Judicial review of environmental compliance orders.
Federal environmental laws are enforced in a variety of ways. In addition to the traditional route of judicial enforcement, Congress has armed the Environmental Protection Agency (EPA) with various administrative means of ensuring compliance with environmental laws. Among these enforcement weapons is the administrative "compliance order." The compliance order is a directive from the EPA requiring the recipient to comply with a particular statutory or regulatory requirement by a specified deadline. Violation of a compliance order carries the potential for civil or criminal sanctions. The purpose of the compliance order is to "provide a quick, responsive, and flexible enforcement tool, particularly well-suited to remedying less important violations."(1) However, without judicial review, the compliance order may become an instrument of intimidation.
If the recipient of a compliance order disagrees with the EPA regarding an alleged violation, early access to the courts may be critical not only to serve as a check on agency application of the law, but also to protect the recipient from the practical effects of threatened penalties. Without judicial review at the time the order is issued, the recipient faces a dilemma: either comply with the order or risk the potential imposition of heavy penalties for noncompliance if the order is sustained in a subsequent EPA enforcement action. Barring an express statutory duty, the agency's decision to bring an enforcement action is entirely discretionary.(2) Thus, the recipient of a compliance order with a meritorious claim may effectively be coerced into compliance because it is unwilling to risk the accrual of potential penalties until the EPA decides to take enforcement action.
Despite the arguments favoring review, federal appellate decisions have consistently denied judicial review of environmental compliance orders in actions brought by recipients.(3) Each denial of judicial review has been based on one of two rationales: statutory preclusion or ripeness.
Courts applying "statutory preclusion" have held that the environmental statute authorizing the compliance order precludes judicial review. Under the Administrative Procedure Act (APA), judicial review of agency action is limited by the extent to which the relevant statute precludes review.(4) The Supreme Court has interpreted this provision to allow implied statutory preclusion.(5) In the case of compliance orders, the courts have construed the history, structure, and language of the relevant statute to imply an intent by Congress to preclude such direct actions. This Comment examines the "implied preclusion" basis for rejecting judicial review and concludes that the evidence of congressional intent does not overcome the strong presumption of review embodied in the APA.
Some courts have held that direct review of compliance orders is not available because the orders lack "finality,"(6) an attribute required by the APA and derived from the larger justiciability concept of ripeness. The analysis used by these courts is more accurately characterized as one of ripeness rather than finality. The courts have held that the compliance order was not a "final" agency action because the order had no legal or practical effect on the recipient and judicial review at this time would interfere with the enforcement efforts of the agency. This Comment argues that compliance orders are both final and ripe for review because they represent a pronouncement of law by the agency with serious consequences for violations. Unavailability of review subjects the recipient, as a practical matter, to substantial coercive pressure to comply. Furthermore, direct review of compliance orders would actually enhance enforcement by defining the applicable environmental laws in individual cases and establishing a body of interpretive case law upon which industry as a whole may rely.
Section II of this Comment describes the basic structure of the EPA's enforcement authority under various environmental statutes and details the nature and consequences of the compliance order device. Section III introduces the presumption of reviewability in the APA, as interpreted by the Supreme Court, and analyzes those lower court decisions that have found implied preclusion of review of compliance orders. It concludes that the "clear and convincing evidence" necessary to overcome the strong presumption of reviewability is not present in the context of compliance orders.
Section IV assesses the finality and ripeness bases for rejecting judicial review. The Section introduces the concepts of finality and ripeness and then analyzes the lower court decisions that relied on these concepts to deny review of compliance orders. Finally, the Section argues that judicial review of compliance orders is appropriate at the time the order is issued.
Section V concludes by asserting that the courts have a duty to protect against prosecutorial overreaching and that, pending congressional clarification of the compliance order device, a presumption of review should apply.
II. ENVIRONMENTAL COMPLIANCE ORDERS: A STATUTORY FRAMEWORK
A number of environmental statutes contain a compliance order device in their enforcement scheme.(7) For discussion purposes, this section describes the enforcement provisions in section 113 of the Clean Air Act (CAA).(8) Not only do other environmental statutes follow a similar structure,(9) but many of the cases that have addressed the issue of review of compliance orders were decided in the context of the CAA. Thus, some familiarity with its specific provisions will be useful.
The CAA authorizes the EPA to proceed either judicially or administratively whenever the agency determines that "any person has violated or is in violation of any requirement or prohibition."(10) Upon finding a violation, the EPA has four basic enforcement options: issue a compliance order, issue an administrative penalty order, bring a civil enforcement action in district court, or seek criminal penalties in district court.(11) In some circumstances, the EPA is required to issue a "notice of violation" and to wait thirty days before taking any of these enforcement actions.(12)
When the EPA issues a compliance order, the order will state the specific nature of the violation and specify a deadline for compliance.(13) The order will direct the recipient to comply with the statutory or regulatory requirement "as expeditiously as practicable."(14) However, the compliance order does not take effect until the recipient has had an opportunity to confer with the EPA about the alleged violation.(15) The purpose of this "conference procedure" is to encourage a resolution between the EPA and the alleged violator "without resort to judicial process."(16) The recipient who fails to obey a compliance order is subject to active or judicial civil penalties of up to $25,000 per day, beginning on the effective date of the compliance order.(17) In other words, the violation of a compliance order alone is a sufficient basis for the EPA to seek penalties through judicial or administrative proceedings.(18) Without direct review, these penalties will continue to accrue until the EPA, at its discretion, commences an enforcement action.(19) Regardless of the merits of the alleged violation underlying the compliance order, disregarding the order potentially subjects the recipient to accruing daily penalties.
In addition, criminal penalties may be imposed against "[a]ny person who knowingly violates . . .any [compliance] order . . ."(20) A convicted violator may be fined, or imprisoned up to five years, or both.(21) Thus, failure to obey a compliance order subjects the recipient to civil, criminal, or administrative enforcement actions, including penalties of up to $25,000 per day of violation.(22) Only direct review of compliance orders can counteract this coercive pressure
III. COMPLIANCE ORDERS: IMPLIED PRECLUSION OF JUDICIAL REVIEW
A. Administrative Procedure Act: The Presumption of Reviewability
The Administrative Procedure Act (APA)(23) expressly establishes a legal cause of action based on administrative actions.(24) As the Supreme Court has explained: "The Administrative Procedure Act . . . embodies the basic presumption of judicial review to one ~suffering legal wrong because of agency action, or adversely affected or aggrieved by agency action.'"(25) The Court has held that "only upon a showing of ~clear and convincing evidence' of a contrary legislative intent should the courts restrict access to judicial review."(26)
However, the APA withdraws its grant of review "to the extent that statutes preclude judicial review."(27) The Supreme Court has interpreted this provision as allowing either express or implied statutory preclusion.(28) In deference to statutory preclusion, the Supreme Court has retreated from the "clear and convincing evidence" standard of Abbott Laboratories:
This Court has ... never applied the "clear and convincing evidence"
standard in the strict evidentiary sense .... Rather, the
Court has found the standard met, and the presumption favoring
judicial review overcome, whenever the congressional intent to
preclude judicial review is "fairly discernible in the statutory
scheme." In the context of preclusion analysis, the "clear and convincing
evidence" standard is not a rigid evidentiary test but a useful
reminder to courts that, where substantial doubt about the congressional
intent exists, the general presumption favoring judicial
review of administrative action is controlling.(29)
Thus, the Court reinterpreted in Block v. Community Nutrition Institute(30) the "clear and convincing evidence" standard of Abbott Laboratories to allow the presumption of reviewability to be rebutted whenever it is "fairly discernible in the statutory scheme" or there is no "substantial doubt about the congressional intent" to preclude review.(31)
The Court then applied this reformulated standard to find that Congress intended the Agricultural Marketing Agreement Act of 1937 to preclude judicial review of milk market orders(32) in actions brought by consumers.(33) Congressional intent to preclude consumer suits was discernible in the Act's complex and delicate administrative scheme, which consumer suits would severely disrupt.(34) First, the process for establishing milk market orders did not provide for direct participation by consumers.(35) This indicated an intent to "foreclose consumer participation in the regulatory process."(36) Second, because Congress required milk handlers to exhaust administrative remedies before obtaining judicial review, a similar administrative exhaustion requirement would have been placed on consumers if they were meant to challenge the orders.(37) Indeed, permitting such actions would allow handlers to effectively avoid the exhaustion requirement by bringing or encouraging a suit merely as a "consumer."(38) The "congressional intent to preclude judicial review [of consumer suits] was fairly discernible in the detail of the legislative scheme" and the presumption of reviewability was rebutted.(39) The Court explained that "[w]hether . . . a particular statute precludes judicial review is determined not only from its express language, but also from the structure of the statutory scheme, its objectives, its legislative history, and the nature of the administrative action involved."(40) Thus, a statute may implicitly preclude judicial review if the language, structure, purpose and legislative history of the statute amount to "clear and convincing" evidence of the legislative intent to preclude review.
B. Compliance Orders: Where is the Presumption of Reviewability?
Although the Supreme Court has not addressed the issue, several lower federal courts have denied review of compliance orders based on implied preclusion.(41) However, these cases did not correctly apply the test for preclusion.
