By Jeryl L. OlsonPatrick D. Joyce, and Craig B. Simonsen

Seyfarth Synopsis: Last week before his departure USEPA Administrator Pruitt notified the regulated community that he had directed the Agency to update regulations governing the Agency’s use of Section 404(c) veto power in permitting discharges of dredged or fill materials under Section 404 of the Clean Water Act.

The U.S. Environmental Protection Agency’s (USEPA) current regulations implementing Clean Water Act (CWA) section 404(c) allow the Agency to veto at any time during the permitting process a permit issued by the U.S. Army Corps of Engineers (USACE) under CWA section 404(a) that allows for the discharge of dredged or fill material at permitted sites.  USEPA has historically taken the position that it can preemptively veto a permit before, during or after a 404(a) application is filed or a permit is issued.

In a memorandum last week, USEPA Administrator E. Scott Pruitt directed the Office of Water to develop a proposed rulemaking that would end USEPA’s preemptory and retroactive 404(c) veto power. Administrator Pruitt said that it was his goal to refocus EPA “on its core mission of protecting public health and the environment in a way that is fair and consistent with due process.”  He continued that EPA “must ensure that EPA exercises its authority under the Clean Water Act in a careful, predictable, and prudent manner.”

Administrator Pruitt indicated that the “regulations were last revised nearly 40 years ago“ and “EPA’s regulations should reflect today’s permitting process and modern-day methods and protections, including the robust existing processes under the National Environmental Policy Act.”

Accordingly, the memo directs USEPA’s Office of Water to develop a proposed rulemaking that would consider the following changes:

  • Eliminating the USEPA authority to initiate the section 404(c) process before a USACE 404(a) permit application has been filed with the USACE or a state, otherwise known as the “preemptive veto.”
  • Eliminating the authority of USEPA to initiate the section 404(c) veto process after a USACE 404(a) permit has been issued by the USACE or a state, otherwise known as the “retroactive veto.”
  • Requiring a Regional Administrator to obtain approval from USEPA Headquarters before initiating the section 404(c) veto process over a USACE 404(a) permit.
  • Requiring a Regional Administrator to review and consider the findings of an Environmental Assessment or Environmental Impact Statement prepared by the USACE before preparing and publishing notice of a proposed determination.
  • Requiring USEPA to publish and seek public comment on a final USEPA determination before such a determination takes effect.

We have previously blogged on related wetlands topics, including Supreme Court to Decide if Army Corps Initial Jurisdictional Determination to Regulate Wetlands Under CWA is Ripe for Judicial Review, Sackett v. EPA: Supreme Court Decides Unanimously In Favor Of Landowners, and New Wetlands Definition.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of Seyfarth’s Environmental Compliance, Enforcement & Permitting Team.

By Andrew H. Perellis, Kay R. Bonza, and Craig B. Simonsen

EPA SignSeyfarth Synopsis: The EPA and Army Corps of Engineers have proposed to rescind the 2015 Clean Water Rule defining “Waters of the U.S.,” and recodify the pre-existing rule, then engage in a subsequent rulemaking to re-evaluate and revise the definition of WOTUS presumably intended to decrease in the number of water bodies subject to EPA permitting obligations.

The U.S. Environmental Protection Agency and the Army Corps of Engineers have published a proposed rule on the “Definition of “Waters of the United States” – Recodification of Pre-Existing Rules.”

We had previously blogged about the EPA’s monumental final rule, in June 2015, expanding the definition of “Waters of the United States” (WOTUS) under the Clean Water Act, thereby increasing the number of water bodies subject to protection by the EPA through permitting obligations. The final rule was based on EPA’s Science Advisory Board’s draft scientific report, “Connectivity of Streams and Wetlands to Downstream Waters: A Review and Synthesis of the Scientific Evidence.” EPA/600/R-11/098B (September 2013).

In commenting on the proposed rule to rescind the WOTUS rule, EPA Administrator Scott Pruitt said, “we are taking significant action to return power to the states and provide regulatory certainty to our nation’s farmers and businesses …. This is the first step in the two-step process to redefine ‘waters of the U.S.’ and we are committed to moving through this re-evaluation to quickly provide regulatory certainty, in a way that is thoughtful, transparent and collaborative with other agencies and the public.”

