The regulators lost to the regulated yesterday in Sackett v. Environmental Protection Agency. As Ilya Somin notes, the Supreme Court’s unanimous opinion held that property owners and other regulated parties may challenge administrative compliance orders issued by the Environmental Protection Agency under the Clean Water Act. This is a small, yet significant, victory guaranteeing a modicum of procedural protection for those subject to regulation under the CWA.
In this case, the EPA issued an ACO to the Sacketts alleging they had filled wetlands without a federal permit and directing them to take remedial action or face civil penalties. The Sacketts had sought an agency hearing on the matter, but the EPA declined. So the Sacketts went to court. The federal government maintained that judicial review of the ACO was unavailable unless and until the EPA filed a civil enforcement action against them. The U.S. Court of Appeals for the Ninth Circuit concurred, only to be reversed by the Supreme Court.
Writing for the Court, Justice Antonin Scalia explained that an ACO can be challenged as a final agency action under the Administrative Procedure Act, as the order represents the conclusion of the agency’s consideration of the question and is, itself, the source of a binding obligation on the regulated party. The order “has all of the hallmarks of APA finality” and is thus presumptively subject to judicial review. As the CWA does not expressly or impliedly preclude judicial review, and there is no other adequate remedy in court, the Sacketts can have their day in court.
Justice Scalia’s opinion for the Court is quite narrow, and lacks the rhetorical flourishes we’ve come to expect in his environmental opinions. The Court had no occasion to reach the due process issues lurking below the surface of the case – specifically whether the Sacketts would be entitled to some opportunity to be heard, if not in court then before the agency, before they could be subject to fines for violating the administrative compliance order. Although Justice Scalia noted the continuing uncertainty over the scope of federal regulatory jurisdiction under the CWA, particularly with regard to wetlands, his opinion made clear the Court was expressing no opinion as to whether the EPA properly asserted jurisdiction over the Sacketts’ land. Solely at issue was whether the Sackett’s could challenge the EPA’s assertion of jurisdiction and claim that the Sacketts had violated federal law by filling jurisdictional wetlands on their property without first obtaining a federal permit. Justice Ginsburg wrote a brief concurring opinion stressing this point.
Justice Alito’s concurring opinion stressed the continuing regulatory uncertainty to which private landowners are subject under the Clean Water Act. The statute’s reach is “notoriously unclear,” and yet landowners can face substantial fines if they fail to obtain the requisite federal permits before modifying wetlands on their land. According to Alito, the Court’s decision in Sackett offers landowners “ a modest measure of relief” in that it now ensures that landowners may seek judicial review of an agency order directing them to cure CWA violations or face additional fines. Yet according to Alito, the burden on landowners remains substantial.
the combination of the uncertain reach of the Clean Water Act and the draconian penalties imposed for the sort of violations alleged in this case still leaves most property owners with little practical alternative but to dance to the EPA’s tune.
According to Alito, real relief will only come when Congress or the agencies provide a “reasonably clear” jurisdictional rule defining what constitute “waters” subject to federal regulatory control.