Real Estate Law: Supreme Court EPA "Compliance Orders" Open to Challenge

The U.S. Supreme Court just handed a big win to all landowners who receive a “compliance order” pursuant to the federal Clean Water Act, issued by the Environmental Protection Agency (“EPA”). The nation’s highest court held that the landowner has the right to seek immediate, emergency relief in federal court to attempt to stop the EPA’s enforcement of the order.

A compliance order is the EPA’s way of notifying a landowner that the owner has done something to discharge a pollutant in any waters in the United States, in violation of the Clean Water Act. Compliance orders usually require the owner to cease the cited activity immediately and restore the land to its original condition. Failing to comply with the EPA’s command subjects the owner to a civil penalty of up to $37,500 per day, which can be increased to as much as $75,000 per day if the EPA prevails in any lawsuit it files against the non-compliant landowner.

The case that the Supreme Court just decided concerned a couple who purchased two-thirds of an acre near a lake in Idaho. They had filled in part of their land with dirt and rock for a foundation to a house they were building when the EPA issued a Compliance Order. The EPA said the couple had violated the Clean Water Act, and ordered them to restore their property immediately. The couple disputed the EPA’s determination, but their request for a hearing before the EPA was denied. The EPA also refused to reconsider the Compliance Order, which it said was not subject to further review. The EPA informed the couple that their only choice was to comply with the order or pay a fine of $37,500 a day.

The couple sued in federal court to prohibit enforcement of the order and declare that the order was incorrectly issued. At trial, the court threw out their case, basing its decision on law that it believed prohibited landowners from challenging an EPA compliance order.

The Supreme Court disagreed, holding that the couple’s lawsuit was not prohibited and could move forward. The decision opens the door to for landowners to bring a swift and effective challenge to an EPA Compliance Order rather than wait, sometimes for months and years on end, for the EPA to voluntarily review its order, during which time landowners risk massive fines for non-compliance.


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