U.S. Supreme Court Opens Courthouse Doors For Early Challenges To Environmental Agency Orders

The Supreme Court today handed down its decision in the widely discussed case of Sackett v. Environmental Protection Agency, addressing the question of whether a regulated party can obtain pre-enforcement review of EPA administrative compliance orders under the Clean Water Act (CWA).1 In a unanimous decision, the Court dealt EPA a major setback by reversing the lower court decision and holding that the petitioners are entitled to bring suit under the Administrative Procedure Act (APA) to challenge the jurisdictional basis for such orders. This decision is certain to affect procedures for issuance and review of pre-enforcement actions under the CWA and possibly other environmental statutes.

BACKGROUND

Plaintiffs Michael and Chantell Sackett own a 0.63-acre undeveloped lot near Priest Lake, Idaho, where they wish to build their family home. The lot is separated from the lake by several lots that contain permanent structures. In April and May 2007, the Sacketts filled approximately one-half acre of their property in preparation for construction. In November 2007, the EPA issued a compliance order asserting that the property was subject to the CWA because it contained wetlands and was adjacent to the lake, a "navigable water" under the statute.2 The compliance order found a CWA violation because filling had been conducted without the required permit from the Army Corps of Engineers (Corps). The compliance order directed the Sacketts to restore the parcel within a year and warned that failure to comply may lead to civil penalties of up to $32,500 per day.3 In April 2008, the Sacketts requested a formal administrative hearing, which the EPA denied.

The Sacketts filed suit in the U.S. District Court for the District of Idaho challenging the jurisdictional basis for the order. Specifically, the Sacketts alleged that the compliance order (1) should be set aside as arbitrary and capricious under the APA, which provides for judicial review of final agency actions "for which there is no other adequate remedy in a court,"4 and (2) violates the Sacketts' procedural due process rights because it was issued without a hearing. The EPA moved to dismiss the action. In August 2008, the district court granted EPA's motion, holding that the CWA precluded judicial review of compliance orders before the EPA has filed an enforcement action.

On appeal, the Ninth Circuit affirmed, joining courts in other circuits by holding that the CWA impliedly precludes pre-enforcement judicial review of a compliance order because the structure and objectives of the Act indicated that Congress...