KMTG Will Host MCLE Presentation On Sackett v. EPA Decision

On Friday, June 8, from 12 p.m. - 1p.m. (pacific time), Kronick Moskovitz Tiedemann & Girard (KMTG) will be hosting a brown-bag lunch MCLE event, entitled "Sackett v. Environmental Protection Agency: Judicial Review of Clean Water Act Compliance Orders." On March 21, the Supreme Court issued its unanimous decision in Sackett v. EPA, holding that Clean Water Act compliance orders are final agency action subject to judicial review under the Administrative Procedure Act. In so ruling, the high court reversed twenty years of lower court precedent holding that landowners who receive such orders have no right to challenge those orders in federal court. Damien Schiff of the Pacific Legal Foundation, lead counsel for the Sacketts, will lead a webinar presentation on the decision. KMTG will be hosting the in-person presentation. Mr. Schiff's presentation will include a short history of the case and how it ended up in the Supreme Court, a review of Justice Scalia’s opinion for the Court, and expectations for how the decision will affect EPA’s enforcement of the Clean Water Act and other environmental laws. The webinar will be moderated by Hanspeter Walter of KMTG.

This event is presented by the Natural Resources subsection of the California Bar’s Real Property Law section.  Attendees of the webinar or the in-person presentation are eligible for 1.0 MCLE credit.

To register for the webinar, click here or go to www.calbar.org/online-cle and select Tele-Seminars and Webinars.

To attend in-person, at Kronick Moskovitz Tiedemann & Girard (400 Capitol Mall, 27th Floor, Sacramento, CA 95814), please email Lindsey Ono at Lono@kmtg.com.

For additional information regarding this event, please contact Lindsey Ono or Hanspeter Walter.

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Property Owners Entitled to Judicial Review of EPA Compliance Orders

Property Owners Entitled to Judicial Review of EPA Compliance Orders

Last week, in a closely-watched Clean Water Act case, the United States Supreme Court unanimously upheld the rights of property owners to obtain judicial review of a compliance order issued by the Environmental Protection Agency (EPA). The Court's opinion may be found here.

The decision arises out of an order issued by the EPA under Section 309 of the Clean Water Act. The order declared that property owned by Mike and Chantell Sackett of Priest Lake, Idaho, contained wetlands adjacent to Priest Lake. The order found that the Sacketts violated the Clean Water Act by discharging fill material into wetlands, a violation of Sections 301 and 502(12) of the Act, and directed the Sacketts to restore their property as directed by the EPA and to allow EPA access to the property and documentation regarding the site. Failure to comply with the order exposed the Sacketts to civil penalties of up to $75,000 per day for as long as the violation continues.

The issue resolved by the Court involves the Sacketts' efforts to obtain judicial review of the compliance order. After the EPA denied their request for a hearing, the Sacketts sued in federal district court in Idaho, which dismissed their complaint for lack of subject matter justice. That dismissal was subsequently upheld by the Ninth Circuit Court of Appeals, which held that the Clean Water Act precludes pre-enforcement judicial review of administrative compliance orders, and that such preclusion does not violate due process. The Ninth Circuit's opinion may be found here. Absent judicial review, the Sacketts were faced with the prospect of complying with an order at a cost greater than the value of their property. Alternatively, they could ignore the order and risk a civil action by the EPA, with civil penalties that grew with each passing day of alleged violation.

In reversing the Ninth Circuit, the Court held that EPA's compliance order satisfied the requirements for final agency action for which there is no adequate remedy, other than review under the Administrative Procedure Act, and that nothing in the Clean Water Act precluded judicial review. Concluding the opinion of the Court, Justice Scalia explained:

The APA’s presumption of judicial review is a repudiation of the principle that efficiency of regulation conquers all. And there 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.