The proposed rescission follows President Trump’s February 28, 2017, Executive Order on “Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the ‘Waters of the United States’ Rule.”  The effect of the rescission would be to recodify the regulatory text that was in place prior to the 2015 Clean Water Rule and that is currently in place as a result of a U.S. Court of Appeals for the Sixth Circuit’s stay of the 2015 rule. Therefore, according to the EPA press release, this action, when final, “will not change current practice with respect to how the definition applies.”

EPA also notes that the agencies have begun deliberations and outreach on the second step of the rulemaking involving a reevaluation and revision of the definition of WOTUS in accordance with the Executive Order.

The regulated community — industry, municipalities, developers, builders, and a host of others — should watch and monitor this rulemaking effort closely.  While this initial step will recodify the pre-existing rule, the subsequent rulemaking to re-evaluate and revise the definition of WOTUS presumably is intended to reduce the number of regulated water bodies constituting “waters of the United States,” thereby decreasing permitting obligations, or subjecting fewer entities to permitting requirements as a result of a narrower definition of WOTUS.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Seyfarth Environmental Compliance, Enforcement & Permitting Team.

By Andrew H. Perellis, Patrick D. Joyce, and Craig B. Simonsen

US Supreme Court Capitol Hill Daytime Washington DCSeyfarth Synopsis: The Supreme Court decided that Army Corps’ jurisdictional determinations are judicially reviewable. This decision leaves open the question of whether other types of administrative decisions are immediately judicially reviewable.

In a significant victory for owners of private property, the Supreme Court of the United States (SCOTUS) decided this week that an Army Corps of Engineers (Corps) jurisdictional determination (JD) is a final agency action judicially reviewable under the Administrative Procedure Act (APA).  U.S. Army Corps of Engineers v. Hawkes Co., Inc., et al., No. 15-290, 578 U.S. ____ (May 31, 2016).

The issue presented was whether a so-called “approved” jurisdictional determination — the government’s determination that a wetland is regulated under the Clean Water Act (CWA) thereby requiring a permit to dredge or fill — is immediately reviewable. The Hawkes decision builds on the holding of Sackett v. EPA, 132 S. Ct. 1367 (2012) (see our earlier blog on the Sackett decision) where SCOTUS concluded that an EPA compliance order issued under the CWA requiring that a developer cease its filling activity of an allegedly regulated wetland was judicially reviewable. SCOTUS rejected the Government’s contention that the landowner has to await EPA’s judicial enforcement of that order.

Following Sackett, the Circuit Courts of Appeal have split as to whether a landowner receiving a JD finding the wetland to be CWA-regulated is final and reviewable — with the Eighth Circuit holding yes, and the Fifth Circuit holding no.

In Hawkes, the plaintiffs sought to mine peat from wetland property. The Corps upset that plan when it issued an approved JD that the property constituted “waters of the United States” (WOTUS), requiring the plaintiffs to obtain a permit to discharge dredged or fill materials into these “navigable waters.” Approved JDs present a definitive statement that waters of the United States are, or are not, present. The Corps also issues “preliminary” JDs that only tell a landowner that waters of the United States “may” be present. Preliminary JDs were not at issue in this case. An approved JD is binding upon the Corps and EPA. For example, where the JD concludes that a CWA-regulated wetland is not involved, it provides the landowner with a “safe-harbor” for five years, under which it is free to develop its property without need to obtain a permit. For this reason, SCOTUS concluded that the JD affects the plaintiffs’ rights and obligations and has legal consequences, making it reviewable.

This SCOTUS determination could have heightened importance in the context of the EPA’s and the Corps’ recent release of the Final Clean Water Rule: Definition of “Waters of the United States.” We blogged about this new rule when it was published. The new WOTUS rule will substantially increase the number of potential wetlands, making a challenge to the Corps’ Jurisdictional Determinations more likely now that SCOTUS has decided that they are judicially reviewable.

The Hawkes decision also leaves open questions of whether other types of administrative decisions are immediately judicially reviewable. In a related Law360 Expert Analysis (Water Case Shows Justices Warm To Review Of Fed. Agencies), Andy Perellis notes that “there is potentially a universe of agency actions such as guidance documents or opinion letters that in the past have evaded judicial review that may be reviewable because those agency determinations have immediate consequences.”