1. Fry Roofing Co. v. EPA
The Eighth Circuit held in Lloyd A. Fry Roofing Co. V. EPA(42) that the legislative history and statutory structure of the Clean Air Act (CAA) demonstrated clear and convincing evidence of congressional intent to preclude judicial review of an "abatement order."(43) The order directed the operator of an asphalt roofing plant to eliminate certain "opacity" violations in the plant's emissions by a particular date.(44) The recipient of the order filed a complaint challenging the order and claimed that an exception under the CAA applied to its emissions.(45)
The court relied on two factors to find implied preclusion of review of compliance orders in the structure of the CAA. First, legislative history indicated that the Conference Committee charged with reconciling the House and Senate versions of the bill deleted a provision in the Senate version that expressly provided for judicial review of compliance orders.(46) The court acknowledged that the legislative records contained no indication of the reason for the deletion, but interpreted the deletion to suggest strongly that "the intent of the omitted portion was rejected in the bill as passed."(47) The court relied heavily on this factor in its conclusion that "[t]he deletion . . . impel[s] us to rule that the Congress knowingly meant to and did foreclose plaintiff from maintaining this action."(48) The final statute contained no express language either granting or denying direct review of compliance orders.(49)
The unexplained deletion however is not conclusive of legislative intent, and thus falls short of the "clear and convincing evidence" standard of Abbott Laboratories. Even under the less demanding analysis of Community Nutrition Institute, the deletion does not erase "substantial doubt about the congressional intent"(50) to exclude and thus the general presumption favoring judicial review of administrative action should control. The court in Fry Roofing acknowledged the lack of legislative explanation for the deletion, yet concluded that no "substantial doubt" existed. Furthermore, the court rejected the plaintiff's equally plausible interpretation that the "Conference Committee recognized that the right to pre-enforcement review is so well established that specific provision for it need not be made."(51)
As another plausible explanation, the Conference Committee may have eliminated the review provision in the CAA due to the APA's express grant of judicial review, which would render such a provision in the CAA redundant and unnecessary. Furthermore, if Congress had wanted to preclude judicial review of compliance orders, it could have deleted the Senate proposal and expressly denied review through a contrary provision. Moreover, the lack of evidence supporting the deletion suggests that it had no particular significance. Thus, because there were several equally reasonable interpretations of the deletion, substantial doubt existed regarding congressional intent, and the strong presumption of reviewability should have applied.
Second, the Fry Roofing court relied on an application of the structural analysis used in Community Nutrition Institute to find that "judicial review is wholly inconsistent with the enforcement mechanism established by Congress."(52) The court read the CAA as giving the EPA alternative enforcement options: either issue a compliance order or file an enforcement action in district court.(53) The court construed the compliance order, including the informal conference and deadline for compliance, as primarily a mechanism to encourage nonjudicial resolution of CAA disputes.(54) Allowing review of the compliance order, the court found, would interfere with nonjudicial settlement of the compliance order.(55)
Notwithstanding the conference opportunity and the deadline, however, the CAA does contemplate judicial review of compliance orders. The sole question is when that review will be provided. Under the CAA, the EPA may seek judicial enforcement of the environmental statute or regulation instead of issuing a compliance order.(56) Alternatively, the EPA may issue a compliance order and, upon the recipient's failure to obey it, seek judicial enforcement of the order.(57) If the EPA seeks to judicially enforce the compliance order, the defendant may presumably challenge the validity of the order as a defense. Where the EPA prevails, the resulting judgment could include penalties for violation of the compliance order that date back to the effective date of the compliance order. Thus, the enforcement mechanism established by Congress provides for judicial review in either type of EPA enforcement action.
In addition, allowing judicial review will not interfere with the statutory requirement for a settlement conference. The CAA provides that the conference opportunity must occur before the compliance order takes effect.(58) Thus, only after this conference opportunity does the order becomes valid against the recipient and the penalty begin to accrue for any violation of the order. Therefore, the settlement conference opportunity will have already occurred before the recipient of an order seeks judicial review.
The problem is that the EPA may, for tactical reasons, decline to seek enforcement of the order in the hopes that the threat of mounting civil and criminal penalties will result in "voluntary"
compliance.(59) The Eighth Circuit recognized this problem, but responded that "[plaintiff can protect itself from the unconscionable accumulation of large fines, however, by invoking the equitable doctrine of laches if the Agency falls to act promptly to seek enforcement."(60) However, reliance on a laches defense to prevent the "unconscionable accumulation" of penalties is not only risky and impractical, but may not be available against the United States.(61) Even if available, equity would tend to favor an agency's discretionary, and largely unreviewable, decision regarding the timing of enforcement.(62) More importantly, the availability of a laches defense does not shed light on Congress' intent regarding review of compliance orders.
Another reason that judicial review consistent with the CAA's enforcement mechanism is that the nature of judicial review is different depending on the enforcement route taken by the EPA. Judicial review of the compliance order constitutes review of agency action, which is generally deferential to the agency under section 706 of the APA.(63) In contrast, where the EPA seeks to enforce an environmental statute directly, the court will review such law and its application de novo. Thus, the EPA's enforcement options are not eliminated or undermined by allowing review of a compliance order because they each carry different legal effects when reviewed. This difference maintains the integrity of EPA's statutory enforcement options.
The evidence relied upon by the court in Fry Roofing does not appear to eliminate "substantial doubt about the congressional intent" to preclude review because the deletion of the review provision in the Senate bill of the CAA is subject to several equally rational interpretations and the "enforcement mechanism" is not incompatible with review. The conference opportunity is still available prior to review of an effective compliance order. Based on the above analysis of Fry Roofing, a compliance order issued under the CAA should be subject to judicial review.
2. Hoffman Group v. EPA
Two recent circuit court decisions, relying in part on Fry Roofing, found implied preclusion and denied review of compliance orders issued under the Clean Water Act (CWA).(64) In Hoffman Group, Inc. v. EPA,(65) the Seventh Circuit held that the recipient of a compliance order is not entitled to judicial review because the only means to compel compliance is through an EPA enforcement proceeding, at which time the recipient can challenge the order.(66) The court interpreted this system as a "detailed mechanism" that impliedly precluded review of a compliance order.(67)
However, judicial review merely adjudicates the validity of the compliance order and does not affect the EPA's subsequent means of enforcement should the order be sustained. Following review, the EPA may still seek compliance through administrative penalties, criminal sanctions, or a civil enforcement suit. The EPA may also counterclaim for enforcement during judicial review of a compliance order. For example, a district court in New York permitted review of a compliance order in an action brought by the recipient because the EPA's counterclaim effectively transformed the suit into an enforcement action.68 Thus, even if the recipient of a compliance order obtains judicial review, the EPA retains its discretion to determine the method of enforcement.
Hoffman Group relied in part on a line of cases under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA)(69) holding that review of compliance orders under CERCLA is implicitly precluded from review.(70) However, the administrative order under CERCLA is distinguishable from a compliance order under either the CAA and the CWA because the CERCLA order can only be issued when "there may be an imminent and substantial endangerment to the public health or welfare or the environment."(71) In the CERCLA decisions, the courts reasoned that delaying judicial review would interfere with prompt agency action to abate serious health hazards.(72)
In contrast, the CWA and CAA compliance order provisions do not contain such an imperative.(73) Rather, the EPA may issue a compliance order for any violation under those statutes.(74) Thus, judicial review of CWA and CAA orders will not necessarily interfere with the objective of the order because there may be no need for emergency response.(75) In fact, Congress expressly granted emergency powers to the EPA in separate statutory sections to specifically address situations presenting "an imminent and substantial endangerment to public health or welfare, or the environment."(76) Therefore, the cases finding implied preclusion of review of CERCLA orders are inapposite because the CWA and CAA compliance orders apply to many situations that may or may not involve imminent danger.
Moreover, judicial review does not ordinarily relieve the recipient of the obligation to comply with the order. Courts will decline to stay the effective date of the compliance order during review unless the recipient can show, among other things, that "irreparable injury" to the recipient will occur without such relief and that granting relief will not harm the public interest.(77) The recipient will thus typically remain obligated to comply with the order during the pendency of the litigation. Therefore, basing implied preclusion of review for compliance orders on litigation delay is somewhat misleading.
The court in Hoffman Group, Inc. v. EPA(78) concluded, "[h]aving provided a detailed mechanism for judicial consideration of a compliance order via an enforcement proceeding, Congress has impliedly precluded judicial review of a compliance order except in an enforcement proceeding."(79) The court apparently discerned this "detailed mechanism" from the express review provisions for administrative penalties, the absence of review provisions for compliance orders, and the opportunity to challenge the compliance order in an enforcement proceeding.(80) However, these factors not only fail to constitute any sort of "detailed mechanism," they are not determinative of congressional intent to preclude review. The Supreme Court in Abbott Laboratories rejected the rationale that express review provisions precluded review of compliance orders, when it stated, "~[t]he mere fact that some [agency] acts are made reviewable should not suffice to support an implication of exclusion as to others.'"(81) Thus, the fact that administrative penalty orders are expressly reviewable does not indicate legislative intent to preclude review of compliance orders.
