Supreme Court Allows Immediate Challenges To Environmental Compliance Orders In Sackett V. EPA

On March 21, 2012, the Supreme Court unanimously reversed a decision by the United States Court of Appeals for the Ninth Circuit, holding that a compliance order issued under the Clean Water Act ("the Act") constitutes a "final agency action" and that recipients of these orders may immediately file suit challenging such orders under the Administrative Procedure Act ("APA"). The decision repudiates the position of the United States Environmental Protection Agency ("EPA") that the targets of such orders must wait until EPA decides to enforce the order before seeking judicial review.

The ruling not only means that recipients of compliance orders can seek judicial review immediately, it will also cause the EPA to develop more robust enforcement cases before issuing compliance orders so that such orders are able to withstand judicial scrutiny. The implications of this ruling will also likely reach into other administrative contexts (both environmental and otherwise) and enable regulated entities to challenge regulatory actions sooner.

Case Background

The facts of the case tell a compelling story of individual citizens confronting a powerful government bureaucracy. Michael and Chantel Sackett own a 2/3 acre residential lot in Idaho and planned to build a house on their property. The lot lies just north of Priest Lake, but it is separated from the lake by several lots containing permanent structures. To prepare the land for construction, the Sacketts filled in part of the lot with dirt and rock. Months later, they received a compliance order from the EPA finding that the property contained jurisdictional wetlands, that the wetlands were located adjacent to a navigable body of water (Priest Lake), and that the fill material constituted an unauthorized discharge of fill material prohibited by the Act. On the basis of these findings, the order directed the Sacketts to immediately restore the property. If the Sacketts failed to comply and the EPA decided to file a civil suit to enforce the order, the couple could have been subject to up to a $75,000 fine per day of violation.1

Faced with such severe consequences and believing that the EPA was in the wrong, the Sacketts sought a hearing with the EPA. Their request was denied. They then filed suit in the federal District Court of Idaho, seeking declaratory and injunctive relief. The Sacketts argued that the EPA's issuance of the compliance order was arbitrary and capricious under the APA, and that the...