Supreme CourtSeyfarth Partner Andrew H. Perellis is quoted in this Law360 expert analysis, High Court Water Case Could Put Target On Agencies’ Backs (March 29, 2016).

The pending Supreme Court case, U.S. Army Corps of Engineers v. Hawkes Co. Inc. et al., no. 15-290, involves what constitutes a final agency action reviewable under the Administrative Procedure Act. We had previously blogged about this appeal, and its relation to Sackett v. EPA, 132 S. Ct. 1367 (2012). See our earlier blog on the Sackett decision. The case pertains to whether a “jurisdictional determination” regarding a wetland regulated by section 404 of the Clean Water Act is immediately reviewable in court. It is a follow-up case to the Supreme Court’s 2012 Sackett decision holding at a compliance order issued under Section 404 is immediately reviewable.

The Law360 article notes that “landowners and the U.S. Army Corps of Engineers will square off Wednesday at the U.S. Supreme Court in a test of when exactly a party may challenge the Corps’ determination that it has jurisdiction over a wetland — a case that could open government agency decisions up to more challenges across the board.”

In the analysis, Perellis concludes that “one of the key considerations for the high court will be to what extent there are real, tangible consequences in terms of what the property owner can or cannot do with a property following the issuance of a jurisdictional determination.”

By Andrew H. Perellis, Patrick D. Joyce, and Craig B. Simonsen

Supreme CourtThe Supreme Court of the United States (SCOTUS) agreed on Friday to review an important Clean Water Act (CWA) decision issued by the Eighth Circuit in Hawkes Co., Inc., et al. v. U.S. Army Corps of Engineers, No. 13-3067 (April 10, 2015).

The issue presented for SCOTUS is whether an Approved Jurisdictional Determination — the first step in the wetlands permitting process — is immediately reviewable. The Supreme Court showed similar interest in  Sackett v. EPA, 132 S. Ct. 1367 (2012). See our earlier blog on the Sackett decision.  At issue in Sackett was an EPA compliance order issued under the CWA requiring that the developer cease its filling activity of an allegedly regulated wetland. Later, rather than sooner, judicial review can leave the landowner open to considerable expenses.

In Sackett, SCOTUS found the compliance order to be reviewable once issued, so that the landowner did not have to await EPA’s judicial enforcement of that order. Following Sackett, the courts have split as to whether  an Approved Jurisdictional Determination is similarly reviewable — with the Eighth Circuit holding yes, and the Fifth Circuit holding no.

In Hawkes, the plaintiff sought to mine peat from wetland property. The U.S. Army Corps of Engineers (Corps) upset that business plan when it issued an Approved Jurisdictional Determination that the property constituted “waters of the United States” (WOTUS), and therefore the company was  required to obtain a permit to discharge dredged or fill materials into these “navigable waters.”

Review of the Approved Jurisdictional Determination was brought before the District Court. The District Court concluded that an Approved Jurisdictional Determination, although the consummation of the Corps’ decisionmaking process, was not a “final agency action” subject to judicial review within the meaning of the Administrative Procedure Act, 5 U.S.C. § 704. While the appeal of that decision was pending before the Eighth Circuit, a panel of the Fifth Circuit reached a similar conclusion. Belle Co., LLC v. U.S. Army Corps of Engineers, 761 F.3d 383 (5th Cir. 2014), cert. denied, 83 U.S.L.W. 3291 (U.S. Mar. 23, 2015) (No. 14-493).

The Eighth Circuit concluded that the District Court (as well as the Fifth Circuit in Belle) “misapplied the Supreme Court’s decision in Sackett v. EPA, 132 S. Ct. 1367 (2012),” and reversed the District Court opinion.

The SCOTUS determination could have heightened importance in the context of the EPA and the Corps recent release of its Final Clean Water Rule: Definition of “Waters of the United States.” We had blogged about the new rule when it was published. The new WOTUS rule will substantially increase the number of potential wetlands, making challenges to the Corps’ Approved Jurisdictional Determinations more likely if SCOTUS determines that such a determination is judicially reviewable.