But perhaps the most interesting commentary in the decision is found in Justice Alito's concurring opinion, where he commented:

The reach of the Clean Water Act is notoriously unclear. Any piece of land that is wet at least part of the year is in danger of being classified by EPA employees as wetlands covered by the Act, and according to the Federal Government, if property owners begin to construct a home on a lot that the agency thinks possesses the requisite wetness, the property owners are at the agency’s mercy. The EPA may issue a compliance order demanding that the owners cease construction, engage in expensive remedial measures, and abandon any use of the property. If the owners do not do the EPA’s bidding, they may be fined up to $75,000 per day ($37,500 for violating the Act and another $37,500 for violating the compliance order). And if the owners want their day in court to show that their lot does not include covered wetlands, well, as a practical matter, that is just too bad. Until the EPA sues them, they are blocked from access to the courts, and the EPA may wait as long as it wants before deciding to sue. By that time, the potential fines may easily have reached the millions. In a nation that values due process, not to mention private property, such treatment is unthinkable.

The practical effect of the Court's ruling is that the Sacketts, and others who may find themselves in the "unthinkable" predicament described by Justice Alito, will have their day in court. They will certainly be permitted to challenge EPA's claim of regulatory authority over their property. It is less clear whether, at the pre-enforcement stage, they will also be able to challenge the terms and conditions of the compliance order, as Justice Ginsburg explains in her concurring opinion.

For more information regarding this matter, please contact Eric Adair or the KMTG attorney with whom you normally consult.

California Supreme Court Issues Decision On Moss Landing Powerplant Expansion

On August 15, 2011, the California Supreme Court issued its decision in Voices of the Wetlands v. State Water Resources Control Board, et al., resolving a decade-long dispute over expansion of the Moss Landing Powerplant near Monterey Bay, California.

Dynegy Moss Landing LLC (Dynegy), the current owner of the facility, sought approval from the State Energy Commission to expand the plant and modify the cooling intake.  This expansion also required issuance or renewal of a cooling water intake permit from the Regional Water Quality Control Board.  An environmental group, Voices of the Wetlands, sued to challenge the Regional Board's issuance of the intake permit on the primary ground that it did not require the "the best technology available for minimizing adverse environmental impact" as required by federal Clean Water Act section 316(b).  The debate over technological and environmental standards, and the procedures for judicial and administrative review of the action in the trial and appellate courts, finally found its way to the California Supreme Court.

In a lengthy and detailed ruling, the Court addressed several important procedural and jurisdictional issues affecting such projects, including the following.  First, the Court rejected an argument raised by Dynegy and the Energy Commission as amicus curiae that the Warren-Alquist Act granted the Energy Commission and the Court exclusive jurisdiction over powerplant permitting decisions and any matters that could be raised in such proceedings, including water permitting deficiencies.  The Court held that the Warren-Alquist Act did not preclude the superior court from exercising jurisdiction over challenges to the Regional Board's decision to renew the power facility's cooling water intake permit.

Second, the Court upheld the superior court’s decision to order an interlocutory remand, in lieu of issuing the writ of mandate sought by petitioner.  On finding deficiencies in the Regional Board’s findings, the superior court had retained jurisdiction and ordered an interlocutory remand, allowing the Regional Board to receive new evidence and make new findings, after which the court entered judgment in favor of the Regional Board.  Despite protests that this procedure had improperly denied petitioner a meritorious judgment on the writ and prevented a challenge to the new findings, the Supreme Court ruled that the trial court was within its discretion under Code of Civil Procedure section 1094.5.

Third, the Court also ruled that the Regional Board properly utilized a cost-benefit analysis, and in particular a "wholly disproportionate" cost-benefit standard, to conclude that the existing cooling intake design, as upgraded to accommodate plant expansion, reflected "the best technology available for minimizing adverse environmental impact" under Clean Water Act section 316(b).

A complete copy of the decision can be found here.

If you have any questions regarding this decision, please contact Hanspeter Walter or the KMTG attorney with whom you normally consult.