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Despite Sackett Ruling, Industry Still Faces Challenges with EPA in Permitting and Enforcement Matters

Thursday, July 19, 2012 9:16 am by

In March 2012, the U.S. Supreme Court issued its much-anticipated ruling in Sackett v. EPA, a case which had the potential to significantly change the way the EPA enforces the environmental laws. Despite a unanimous decision against it, EPA has been publicly stating that the case will not significantly change its enforcement approach. The question remains: is the agency underestimating the Sackett decision or will it truly be business as usual?

EPA’s Enforcement Scheme

Despite a large and dedicated workforce, EPA faces a number of obstacles in effectively enforcing environmental laws. First and foremost, the agency is simply outnumbered; there have always been many more regulated entities than EPA employees. Added to this numerical disadvantage are the enforcement difficulties inherent in the geographic dispersal of regulated entities across the country, travel and other budgetary restrictions, the need for extensive development of a factual record prior to judicial enforcement, and the passage of time between the acts giving rise to the alleged violation and the enforcement action itself. EPA has historically relied on a number of methods to help it overcome these obstacles, including heavy reliance on quick, less resource-intensive enforcement solutions. One such option has been an administrative order (AO) bolstered by threats of significant penalties for noncompliance. As a general rule, courts have historically prevented recipients of such AOs from seeking review of them before they are enforced (this is often referred to as the “pre-enforcement review bar”).

The Genesis of the Pre-enforcement Review Bar

It is doubtful that EPA would rely so heavily on AOs if it had to gather and adjudicate the extensive factual record necessary to litigate an enforcement action; if it did, EPA would hardly be in a better position than if it simply brought an enforcement action in the first place. However, in most instances, EPA has been able to use AOs in conjunction with a mechanism that allows it to avoid the need to assemble that record. That mechanism is the pre-enforcement review bar, which attempts to balance the American judicial system’s right to due process with the desire for the expeditious administration of justice. Courts have almost always enforced the bar, often relying on EPA’s desire to act quickly. As the U.S. Court of Appeals for the Seventh Circuit stated, “Congress intended to allow EPA to act to address environmental problems quickly and without becoming immediately entangled in litigation.”

The trouble with rationales like this is that they overlook due process concerns—that failure to afford entities pre-enforcement review allows their property or liberty to be taken without judicial review. Moreover, this rationale reflects a view, decades after the environmental laws were adopted, which is presumptive, blanket, and intractable, and is based on a previous regulatory scheme that often is not used as originally intended and does not function as it did when the bar was enacted.

A blanket prohibition against judicial review prior to EPA enforcement arguably made sense 30 years ago at the inception of environmental regulation. At that time, most disputes between regulated entities and EPA were based on issues of fact, not law. Moreover, the enforcement situations faced by EPA and regulated entities at the time involved issues that were comparatively more straightforward.

The Pre-enforcement Review Bar Today

Today, most disputes between EPA and regulated parties relate to much more arcane issues of the law, and many disagreements over EPA’s enforcement authority are legal – if not jurisdictional – rather than factual. For example, the Clean Air Act (CAA) regulatory scheme has expanded to such a degree that almost no legal or technical experts practice the entirety of the act. Since the 1990 CAA amendments, EPA has added more than 10,000 pages of CAA regulations (which have grown from 3,747 pages in 1990 to 14,220 in 2011). Many regulated entities now find it difficult simply to understand what conduct is prohibited under the CAA. Moreover, EPA has moved to enforcing much more complicated portions of the act.

Another compounding factor is EPA’s effort to regulate through enforcement. In the absence of new environmental laws or rules that tighten pollution standards or increase mitigation requirements, in recent years, EPA has brought enforcement actions for the purpose of not just penalizing violators but also seeking emission restrictions from them that are more stringent than those available under regulations. Thus, alleged violators face the decision to either submit to strict pollution requirements to which they would not otherwise be subject (and to which their competitors are not) or fight a lengthy court case, which could result in the imposition of extraordinarily high penalties. The pre-enforcement review bar accentuates the downside of mounting such a challenge, raising the possibility that a company will simply submit rather than litigate.

The Sacketts’ Case

Following EPA’s rejection of the Sacketts’ request for an administrative hearing regarding the validity of the AO issued to them, the Sacketts sued EPA in federal district court, alleging violations of the Administrative Procedure Act (APA) and their right to due process. Relying on the pre-enforcement review bar, the district court dismissed the Sacketts’ claims and the Ninth Circuit affirmed the decision.

There was little doubt following oral argument in the Supreme Court that the Sacketts would prevail. A majority of the justices appeared inclined to rule in their favor, including Chief Justice Roberts and Justices Thomas, Scalia, Alito, and Breyer. Justices Kagan, Sotomayor, and Ginsberg also expressed some doubt as to the government’s position. The fact that the Court decided the case unanimously, however, was somewhat surprising, reflecting the untenable nature of EPA’s position.

After Sackett

Notwithstanding their unanimous win, a number of obstacles still stand in the Sacketts’ way and will stand in the way of any parties who seek to take advantage of the Supreme Court’s decision in the future. The Sacketts now have to decide whether to settle their case in the face of mounting civil penalties or to challenge an EPA jurisdictional decision that will receive substantial deference from the courts. The approach of those who come after this decision will depend in part on how EPA responds to the ruling.

The Sacketts’ situation is a sympathetic one: they appear as David to EPA’s Goliath, lacking extensive financial resources or knowledge of the regulatory scheme. But the obstacles the Sacketts face—in terms of the complexity of the regulatory scheme, the time and resources required to understand the process, and the inability to obtain prompt judicial review of EPA’s decisions—are faced by all those attempting to comply with the Clean Water Act and other environmental statutes. And alleged violators with deeper pockets tend to face larger potential penalties. Even though the EPA is outnumbered on an industry basis, on an individual basis it has the upper hand. All parties, large and small, face an agency favored by enormous resources, tremendous statutory authority, prosecutorial discretion, judicial deference, and the claim to be protecting an environment that cannot protect itself. The deck is stacked heavily against anyone seeking to challenge an EPA enforcement action. In the end, obtaining pre-enforcement review is an important step to adding rationality and equity to the permitting and enforcement scheme, but it is only one of many necessary steps that can be taken.

For a more thorough discussion of this topic, see the article “Before and After Sackett v. U.S. Environmental Protection Agency” in the July 2012 issue of The Federal Lawyer.


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