Moreover, there is no "detailed mechanism" providing for judicial review of a compliance order. The EPA can enforce the order through a judicial enforcement action or by administrative penalty proceeding. These options do not relieve the recipient from accruing potential penalties in the interim. As discussed above, the ability of the EPA to enforce a compliance order does not mitigate the fact that the recipient of an order is subject to potential penalties until the EPA, in its discretion, takes enforcement action. Nor does the EPA's ability to enforce a compliance order represent "clear and convincing evidence" that Congress intended to preclude review of compliance orders.
In sum, the message of both Abbott Laboratories and Community Nutrition Institute is that a presumption of review exists under the APA, and that the presumption controls in the face of uncertainty over congressional intent. Neither the CAA nor the CWA evince an intent to preclude pre-enforcement review of compliance orders, and therefore the presumption of reviewability should apply.
IV. Justiciability of Compliance Orders: Finality and Ripeness
A. The Ripeness and Finality Principles of Abbott Laboratories
The timing of judicial review is determined by a variety of constitutional, judicial, and statutory requirements, including the doctrines of ripeness, exhaustion, and finality.(82) These justiciability concepts do not possess clearly defined boundaries but rather have overlapping, interrelated and often indistinguishable concerns.(83) For example, the concept of ripeness encompasses a broad number of considerations bearing on the appropriate time for judicial review. The doctrine of finality, which requires an agency's decision to be "definitive" rather than preliminary or intermediate,(84) is generally considered to be an ingredient of ripeness.(85) The related doctrine of exhaustion requires a litigant to pursue all available administrative remedies before judicial review is available.
The Supreme Court stated in Abbott Laboratories v. Gardner, the leading case on ripeness, that
[the] basic rationale [underlying ripeness] is to prevent the courts,
through avoidance of premature adjudication from entangling themselves
in abstract disagreements over administrative policies, and
also to protect the agencies from judicial interference until an administrative
decision has been formalized and its effects felt in a
concrete way by the challenging parties.(86)
Writing for the majority, Justice Harlan held the case ripe for judicial review and set forth a two-part inquiry for ripeness: 1) the fitness of the issues for judicial determination and 2) the hardship to the parties of withholding judicial consideration.(87)
Part one, judicial fitness, is determined by whether the "issue tendered is a purely legal one" and whether the agency conduct at issue is "final agency action" under the APA.(88) In Abbott Laboratories, the Court found ripe the issue of whether the Food and Drug Administration (FDA) had authority to promulgate the drug labeling regulation, because the issue was purely a legal question of statutory interpretation and because it constituted "final agency action" under the APA.(89) The Court emphasized that the drug labeling regulation was "quite clearly definitive" and "compliance was expected."(90) According to the Court, these regulations "have the status of law and violations of them carry heavy criminal and civil sanctions."(91)
Part two of the Abbott Laboratories' ripeness analysis addresses the hardship to the parties of withholding judicial consideration.(92) This involves examining the effect on the regulated party of denying pre-enforcement review and the impact on the agency of allowing pre-enforcement review. In one of two companion cases, Toilet Goods Association v. Gardner,(93) the Court framed the inquiry in terms of whether "primary conduct is affected."(94) In Abbott Laboratories, the Court found that the labeling regulations had "a direct effect on the day-to-day business of all prescription drug companies." The court observed:
If petitioners wish to comply they must change all their labels, advertisement, and
promotional materials; they must destroy stocks of
printed matter, and they must invest heavily in new printing type
and new supplies. The alternative to compliance--continued use of
material which they believe in good faith meets the statutory requirements,
but which clearly does not meet the regulation of the
Commissioner--may be even more costly. That course would risk
serious criminal and civil penalties for the unlawful distribution of
Thus, the drug manufacturers faced a "Hobson's choice"(96) of either incurring significant compliance costs or risking large civil or criminal penalties for noncompliance. This dilemma weighed heavily in favor of pre-enforcement review.
The government argued that pre-enforcement review of the regulation "may delay or impede effective enforcement of the Act" by interfering with its administration and would result in a multiplicity of suits.(97) The Court, however, found that pre-enforcement review would actually speed enforcement because "[i]f the Government prevails, a large part of the industry is bound by the decree; if the Government loses, it can more quickly revise its regulation."(98) A judgment interpreting the statute in favor of the government will encourage compliance by providing case law upon which both regulated parties and other courts may rely.(99) Finally, it is unlikely that a court will enjoin enforcement of the regulation if such action would harm the public interest.(100) Therefore, pre-enforcement review of the drug labeling regulations did not interfere with FDA enforcement efforts.
The Court concluded that where the issue is fit for judicial resolution, and "where a regulation requires an immediate and significant change in the plaintiffs' conduct of their affairs with serious penalties attached to noncompliance, [then] access to the courts under the Administrative Procedure Act ... must be permitted, absent a statutory bar or some other unusual circumstance."(101)
B. Application of Ripeness Under Abbott Laboratories
While Abbott Laboratories remains the bellwether for ripeness analysis, several practical problems of application exist.(102) Among these difficulties are the "unenlightening distinctions between cases deemed ripe and those deemed not ripe" and the "uncertainty of distinctions between ripeness and other threshold issues."(103) With this forewarning, this section will review a few decisions applying the Abbott Laboratories ripeness "doctrine" that may shed light on the ripeness and finality of compliance orders.
In FTC v. Standard Oil,(104) the Supreme Court refused pre-enforcement review of an administrative complaint issued by the Federal Trade Commission (FTC) against several oil companies because the complaint was not a "final agency action" under the APA.(105) The Court found that the complaint merely represented a preliminary position of the agency regarding a violation which would be finalized in an order, if issued, following adjudicatory proceedings.(106) Next, the Court concluded that the complaint had no legal force or effect upon the daily business of the oil companies beyond serving notice of allegations by the FTC and requiring a response.(107) Further, the Court reasoned that judicial review at this stage would serve neither efficiency nor enforcement because it would prevent the agency from applying its expertise and correcting its own mistakes and would burden the courts with piecemeal review that delayed a determination regarding violation of the Act, which may obviate the need for judicial review.(108) In addition, the Court recognized that any party served with an FTC complaint could circumvent the administrative process entirely by judicially challenging the issuance of the complaint.(109)
In Bell v. New Jersey,(110) the Supreme Court held that an order issued by the Department of Education assessing a deficiency against certain states for misapplication of federal funds constituted a final agency action under both the APA and the applicable statute, because the order was the agency's definitive statement of the deficiency amount.(111) The agency argued that the order was not final action because the method of payment remained to be determined.(112) The Court stated that "[o]ur cases have interpreted pragmatically the requirement of administrative finality, focusing on whether judicial review at the time will disrupt the administrative process."(113) The Court then concluded that judicial review at that time would not disrupt the administrative process and analogized the agency order to a damage award from a court:
Although the judgment in favor of the plaintiff is not self-executing
and he may have to undertake further proceedings to collect the
damages awarded, that possibility does not prevent appellate review
of the decision, which is final .... Review of the agency's decision
at this time will not disrupt administrative proceedings any more
than review of a trial court's award of damages interferes with its
In National Automatic Laundry and Cleaning Council v. Shultz,(115) the D.C. Circuit found final and ripe for review a letter from the Department of Labor interpreting the Fair Labor Standards Act to apply to coin-operated laundries. The court recognized "that judicial review at too early a stage removes the process of agency refinement, including give-and-take with the regulated interests, that is an important part of the life of the agency process."(116) Nevertheless, the court found that this "informal" interpretive letter possessed the "expected conformity," for both the regulated businesses and the agency, that was stressed in Abbott Laboratories. Not only was the letter "intended as a deliberative determination of the agency's position at the highest available level on a question of importance,"(117) but the regulated businesses faced potential civil and criminal penalties in the event the Administrator's interpretation proved to be correct. The court concluded that the sound course was to accept the agency ruling as "presumptively final."(118)
Thus, questions of finality, and consequently ripeness, are determined "pragmatically" by assessing the "definitive" nature of the agency's action and its practical effect upon the regulated party. "Preliminary, procedural, or intermediate agency action[s]" are not final.(119) A final agency action carries the expectation of conformity. Moreover, ripeness requires the court to assess the hardship on the regulated party of denying review. A case is often ripe if, without access to the courts, a party will be confronted with a "Hobson's choice" of costly compliance or the threat of penalties. A ripe dispute has a direct effect on the day-to-day business of the regulated party. These factors must be analyzed in light of the potential inefficiencies of premature judicial resolution and the possible disruption in the administrative enforcement process.
The above cases may be viewed on a continuum. At one end is the non-final administrative complaint in Standard Oil, which merely served as notice of an alleged violation and did not directly affect the daily operation of the oil companies. At the other end is the final order in Bell, which assessed a charge against the states and which the Court characterized as a final judgment for damages, with only execution remaining. National Automatic Laundry falls somewhere in the middle as an example of informal agency action held to be final because, on balance, the definitive nature of the letter and the threat of penalties figured more prominently in the "pragmatic" analysis of ripeness than did the need for administrative autonomy and enforcement discretion. Thus, the question is whether the environmental compliance order is more like an administrative complaint which serves only as notice of a violation, as in Standard Oil, or more similar to a judgment of violation on which only execution remains, as in Bell. The next section addresses this issue.
