Posted by: Patricia Salkin | April 21, 2012

U.S. Supreme Court Holds EPA’s Compliance Order under the Clean Water Act was a Final Agency Action Subject to Review Under the APA

The Petitioners, Michael and Chantell Sackett, own a 2/3-acre residential lot in Bonner County Idaho.  After filling a portion of their lot in preparation for constructing a house, the Sacketts received a compliance order from the EPA.  The EPA determined, among other things, that the Sacketts property contained federally regulated wetlands and the filling of said wetlands without a permit constituted a violation of the Clean Water Act.  When the Sacketts, who disagreed that their property is subject to the Act, were denied a hearing by the EPA, they commenced an action in the United States District Court for the District of Idaho seeking declaratory and injunctive relief.  The District Court dismissed their claims for want of subject matter jurisdiction, the Ninth Circuit affirmed and the Supreme Court granted cert.  The High Court considered the limited question of whether the Sackett’s could bring a civil action under the Administrative Procedure Act (APA), 5 U.S.C. §500 et. seq., to challenge the issuance by the EPA of an administrative compliance order under §309 of the Clean Water Act, 33 U.S.C. §1319. 

Chapter 7 of the APA provides for judicial review of “final agency action for which there is no other adequate remedy in a court.” 5 U.S.C. §704.  After a lengthy analysis, the Court held that (1) the compliance order was final agency action; and (2) there was no other adequate remedy in a court. 

Final Agency Action 

The Court had no trouble in determining, at the outset, that the consent order constituted agency action, which the APA defines as including even a “failure to act.” §§551(13), 701(b)(2).  The more difficult question was whether that action was final.  Finding guidance in precedent, including the 1997 case of Bennet v. Spear (520 U.S. 154), the Court determined that the consent order had “all of the hallmarks of APA finality that [their] opinion establish.”  To wit, the order imposed legal obligations on the Sacketts to “restore” their property and give the EPA access thereto, legal consequences flowed from issuance of the order including increased penalties, and the findings and conclusions of the order were not subject to further agency review.  Rejecting the Government’s position, the Court found that the EPA’s invitation in the order to engage in informal discussion of the terms and requirements of the order did not, in and of itself, entitle the Sacketts to further agency review. 

No Other Adequate Remedy 

The Court next turned to the question of whether another adequate remedy in a court existed. A determination on this issue required an analysis of the framework of EPA Clean Water Act enforcement cases.  Generally, the Court noted, judicial review comes by way of a civil action brought by the EPA under 33 U.S.C. §1319.  The Sacketts, however, cannot initiate that process and each day they wait for the agency to act exposes them to increased financial liability.  Alternatively, they could apply to the Army Corps of Engineers for a permit and file suit under the APA if a permit is denied.  To this end, the Court noted that “[t]he denial of action that might be sought from one agency does not ordinarily provide an ‘adequate remedy’ for action already taken by another agency.”  

The Government’s position was that §701(a)(1) of the APA excludes APA review “to the extent that [other] statutes preclude judicial review” and that, based on its statutory scheme, the Clean Water Act is such a statute.  The Government advanced several policy and statutory construction claims, each of which the Court found to be unavailing.

Their first claim is that since Congress gave the EPA the choice between a judicial proceeding (civil action) and an administrative action (compliance order), it would undermine the Act to allow judicial review of the latter.  Since the administrative action requires “voluntary compliance” however, the Court found that judicial review is appropriate when the recipient of an order chooses not to comply.  

Next the Government notes that compliance orders must be enforced by the agency and are not self-executing, suggesting that Congress did not view them as coercive sanctions that must be subject to judicial review.  To that end, the Court notes that the APA provides for judicial review of all final agency actions, not just those that impose self-executing sanctions. 

They further urge the Court to consider that Congress provided for judicial review in cases when the EPA assesses administrative penalties after a hearing (see §1319(g)(8)) but did not provide for review of compliance orders.  This, however, was not enough, in the eyes of the Court, to overcome the APA’s presumption of reviewability for final agency action. 

Finally, the Government notes that the Clean Water Act was passed, in large part, to respond to the inefficiency of existing remedies for water pollution and that compliance orders can obtain quick remediation through voluntary compliance.  They warned that the EPA will be less likely to use the order if they are subject to judicial review.  Justice Scalia notes that, while this may be true, it will be true for all agency actions subjected to judicial review and “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 judicial review – even judicial review of the question whether the regulated party is within the EPA’s jurisdiction.” 

In reversing the judgment of the Court of Appeals, the Court concluded that the compliance order in this case is final agency action for which there is no adequate remedy other than APA review, and that the Clean Water Act does not preclude that review. 

Sackett v. Environmental Protection Agency, 566 U. S. ____ (2012) 

Special thanks to Corey Auerbach, Esq. of Damon Moery, LLP in Clarence, NY for this posting.

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