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Thursday, March 22, 2012

U.S. Supreme Court Bolsters Landowner Rights when Contesting Agency Non-Compliance Letters

In Sackett v. EPA, decided on March 21, 2012, the U.S. Supreme Court held that private landowners may bring a civil action under the Administrative Procedure Act, 5 U. S. C. §500 et seq., to challenge the EPA's issuance of an  administrative compliance order under the Clean Water Act.  Administrative compliance orders are letters sent by the agency to landowners instructing them to correct alleged violations or face penalties up to $37,500 per day.  If the order is ignored and the EPA successfully prosecutes, a landowner could face increased fines ($75,000 per violation) due to the earlier warning.
The facts in Sackett involved home construction on a 2/3-acre residential lot in Bonner County, Idaho.  In preparation for constructing a house, the Sacketts filled in part of their lot with dirt and rock.  Some months later, they received from the EPA a compliance order claiming that wetlands were illegally filled.  When they attempted to challenge the order in court, the Sacketts’ claims were rejected for lack of jurisdiction. 

In support of the lower court’s dismissal, the EPA argued that compliance orders, alone, are not "final" orders that can be reviewed in court.   The orders alone do not impose any penalties for non-compliance, but rather warn landowners of potential enforcement.  Under the EPA's theory, landowners must wait for an enforcement action before they can challenge the order.  Meanwhile each day the landowner remains in “non-compliance,” the potential penalty dramatically increases if the landowner does not comply.  

In a unanimous decision, the U.S. Supreme Court disagreed. 
The Court found that the issuance of a compliance letter under the CWA is a final agency action, subject to judicial review.  The Court noted that landowners have no right to further agency review after receiving the compliance letter.  Landowners are given no opportunity by EPA to refute the "findings and conclusions" or the required action outlined in the letter. Therefore, compliance orders are "final agency actions."  Finally, the Court found nothing in the Clean Water Act that would preclude judicial review of such final actions under the APA. 

The unanimous decision is a win for private landowners and serves as a strong warning for local, state and federal government entities when issuing informal compliance orders.  Whether intended to be an informal compliance request or not, a letter demanding action may be subject to judicial review.  Before issuing compliance orders, all government bodies should consider the legal ramifications.

Post Authored by Brent Denzin, Ancel Glink


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