C. Finality and Ripeness of Environmental Compliance Orders
A number of courts have concluded that compliance orders are not "final agency actions" entitled to direct judicial review, and that the validity of a compliance order is reviewable only as a defense in an enforcement action brought by the agency.(120) This Comment argues that barring review of compliance orders on the basis of finality ignores the true nature of the order, and presents inequitable difficulties for the recipient. Alleged violators need the opportunity to challenge compliance orders without the threat of large penalties accruing while awaiting EPA enforcement.(121) As a policy matter, judicial review will not upset administrative enforcement because there is nothing left for the EPA to do short of seeking enforcement of the order. Further, review will also result in quicker compliance because the recipient will not have to await the EPA's enforcement to determine what action is properly required by law.
1. "Finality" Under the Clean Air Act
The question of "finality" became an explicit focal point for review under the CAA when Congress expanded section 307(b) in 1977. As amended, section 307(b) grants exclusive jurisdiction to
the court of appeals of "any other final action of the [EPA] ... which is locally or regionally applicable."(122) Under this section, a person must file a petition for review within sixty days of the date that notice of such action appears in the Federal Register.(123) Failure to seek review within sixty days after the order is published will preclude judicial review at any later enforcement proceeding brought by the EPA.(124) If compliance orders are deemed to be final agency action under section 307(b), the statute expressly provides for review by filing a timely petition in the court of appeals.
In Harrison v. PPG Industries, Inc.,(125) the Supreme Court interpreted the scope of "any other final action" under section 307(b) to permit review of any "~final action' as that term is understood in the context of the Administrative Procedure Act."(126) The Court acknowledged that section 307(b) conferred exclusive jurisdiction in the circuit courts of appeals for review of all EPA actions,(127) and rejected the argument that appellate courts are ill-equipped to provide adequate review due to often "skeletal records" and the inability to supplement the record through discovery or other trial court devices.(128) The Court noted that an appellate court unable to exercise informed judicial review because of an inadequate administrative record could always remand a case to the agency for further consideration.(129)
In Harrison, the Court held that an opinion letter by the EPA constituted "any other final action" under section 307(b) and thereby vested jurisdiction in the court of appeals.(130) In its letter, the EPA ruled that certain equipment at PPG's facility was subject to the new source performance standards of the CAA. Notably, the parties stipulated that the EPA's decision was "final," and the only issue addressed by the Court was the jurisdictional reach of "any other final action' under section 307(b).(131) However, the Court agreed that, short of an enforcement action, the EPA had rendered its last word on the matter."(132) This statement suggests that the Court might also view compliance orders as final because, like the letter in Harrison, they represent the EPA's formal position regarding application of the environmental laws. Nonetheless, Harrison decided only that any agency action that is "final" is reviewable by petition to the court of appeals within sixty days.
Another Supreme Court decision, Adamo Wrecking Co. v. United States,(133) specifically referred to the finality of compliance orders in deciding the effect of express statutory preclusion under the sixty-day filing requirement of section 307(b). In dicta, the court noted that CAA compliance orders "would likely be reviewable under the Administrative Procedures Act."(134) This is as close as the Supreme Court has come to deciding that compliance orders are final agency action.
2. Is The Compliance Order "Final Action"?
a. Asbestec Construction Services, Inc. v. EPA
The Second Circuit held in Asbestec Construction Services, Inc. v. EPA(135) that the EPA's compliance order under the CAA was not a "final action," as required by section 307(b); thus, review would have to wait until the EPA brought an enforcement action.(136) The compliance order contained several provisions: it declared that a violation of the CAA had occurred, required the identification of all significant renovations or demolitions involving asbestos performed during the past three years, and demanded compliance with the CAA in all future asbestos projects.(137) The Second Circuit determined that although the compliance order was a "final and definitive statement of the agency's position .... the other Standard Oil factors tip the scales against a finding that the compliance order is a final action."(138)
In assessing the compliance order's finality, the court first found that it lacked any "practical and immediate effect" because "neither [Asbestec's] duties nor its obligations have been altered by the compliance order."(139) The court focused on the ambiguous dictate in the order which required compliance with the CAA in the future; this really amounted to no more than an order to obey the law. Admittedly, this part of the order is not ripe because it presents no concrete legal issue for the court to resolve, an aspect of ripeness rooted in the "case or controversy" requirement.(140)
However, the order also required Asbestec to produce a list of prior abatement projects. Technically, the compliance order imposed an affirmative, albeit minimal, obligation to submit this list to the EPA; failure to do so would potentially subject Asbestec to civil and criminal penalties. The general focus of the compliance order in Asbestec was unusual; CAA enforcement provisions contemplate a compliance order with specific requirements at a specified location.(141) Because a compliance order may take various forms, Asbestec may suggest that case by case analysis of the ripeness of each compliance order is more appropriate than a per se rule barring review.
Next, the Asbestec court characterized the issues as mostly factual rather than legal, and concluded that because an order reviewable under section 307(b) may be filed only in the appellate courts, which are ill-equipped to serve as fact-finding forums, this factor argued strongly against finding the order to be final.(142) However, this basis for the decision is mistaken; the Supreme Court has rejected this argument, noting that a court of appeals may always remand back to the agency if the record requires additional factual development.(143) Moreover, the issue for the reviewing court is whether the EPA has properly exercised its authority to issue orders under section 113 "on the basis of any information available to the Administrator [that] ... any person has violated" the CAA.(144) Given this standard, appellate courts need only examine whether the facts available to the EPA at the time of its decision justified issuance of the compliance order.(145)
Finally, regarding the effect of review on judicial and administrative efficiency, the court in Asbestec compared the CAA to CERCLA(146) and cited an early CERCLA case(147) for the proposition that the "EPA must have some degree of free rein to protect the public from exposure to asbestos .... [without] the delay of court review of administrative action."(148), The comparison is inappropriate, because a CERCLA order differs from a compliance order under pollution control statutes in that the CERCLA order requires that there may be "imminent and substantial endangerment" to the public health or environment.(149) In contrast, a compliance order under the CAA seeks to abate all violations. Thus, the emergency response rationale of the CERCLA decisions does not necessarily apply to CAA compliance orders, and did not apply in Asbestec: the asbestos abatement project had ended before the EPA issued the order.
Furthermore, the court in Asbestec failed to specify how direct review of compliance orders would impinge on the EPA's ability to prevent asbestos exposure. The right of direct review does not relieve a party from compliance while the case proceeds,(150) and a substantial showing is necessary to obtain a stay of the order.(151) In addition, section 303 of the CAA gives the EPA "emergency powers" to take immediate judicial or administrative action, including issuance of an EPA emergency order, in response to "imminent and substantial endangerment to public health or welfare, or the environment."(152) Therefore, protection of the environment and the public is not compromised by direct review of a compliance order because a court is unlikely to stay compliance in the presence of "imminent endangerment" and the EPA has emergency powers to address such hazards.
Thus, Asbestec should not be read as a blanket rejection of direct review of compliance orders, but as a fact-sensitive determination that the order at issue was not ripe for review. The order was not ripe because its primary objective was to ensure Asbestec's future compliance with the law generally. Unlike many compliance orders, this one served more as a warning than as a specific command. A key factor for the court was the lack of practical effect on the recipient, who argued that the order cast a stigma which caused a decrease in business. This suggests that under different facts involving an order with more immediate and concrete impact on the recipient, a compliance order would be ripe for review. Thus, viewed from the Abbott Laboratories perspective, the particular order in Asbestec was not ripe because it lacked "definitive" character and did not directly affect Asbestec's day-to-day business.
b. Solar Turbines Inc. v. Seif
Soon after the Asbestec decision, the Third Circuit addressed the same issue of the reviewability of CAA compliance orders in Solar Turbines Inc. v. Seif(153). The EPA compliance order in Solar Turbines, issued under section 167 rather than section 113,(154) required immediate cessation of construction or operation of a gas turbine facIlity.(155) Solar Turbines had constructed the facility pursuant to a state permit.(156)
Relying on the ripeness and finality standards of Abbott Laboratories and Standard Oil, the court held that the compliance order was not subject to direct review in the court of appeals because the order did not constitute a "final order," as required by section 307(b).(157) The court found the order had no "operative effect" against the recipient and served merely as notice of the violation.(158) As the court candidly admitted at the outset, "[t]he effect of a section 167 order is at the center of this appeal."(159)
The Third Circuit analogized the section 167 compliance order to a notice of violation under section 113, which has also been held not to be subject to preenforcement review.(160) With regard to finality, the court held that "because Solar Turbines is not compelled to obey the order at the risk of sanctions and does not face severe hardship as a result of the order, the administrative order issued under section 167 does not constitute final agency action,"(161) The court determined that the plain statutory language does not identify any adverse consequences from violating a section 167 administrative order.(162) Instead, "[t]he only apparent function of a section 167 order is to serve as a vehicle by which the EPA can notify a party that it believes the requirements of PSD are being violated."(163) Thus, the court found the section 167 order to be "more similar" to the issuance of a complaint, as in Standard Oil, which lacked finality.(164)
As to the remaining ripeness factors, the court concluded that the EPA had taken a definitive position regarding Solar Turbines compliance with CAA requirements and that direct review would actually speed enforcement of the CAA rather than interfere with it.(165) The court equivocated regarding the nature of the issues presented: "it is not clear whether the merits in this case present a pure question of law or require factual development."(166) In any event, the court emphasized throughout the opinion that the section 167 order was not "final action" for purposes of section 307(b) because sanctions did not attach to a violation of the order.(167) The court apparently accepted the EPA's argument that the "only mechanism with teeth under section 167 is the injunctive relief alternative."(168)
However, an examination of the statutory language indicates that, contrary to the court's reading in Solar Turbines, penalties may be imposed for violations of a section 167 order in the same fashion as for violations of section 113 compliance orders. Subsection 113(c) provides for criminal penalties against "[a]ny person who knowingly violates ... an order under section 11671 of [the CAA]."(169) Therefore, Solar Turbines was subject to criminal penalties for a "knowing" violation of the section 167 compliance order.
