In an important – and unanimous – ruling, the U.S. Supreme Court today re-affirmed common sense legal checks on the ability of the EPA to abuse so-called “compliance orders” that the agency essentially uses as “regulation by sledgehammer.”  

Today’s ruling in Sackett v. EPA arises out of the EPA’s efforts to block Idaho landowners from constructing a home on their property near Priest Lake, claiming that the property was “wetlands” under the Clean Water Act. The EPA threatened the Sacketts with up to $75,000-a-day fines unless they stopped building, and insisted the Sacketts had no right to bring their own lawsuit to challenge the very basis of the compliance order – the EPA’s determination that their property was a “wetlands.”  In other words, the EPA gave the Sacketts a stark choice: accept our conclusion that your property is a wetland and stop building your home, or face staggering fines that will cost you far more than your property is worth.

Justice Scalia’s opinion for the unanimous Court called the EPA’s action what it is – “strong-arming [ ] regulated parties into ‘voluntary compliance’ without the opportunity for judicial review.” The Court ruled that regulated parties do have the right, under the federal Administrative Procedure Act, to challenge EPA compliance orders. “In a nation that values due process, not to mention private property,” Justice Alito added in a concurring opinion, the EPA’s treatment of the Sacketts is “unthinkable.”

Compliance orders like that issued to the Sacketts are common. The EPA issues thousands of compliance orders each year demanding that businesses and individuals submit to the Agency’s will or face staggering fines – potentially tens of millions of dollars – all while insisting that that the regulated parties have no legal right to challenge the validity of the EPA’s claims. Faced with blockbuster, bet-the-business fines, companies and individuals “voluntarily” submit to the EPA even when it’s unclear whether the EPA has any authority whatsoever to act. The result, as Justice Alito explained in his concurrence, is that most property owners have “little practical alternative but to dance to the EPA’s tune.” Today’s ruling was an important step toward reining in such abuse of the regulatory process.

You can find the U.S. Chamber’s amicus brief in support of the Sacketts here.