Rule of Law Prevails in Sackett v. EPA

This week, the Supreme Court decided a case that was anxiously awaited by property rights mavens on one side and environmentalists on the other. The case involved the Sacketts, owners of some property near Priest Lake in Idaho, upon which they wished to build a house. In preparation for construction, they contracted to have .6 acres of their land filled with rock and dirt. After learning of this plan and subsequent discussions with the Sacketts, the Environmental Protection Agency (EPA) concluded that the land was wetlands subject to protection under the Clean Water Act (CWA) and issued a Compliance Order to the Sacketts. The Order directed them to cease and desist from further filling and to restore the land according to an EPA restoration plan. The Sacketts believed EPA was in error as to whether their land was subject to CWA jurisdiction and asked EPA for a hearing on the matter. EPA refused. The Sacketts then sought review in federal district court under the Administrative Procedure Act (APA), arguing that EPA’s decision was arbitrary and capricious and that it deprived them of property without due process of law. The district court dismissed the case for want of jurisdiction and the Ninth Circuit affirmed, holding that the CWA precludes pre-enforcement review of administrative compliance orders. The Sacketts sought and the Supreme Court granted certiorari as to whether the CWA does indeed preclude such review and, if so, whether that would deny due process.

Judicial review is precluded under the APA “to the extent that [other] statutes preclude judicial review.” The government maintained that the other statute here was the CWA. Although the CWA clearly does not expressly preclude review, as the Comprehensive Environmental Response, Compensation, and Liability Act does, the government argued that the structure of the statute impliedly precluded review. First, the CWA authorizes EPA either to issue a compliance order or to bring a civil action in court to enforce the act. This provision, EPA said, suggests that Congress intended to give EPA a choice between bringing an administrative action or a judicial proceeding, and to allow pre-enforcement review of a compliance order would effectively eliminate a non-judicial option. Second, the CWA does expressly provide for pre-enforcement judicial review of administrative penalties but does not similarly provide for pre-enforcement review of compliance orders. This provision, the government argued, indicated a congressional intent to preclude pre-enforcement review of those orders. Finally, the government claimed that in the CWA Congress intended to remedy what had been a lack of effective enforcement under the CWA’s predecessor and that compliance orders insulated from pre-enforcement review furthered that intent.

The Supreme Court, in an opinion by Justice Scalia, unanimously rejected these arguments. Unlike Justice Scalia’s diatribe against wetland protection in Rapanos v. EPA, his opinion for the Court was short and strictly confined to traditional doctrines of administrative law. First, he rejected the government’s throw-away argument that the order was not final agency action. The order met the traditional requirements that it be the culmination of the agency process and that legal consequences must flow from it. Second, he rejected the argument that the CWA impliedly precluded review. He noted that the Court has interpreted the APA as creating a presumption in favor of judicial review. While the presumption is rebuttable, Congress’s intent to preclude review must be “fairly discernible” in the legislative scheme.

Here, the mere fact that the CWA provided two separate means of proceeding – one administrative and one judicial – did not by itself suggest any intent to preclude review of the administrative action under the APA. There are other explanations for why Congress would give EPA options as to how to proceed. Similarly, just because the CWA explicitly provided for judicial review of the administrative penalties did not really indicate that there should be no judicial review of compliance orders. The Court did not mention, although it might have, that the administrative penalties provision of the CWA was added by amendment in 1987 and thus could hardly bear on the intent of the compliance order provision that was in the original 1972 act. Moreover, the reason for making specific provision for judicial review of the administrative penalties was because the review deviated in some regards from what the APA would by default have provided. Finally, the Court was not swayed by the government’s warning that allowing judicial review would make EPA less likely to use compliance orders, thereby impeding swift enforcement of the CWA. As the Court noted, “[t]hat may be true – but it [is] true for all agency actions subjected to judicial review.”

Justice Ginsburg wrote a short concurrence stating that the decision involved a case challenging EPA’s jurisdiction, not a case challenging the “terms and conditions” of the order. Justice Alito wrote a longer concurrence bitterly complaining about the failure of Congress, EPA, and the Corps of Engineers to give clear guidance as to what constitutes “waters of the United States” under the CWA, leaving property owners to “feel their way” and ever fear that EPA will issue a compliance order against them for alleged CWA violations.

The environmental community is already breathing a certain sigh of relief. First, the Court did not address whether preclusion of review would violate due process. It was hardly likely to, since it had earlier denied certiorari in a case that directly raised that issue under CERCLA. Second, environmentalists view the opinion as a narrow one, limited by its terms to the CWA. Actually, that’s not so. The Court relied on the APA’s presumption of review to raise a relatively high hurdle to implied preclusion. One should expect the same analysis with respect to other environmental statutes that do not have an express preclusion provision. Finally, environmentalists take heart in Justice Ginsburg’s solo concurrence, hoping that pre-enforcement review will be limited to issues of CWA jurisdiction. I wouldn’t bet on it, though. No one joined her concurrence, and the rationale of the Court opinion cannot be limited to jurisdictional issues. There is simply no authority for implied preclusion of some issues but not others, nor did Justice Ginsburg suggest any.

Property rights advocates are trumpeting a victory. Yet that’s quite an overstatement because the Sackett decision is not based on any particular notion of property rights. The Court’s opinion hardly mentions property rights; instead, its focus is on the liability imposed on persons by agency action and rights granted by the APA, not some underlying constitutional right. Moreover, the Sacketts have hardly “won.” All they have obtained is the ability to have EPA’s order tested in court. If EPA has done its homework, the Sacketts will lose on the merits.

Nevertheless, the Sackett decision is an important one. EPA, knowing that its orders may be tested in court, will have an added incentive to get their decisions right the first time. Those subject to compliance orders will have little incentive to seek review in the face of a well-documented EPA decision, because seeking review does not automatically stay the order or delay the requirement to comply. But those who truly believe that EPA has made a mistake will have an avenue to test that belief without having to intentionally violate the order and subject themselves to possibly greater punishment. In short, in Sackett the rule of law prevailed.