Similarly, section 113(b) authorizes civil penalties and section 113(d) authorizes administrative penalties for a violation of any "order" under the CAA.(170) The statutory language indicates that civil and administrative penalties of up to $25,000 per day of violation may be imposed under section 113 for violations of section 167 compliance orders. The entire tenor of the majority opinion suggests that if the statute were read to impose sanctions for the violation of a section 167 order, then the court would have found the compliance order to be a "final action" and permitted direct review.(171)
Despite this clear statutory language, the court seemed persuaded by the agency's argument that the compliance order was only a notice device without any teeth. However, the EPA sends a different message to the recipient of a compliance order. violation of the compliance order will result in statutory penalties.(172) The recipient of an order is thus placed in precisely the same position as the drug manufacturers in Abbott Laboratories--facing either costly compliance or the threat of serious civil and criminal penalties. Therefore, since penalties attach to the violation of a compliance order, direct review should be available because the order is both final and ripe.
c. Compliance Order versus Notice of Violation
The Solar Turbines comparison of a compliance order to a notice of violation is misplaced because the notice and order are each distinct enforcement tools with different purposes and consequences. Section 113 of the CAA provides that a notice of violation, followed by thirty days, is a prerequisite to EPA enforcement in a few limited circumstances, including federal enforcement of a State Implementation Plan (SIP).(173) The notice of violation must be given to both the alleged violator and the state.(174)
One commentator suggested that the purpose of the notice of violation is to "ease federalist tension" between federal and state authorities, not to achieve economical compliance.(175) If the aim of the notice is to encourage voluntary compliance by alerting the person to a perceived violation, then "Congress would have required that the notice be given in all cases, not just where state-developed regulations or permits were being enforced."(176) A notice of violation is merely a "procedural" prerequisite, in some limited circumstances, to the EPA taking federal enforcement measures.(177)
In contrast, a compliance order is intended to serve as an unequivocal command to an alleged violator to conform their conduct by a specified deadline.(178) The use of the terms "notice" and "order" indicates a legislative distinction between the two devices and reflects an intent to give compliance orders greater force and effect. Unlike a notice of violation, a compliance order "may require the cessation of economically rewarding activity or the expenditure of funds on remedial measures, and violation of an order may lead to the imposition of penalties or criminal liability."(179)
Thus, the lack of finality of a violation notice is immaterial to the finality of a compliance order because the compliance order is issued later in the enforcement process and imposes substantive requirements upon the recipient that the notice does not. Therefore, the cases which found an absence of finality in a violation notice(180) do not bear upon the issue of finality of a compliance order. Therefore, the court in Solar Turbines was incorrect in relying on these cases as a basis for rejecting the finality of the compliance order.(181) According to the court, the order carried no sanctions.(182)
Solar Turbines illustrates the problem of denying direct review of compliance orders and underscores the impact these orders have on the recipient In Solar Turbines, the EPA's compliance order effectively invalidated the state permit under which Solar Turbines constructed its facility. The unavailability of judicial review required Solar Turbines to "choose between not operating the completed plant (an extremely costly option) and operating the plant despite the attendant risk of enormous penalties."(183)
The absence of direct review of compliance orders effectively coerces a recipient to comply with the order under threat of mounting penalties during the period prior to EPA enforcement. In addition, a challenger to the order faces criminal penalties for a knowing, violation of the order. Direct judicial review of compliance orders should not be barred by the doctrines of statutory preclusion and finality. Nothing in the CAA or CWA conveys an intent to implicitly preclude preenforcement review of compliance orders sufficient to overcome the presumption of reviewability. Nor should the doctrine of finality forbid review. The compliance order represents a definitive EPA position which directs a regulated party to comply by a specified time. The EPA issues these orders with the expectation of full compliance. The orders have a significant practical effect on a recipient's business or operations. The only remaining action for the EPA is enforcement of the order. Thus, the compliance order is a final action reviewable under the APA.
From a policy perspective, the availability of judicial review will expedite enforcement and serve as a check on agency enforcement discretion. A 1980 dissenting opinion in the Third Circuit explained this point:
If [the recipient] is relegated to reliance on some distant enforcement
hearing, the threat of $25,000-a-day penalty may impel the
company to undergo an unnecessary expense of millions of dollars,
which will have to be borne [by the company's customers]. On the
other hand, if the Administrator's interpretation of the [state CAA
plan]is correct, in the absence of a hearing, [the recipient] may in
good faith continue to imperil the public health and welfare by
[violating the CAA].(184)
Thus, preenforcement review will enhance enforcement by establishing the environmental requirements that are applicable to both the parties involved and the regulated community.
Congress should clarify this enforcement device and decide whether penalties should be imposed and judicial review available, or whether the compliance order should serve merely as a form of notice to the alleged violator. Until Congress acts, however, direct review of environmental compliance orders should be available to recipients, in light of the serious penalties for refusal to obey and the EPA's use of the orders to extort compliance. (1.) Law of Environmental Protection [sections] 8.01[51[b] (Sheldon M. Novick et al. eds., 1990). (2.) See Heckler v. Chaney, 470 U.S. 821 (1985). (3.) See Southern Pines Assocs., ex rel. Goldmeier v. United States, 912 F.2d 713 (4th Cir. 1990) (no pre-enforcement review of compliance order under Clean Water Act); Hoffman Group, Inc. v. EPA, 902 F.2d 567 (7th Cir. 1990) (no pre-enforcement review of compliance order under Clean Water Act); Solar Turbines, Inc. v. Seif, 879 F.2d 1073 (3d Cir. 1989) (no pre-enforcement review of compliance order under Clean Air Act); Asbestec Constr. Servs., Inc. v. EPA, 849 F.2d 765 (2d Cir. 1988) (no pre-enforcement review under Clean Air Act); Lloyd A. Fry Roofing Co. v. EPA, 554 F.2d 885 (8th Cir. 1977) (no pre-enforcement review under Clean Air Act). (4.) 5 U.S.C. [subsections] 551-559, 701-706 (1988). See infra note 27 and accompanying text. (5.) See infra note 28 and accompanying text. (6.) See infra note 84 and accompanying text. (7.) See Clean Air Act, 42 U.S.C. [sections] 7413(a) (Supp. III 1991); Federal Water Pollution Control Act (Clean Water Act), 33 U.S.C. [sections] 1319 (1988); Solid Waste Disposal Act (Resource Conservation and Recovery Act), 42 U.S.C. [sections] 6928 (1988); Safe Drinking Water Act, 42 U.S.C. [subsections] 300g-3(g), 300h-2(c) (1988); Comprehensive Environmental Response, Compensation and Liability Act (CERCLA), 42 U.S.C. [sections] 9606(a) (1988). (8.) 42 U.S.C. [sections] 7413. (9.) For example, the enforcement provisions of the Clean Water Act were modeled after those of the Clean Air Act. Southern Pines Assocs., ex rel. Goldmeier v. United States, 912 F.2d 713, 716 (4th Cir. 1990) (citing S. Rep. No. 414, 92d Cong., 1st Sess. 63 (1971)). See also Law of Environmental Protection, supra note 1, [sections] 8.01[5)[b][i) ("CAA section 113 provides the model for many successive administrative order provisions."). (10.) 42 U.S.C. [sections] 7413(a)(1). (11.) Id. [sections] 7413(a)(3). (12.) For example, whenever the EPA finds a violation of a federally approved State Implementation Plan (SIP), a thirty day prior "notice of violation," must be given to both the alleged violator and the relevant state before further enforcement action is permitted. Id. [sections] 7413(a)(1)-(2). (13.) Id. [sections] 7413(a)(4). (14.) Id. (15.) Clean Air Act, 42 U.S.C. [sections] 7413(a)(4) (Supp. III 1991). (16.) Lloyd A. Fry Roofing Co. v. EPA, 554 F.2d 885, 891 (8th Cir. 1977). (17.) Clean Air Act, 42 U.S.C. [sections] 7413(b), (d) (Supp. III 1991). The Clean Water Act states this result even more clearly. "[A]ny person who violates any [compliance] order issued by the Administrator . . . shall be subject to a civil penalty not to exceed $25,000 per day . . . ." 33 U.S.C. [sections] 1319(d) (emphasis added). (18.) Law of Environmental Protection, supra note 1, [sections] 8.01[b] ("[V]iolation of an order is an offense separate and apart from any violation of the underlying requirement with which compliance is directed."). (19.) Absent a statutory duty, an agency's decision not to take enforcement action is "committed to agency discretion" and is thus precluded from judicial review under section 701(a)(2) of the APA. Heckler v. Chaney, 470 U.S. 821, 832 (1985). (20.) 42 U.S.C. [sections] 7413(c)(1) (Supp. III 1991). (21.) Id. (22.) Id. [sections] 7413. (23.) 5 U.S.C. [subsections] 551-559, 701-706 (1988). (24.) Id. [subsections] 702, 704. Prior to APA's enactment in 1946, the Supreme Court applied a "common law presumption in favor of judicial review of administrative action." Cynthia Tripi, Chapter, Administrative Law--Availability of Judicial of Administrative Action, 55 Geo. Wash. L. Rev. 729, 729 & n.1 (1987). See also K. Davis, Note, Statutory Preclusion of Judicial Review Under the Administrative Procedure Act, 1976 Duke L.J. 431, 433. (25.) Abbott Laboratories v. Gardner, 387 U.S. 136, 140 (1967) (quoting Section 702 of the APA). (26.) Id. at 141 (quoting Rusk v. Cort, 369 U.S. 367, 379-80 (1962)). The "clear and convincing evidence" language is also quoted from legislative history of the APA, which the Court found "elucidating" regarding this issue. Id. at 140 & n.2 (quoting H.R. Rep. No. 1980, 79th Cong., 2d Sess. 41 (1946)).