By Jeryl L. Olson, Andrew H. Perellis and Patrick D. Joyce

The EPA and Army Corps of Engineers recently released its Final Clean Water Rule: Definition of “Waters of the United States.”

We had previously blogged about the Agency’s draft of the proposed rule that was distributed in November, 2013 as well as a “clarification” of the proposed rule distributed in March, 2014.

EPA claims that the Final Rule does not create any new or different regulatory requirements and is only a “definitional rule” that clarifies the scope of the “waters of the United States” under the Clean Water Act in light of the U.S. Supreme Court cases in U.S. v. Riverside Bayview Homes, 474 U.S. 121 (1985), Solid Waste Agency of Northern Cook County v. U.S. Army Corps of Engineers (SWANCC), 531 U.S. 159 (2001), and Rapanos v. United States (Rapanos), 547 U.S. 715 (2006).  Many commentators and experienced environmental practitioners, however, believe that the rule expands federal jurisdiction.  Challenges to the rule are expected, and the courts will have another say in determining the extent to which federal jurisdiction can extend to “waters,” including wetlands and ephemeral streams that are isolated, or otherwise not directly adjacent to what is considered to be a traditional navigable water or tributary to a traditional navigable water.

The Final Rule identifies three basic categories of jurisdictional waters (“the Big Three”) for which the scope of federal jurisdiction largely is not in dispute. These include:

  • Traditional navigable waters
  • Interstate waters
  • The territorial seas

Additionally, tributaries to the above, and wetlands adjacent to either tributaries or to the Big Three are considered to be regulated waters of the United States.

In addition, the Final Rule identifies a category of waters subject to case-specific analysis to determine whether they are jurisdictional.  The following six types of waters are jurisdictional if the satisfy the “significant nexus” test and therefore “significantly affect the chemical, physical, or biological integrity of traditional navigable waters, interstate waters, or the territorial seas in the region:”

  • Prairie potholes
  • Carolina and Delmarva bays
  • Pocosins
  • Western vernal pools in California
  • Texas coastal prairie wetlands
  • Waters within the 100-year flood plain and that are within 4,000 feet of the tide line or the ordinary high water mark of a traditional navigable water, interstate water, the territorial seas, impoundments, or covered tributary (“similarly situated waters”)

Finally, the Final Rule identifies the following waters that are specifically excluded from jurisdiction:

  • Waste treatment systems and wastewater recycling structures on dry land
  • Prior converted cropland
  • Ditches with ephemeral or intermittent flow that are not a relocated tributary or excavated in a tributary and ditches that do not flow into another water
  • Irrigated lands that revert to dry land
  • Artificial lakes such as stock watering ponds, irrigation ponds, settling basins, rice fields, log ponds, and cooling ponds and artificial reflecting pools or swimming pools on dry land
  • Depressions incidental to mining or construction that may become filled with water
  • Erosional features, including gullies, rills, and ephemeral features such as ephemeral streams that do not have a bed and banks and ordinary high water mark
  • Puddles
  • Groundwater
  • Stormwater control features constructed to convey, treat, or store stormwater on dry land

The final rule differs from the proposed rule in some respects, three of which are noted below.

First, the proposed rule defined “floodplain” and “riparian area” in very scientific terms.  The final rule abandons this approach.  Instead, EPA uses a 100-foot measure from the ordinary high water mark in lieu of the term “riparian area.” Also, instead of just using the term “floodplain,” EPA now defines adjacent waters as being a maximum of 1,500 feet from the jurisdictional water and within the FEMA 100-year floodplain.

Second, unlike the proposed rule, the scope of the case-by-case significant nexus analysis now has a geographic limit.  Under the final rule, to be potentially subject to regulation, the water must be within 4,000 feet of the ordinary high water mark of a tributary and within the FEMA 100-year floodplain.

Third, the final rule clarifies the scope of regulation over ditches.  As proposed, a ditch is somewhat more narrowly regulated, and is jurisdictional only where it is (1) an ephemeral or intermittent ditch excavated in a tributary or constructed in order to relocate a tributary or (2) an intermittent ditch that drains wetlands directly into another jurisdictional water.

The final rule is complex and the regulated community should seek legal advice in determining how the new rule may apply in particular situations.

