On March 21, 2012, the U.S. Supreme Court decided Sackett v. Environmental Protection Agency, No. 10-1062, holding that a person who receives a compliance order from the Environmental Protection Agency under the Clean Water Act may bring a civil action under the Administrative Procedure Act to challenge the issuance of the order.
The Clean Water Act prohibits the discharge of pollutants into navigable waters without a permit. When the Environmental Protection Agency determines that a violation of the CWA has occurred, the agency may either issue a compliance order or initiate a civil enforcement action, which may result in a civil penalty of up to $37,500 a day. The Sacketts received a compliance order from the EPA that stated that their residential lot contained navigable waters and that their construction project violated the CWA. The Sacketts sought declarative and injunctive relief in federal district court, contending that the compliance order was "arbitrary [and] capricious" under the Administrative Procedure Act (APA), and that it deprived them of due process in violation of the Fifth Amendment. The district court dismissed the claims for want of subject-matter jurisdiction, and the Ninth Circuit affirmed, concluding that the Clean Water Act precluded pre-enforcement judicial review of compliance orders and that such preclusion did not violate due process.
The Supreme Court reversed, holding that the Sacketts may bring a civil action under the APA to challenge the issuance of the EPA's order. Noting that the APA provides for judicial review of "final agency action" for which there was no other adequate judicial remedy, the Court poited out that the compliance order at issue had all the hallmarks of finality: it determines rights or obligations; it has legal consequences; it limits the Sacketts' ability to obtain a permit; and it represents the consummation of the agency's decision-making process. In addition, the CWA itself did not authorize the Sacketts to initiate litigation to challenge the permit, and they faced additional potential liability with each day that passed. Finally, the Court held that the statutory scheme of the CWA did not itself preclude judicial review under the APA, noting the "presumption favoring judicial review of administrative action."
Justice Scalia delivered the decision for a unanimous Court. Justices Ginsburg and Alito filed concurring opinions.