September 23, 2010

Ninth Circuit says no to judicial review of compliance orders

By Ninth Circuit says no to judicial review of compliance orders

Author:  Damien M. Schiff

Last Friday, the Ninth Circuit Court of Appeals ruled in Sackett v. Environmental Protection Agency that a landowner does not have the right of immediate judicial review when he receives a compliance order from the EPA for alleged violations of the Clean Water Act (PLF represents the appellants, Michael and Chantell Sackett).  The Ninth Circuit also ruled that delaying judicial review until either the landowner has been denied a permit, or is the subject of an EPA enforcement action, does not violate the landowner's due process rights.

The case arises out of the Sacketts' efforts to build a home near the shores of Priest Lake in western Idaho.  The Sacketts purchased a small lot already surrounded by built-out parcels.  The Sacketts conducted, prior to purchase, a full due-diligence search that revealed no wetlands permitting issues or requirements for the property.  Shortly after beginning construction, the EPA issued the Sacketts a compliance order, demanding that they remove the fill that they had placed on the property, restore the alleged wetlands that used to be there, and fence off the property for three years before applying to the Army Corps of Engineers for a permit.  At that point, PLF got involved and sued in federal court demanding that the Sacketts be allowed immediately to challenge EPA's jurisdiction over the property.  The district court dismissed the Sacketts' complaint, and the appeal to the Ninth Circuit followed.

In the court of appeals, the Sacketts argued that denial of the right of immediate judicial review put landowners in an impossible situation:  either spend hundreds of thousands of dollars applying for a permit that the landowner believes is unnecessary, and then sue over the result; or, do nothing and invite the Damoclean sword of a potential EPA enforcement action.  The Sacketts relied on an Eleventh Circuit case, TVA v. Whitman, which held that EPA compliance orders under the Clean Air Act do violate landowners' due process rights and are for that reason null and void.

The Ninth Circuit rejected these arguments, holding that delay in judicial review does not violate due process so long as adequate review can be had at some point.  The court interpreted the Clean Water Act as allowing just such review, along the way noting that the amount of any civil penalty would be up to the discretion of a judge, not EPA.  Nevertheless, the court had no answer for the Sacketts' principal complaint, i.e., that it makes no sense to force a landowner to spend hundreds of thousands of dollars, not compensable, in order to "purchase" one's day in court.

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Sackett v. Environmental Protection Agency

Chantell and Michael Sackett received a local permit to build a modest three-bedroom home on a half-acre lot in an existing, partially built-out residential subdivision in Priest Lake, Idaho. The home poses no threat to water quality but federal EPA regulators nonetheless declared their property to contain a wetland and demanded they stop all work and restore the lot to its natural condition or pay fines of up to $75,000 per day. When they sued to challenge this order, EPA asserted they had no right to judicial review. The district court and Ninth Circuit Court of Appeals agreed, and tossed their lawsuit out of court. The United States Supreme Court unanimously reversed, ruling that failure to allow the lawsuit violated the Sacketts’ constitutional due process rights. They are now litigating their claims in federal district court in Idaho.

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