By Jeryl L. Olson and Craig B. Simonsen

On September 11, 2013, U.S. Environmental Protection Agency published its revised Spill Prevention Control and Countermeasures (SPCC) Guidance for Regional Inspectors, which is directed not only to EPA inspectors, but also to owners and operators of facilities subject to the SPCC requirements.  The Clean Water Act guidance is designed to “facilitate nationally consistent implementation of the SPCC rule.”  EPA 550-B-13-001.

The guidance is very useful, and surprisingly comprehensive; it includes detailed discussions of the following major SPCC issues:

  • SPCC Rule Applicability;
  • Environmental Equivalence;
  • Secondary Containment;
  • Impracticability Determinations;
  • Oil Water Separators;
  • Facility Diagram and Descriptions;
  • Inspections, Evaluations and Testing.

In addition to the guidance topics listed above, the guidance conveniently includes the entire text of Clean Water Act, §311(j)(1)(c) SPCC requirements, as well as the implementing regulations from the Code of Federal Regulations, including 40 CFR Parts 109, 110 and 112.

Additional features of the guidance are samples of storage facility plans, production facility plans, and contingency plans.  While all aspects of the guidance  should be applauded for their utility, for regulated facilities, environmental consultants and environmental attorneys, the most useful part of the guidance is the inclusion of EPA’s SPCC Inspection Checklist which will be followed by inspectors in the course of compliance inspections at SPCC regulated facilities.  For regulated facilities, this Checklist can be used as a roadmap for compliance, and will be an effective tool in compliance auditing.

While EPA has published the guidance on its website, it has cautioned that the guidance is a “living document” and may be revised; EPA also encourages comments on the guidance from the regulated community.  To facilitate use of the guidance and to further the utility of the guidance, EPA is conducting webinars which are available not only to EPA employees, but to all SPCC stakeholders.  The sessions are approximately 90 minutes long, and the schedule of the webinars (which are to be conducted September 12, 18 and 19) and time periods on those dates, can be found at http://www.epa.gov/emergencies/content/spcc/spcc_guidance_webinars.htm.  EPA warns that registration is required for the webinars, and anticipates they will be popular and may result in the need for a “waiting list,” so early registration is important.

By Andrew H. Perellis and Ilana R. Morady

On March 21, 2012, the United States Supreme Court issued a unanimous decision hugely impacting EPA’s enforcement authority under the Clean Water Act (CWA). The decision also has strong implications for EPA’s enforcement authority under the Clean Air Act (CAA).

The issue before the Court was whether two landowners could bring a civil action under the Administrative Procedure Act (APA) to challenge EPA’s issuance an administrative compliance order (ACO). ACOs are a principal civil enforcement tool used by EPA, and they require parties to undertake response action when EPA believes a violation of the CWA has occurred. Michael and Chantell Sackett, owners of an undeveloped parcel of land in Idaho, filled a portion of their land in 2007 in preparation for building their home. The EPA, however, determined that the Sacketts had violated the CWA because their parcel contained a wetland. Under the CWA, a permit is required for filling a wetland. EPA issued an ACO to the Sacketts under Section 309 of the CWA, 33 U.S.C. § 1319, directing them to restore their land to its original condition and remove the fill material.

The Sacketts petitioned EPA for a hearing to challenge the agency’s determination that their parcel contained a wetland, but the agency refused, claiming that the Order was not subject to judicial review until and unless EPA sought to enforce the Order in court. EPA vigorously defended its position all the way to the U.S. Supreme Court, but none of the Justices bought EPA’s argument. The Court held that the ACO at issue was final agency action subject to APA review. Justice Scalia delivered the Court’s opinion, stating that “[t]here is no reason to think that the Clean Water Act was uniquely designed to enable the strong-arming of regulated parties into ‘voluntary compliance’ without the opportunity for judicial review — even judicial review of the question whether the regulated party is within the EPA’s jurisdiction.”

Section 704 of the APA, 5 U.S.C. § 704,  provides for judicial review of “final agency action for which there is no other adequate remedy in a court.” On the issue of whether the ACO was final agency action, the Court said “it ha[d] all of the hallmarks of APA finality….” During oral argument and in its brief, the Government asserted that the ACO was not final agency action because the Order invited the Sacketts to “engage in informal discussions of the terms and requirements” of the Order and to inform EPA of “any allegations [t]herein which [they] believe[d] to be inaccurate.” The Court, on the other hand, noted that “the mere possibility” that EPA might change its mind did not serve to make “an otherwise final agency action nonfinal.”

