On March 21, 2012, in Sackett v. EPA, the U.S. Supreme Court (the “Court”) unanimously ruled that an order issued by the U.S. Environmental Protection Agency (“EPA”) against the Sacketts, who had allegedly filled wetlands without a permit, was “final agency action.” This means that the Sacketts can challenge that order in court and dispute that they violated the Clean Water Act. While the Court’s decision may seem like an obvious conclusion, years of EPA enforcement actions and lower court rulings have denied property owners access to the courts until they complete a costly permitting process, even when property owners believe a permit is not required.
The Sacketts had brought suit against EPA, challenging the order that directed them to immediately restore the wetland they allegedly filled on their property, and if they refused to do so, they would be subject to administrative and civil penalties of up to $75,000 per day. Upon receipt of the order, the Sacketts initially sought a hearing with EPA to challenge EPA’s jurisdiction over their property. The Sacketts claim that the property did not contain regulated wetlands and that EPA therefore lacked authority to issue the order. EPA denied the Sacketts’ request for a hearing. Then the Sacketts filed a lawsuit in federal district court, contending that EPA’s issuance of the order was arbitrary and capricious and that it deprived them of due process of law. The district court and the Ninth Circuit Court of Appeals both concluded that the Clean Water Act did not allow courts to review these types of orders, and because the Clean Water Act prevented court review, these courts found no violation of due process.
The Court reversed the lower courts’ decision in ruling that the order was “final agency action” that could be challenged because: (1) the order determined rights or obligations (the Sacketts are required to restore the property); (2) legal consequences flowed from the issuance of the order (up to $75,000 per day in civil penalties); (3) the order marks the consummation of EPA’s decision making process (findings and conclusions were not subject to further agency review); and (4) the Sacketts had no other adequate remedy at law.
Despite the expected claims from environmental groups that this decision will undermine the Clean Water Act, in reality this decision only gives the Sacketts their day in court. The Court expressly stated that it was not deciding the underlying question whether wetlands did exist on the Sacketts’ property before the fill activity. That issue still needs to be decided by a lower court.
This decision is a significant victory for property rights advocates that have long claimed that orders issued by EPA and the U.S. Army Corps of Engineers should be subject to immediate judicial review. Hopefully, it will make the agencies think twice about asserting jurisdiction over property where the wetland determination is, at best, uncertain.
For more information on this case or its implications, please contact Steve Hill.