US Supreme Court ruling on due process in wetlands regulation
Challenging a wetlands designation in eminent domain cases is often a key issue for property owners attempting to obtain just compensation for the acquisition of their property. While the decision of the Supreme Court in Sackett v. EPA is not made in the context of eminent domain, the Court's findings with respect to the EPA could well be germane in cases that involve eminent domain.
Sackett v. U.S.Environmental Protection Agency
Supreme Court of the United States No. 10–1062.
Argued January 9, 2012—Decided March 21, 2012
Last week the United States Supreme Court handed a decisive win to property owners battling to protect their due process rights against baseless environmental regulation. In Sackett v. EPA, the Sacketts were denied their due process rights when they attempted to challenge the Environmental Protection Agency’s (EPA) determination that the Sackett property was encumbered with wetlands. Download Sackett v. EPA.
The Sacketts purchased a 0.63 acre lot in a residential, platted subdivision in Idaho intending to build a house. All permits were granted by the local municipality and gravel was laid in preparation for building the foundation of the home. Without warning, evidence, or explanation, the EPA issued the Sacketts a “compliance order,” demanding construction stop and the land be returned to its pre-gravel condition. According to their attorneys at the Pacific Legal Foundation, the Sacketts were told by the EPA that it controlled the land because the land is “wetlands.” Failure to comply with the EPA’s order racked up fines of $75,000 a day.
The question before the Supreme Court was whether the Sacketts could get judicial review of the EPA’s compliance order as a final agency decision without first applying for a wetlands development permit and being rejected. The Sacketts argued the compliance order was a final agency decision and requiring a property owner to go through the permit process before challenging the wetlands designation denied due process. For example, it was estimated the Sacketts could wait years for a permit, incurring more than $200,000 in expenses all the while incurring EPA fines, all to develop a lot that only cost $23,000. (see Pacific Legal Foundation Talking Points.) It was argued that such an interpretation would require property owners who challenge the EPA to pay huge sums to gain access to the Courts. The EPA argued the Clean Water Act, 33 U.S.C. §1251, et seq., precludes judicial review of a compliance order. It further argued that allowing judicial review would greatly hinder the EPA’s ability to enforce the Clean Water Act.
The Supreme Court held the Sacketts may institute a civil action under the Administrative Procedure Act (APA), 5 U.S.C. §706(2)(A). The APA provides for judicial review of “final agency action for which there is no other adequate remedy in a court.” 5 U.S.C. §704. The EPA’s compliance order is a “final agency action.” Moreover, applying for a wetlands permit and then filing suit under the APA when the permit is denied does not provide an adequate remedy for the EPA’s action. Remanded.
Winifred E. Campbell is an associate with Carlin & Ward, P.C.