On the issue of whether the Sacketts had another route to judicial review, the Court rejected EPA’s contention that applying to the U.S. Army Corp of Engineers for a permit, and then filing suit under the APA if the permit was denied, was an adequate remedy. But, the crux of EPA’s argument before the Court was not that other available remedies barred APA review. Rather, EPA relied heavily on the notion that the CWA precluded judicial review of the ACO.

Under Section 701 of the APA, 5 U.S.C. § 704, judicial review is unavailable “to the extent that [other] statutes preclude [it].” Although the CWA does not expressly preclude judicial review, the Government posited that because the CWA authorizes EPA to either file a civil action or issue an ACO when it determines that a regulated entity is in violation of the CWA, Congress intended the agency to have an enforcement option that obviates the need for judicial intervention. Pre-enforcement judicial review, EPA argued, would eliminate that choice. The Court, however, said that “[t]here are eminently sound reasons other than insulation from judicial review why compliance orders are useful,” for example providing a means of speedily resolving issues through voluntary compliance if the recipient so desires.

In arguing its position, the Government exhorted that EPA would be less likely to use ACOs if they were subject to judicial review. Now that the regulated community can seek pre-enforcement judicial review of ACOs issued under the CWA, it remains to be seen how EPA’s enforcement tactics will change. It also remains to be seen how EPA will use ACOs under other environmental statutes, particularly under the CAA. The CAA’s language addressing ACOs, at 42 U.S.C. § 7603, is virtually identical to Section 309 of the CWA. In any event, yesterday’s decision is surely a landmark, and a big win for the regulated community.

By Andrew H. Perellis and Ilana R. Morady

On Monday, January 9, 2012, the United States Supreme Court heard oral arguments in Sackett v. United States Environmental Protection Agency, No. 10-1062. According to news agencies attending the oral argument, the Justices seemed skeptical of EPA’s contention that its administrative compliance orders issued under the Clean Water Act were not subject to judicial review until and unless EPA brought an enforcement action. Reportedly, Justice Antonin Scalia called EPA’s practice of dealing with private property to be high-handed, while Justice Samuel Alito considered EPA’s actions to be “outrageous.” The decision, expected this Spring, would impact not only the Clean Water Act enforcement authority, but also, the Clean Air Act, and possibly orders issued under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA or “Superfund”) as well.

The case involves an administrative compliance order (ACO) issued by the EPA under the Clean Water Act (CWA) to two ordinary citizens. ACO’s are a principal civil enforcement tool used by the EPA, and they require parties to undertake response action when the EPA believes a violation of the CWA has occurred. Under the CWA, EPA may issue compliance orders “on the basis of any information available,” which can include an anonymous phone tip or a newspaper article. Under the express terms of the CWA, a recipient’s failure to comply with the order can subject the recipient to penalties of $37,500 per day. The issue before the Supreme Court on Monday centered on whether these ACO’s are constitutional if timely judicial review is precluded.

The Petitioners, Michael and Chantell Sackett, are owners of an undeveloped parcel of land in Idaho, for which they paid $23,000. In 2007, they filled a portion of the land in preparation for building their home. The EPA, however, determined that the Sacketts had violated the CWA because their parcel contained a wetland. Under the CWA, a permit is required for filling a wetland. The EPA issued an ACO to the Sacketts, directing them to restore their land to its original condition and remove the fill material. The Sacketts petitioned the EPA for a hearing to challenge the agency’s determination that their parcel contained a wetland, but the agency refused, claiming that the Order was not subject to judicial review until and unless EPA sought to enforce the Order in court.