In Abbott Laboratories v. Gardner, the Supreme Court held that the Federal Food, Drug and Cosmetic Act did not preclude pre-enforcement review of a regulation that required use of the generic name on all prescription drugs every time the pharmaceutical company's trade name was used in labeling and advertising. Id. at 142-48. The government argued that because the statute includes a specific procedure for reviewing certain kinds of regulations that other types were necessarily meant to be excluded. Id. at 141. The Court rejected this analysis, noting that the mere fact some agency acts are made reviewable does not support an implication that Congress intended that others be excluded. Id. The proper inquiry, rather, is whether "the entire legislative scheme . . . evinces a congressional purpose to bar agency action . . . from judicial review." Id.
Applying that standard, the Court found no evidence that Congress meant to preclude national avenues of judicial relief Id. at 142. First, the statute contained no express authority for preclusion. Id. at 141. Second, the legislative materials "acknowledged that traditional judicial remedies were available" and suggested that Congress merely intended to broaden the scope of judicial review for particular types of regulations. Id. at 143-44. Last, the Court construed a savings clause in the review provisions of the Act as completely consistent with a presumption favoring judicial review. Id. at 146. Thus, after examining th language and legislative history of the statute, the Court held that the Food, Drug and Cosmetic Act did not preclude pre-enforcement review of the regulation for labeling and advertising prescription drugs. Id. at 148. (27.) 5 U.S.C. [sections] 701(a)(1) (1988). The APA also denies judicial review if the "agency action is committed to agency discretion by law." Id. [sections] 701(a)(2). For application of the "committed to agency discretion" provision, see Heckler v. Chaney, 470 U.S. 821 (1985), and Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971). (28.) Block v. Community Nutrition Institute, 467 U.S. 340, 347 (1984); Morris v. Gressette, 432 U.S. 491, 501 (1977); Dunlop v. Bachowski, 421 U.S. 560, 567 (1975); Barlow v. Collins, 397 U.S. 159, 166 (1970); Abbott Laboratories v. Gardner, 387 U.S. 136, 140 (1967). (29.) Block v. Community Nutrition Institute, 467 U.S. 340, 350-51 (1984) quoting Data Processing Service Organizations, Inc. v. Camp, 397 U.S. 150, 157 (1970)) (citation omitted) (emphasis added). (30.) 467 U.S. 340. (31.) Id. at 351. However, whether this reformulation amounts to a real change in applying the presumption is unclear, a number of subsequent decisions suggest that the "clear and convincing standard" of Abbott Laboratories is alive and well. See, e.g., United States v. Fausto, 484 U.S. 439, 452 (1988) ("Congress will be presumed to have intended judicial review of agency action unless there is ~persuasive reason' to believe otherwise."); Japan Whaling Ass'n v. American Cetacean Soc'y, 478 U.S. 221, 230 n.4 (1986) ("[T]he rule is that the cause of action for review of [agency] action is available absent some clear and convincing evidence of legislative intention to preclude review."); Bowen v. Michigan Academy of Family Physicians, 476 U.S. 667, 670 (1986) ("We begin with the strong presumption that Congress intends judicial review of [agency] action."); Lindahl v. Office of Personnel Management, 470 U.S. 768, 778 (1985) ("We have often noted that ~only upon a showing of ~clear and convincing evidence' of a contrary legislative intent' should the courts restrict access to judicial review." (quoting Abbott Laboratories v. Gardner, 421 U.S. 560, 568 (1975)). (32.) Milk market orders are mechanisms, created by formal rulemaking, by which the Secretary of Agriculture sets the minimum prices that those who process dairy products must pay to dairy farmers for their milk products. Block v. Community Nutrition Institute, 467 U.S. 340, 341-42 (1984). (33.) Id. at 351-53. (34.) Id. at 348. The central purpose of the statute was to "protect . . . producers of milk and milk products," i.e., raise milk prices. Id. at 352. (35.) Id. at 346-47. (36.) Id. at 347. The Court did not discuss the consumer's opportunity to participate during the notice and comment rulemaking process of these "orders." (37.) Block v. Community Nutrition Institute, 467 U.S. at 340, 346-347 (1984). (38.) Id. at 348. (39.) Id. at 351. (40.) Id. at 345. (41.) See, e.g., Southern Pines Assocs., ex rel. Goldmeier v. United States, 912 F.2d 713 (4th Cir. 1990); Hoffman Group, Inc. v. EPA, 902 F.2d 567 (7th Cir. 1990); Lloyd A. Fry Roofing Co. v. EPA, 554 F.2d 886 (8th Cir. 1977). (42.) Lloyd A. Fry Roofing Co. v. EPA, 564 F.2d 896 (8th Cir. 1977). (43.) Id. at 891-92. The terms "abatement order" and "compliance order" are often used interchangeably. (44.) Id. at 887. (45.) Id. (46.) Id. at 890. (47.) Lloyd A. Fry Roofing Co. v. EPA, 554 F.2d 895, 890 (8th Cir. 1977) (citing Gulf Oil Corp. v. Copp Paving Co., 419 U.S. 186, 200 (1974)). (48.) Id. at 892. (49.) 42 U.S.C. [sections] 7413 (Supp. III 1991). A 1977 amendment to the CAA provided for judicial review of "any final agency action." 42 U.S.C. [sections] 7607(b). Thus, in the context of the CAA, the inquiry has shifted to one of finality. See infra notes 140-51 and accompanying text. However, the discussion of implied preclusion is relevant to the environmental statutes without such a "finality" provision. See, e.g., Clean Water Act, 33 U.S.C. [subsections] 1251-1387 (1988). (50.) Block v. Community Nutrition Institute, 467 U.S. 340, 351 (1984). (51.) Lloyd A. Fry Roofing Co. v. EPA, 554 F.2d 885, 890 (8th Cir. 1977). (52.) Id. at 890-91. (53.) Id. at 891. (54.) Id. (55.) Id. (56.) 42 U.S.C. [sections] 7413(b) (Supp. III 1991). (57.) Id. In fact, Section 113(a)(4) expressly provides that "no [compliance] order issued under this subsection shall . . . affect or otherwise limit the State's or the United States authority to enforce under other provisions of this chapter." Id. Thus, contrary to the court's reading in Fry Roofing, EPA may issue a compliance order and concurrently take additional enforcement actions. (58.) Id. [sections] 7413(a)(4) (Supp. III 1991).
