The U.S. Supreme Court last Wednesday ruled against the U.S. Environmental Protection Agency (EPA) in a decision that will affect clean water enforcement throughout the country and could impact a range of agency enforcement programs. The Supreme Court held that parties can challenge what are known as administrative compliance orders issued under the Clean Water Act (CWA). These are orders the agency issues to ensure environmental standards are complied with before enforcement actions are initiated in court. The Court’s decision could deter EPA from issuing voluntary compliance orders under the CWA because of the potential increase in legal challenges.

 

The case was originally filed in U.S. District Court in Idaho by landowners Michael and Chantell Sackett, who filled a section of their property with rock and dirt without first obtaining a permit. EPA determined that the section was a wetland under the CWA and issued a compliance order requiring the Sacketts to remove the material and return the wetland to its original condition or face greater penalties in a civil enforcement action. The Sacketts filed suit, alleging that the compliance order violated the "arbitrary and capricious" standard under the Administrative Procedure Act (APA) and deprived them of due process.

 

The district court dismissed the case challenging the compliance order, concluding that the CWA does not allow judicial review of compliance orders before the EPA has started an enforcement action in federal court.

 

The U.S. Court of Appeals for the Ninth Circuit agreed. While the APA provides for judicial review of "final agency action for which there is no other adequate remedy in a court," the Ninth Circuit determined that the CWA precludes judicial review of pre-enforcement, voluntary compliance orders like the one issued to the Sacketts. The court noted that the CWA’s "goal of enabling swift corrective action would be defeated by permitting immediate judicial review of compliance orders."

 

The Supreme Court disagreed. In a unanimous decision, the Court ruled that administrative compliance orders are final agency actions under the APA and can therefore be reviewed before the EPA starts an enforcement action in federal court. The case will now be sent back to federal court, where the Sacketts will be allowed to challenge the compliance order on the grounds that their property is not a wetland over which EPA has regulatory authority.

 

 

The Supreme Court's ruling opens the door for courts to review pre-enforcement compliance orders, allowing landowners to challenge EPA jurisdiction over their property earlier – before any penalties are assessed, injunctions are issued, or violations are alleged in court. The Court conceded that EPA may be less likely to use compliance orders if they are subject to judicial review but concluded that "[c]ompliance 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."

 

The case also highlights the uncertainty surrounding EPA's legal authority under the CWA. Although the Court has heard cases debating what exactly constitutes a "water of the United States" that is subject to regulation under the CWA, it has been unable to define the precise scope of jurisdiction. It is widely debated whether federal agencies have regulatory jurisdiction over wetlands, ponds, streams, and other water bodies where there is not a continuous flow of water connecting them to a "navigable water" covered by the CWA. The Court's 4-1-4 split in the 2006 Rapanos case has only seemed to add to this ambiguity.

 

The Sackett decision did not reach the merits of the jurisdictional issue, but Justice Samuel Alito was less than subtle in addressing it in his concurring opinion. "Allowing aggrieved property owners to sue under the Administrative Procedure Act is better than nothing, but only clarification of the reach of the Clean Water Act can rectify the underlying problem," he said. According to Alito, the EPA has failed to provide a "clear and sufficiently limited definition" (emphasis added) of waters that are covered by the CWA. "Real relief," he said, "requires Congress to do what it should have done in the first place: provide a reasonably clear rule regarding the reach of the Clean Water Act." Alito and other conservative justices have argued for a more restrictive definition of agency jurisdiction under the current statute.

 

Some expect that this decision will be interpreted narrowly and have a limited effect on environmental enforcement; others warn that it could allow people and corporations to delay the enforcement of legitimate compliance orders. EPA uses administrative compliance orders to prompt parties to comply with environmental standards before it undertakes formal enforcement actions in federal court. These orders help the agency achieve swift compliance while saving the time and money that is often spent on litigation. Joel Mintz, a member scholar with the Center for Progressive Reform, wrote that in the event EPA issues fewer compliance orders, the agency will have to choose between ignoring violations, issuing less effective warning letters, or referring the cases to the Department of Justice for enforcement. "Whatever the merits of the Sackett decision," he said, "I don’t see it bringing the United States any closer to achieving the 'chemical, physical and biological integrity of the Nation's waters' that is the objective of the Clean Water Act."

 

Going forward, the Sackett decision may lead to challenges of compliance orders under other statutes. Mintz wrote that, "[i]n the wake of Sackett, future judicial challenges to [administrative compliance orders] issued under the Clean Air Act, the Resource Conservation and Recovery Act, the Superfund statute and other federal environmental statutes seem certain to follow."