New CWA Compliance Order Case: Foster v. EPA

The U.S. District Court for the Southern District of West Virginia has ruled on the government’s motions to dismiss the plaintiffs’ constitutional arguments in a new Clean Water Act (CWA) administrative compliance order matter.  The plaintiffs, West Virginia property developers, were alleged to have violated the CWA by illegally discharging dredge and fill material into Neal Run, a tributary stream that flows into the “waters of the United States”.  EPA issued a CWA Compliance Order under Section 309 of the CWA, requiring the plaintiffs to restore the property to “pre-disturbance grade and conditions”.  The plaintiffs, who purchased the property out of the bankruptcy estate of the previous owner, then filed a lawsuit seeking declaratory and injunctive relief from the order under the Administrative Procedures Act (APA) or an injunction halting its enforcement.  They alleged that the order violated both their procedural and substantive due process rights.  The case is Foster, et al., v. EPA, et al.

The lawsuit was filed in December 2014, and the District Court issued its Memorandum Opinion and Order regarding the constitutional claims on September 30, 2015.  In short, the District Court agreed with the plaintiffs that an “APA review” of the compliance order, presumably through the administrative review procedures established by EPA, were not sufficient to protect and adjudicate the plaintiffs’ procedural due process claims.  According to the District Court, “the government cites no cases in which a federal court has squarely held that due process protections for an aggrieved party may be limited to post-deprivation judicial review under the APA”.

The District Court held that the plaintiffs had alleged a plausible procedural due process claim (i.e., “[a]lthough the plaintiffs have not identified a protected liberty interest, their procedural due process claim need not be dismissed if they have a cognizable property interest impacted by the compliance order”), and EPA’s motion to dismiss the procedural due process claim was denied upon a finding that “significant effects on plaintiffs’ property rights are sufficient to ground a due process claim.”  It also noted that “When the penalties from disobeying a law are ruinous, but compliance undermines judicial review, the effect is a deprivation of due process because judicial review becomes unavailable as a practical matter,” citing Ex parte Young, 209 U.S. 123, 144-45, 147 (1908).

However, the District Court agreed that the substantive due process claim should be denied.