(59.) There are a few situations in which the CAA mandates an enforcement action. For example, EPA must commence an enforcement action in the case of violations by "any person that is the owner or operator of an affected source, a major emitting facility, or a major stationary source." 42 U.S.C. [sections] 7413(b) (Supp. III 1991). (60.) Lloyd A. Fry Roofing Co. v. EPA, 554 F.2d 885, 891 (8th Cir. 1977). Interestingly, the court "admonished [the EPA] to proceed expeditiously ... in the event the alleged violator fails to comply with the ... abatement order so as to minimize any penalty which may be imposed." Id. at 891 n.4. This court-imposed enforcement duty is not contained in the statute and appears to be beyond the court's jurisdictional powers. Heckler v. Chaney, 470 U.S. 821 1985). (61.) "Courts generally have refused to apply the doctrine of laches to the federal government when it is acting in its sovereign capacity to protect the public welfare." United States v. CPS Chem. Co., 779 F.supp. 437, 451 (E.D. Ark. 1991) (citing United States v. California, 332 U.S. 19, 40 (1947). See also Citizens and Landowners Against the Miles City/New Underwood Powerline v. Secretary, United States Dept. of Energy, 683 F.2d 1171, 1178 n.14 (8th Cir. 1982); United States v. Arrow Transportation Co., 658 F.2d 392, 394 (5th Cir. 1981), cert. denied, 456 U.S. 915 (1982); United States v. Weintraub, 613 F.2d 612, 618-19 (6th Cir. 1979), cert. denied, 447 U.S. 905 (1980); United States v. Chevron, U.S.A. Inc., 757 F.supp 512, 515 (E.D. Pa 1990) (citing Costello v. United States, 365 U.S. 265 (1960)); United States v. B.F. Goodrich Co., 609 F.Supp. 1, 5 (W.D. Ky. 1984). (62.) See Heckler v. Chaney, 470 U.S. 821 (1985). (63.) 5 U.S.C. [sections] 706 (1988). "The reviewing court shall . . . hold unlawful and set aside agency action, findings, and conclusions found to be arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law." Id. [sections] 706(2)(A). See, e.g., Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 (1971). (64.) Hoffman Group, Inc. v. EPA, 902 F.2d 567, 569 (7th Cir. 1990); Southern Pines Assocs., ex rel. Goldmeier v. United States, 912 F.2d 713, 716-17 (4th Cir. 1990). (65.) 902 F.2d 567 (7th Cir. 1990). (66.) Hoffman Group, 902 F.2d at 569. In Hoffman Group, the Seventh Circuit misstated the statutory effect of a compliance order. "Hoffman is not subject to an injunction or any penalties for not obeying the Compliance Order." Id. at 570. The CWA clearly states that "any person who violates any order issued by the Administrator under subsection (a) of this section [which authorized compliance orders] shall be subject to a civil penalty not to exceed $25,000 per day for each violation." 33 U.S.C. 1319(d) (1988). Thus, a violation of a compliance order is sufficient grounds for imposing civil penalties. (67.) Id. (68.) Donner Hanna Coke Corp. v. Costle, 464 F.Supp. 1295, 1299 (W.D.N.Y. 1979). See also Conoco Inc. v. Gardebring, 503 F.supp. 49 (N.D. Ill. 1980) (review of notice of violation in action by recipient with counterclaim by EPA for enforcement). (69.) 42 U.S.C. [subsections] 9601-9675 (1988). (70.) Hoffman Group, Inc. v. EPA, 902 F.2d 567, 569 (7th Cir. 1990); see also Southern Pines Assoc., ex rel. Goldmeier v. United States, 912 F.2d at 716-717. (71.) 42 U.S.C. [sections] 9606(a) (1988). (72.) See, eg., Wagner Seed Co. v. Daggett, 800 F.2d 310, 315 (2d Cir. 1986). In 1986, Congress provided for express preclusion of pre-enforcement review in the Superfund Amendments and Reauthorization Act. 42 U.S.C. [sections] 9613(h) 1988). (73.) Clean Air Act, 42 U.S.C. [sections] 7413(a) (Supp. III 1991); Clean Water Act, 33 U.S.C. [sections] 1319(a) (1988). (74.) Id. (75.) For example, the order at issue in Hoffman Group required the recipient to undertake restoration activities on a wetland area in which the recipient's allegedly illegal fill activities had already been completed. 902 F.2d at 568. No further threat of environmental harm was present and no apparent harm from allowing review was indicated. (76.) 42 U.S.C. [sections] 7603 (Supp. III 1991). See also 33 U.S.C. [sections] 1364 (1988). (77.) Abbott Laboratories v. Gardner, 387 U.S. 136, 155-56 (1967); Virginia Petroleum Jobbers Ass'n v. FPC, 259 F.2d 921 (D.C. Cir. 1958). (78.) 902 F.2d 567 (7th Cir. 1990). (79.) Hoffman Group, 902 F.2d at 569. (80.) Id. (81.) Abbott Laboratories v. Gardner, 387 U.S. 136, 141 (1967) (quoting Louis L. Jaffe, Judicial Control of Administrative Action 357 (1965)). (82.) See National Automatic Laundry and Cleaning Council v. Shultz, 443 F.2d 689 (1971) (discussing various justiciability concepts). (83.) See, eg., Ticor Title Insurance Co. v. FTC, 814 F.2d 731 (D.C.Cir. 1987) three separate opinions dismissing action on three different grounds: exhaustion, finality, and ripeness); National Automatic Laundry and Cleaning Council v. Shultz, 443 F.2d 689, 692 (D.C.Cir. 1971) ("These concepts are separable, and for clarity of analysis we discuss them separately, but with overall awareness that they are intermeshed in the determination of the appropriate occasion for judicial review."). (84.) The APA provides that "final agency action for which there is no other adequate remedy in a court are subject to judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action." 5 U.S.C. [sections] 704 (1988). See Williamson County Regional Planning Comm'n v. Hamilton Bank of Johnson City, 473 U.S. 172, 193 (1996) ("[T]he finality requirement is concerned with whether the initial decisionmaker has arrived at a definitive position on the issues that inflicts an actual, concrete injury."); Ciba-Geigy Corp. v. EPA, 801 F.2d 430, 435 & n.7 (D.C. Cir. 1986) (Abbott Laboratories requires application of the finality requirement in a ~flexible' and ~pragmatic' way.). (85.) See Abbott Laboratories v. Gardner, 387 U.S. 136 (1967); FTC v. Standard Oil Co., 449 U.S. 232 (1980). (86.) Abbott Laboratories, 387 U.S. at 148-49. (87.) Id. at 149. (88.) The Administrative Procedure Act provides: "Agency action made reviewable by statute and final agency action for which there is no other adequate remedy in a court are subject to judicial review. A preliminary, procedural, or intermediate agency action or ruling not directly reviewable is subject to review on the review of the final agency action." 5 U.S.C. [sections] 704 (1988). (89.) Abbott Laboratories, 387 U.S. at 149-50. (90.) Id. at 151. (91.) Id. at 152. See Toilet Goods Assn. v. Gardner, 387 U.S. 158, 162-63 (1967) ("[T]his regulation--promulgated in a formal manner after notice and evaluation of submitted comments--is a ~final agency action' under [sections] 10 of the Administrative Procedure Act."). (92.) Abbott Laboratories, 387 U.S. at 149. See also Pacific Gas & Electric Co. v. State Energy Resources Conservation & Dev. Comm., 461 U.S. 190, 201 (1983) (Although a party need not wait until a threatened hardship becomes a reality, the hardship must be certain and impending to obtain preventative relief). (93.) 387 U.S. 158 (1967). (94.) Id. at 164. (95.) Abbott Laboratories, 387 U.S. at 152-53. (96.) "Liveryman Thomas Hobson, who died in 1630 at the age of eighty-five or eighty-six, obliged customers ~to take the horse which stood near the stable door' or none at all." Solar Turbines Inc. v. Seif, 879 F.2d 1073, 1084 n.2 (3rd Cir. 1989) (quoting Steele, The Spectator, Oct. 14, 1712, No. 509). (97.) Abbott Laboratories, 387 U.S. at 154. (98.) Id. at 154. (99.) Id. at 154-56. (100.) Id. at 156. (101.) Abbott Laboratories, 387 U.S. at 153. (102.) See Brian C. Murchison, On Ripeness and "Pragmatism" In Administrative Law, 41 Admin. L Rev. 159, 165-66 (1989) (Abbott Laboratories "so successfully avoided rule-like definitions of the factors of ripeness that it implicitly called into question the wisdom of doctrine making as an enterprise in this area of administrative law."). (103.) Id. at 162. (104.) 449 U.S. 232 (1980). (105.) Id. at 242-43. (106.) Id. (107.) Id. (108.) Id. (109.) FTC v. Standard Oil Co., 449 U.S. 232, 243 (1980). (110.) 461 U.S. 773 (1983). (111.) Id. at 780. (112.) Id. at 779. (113.) Id. ( citing FTC v. Standard Oil Co., 449 U.S. 232, 239 (1980)). (114.) Id. at 779-80 (citations omitted). (115.) 443 F.2d 689 (D.C. Cir. 1971). (116.) Id. at 703. (117.) Id. at 701. The court noted that "only 1.2596 of the Division's answers to inquiries are signed by the Administrator himself." Id. (118.) Id. (119.) Administrative Procedure Act, 5 U.S.C. [sections] 704 (1988). (120.) See, e.g., Solar Turbines Inc. v. Self, 879 F.2d 1073 (3d Cir. 1989); Asbestec Constr. Servs., Inc. v. EPA, 849 F.2d 765 (2d Cir. 1988). (121.) "Without the option of seeking review of [wetlands] jurisdictional determinations [under the CWA],... landowners who fear the imposition of substantial penalties for the violation of wrongful wetlands determinations are effectively coerced into compliance with the governments dictates." Virginia S. Albrecht & David Isaacs, Wetlands Jurisdiction and Judicial Review, 7 Nat. Resources & Env't, Summer 1992, 29, 65. (122.) 42 U.S.C. [sections] 7607(b)(1) (Supp. III 1991). A compliance order is "locally or regionally applicable" because it addresses the activities of a specific party at a particular site. (123.) Id. (124.) Id. [sections] 7606(b)(2). (125.) 446 U.S. 578 (1980). (126.) Id .at 586. See also West Penn Power Co. v. United States EPA, 860 F.2d 581, 584 (3rd Cir. 1988) ("[I]t makes sense to define finality under the Clean Air Act in the same way that it is defined in administrative law generally."). (127.) Harrison, 446 U.S. at 579. (128.) Id. at 592-94. (129.) Id. at 593-594 (citation omitted) (footnote omitted). (130.) Id. at 589. EPA's letter followed a formal request by PPG Industries for a determination under a procedure provided in the regulations. Id. at 583. In several ways, this letter parallels a compliance order because it sets forth, somewhat formally, the EPA's position regarding the application of the CAA to a specific situation and anticipates compliance with the agency's decision. (131.) Id. at 586 (emphasis in original). "It is undisputed that the Administrator's ruling represented EPA's final determination concerning the applicability of the ~new source' standards to PPG's power facility." Id.
