Supreme Court Holds EPA Compliance Order Asserting Clean Water Act Jurisdiction Is Subject To Judicial Review

Sackett v. Environmental Protection Agency, 566 U.S. ___ (2012) (decided March 21, 2012)

Private property owners are entitled to immediate judicial review of Environmental Protection Agency compliance orders that seek to regulate their property under the federal Clean Water Act ("CWA"), the Supreme Court unanimously held last week. The Court's much anticipated decision in Sackett v. Envtl. Protection Agency says that property owners need not wait for the EPA to bring a judicial enforcement action in order to contest the agency's assertion that their property contains "waters of the United States" subject to CWA jurisdiction. But at least one member of the Court believes that Justice Scalia's narrowly crafted opinion will have limited benefits for most property owners and that Congressional action is still needed to clarify the extent of CWA jurisdiction.

Sackett involved a couple who filled approximately a half acre on a residential lot they owned near Priest Lake in Idaho. The EPA subsequently issued an administrative compliance order to the property owners, finding that the filled property contained wetlands that were "waters of the United States" subject to federal jurisdiction under the CWA. The order found that the fill of the wetlands violated CWA § 301 and directed the Sacketts to restore the filled wetlands according to an EPA work plan.

The Sacketts did not believe their property was subject to the CWA and requested a hearing before the EPA. EPA denied the request. The EPA's action presented the Sacketts with two unpalatable options: incur significant expense to remove the fill and restore the alleged wetlands, or wait for the EPA to bring a civil enforcement action while the potential penalties continued to accrue. The CWA provides for penalties of up to $37,500 per day for violations, and the EPA takes the position that the penalties are doubled when a person has received a compliance order and failed to comply.

The Sacketts instead filed suit in federal district court, claiming that the compliance order violated the Administrative Procedure Act ("APA") and deprived them of protected property interests without the due process guaranteed by the Fifth Amendment. The district court dismissed the Sacketts' claims for lack of subject matter jurisdiction, and the Ninth Circuit affirmed, finding that the CWA precludes pre-enforcement judicial review of compliance orders. Other circuits have reached the same conclusion.

The Supreme Court...