Beveridge & Diamond
 

Supreme Court to Decide When Landowners May Challenge Clean Water Act Jurisdiction

Beveridge & Diamond, P.C., June 28, 2011

In an unexpected move, on June 28, the United States Supreme Court granted certiorari to consider whether landowners may obtain judicial review of an administrative compliance order ("ACO") without first being required to submit to an enforcement action by the Environmental Protection Agency ("EPA"). The case at issue, Sackett v. EPA, No. 10-1062 (U.S. June 28, 2011), focuses on an ACO arising from the assertion of federal jurisdiction over wetlands and other waters under the Clean Water Act ("CWA"), but the Court’s decision could affect the availability of pre-enforcement judicial review under a wide range of federal environmental statutes.

Sackett addresses the crucial question of when can regulated entities and citizens sue the federal government to contest the assertion of CWA jurisdiction over their land or activities. 

The dispute in Sackett began when an Idaho couple attempted to build a new home on a small parcel of land they own.  Believing they did not have jurisdictional wetlands or waters on their property, the Sacketts began grading the site without obtaining a CWA Section 404 permit for discharges of dredged or fill material into waters of the United States. EPA, on the other hand, believed that there were jurisdictional wetlands on the Sacketts’ property and issued an ACO prohibiting further work and ordering the couple to restore the wetlands.

The Sacketts sought review of the ACO in the U.S. District Court of Idaho, but the court dismissed their lawsuit, finding that the landowners had not been subjected to an enforcement action by EPA and, therefore, there was no final agency action to review. On appeal, the U.S. Court of Appeals for the Ninth Circuit affirmed, further holding that the Sacketts’ due process rights were not violated by the unavailability of judicial review because parties subject to ACOs under the CWA have an opportunity to seek judicial relief if EPA ultimately commences an enforcement action against them. The Sacketts then petitioned the Supreme Court. The Court granted their petition and agreed to consider two questions: 1) May citizens seek pre-enforcement judicial review of an ACO pursuant to the Administrative Procedure Act, 5 U.S.C. § 704?; and 2) If not, does the citizens’ inability to seek pre-enforcement judicial review of an ACO violate their rights under the Due Process Clause of the U.S. Constitution?

Sackett arguably will represent the most important CWA regulation case that the Supreme Court has considered since ruling on the reach of federal CWA jurisdiction in United States v. Riverside Bayview Homes in 1985. Under current federal court precedent, judicial review is available to landowners and developers only after EPA or the Army Corps of Engineers initiates an enforcement action for allegedly unlawful discharges of dredged or fill material into wetlands and jurisdictional waters.  As a result, a landowner faces a Hobson’s choice of either encouraging the agencies to initiate an enforcement action against it – exposing one to potentially significant civil and/or criminal penalties – or submitting to CWA jurisdiction and obtaining costly, time-consuming Section 404 permits despite disagreeing that a project or activity is subject to federal jurisdiction.

Sackett could eliminate that dilemma and bring relief to landowners nationwide.  Should the Court reverse the Ninth Circuit, landowners may be able to seek immediate judicial review of federal jurisdiction rather than having to apply for a permit authorizing activities that arguably are not subject to CWA jurisdiction or to instigate an enforcement action in order to secure court-reviewable final agency action.  In short, a favorable ruling in Sackett could lead to significant cost savings and substantially less exposure to liability for regulated entities by providing a window of time in which they may raise their objections in court before EPA or the Corps takes enforcement action.

To discuss these issues further, please contact Gus Bauman, (202) 789-6013 (gbauman@bdlaw.com), or Parker Moore, (202) 789-6028 (pmoore@bdlaw.com).

For a printable PDF of this article please click here.

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