EPA wetlands order can be challenged by land owners, Supreme Court rules

The US Supreme Court Wednesday ruled unanimously in favor of an Idaho couple seeking to have their day in court to challenge an Environmental Protection Agency order that scuttled plans to build their dream home on a subdivided lot the EPA said was a federal wetland.

The couple, Chantell and Michael Sackett, had started to fill the home site with dirt and gravel to prepare for construction. But the EPA intervened, announcing that the property was a regulated wetland. Agency officials ordered the couple to restore the land to its original state or face up to $75,000 a day in fines.

The Sacketts disputed the EPA’s wetland designation and filed a lawsuit to litigate the issue in federal court.

The EPA argued that the Sacketts’ lawsuit must be dismissed because the EPA’s Clean Water Act compliance order did not amount to final agency action.

A federal judge and the Ninth US Circuit Court of Appeals agreed with the EPA and threw the suit out. Facing bankrupting daily fines and no clear avenue for judicial review, the Sacketts took their case to the Supreme Court.

In a unanimous decision on Wednesday, the high court said the Sacketts are entitled to challenge the EPA order in federal court.

“The Sacketts may bring a civil action [under the Administrative Procedure Act] to challenge the issuance of the EPA’s order,” Justice Antonin Scalia said in a statement from the bench announcing the decision. “The APA provides for judicial review of final agency action for which there is no other adequate remedy in court,” he said.

The justices did not rule that the couple may proceed with construction of their home on the disputed tract. Instead, the high court decision sets the stage for a federal judge to examine the EPA order. In effect, the Sacketts won the opportunity to present their case to a neutral judge.

“We are very thankful to the Supreme Court for affirming that we have rights … and that the EPA is not beyond the control of the courts and the Constitution,” Mr. Sackett said in a written statement.

“The EPA used bullying and threats of terrifying fines, and has made our life hell for the past five years,” Sackett said. “It said we could not go to court and challenge their bogus claim that our small lot had ‘wetlands’ on it.”

He added: “As this nightmare went on, we rubbed our eyes and started to wonder if we were living in some totalitarian country.”

The Supreme Court decision represents a victory for property owners faced with the prospect of EPA action that effectively seizes control of their land by declaring it a “wetland,” said Damien Schiff, a lawyer with the Pacific Legal Foundation, which is representing the Sacketts.

“The justices have made it clear that EPA bureaucrats are answerable to the law and the courts just like the rest of us,” Mr. Schiff said in a statement. “EPA will have to be prepared to show a reviewing court that its wetlands regulations are really necessary – not just a power trip.”

At the heart of the dispute is a .63-acre lot near Idaho’s scenic Priest Lake that the Sacketts purchased in 2005 for $23,000.

After obtaining local permits in 2007, the couple began grading the property with soil and rock in preparation for construction of a three-bedroom home.

As the grading got underway, EPA officials arrived at the site and ordered the work to stop. They advised the Sacketts that the tract was a federally-regulated wetland and that the fill material was a form of pollution in violation of the Clean Water Act.

The Sacketts disagreed that their lot was a “wetland” subject to federal regulation. The EPA responded by issuing a compliance order requiring them to immediately remove all fill material from the site and restore the property to its original condition. The order required the couple to plant new trees and shrubs and keep a fence around the lot for three growing seasons.

The Sacketts estimate the restoration would cost $27,000 – four thousand dollars more than they paid for the property. The EPA also advised them that they would be fined up to $75,000 for each day the fill material remained on the lot.

The EPA told the couple they should have applied for a permit before they began construction. The Sacketts estimate the wetlands permit process might have cost as much as $200,000.

The Sacketts asked for an administrative hearing. The agency refused. That’s when the couple filed their federal lawsuit asking a US district judge to determine whether their land was, in fact, a federally-regulated wetland.

The judge dismissed the case. That decision was upheld by a federal appeals court panel.

The courts ruled that since the EPA’s action was just an administrative order – rather than final agency action – the Sacketts could not file a lawsuit. They would have to wait until the EPA filed a formal enforcement action against them.

On Wednesday, the Supreme Court reversed the lower court rulings and rejected the EPA’s position.

“We conclude that the compliance order in this case is final agency action for which there is no adequate remedy other than APA review, and that the Clean Water Act does not preclude that review,” Justice Scalia wrote for the court.

In a concurring opinion, Justice Samuel Alito urged Congress to issue a more precise definition of which waters fall under federal regulation via the Clean Water Act. He said the current definition is “notoriously unclear.”

The combination of murky definitions in the CWA and “draconian powers” wielded by the EPA, “still leaves most property owners with little practical alternative but to dance to the EPA’s tune,” Alito wrote.

“Allowing aggrieved property owners to sue under the Administrative Procedure Act is better than nothing, but only clarification of the reach of the Clean Water Act can rectify the underlying problem,” he said.

The case is Sackett v. Environmental Protection Agency (10-1062).