Sackett: the road forward.

• Author: Johnston, Craig N.
• Position: EPA administrative review - Fall Essay Series

1. INTRODUCTION

   On March 21 of this year, the Supreme Court unanimously held in Sackett v. U.S. Environmental Protection Agency (1) that the recipients of a compliance order issued under section 309(a) of the Clean Water Act (CWA) (2) were entitled to pre-enforcement review on the question whether the U.S. Environmental Protection Agency (EPA) had properly asserted jurisdiction over their property. While the decision overruled two decades worth of unanimous precedent from the federal courts of appeals, (3) in the end the result was unsurprising to those who had watched the issue for years, and particularly to those who had read the briefing or followed the oral argument. (4)

   The real question is what this means. In this brief Essay, I will first summarize the case, including its facts and lower court history, in addition to the Supreme Court opinion and the attendant concurrences. With that background, I will say a few words about four important, related questions that I expect the courts will have to work out in the wake of Sackett. That accomplished, I will speculate as to how EPA likely will respond to Sackett and suggest that, seen in this light, the decision is likely in the short run to negatively impact EPA's ability to induce compliance, but perhaps not disastrously so. And finally, I will offer another pathway that EPA could take that has the potential of turning the decision into a blessing in disguise.

2. FACTUAL BACKGROUND AND LOWER COURT HISTORY

   Chantell and Michael Sackett own a 0.63-acre parcel of land near Priest Lake, in northern Idaho. (5) Although their property was damp, in April and May of 2007 the Sacketts began filling it in without first seeking a jurisdictional determination from the U.S. Army Corps of Engineers (Corps). (6) Altogether, they filled in approximately one-half acre of their lot. (7)

   Within three days of when the Sacketts began their filling activities, EPA showed up, and asked the equipment operators who were engaged in the filling to stop operating if the Sacketts did not have a permit under section 404 of the CWA. (8) In response, the Sacketts hired a consultant to determine whether their land constituted jurisdictional wetlands under the CWA; this consultant determined both that the property was a wetland and that it was not an "isolated wetland." (9) Despite this, the Sacketts made no effort to apply for an "after-the-fact" permit from the Corps; instead, Chanteli Sackett appeared to continue to believe that the property constituted an isolated wetland. (10)

   In the face of the Sacketts' inaction, EPA issued them a compliance order in November of 2007. (11) This order reflected EPA's determination that the relevant area qualified as a wetland within the meaning of 33 C.F.R. [section] 328.4(8)(b), and that the relevant wetland was "adjacent" to Priest Lake, within the meaning of 33 C.F.R. [section] 328.4(8)(c). (12) The order required the Sacketts to restore the relevant site in accordance with an EPA-approved plan. (13) It further informed them that they would be subject to penalties of up to $32,500 per day of violation if they did not meet the order's terms, (14) but also invited them to "engage in informal discussion[s]" with EPA if they believed any of its allegations to be inaccurate. (15)

   The Sacketts waited more than four months before they contacted EPA, on April 1, 2008. When they did, they requested a formal hearing. In accordance with its long-established practice, EPA denied this request. (16) The Sacketts then filed a judicial challenge in the United States District Court for the District of Idaho, seeking injunctive and declaratory relief. They argued that the order was arbitrary and capricious under the Administrative Procedure Act (APA); (17) they also argued that it violated their due process rights. (18) The district court granted EPA's motion to dismiss, determining that the CWA precluded pre-enforcement review of EPA's orders. (19) The United States Court of Appeals for the Ninth Circuit affirmed, agreeing with the unanimous view of the four other circuit courts that had considered the pre-enforcement review question. (20) The Ninth Circuit further determined that this denial of review did not violate due process, noting that, if and when EPA went to court to enforce the order, even if the order were deemed to be valid, the court could take any good faith arguments the Sacketts may have had into account in determining any applicable fines. (21)

