Sackett v. EPA – The United States Supreme Court’s Unanimous Ruling

On March 21, 2012, a unanimous  Supreme Court decided the case of Sackett v. EPA.   Two justices, Ginsburg and Alito — not typical ideological allies — each filed a concurring opinion.   The Sackett case is important, as it helps define the limits of unilateral action by government agencies, i.e., it recognized that an executive branch administrative agency must be subject to the checks and balances of judicial review when consequential action is taken by the agency.   I believe this case will help prompt agencies to avoid using certain strong-arm tactics unless the underlying objects of the action, and the method of its implementation, are clearly authorized by law.

The Clean Water Act prohibits “the discharge of any pollutant by any person” without a permit, into “navigable waters.” Upon determining that a violation has occurred, the  Environmental  Protection Agency (EPA) may either issue a compliance order or initiate a civil enforcement action. The  resulting  civil penalty may not exceed [$37,500] per day for each violation. The Government’s attorneys argued in the Sackett case that the amount doubles to $75,000 when the EPA prevails against a person who has been  issued  a compliance order but has failed to comply.

Michael and Chantelle Sackett, the petitioners in the Supreme Court, received a compliance order from the EPA, which stated that their residential lot contained navigable waters and that their construction project violated the Act. The Sacketts sought declarative and injunctive relief in the Federal Dis ­trict Court, contending that the compliance order was “arbitrary [and] capricious” under the Administrative Procedure Act (APA), and that it deprived them of due process in viola ­tion of the Fifth Amendment. The District Court dismissed the claims, finding that it lacked jurisdiction to hear the subject matter of the Sacketts’ claim. The Ninth Circuit af ­firmed, concluding that the Clean Water Act precluded judicial review of compliance orders unless and until the EPA sought to enforce such Order, and that such pre ­clusion did not violate due process.

The Supreme Court’s holding was modest in its scope, and provided only that the Sacketts may bring a civil action under the APA to challenge the issuance of the EPA’s order.

In reaching its conclusion, the Supreme Court held that the APA provides for judicial review of “final agency action for which there is no other adequate remedy in a court.”

The Supreme Court looked to prior cases which considered when an agency action is a “final agency action” of the sort which could then be subject to judicial review under the APA; if the Compliance Order was “final agency action,” then the Order was subject to judicial review.   Otherwise, if the Order was merely a step in the agency’s decision-making process, judicial review under the APA would be inappropriate.

The Court found that the compliance order in the Sacketts’ case had all the hallmarks of APA finality. Through it, the EPA “determined” “rights or obligations,” in that it required the Sacketts to restore their property according to an agency-approved plan and to give the EPA access to the property. Also, the court observed that “legal consequences flow from the order, which, according to the Government’s argument in the case, exposed the Sacketts to double penalties in future enforcement proceedings. The order also severely limited the Sacketts’ ability to obtain a permit for their fill from the Army Corps of Engineers. Further, the order’s issuance marked the “consummation” of the agency’s decisionmaking process, for the EPA’s findings in the compliance order were not subject to further agency review. The Sacketts also had “no other adequate remedy in a court.”    A civil action brought by the EPA ordinarily provides judicial review in such cases, but the Sacketts had no way to initiate that process. And each day went by, the Sacketts could accrue additional potential liability. Applying to the Corps of Engineers for a permit and then filing suit under the APA if that permit is denied did not provide an adequate remedy for the EPA’s action.

Finally, the Court observed that the Sacketts might not be entitled to judicial review of the EPA’s compliance order if the statutory scheme set forth in the Clean Water Act itself indicated that judicial review was not available to review such actions.  The Court discussed several of its cases which held that the APA generally creates a “presumption favoring judicial review of administrative action.”  The Court concluded that while the presumption can be overcome by express statutory language, it can also be overcome by inferences of intent drawn from the statutory scheme as a whole.  The government, however, failed to persuade the Court that such an inference could be drawn.