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Wednesday, October 12, 2011

The Supreme Court Agrees to Decide Whether Pre-enforcement Review of EPA Compliance Orders Must Be Allowed: Sackett v. EPA

Robert Meltz
Legislative Attorney

On June 28, 2011, the Supreme Court agreed to resolve a long-simmering issue of federal environmental enforcement. The issue involves the “administrative compliance order” (ACO), a device frequently used by the Environmental Protection Agency (EPA) to enforce federal environmental statutes. In Sackett v. EPA, the Court will review whether the Clean Water Act (CWA) prohibits recipients of ACOs under that act from seeking “pre-enforcement review”—that is, from seeking judicial review of the ACO prior to EPA bringing an enforcement action against the recipient. If the Court finds this statutory bar to exist, it will likely move on to the constitutional question: Does a CWA prohibition on pre-enforcement review of ACOs violate procedural due process?

In an ACO, EPA directs the recipient to comply with a specified statutory, regulatory, or permit requirement by a stated deadline, and recites the penalties that noncompliance may entail should EPA file an enforcement action in court. ACOs are often described as a quick, flexible enforcement tool that serves as an advance warning allowing the recipient to sit down with EPA to negotiate a reasonable settlement that generally avoids penalties. From the recipient’s vantage point, however, there is a distinct downside: ACOs generally do not allow for pre-enforcement review. Thus, if the recipient disagrees with the facts or legal conclusions on which the ACO is based, the recipient faces a dilemma. The recipient may do nothing, challenging the order only later when EPA brings an enforcement action. If so, the recipient, if the challenge fails, faces the prospect of large civil penalties—in the case of the CWA, up to $37,500 per day for each violation. Alternatively, the recipient could comply with the order at sometimes substantial cost, even though disagreeing with it.

This is the dilemma faced by the petitioners in Sackett. The Sacketts, a married couple, filled in most of a small lot to prepare it for house construction. EPA then claimed they should have first obtained a wetlands fill permit under the CWA and so issued an ACO ordering them to restore the lot to its pre-fill condition, even if they intended at some point to apply for the overlooked permit. EPA denied the Sacketts’ request for a hearing as to whether their land was a wetland under the CWA. The couple then sued in federal district court. Holding that the CWA precludes judicial review of ACOs before EPA has filed an enforcement action in federal court, the district court dismissed the case. On appeal, the Ninth Circuit affirmed, and further concluded that such preclusion does not offend the procedural due process requirements of the Constitution. Despite a multitude of lower court decisions under the CWA agreeing with the Ninth Circuit, the Supreme Court took the case—possibly because of a contrary holding on the constitutional question from the Eleventh Circuit under the Clean Air Act.

The ripples from the Supreme Court’s decision in Sackett may go far beyond the CWA; almost every one of EPA’s regulatory statutes grants the agency authority to issue ACOs. Should the Court find that either the CWA or the Constitution requires pre-enforcement review under that act, a wave of litigation challenging preclusion of pre-enforcement review under EPA’s other statutes is likely. A decision in Sackett is likely by June 2012.

Date of Report: September 2
2, 2011
Number of Pages:
Order Number: R4
Price: $19.95

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