preclude pre-enforcement review. Future cases that address the scope of this decision will determine how big of an impact it will actually have on the power of federal agencies.