3. THE SUPREME COURT'S OPINIONS

   Justice Scalia's opinion for the unanimous Court is remarkably straightforward. The Court first determined, in only three paragraphs, that the order constituted a final agency action. (22) In so doing, the Court applied the familiar test from Bennett v. Spear (23) requiring that the action "mark the consummation of the agency's decisionmaking process," and that the action is one "by which rights and obligations have been determined, or from which legal consequences will flow." (24) Dealing with these in inverse order, the Court found that EPA's order met both prongs of the second test: it imposed on the Sacketts the legal obligation to restore their property, and with regard to legal consequences, the Court recognized the government's litigating position that the order doubled the Sacketts' exposure to penalties. (25) On the latter point, the Court also noted that EPA's order had the legal effect of making it less likely that the Sacketts could receive an after-the-fact permit. (26)

   Next, the Court summarily concluded that the order marked the consummation of EPA's decision-making process. Noting, as the Sacketts had discovered, that the respondents had no right to a formal administrative hearing, the Court further determined that "[t]he mere possibility that an agency might reconsider in light of 'informal discussion' and invited contentions of inaccuracy does not suffice to make an otherwise final agency action nonfinal." (27)

   Thus concluding that the order easily met the Bennett v. Spear test, the Court then addressed the implied preclusion analysis that had underlain the unanimous body of circuit court precedent in EPA's favor. Here also, though, Justice Scalia's analysis was both quick and cutting, so much so that he never even bothered to cite any of the circuit court decisions.

   The Court began with the three arguments EPA made based on the CWA's structural dynamics. First, Justice Scalia addressed EPA's best argument, that allowing judicial review would undermine the choice that Congress gave EPA between judicial and administrative enforcement. (28) The Court found, however, that this argument rested "on the question-begging premise that the relevant difference between a compliance order and an enforcement proceeding is that only the latter is subject to judicial review." (29) Noting that there were "eminently sound reasons other than insulation from judicial review [for] why compliance orders are useful"--such as notifying the recipients of potential violations and perhaps thereby quickly resolving some issues through voluntary compliance--Justice Scalia opined that the CWA "does not guarantee the EPA that issuing a compliance order will always be the most effective choice." (30)

   The Court then turned to EPA's two other structural arguments. In response to the argument that EPA's orders are not serf-executing, but rather must be enforced through judicial action, Justice Scalia noted that "the APA provides for judicial review for all final agency actions, not just those that impose a self-executing sanction." (31) And to the government's argument that Congress expressly provided for judicial review of EPA's administrative penalty orders, (32) but not of compliance orders, the Court simply stated, "if the express provision of judicial review in one section of a long and complicated statute were alone enough to overcome the APA's presumption of reviewability ... it would not be much of a presumption at all." (33)

   After distinguishing three cases the Court readily deemed not to be analogous, (34) the Court turned finally to the government's policy argument that allowing judicial review would hamper EPA's ability to enforce the CWA by undermining the usefulness of administrative compliance orders. Justice Scalia conceded that allowing review might make these orders a less attractive enforcement option. He rejected the notion, though, that this argument implied preclusion:

   The APA's presumption of judicial review is a repudiation of the principle that efficiency of regulation conquers all. And there is no reason to think that the Clean Water Act was uniquely designed to enable the strong-arming of regulated parties into "voluntary compliance" without the opportunity for judicial review--even judicial review of the question whether the regulated party is within the EPA's jurisdiction. (35) Justices Ginsburg and Alito wrote brief concurring opinions in Sackett. Justice Ginsburg wrote solely to note her view that the Court's opinion resolved only the issue of whether order recipients under the CWA can bring judicial challenges relating to questions of CWA jurisdiction; in her view, it leaves for another day whether pre-enforcement review is also available regarding the terms and conditions of such an order. (36) For his part, Justice Alito seemed to write for two reasons: 1) to say that he found the government's position "unthinkable" "in a nation that values due process"; (37) and 2) to call upon Congress to more clearly define the reach of the CWA, while at the same time criticizing EPA for not writing a rule to provide such clarity in the wake of Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers (SWANCC), (38) and Rapanos v. United States. (39)

4. WHAT WE LEARNED

   Frankly, I do not believe that we learned that much--at least not much that is at all surprising. Many of us who teach in this area have long thought this result was essentially...