In a unanimous decision, the United States Supreme Court on Wednesday, March 21, 2012 ruled that landowners whose property had been determined to be wetlands can sue the Environmental Protection Agency (“EPA”) prior to a formal enforcement action. EPA had issued an administrative order requiring the landowners to stop all construction activity and restore the property as a wetland, along with the threat of $75,000 per day in civil penalties.
Mike and Chantell Sackett, an Idaho couple, have been in a four-year battle over EPA’s determination that the property on which they plan to build their home contains sensitive wetlands. The Sacketts started building a home on their 0.63-acre lot near, but not adjacent to, Priest Lake in the Idaho panhandle. After three days filling an area on the lot with dirt and preparing for construction, EPA ordered the construction halted due to the presence of wetlands. Several months later, EPA issued an administrative compliance order requiring the land to be restored as a wetland before the couple could apply for a building permit.
The question before the Supreme Court was whether the Sacketts could sue EPA under the Administrative Procedure Act (“APA”) to challenge the determination that their land contained wetlands subject to jurisdiction under the Federal Clean Water Act (“CWA”). The lower courts had dismissed their lawsuit, agreeing with EPA’s position that judicial review of administrative orders is precluded by the CWA. EPA’s position was that judicial review of such an order had to await an enforcement action by the agency to collect fines imposed under the order.
The Supreme Court rejected EPA’s argument, concluding that issuance of an administrative order is final agency action and therefore ripe for judicial review. Responding to EPA’s concerns about adverse effects on its enforcement, the opinion stated that “there is no reason to think that the Clean Water Act was uniquely designed to enable the strong-arming of regulated parties into ‘voluntary compliance’ without the opportunity for review – even judicial review of the question whether the regulated party is within the EPA’s jurisdiction.” In announcing the decision from the bench, Justice Scalia noted that the Sacketts were surprised their property contained navigable waters of the United States “having never seen a ship or other vessel cross their yard.”
The open question is the effect of the decision beyond the Clean Water Act on other Federal environmental statutes including the Clean Air Act (CAA), Resource Conservation and Recovery Act (RCRA), and the Comprehensive Environmental Response, Cleanup and Liability Act (CERCLA or Superfund). Under the Court’s reasoning, the same principle should apply to each environmental statute that does not include explicit language precluding pre-enforcement review of this type of administrative action.