The questions presented to the U.S. Supreme Court on Monday were: (1) whether the Sacketts can seek pre-enforcement judicial review of the ACO pursuant to the Administrative Procedure Act (APA), and (2) if not, whether the Sacketts’ inability to seek pre-enforcement judicial review of the ACO violates their due process rights under the Constitution. The Petitioners argued in their brief that Congress intended to allow review of ACO’s under the APA when it enacted the CWA. Not only has the Supreme Court held that judicial review of agency action is presumed, but if the CWA was meant to preclude judicial review, it has to be “fairly discernible” from the statute. The APA provides that, absent a statutory prohibition, final agency action is reviewable. Interestingly, CERCLA contains an express provision prohibiting pre-enforcement review of ACOs. The CWA, however, does not.

The EPA, on the other hand, argued in its brief that an ACO does not constitute “final agency action” such that judicial review would be presumed or available. Further, the EPA argued that Congress intended to preclude pre-enforcement judicial review of ACOs. Because the CWA authorizes the EPA to either file a civil action or issue an ACO when it determines that a regulated entity is in violation of the CWA, EPA posits that Congress intended the agency to have an enforcement option that obviates the need for judicial intervention. Pre-enforcement judicial review would eliminate that choice.

The Petitioners also argued that the ACO violated their due process rights under the Constitution. For one, the Petitioners argued, the ACO deprived them of the only permitted economically viable use of their land – building a home. It also denied them the right to exclude others from their property – principally EPA employees who under the ACO can “move freely” on the property. The EPA, on the other hand, argued in its brief that the Court should not consider the Petitioners argument on this point because the Petitioners did not raise this argument before the District Court or the 9th Circuit Court of Appeals. Nevertheless, EPA also argued that the ACO did not deprive the Sacketts of any property interest, and that the CWA contains adequate procedural safeguards before petitioners may be subject to penalties. Specifically, any penalty would be imposed only after EPA enforced the order and a judge found an underlying violation of the CWA. Moreover, judges have significant discretion regarding the appropriate amount of penalties. The EPA also argued that the Sacketts could have asked the U.S. Army Corp of Engineers to consider the possible issuance of a fill permit, the denial of which the Sacketts could have sought judicial review.

The Petitioners argued that these modes of review put forth by the EPA are not meaningful. First, judicial review is not meaningful if the Sacketts are subject to a “Damoclean Sword,” never sure of whether or when the EPA will seek enforcement and penalties, which in the Sacketts’ case could be over $40 million dollars. Even a 99% reduction in the maximum penalty, the Petitioners noted, would be a hefty fine. Moreover, the Petitioners argued, the permitting process is not a remedy because in challenging a permitting decision, the Sacketts could not challenge the compliance order itself. The permitting process is also expensive (the average cost of an individual CWA permit is over $250,000), especially for two ordinary citizens like the Sacketts.

Interestingly, although the Sacketts are ordinary citizens, most of the amici on their side are business interests. In fact, three weeks before the Supreme Court granted review of the Sacketts’ case, it denied certiorari to General Electric Co., who had put forth a nearly identical legal grievance under CERCLA. If the Sacketts prevail, the decision will hugely impact the way EPA uses enforcement tools against corporations and other businesses. There are no amici on EPA’s side.

By Craig B. Simonsen

The U.S. Environmental Protection Agency (EPA) has announced its final 2010 Effluent Guidelines Program Plan (Plan), published at 76 Fed. Reg. 66286 (October 26, 2011). Members of the public are encouraged to submit comments on the proposed Plan.

EPA plans to develop effluent guidelines and standards for the discharge of wastewater from the Coalbed Methane Extraction (CBM) industry (estimated to generate 8% of the natural gas production in the U.S.).  It will also develop pretreatment requirements for discharges of mercury from the Dental industry, and for the discharges of wastewater from the Shale Gas Extraction (SGE) industry. In its announcement, EPA Administrator Lisa P. Jackson indicates that “the president has made clear that natural gas has a central role to play in our energy economy. That is why we are taking steps — in coordination with our federal partners and informed by the input of industry experts, states and public health organizations — to make sure the needs of our energy future are met safely and responsibly.”

In addition, the EPA will initiate a preliminary category review for the cellulosic products segment of the Plastics Molding and Forming industrial category. EPA found too that estimated toxic-weighted pollutant discharges of lead from the Pulp, Paper, and Paperboard industrial category need further investigation.

Finally, EPA identified the need for additional data review as part of the 2011 annual review for three industrial categories: Mineral Mining and Processing; Landfills; and Waste Combustors.