Judicial review of environmental compliance orders.

• Author: Davis, Andrew I.

1. INTRODUCTION

   Federal environmental laws are enforced in a variety of ways. In addition to the traditional route of judicial enforcement, Congress has armed the Environmental Protection Agency (EPA) with various administrative means of ensuring compliance with environmental laws. Among these enforcement weapons is the administrative "compliance order." The compliance order is a directive from the EPA requiring the recipient to comply with a particular statutory or regulatory requirement by a specified deadline. Violation of a compliance order carries the potential for civil or criminal sanctions. The purpose of the compliance order is to "provide a quick, responsive, and flexible enforcement tool, particularly well-suited to remedying less important violations."(1) However, without judicial review, the compliance order may become an instrument of intimidation.

   If the recipient of a compliance order disagrees with the EPA regarding an alleged violation, early access to the courts may be critical not only to serve as a check on agency application of the law, but also to protect the recipient from the practical effects of threatened penalties. Without judicial review at the time the order is issued, the recipient faces a dilemma: either comply with the order or risk the potential imposition of heavy penalties for noncompliance if the order is sustained in a subsequent EPA enforcement action. Barring an express statutory duty, the agency's decision to bring an enforcement action is entirely discretionary.(2) Thus, the recipient of a compliance order with a meritorious claim may effectively be coerced into compliance because it is unwilling to risk the accrual of potential penalties until the EPA decides to take enforcement action.

   Despite the arguments favoring review, federal appellate decisions have consistently denied judicial review of environmental compliance orders in actions brought by recipients.(3) Each denial of judicial review has been based on one of two rationales: statutory preclusion or ripeness.

   Courts applying "statutory preclusion" have held that the environmental statute authorizing the compliance order precludes judicial review. Under the Administrative Procedure Act (APA), judicial review of agency action is limited by the extent to which the relevant statute precludes review.(4) The Supreme Court has interpreted this provision to allow implied statutory preclusion.(5) In the case of compliance orders, the courts have construed the history, structure, and language of the relevant statute to imply an intent by Congress to preclude such direct actions. This Comment examines the "implied preclusion" basis for rejecting judicial review and concludes that the evidence of congressional intent does not overcome the strong presumption of review embodied in the APA.

   Some courts have held that direct review of compliance orders is not available because the orders lack "finality,"(6) an attribute required by the APA and derived from the larger justiciability concept of ripeness. The analysis used by these courts is more accurately characterized as one of ripeness rather than finality. The courts have held that the compliance order was not a "final" agency action because the order had no legal or practical effect on the recipient and judicial review at this time would interfere with the enforcement efforts of the agency. This Comment argues that compliance orders are both final and ripe for review because they represent a pronouncement of law by the agency with serious consequences for violations. Unavailability of review subjects the recipient, as a practical matter, to substantial coercive pressure to comply. Furthermore, direct review of compliance orders would actually enhance enforcement by defining the applicable environmental laws in individual cases and establishing a body of interpretive case law upon which industry as a whole may rely.

   Section II of this Comment describes the basic structure of the EPA's enforcement authority under various environmental statutes and details the nature and consequences of the compliance order device. Section III introduces the presumption of reviewability in the APA, as interpreted by the Supreme Court, and analyzes those lower court decisions that have found implied preclusion of review of compliance orders. It concludes that the "clear and convincing evidence" necessary to overcome the strong presumption of reviewability is not present in the context of compliance orders.

   Section IV assesses the finality and ripeness bases for rejecting judicial review. The Section introduces the concepts of finality and ripeness and then analyzes the lower court decisions that relied on these concepts to deny review of compliance orders. Finally, the Section argues that judicial review of compliance orders is appropriate at the time the order is issued.

   Section V concludes by asserting that the courts have a duty to protect against prosecutorial overreaching and that, pending congressional clarification of the compliance order device, a presumption of review should apply.