Justice Stevens, in his dissenting opinion, refused to give much weight to the parties' agreement that the EPA letter constituted "final agency action." Id. at 604 n.3 (Stevens, J., dissenting). Stevens applied the ripeness test of Abbott Laboratories and concluded that the EPA letter in this case was "final." Id. at 603-04. Stevens' dissent involved limiting EPA's ability to manufacture finality simply by giving notice in the Federal Register and thereby triggering the 60-day statutory preclusion of [sections] 307(b)(2). Id. at 604-07. (132.) Id. at 586. (133.) 434 U.S. 275 (1978). (134.) Id. at 282. (135.) 849 F.2d 765 (2d Cir. 1988). (136.) Id. at 769. (137.) Id. at 767. EPA issued the compliance order after the completion of the disputed asbestos abatement project. (138.) Id. at 768. Although citing Standard Oil, the ripeness factors relied upon by the Second Circuit were first set out in Abbott Laboratories as its test for "finality." (139.) Asbestec Constr. Servs., Inc. v. EPA, 849 F.2d 765, 769 (2d Cir. 1988). According to the court, the requirement of a "practical and immediate effect" on the party for finality requires "the imposition of an obligation, the denial of a right, or some other establishment of a legal relationship." Id. at 768. (140.) U.S. Const. art. III, [sections] 2. (141.) "Any order issued under this subsection shall state with reasonable specificity the nature of the violation and specify a time for compliance which the Administrator determines is reasonable. . . ." 42 U.S.C. [sections] 7413(a)(4) (Supp. III 1991). Asbestec opposed the order because of the possibility that the stigma of a past violation would deter future business; apparently compliance history is an important factor in the selection of asbestos abatement contractors. See Asbestec Constr. Servs., Inc. v. EPA, 849 F.2d 765, 768 (2d Cir. 1988). (142.) Asbestec, 849 F.2d at 769. (143.) Harrison v. PPG Industries, Inc., 446 U.S. 578, 592-94 (1980). See supra notes 143-49 and accompanying text. (144.) 42 U.S.C. [sections] 7413(a)(1). (145.) See Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402, 420 (1971) ("[R]eview is to be based on the full administrative record that was before the Secretary at the time he made his decision."). (146.) 42 U.S.C. [subsections] 9601-9675 (1988). (147.) Prior to the Superfund Amendments and Reauthorization Act of 1986 (SARA), which expressly precluded pre-enforcement review of CERCLA orders, the courts rejected pre-enforcement review of CERCLA compliance orders under various theories including implied preclusion and finality. Alfred R. Light and M. David McGee, Preenforcement, Preimplementation, and Postcompletion Preclusion of Judicial Review Under CERCLA, 22 Envtl. L. REP. (Envtl.. L. Inst.) 10397 (June 1992). (148.) Asbestec Constr. Servs. v. EPA, 849 F.2d 765, 769 (2d Cir. 1988). (149.) 42 U.S.C. [sections] 9606(a) (1988). (150.) See supra note 77 and accompanying text. (151.) See supra note 77 and accompanying text. (152.) 42 U.S.C. [sections] 7603. (153.) 879 F.2d 1073 (1989). (154.) Section 167 provides that EPA shall "take such measures, including issuance of an order, or seeking injunctive relief, as necessary to prevent the construction or modification of a major emitting facility which does not conform to the requirements of this part." 42 U.S.C. [sections] 7477 (Supp. III 1991). (155.) Solar Turbines, 879 F.2d at 1076. (156.) Id. at 1075-76, 1982. The state issued the permit under the authority of its federally-approved State Implementation Plan (SIP). On the merits, Solar Turbines challenged the EPA's authority to effectively invalidate the permit issued by the state under an approved SIP. However, the court never reached the merits because it determined that the order lacked finality. (157.) Id. at 1081-82. (158.) Id. at 1081-82. (159.) Id. at 1075. (160.) Solar Turbines Inc. v. Seif, 879 F.2d 1073, 1077-78, 1081 (1989) (citing Union Elec. Co. v. EPA, 593 F.2d 299 (8th Cir. 1979)) (CAA implicitly precludes preenforcement review of notice of violation under section 113); Fry Roofing Co. v. EPA, 564 F.2d 885 (8th Cir. 1977) (CAA implicitly precludes preenforcement review of abatement order under section 113); West Penn Power Co. v. Train, 522 F.2d 302 (3rd Cir. 1975) (notice of violation under CAA section 113 is not final agency action and not reviewable), cert. denied, 426 U.S. 947 (1976). (161.) Solar Turbines, 879 F.2d at 1082. (162.) Id. at 1081. (163.) Id. (164.) Id. (165.) Id. at 1080. (166.) Solar Turbines Inc. v. Seif, 879 F.2d 1073, 1080 (1989). (167.) Id. at 1081. "Even though the wording of the administrative order is in the imperative and directs immediate compliance with its command to stop construction or operation of the cogeneration facility, and even though the accompanying letter seems to threaten civil and criminal liability upon noncompliance, no civil or criminal liabilities accrue from the violation of the order." Id. This is a prime example of the coercive use of compliance orders by the EPA, who is well aware of the difficulty of acquiring pre-enforcement review of its orders. (168.) Id. at 1080-81. (169.) 42 U.S.C. [sections] 7413(c)(1). (170.) Id. [sections] 7413(b), (d). (171.) "The determinative factor on finality in this case is that the administrative order has no operative effect on Solar Turbines." Solar Turbines Inc. v. Seif, 879 F.2d 1073, 1080-81 (1989). "The acknowledged linchpin of the majority opinion lies in its conclusion that the order has no adverse consequences on Solar Turbines and that the sole source of sanction against it is the incipient enforcement action." Id. at 1083 (J., Becker, concurring) (citation omitted). (172.) "[T]he cover letter accompanying the administrative order stated that ~[f]ailure to comply with this order could subject your firm to civil and criminal liabilities pursuant to the Clean Air Act." Id. at 1089. (173.) 42 U.S.C. [sections] 7413(a)(1)-(2). See, e.g., United States v. General Motors Corp., 876 F.2d 1060 (1st Cir. 1989) (notice of violation is prerequisite to enforcement of federally approved SIP), aff'd 496 U.S. 530 (1990). See also Law of Environmental Protection, supra note 1, [sections] 8.01[a][i]. (174.) 42 U.S.C. [sections] 7413(a)(1) (West Supp. 1991). (175.) Law of Environment Protection, Supra note 1, [sections] 8.01[a][i]. "An intent to ease federalist tensions explains why a notice is required prior to federal enforcement of state-developed requirements, but not before federal enforcement of federally developed requirements." Id. (176.) Id. (177.) Id. [sections] 8.01[a][ii]. (178.) 42 U.S.C. 7413(a)(4). A compliance order "shall require the person to whom it was issued to comply with the requirement as expeditiously as practicable, but in no event longer than one year after the date the order was issued, and shall be nonrenewable." Id. (179.) Law of Environmental Protection, supra note 1, [sections] 8.01(51[b][i]. (180.) See Union Electric Co. v. EPA, 593 F.2d 299 (8th Cir. (1979), cert. denied, 444 U.S. 839 (1979); West Penn Power Co. v. Train, 522 F.2d 302 (3d Cir. 1975), cert. denied, 426 U.S. 947 (1976). (181.) Solar Turbines, Inc. v. Seif, 879 F.2d 1073, 1077 (3d Cir. 1989). (182.) Id. at 1081. See also Asbestec Constr. Servs., Inc. v. EPA, 849 F.2d 765, 768 (2d Cir. 1988). (183.) Solar Turbines, 879 F.2d at 1084 (Becker, J., concurring). While this appeal was pending, EPA issued a [sections] 113 compliance order to which penalties unquestionably attached. Id. at 1084 n.3. "Solar Turbines is potentially liable for fines of $25,000 per day of violation if it is still in violation of the Act more than 30 days following notification of violation" under the [sections] 113 compliance order. Id. at 1084. (184.) West Penn Power Co. v. Train, 522 F.2d 302, 320 (3rd Cir. 1975) (Adams, J., dissenting), cert. denied, 426 U.S. 947 (1976). The majority rejected preenforcement review of a compliance order under the CAA. Judge Adams' dissent supported direct review of a notice of violation rather than a compliance order, but his reasoning is equally applicable to review of compliance orders.
Andrew I. Davis, Attorney in private practice in Oregon and Washington, J.D. 1993, Northwestern School of Law of Lewis and Clark College. The author would like to thank Professor William Funk for his comments.
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|Author:||Davis, Andrew I.|
|Date:||Jan 1, 1994|
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