Supreme Court Holds in Sackett v. EPA That Idaho Couple Can Challenge EPA Wetlands Compliance Order As A Final Agency Action

WASHINGTON, D.C. - (Mealey's) The U.S. Supreme Court on March 21 unanimously found that an Idaho couple could file a lawsuit challenging a compliance order issued by the U.S. Environmental Protection Agency under the Clean Water Act (CWA) because the order was a final agency action that could be reviewed under the Administrative Procedures Act (APA) (Chantell Sackett, et al.v. U.S. Environmental Protection Agency, No. 10-1062, U.S. Sup., 2012 U.S. LEXIS 2320).

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Chantell Sackett purchased a 0.63-acre property in Priest Lake, Idaho, for her husband, Michael, in 2007 so they could build a vacation home.  Once the couple began clearing the property, officials from the EPA and U.S. Army Corps of Engineers showed up to ask if the Sacketts had a permit to fill in wetlands.  Seven months later, the agency sent the Sacketts a compliance order requiring them to restore the property to its original condition.  The order also imposed penalties of $37,500 per day for each day of noncompliance.  The Sacketts disputed the order, arguing that the property was a subdivision, not a wetland.

Wetlands

The couple filed suit in the U.S. District Court for the District of Idaho to challenge the order, but their lawsuit was dismissed for failure to state a claim.  Judge Edward J. Lodge held that the plaintiffs could not bring an action against the agency until it filed an enforcement action against them.  The Ninth Circuit U.S. Court of Appeals affirmed.  The high court granted the Sacketts' petition for certiorari in February.

The high court found that the EPA's compliance order constituted a final agency action that could be reviewed under the APA because the order required the couple to restore their property to its initial state and because the order had legal consequences in the form of civil penalties and future enforcement proceedings.

The high court also held that the CWA is not a statute that precludes judicial review under the APA because the APA creates a presumption in favor of judicial review of administrative action.

Justice Antonin Scalia wrote the opinion for the court.

In a separate concurring opinion, Justice Ruth Bader Ginsburg agreed with the finding that the Sacketts should be allowed to challenge the EPA's compliance order.  However, Justice Ginsburg pointed out that the ruling did not address the couple's ability to challenge the EPA's authority to regulate their land as well as the terms of the compliance order.

Justice Samuel Anthony Alito Jr. also wrote in a separate concurring opinion that the reach of the CWA needs to be clarified.

"When Congress passed the Clean Water Act in 1972, it provided that the Act covers 'the waters of the United States,'" Justice Alito wrote.  "But Congress did not define what it meant by 'the waters of the United States'; the phrase was not a term of art with a known meaning; and the words themselves are hopelessly indeterminate.  Unsurprisingly, the EPA and Army Corps of Engineers interpreted the phrase as an essentially limitless grant of authority.  We rejected that boundless view, but the precise reach of the Act remains unclear.  For 40 years, Congress had done nothing to resolve this critical ambiguity, and the EPA has not seen fit to promulgate a rule providing a clear and sufficiently limited definition of the phrase.  Instead, the agency has relied on informal guidance.  But far from providing clarity and predictability, the agency's latest informal guidance advises property owners that many jurisdictional determinations concerning wetlands can only be made on a case-by-case basis by EPA staff."

Damien M. Schiff of the Pacific Legal Foundation in Sacramento, Calif., is counsel for the Sacketts.

The EPA is represented by Malcolm L. Stewart of the Solicitor General's Office in Washington.

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