2. ENVIRONMENTAL COMPLIANCE ORDERS: A STATUTORY FRAMEWORK

   A number of environmental statutes contain a compliance order device in their enforcement scheme.(7) For discussion purposes, this section describes the enforcement provisions in section 113 of the Clean Air Act (CAA).(8) Not only do other environmental statutes follow a similar structure,(9) but many of the cases that have addressed the issue of review of compliance orders were decided in the context of the CAA. Thus, some familiarity with its specific provisions will be useful.

   The CAA authorizes the EPA to proceed either judicially or administratively whenever the agency determines that "any person has violated or is in violation of any requirement or prohibition."(10) Upon finding a violation, the EPA has four basic enforcement options: issue a compliance order, issue an administrative penalty order, bring a civil enforcement action in district court, or seek criminal penalties in district court.(11) In some circumstances, the EPA is required to issue a "notice of violation" and to wait thirty days before taking any of these enforcement actions.(12)

   When the EPA issues a compliance order, the order will state the specific nature of the violation and specify a deadline for compliance.(13) The order will direct the recipient to comply with the statutory or regulatory requirement "as expeditiously as practicable."(14) However, the compliance order does not take effect until the recipient has had an opportunity to confer with the EPA about the alleged violation.(15) The purpose of this "conference procedure" is to encourage a resolution between the EPA and the alleged violator "without resort to judicial process."(16) The recipient who fails to obey a compliance order is subject to active or judicial civil penalties of up to $25,000 per day, beginning on the effective date of the compliance order.(17) In other words, the violation of a compliance order alone is a sufficient basis for the EPA to seek penalties through judicial or administrative proceedings.(18) Without direct review, these penalties will continue to accrue until the EPA, at its discretion, commences an enforcement action.(19) Regardless of the merits of the alleged violation underlying the compliance order, disregarding the order potentially subjects the recipient to accruing daily penalties.

   In addition, criminal penalties may be imposed against "[a]ny person who knowingly violates . . .any [compliance] order . . ."(20) A convicted violator may be fined, or imprisoned up to five years, or both.(21) Thus, failure to obey a compliance order subjects the recipient to civil, criminal, or administrative enforcement actions, including penalties of up to $25,000 per day of violation.(22) Only direct review of compliance orders can counteract this coercive pressure

3. COMPLIANCE ORDERS: IMPLIED PRECLUSION OF JUDICIAL REVIEW

   1. Administrative Procedure Act: The Presumption of Reviewability

      The Administrative Procedure Act (APA)(23) expressly establishes a legal cause of action based on administrative actions.(24) As the Supreme Court has explained: "The Administrative Procedure Act . . . embodies the basic presumption of judicial review to one ~suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action.'"(25) The Court has held that "only upon a showing of ~clear and convincing evidence' of a contrary legislative intent should the courts restrict access to judicial review."(26)

      However, the APA withdraws its grant of review "to the extent that statutes preclude judicial review."(27) The Supreme Court has interpreted this provision as allowing either express or implied statutory preclusion.(28) In deference to statutory preclusion, the Supreme Court has retreated from the "clear and convincing evidence" standard of Abbott Laboratories:

      This Court has ... never applied the "clear and convincing evidence"

      standard in the strict evidentiary sense .... Rather, the

      Court has found the standard met, and the presumption favoring

      judicial review overcome, whenever the congressional intent to

      preclude judicial review is "fairly discernible in the statutory

      scheme." In the context of preclusion analysis, the "clear and convincing

      evidence" standard is not a rigid evidentiary test but a useful

      reminder to courts that, where substantial doubt about the congressional

      intent exists, the general presumption favoring judicial

      review of administrative action is controlling.(29)

      Thus, the Court reinterpreted in Block v. Community Nutrition Institute(30) the "clear and convincing evidence" standard of Abbott Laboratories to allow the presumption of reviewability to be rebutted whenever it is "fairly discernible in the statutory scheme" or there is no "substantial doubt about the congressional intent" to preclude review.(31)

      The Court then applied this...