March 22, 2012
Yesterday, in a case titled Sackett v. EPA, the U.S. Supreme Court issued a rare unanimous ruling stating that property owners can legally challenge a compliance order immediately after it is issued rather than waiting until the agency finalizes its action. While the specifics of the case superficially involve the issue of the reach of Clean Water Act jurisdiction, the ruling was narrowly focused on the question of whether property owners have a right to immediate judicial review of a compliance order and has no impact on the scope of Clean Water Act jurisdiction and regulation.
The background of this case is that a husband and wife purchased a property near a lake in Idaho and began placing fill in order to prepare the site for the construction of their dream home. Soon after, officials from the U.S. Environmental Protection Agency (EPA) arrived at the site and requested to see the Clean Water Act Section 404 permit necessary to place fill in wetlands which the couple did not have and did not know was necessary since they did not perceive that the property contained wetlands. A few months later, the EPA and U.S. Army Corps of Engineers issued an administrative compliance order requiring the Sacketts to remove the fill material and restore the wetland area with fines up to $75,000 per day for noncompliance.
Because the Sacketts disagreed with the EPA’s conclusion that the site contained wetlands, they wanted to contest the basis for the compliance order. However, because the EPA had not taken final action by proving that a violation of the law had taken place, the couple was not allowed to question the compliance order until substantial fines were imposed, a position that was upheld by the lower courts. The EPA disagreed stating that lawsuits challenging compliance orders would undermine their ability to rapidly respond to water pollution activities.
The unanimous ruling by the Supreme Court, written by Justice Scalia, sided with the Sacketts and clarified that compliance orders will still be effective if they could be legally challenged. Justice Scalia wrote, "Compliance orders will remain an effective means of securing prompt voluntary compliance in those many cases where there is no substantial basis to question their validity." While some clearly agreed with this conclusion, others argue that future defendants could significantly delay compliance through litigation. The Sacketts are now able to argue before a judge whether their property contains wetlands that are under the jurisdiction of the EPA and the U.S. Army Corps of Engineers.
Although the ruling did not address the scope of Clean Water Act jurisdiction directly, in a separate opinion, Justice Alito described the reach of the Clean Water Act as “notoriously unclear” and called on Congress to clarify the scope of the act through the legislative process.
Please contact your local Terra Technologies office for a consultation regarding administrative orders and clean water act jurisdiction.