* Business groups also opposed EPA regulation
* At issue costly fines before court review
By James Vicini
WASHINGTON, March 21 (Reuters) - The U.S. Supreme Court ruled on Wednesday that landowners can sue to challenge a federal government compliance order under the clean water law, a decision that sides with corporate groups and puts new limits on a key Environmental Protection Agency power.
The justices unanimously rejected the U.S. government's position that individuals or companies must first fail to comply with an EPA order and face potentially costly enforcement action before a court can review the case.
The opinion by Justice Antonin Scalia was a victory for an Idaho couple who challenged a 2007 EPA order that required them to restore a wetland they had filled with dirt and rock as they began to build a new vacation home near Priest Lake. They were also told to stop construction on the home.
The couple, Chantell and Michael Sackett, denied their property had ever contained a wetland and complained they were being forced to comply with an order without a court hearing.
Their appeal drew support from the U.S. Chamber of Commerce, the National Association of Manufacturers, the National Association of Home Builders and General Electric Co, a company that had made a similar challenge to the EPA compliance orders.
The Supreme Court's ruling comes at a time when the EPA has faced fierce criticism from many Republicans in Congress who say it has issued the most ambitious clean air regulations in decades and has become heavy-handed in enforcement actions.
Scalia concluded the Sacketts may bring a civil lawsuit under the Administrative Procedures Act to challenge the EPA's order.
He said that since the EPA's decision was final and the couple faced potential large fines, they had no other adequate remedy but to bring a civil lawsuit.
Reading his decision from the bench, Scalia said that the Clean Water Act does not prevent judicial review of such orders.
Under the law, violations of the Clean Water Act can result in fines of up to $37,500 per day, plus as much as an additional $37,500 per day for violating the EPA compliance order.
The EPA issues nearly 3,000 compliance orders a year that require accused violators of environmental laws to stop alleged harmful actions and repair any damage that was caused.
The justices overturned a U.S. appeals court ruling that a compliance order was not subject to judicial review until later when the EPA has brought an enforcement action and seeks to have a judge rule in its favor.
'DAY IN COURT'
The court did not reach the broader question of whether the EPA's order violated the constitutional right of due process. It only held that the Administrative Procedures Act, which provides certain rules for federal regulatory agencies, applied.
Scalia said that the Sacketts would not get an adequate remedy if they had to apply to the Army Corps of Engineers for a permit and then file suit if that permit was denied.
He said the Clean Water Act was not "uniquely designed to enable the strong-arming of regulated parties into 'voluntary compliance' without the opportunity for judicial review."
Scalia concluded the 10-page opinion by saying the EPA's orders will remain an effective way to secure prompt, voluntary compliance in the many cases when there was no substantial basis to question their validity.
Justice Samuel Alito wrote a short separate opinion concurring in the outcome. He said allowing property owners to sue was better than nothing, but urged Congress to adopt new legislation clarifying the reach of the Clean Water Act.
Government attorneys had defended the compliance orders as a quick way to stop environmental damage and argued that allowing accused polluters to get a court hearing would tie the EPA up in lengthy litigation.
An attorney for the Sacketts argued that they should not have to wait for years for judicial review until the EPA decides to go to court and said the compliance order was coercive, requiring action to avoid potentially huge fines.
Damien Schiff, the attorney for the couple, hailed the ruling. "EPA is not above the law," he said.
"That's the bottom line with today's ruling. This is a great day for Mike and Chantell Sackett, because it confirms that EPA can't deny them access to justice. EPA can't repeal the Sacketts' fundamental right to their day in court," he said.
Jon Devine, senior attorney in the water program at the Natural Resources Defense Council, said the EPA still can issue compliance orders.
"The Supreme Court did not give anyone a license to pollute. Pure and simple. Those who pollute our waters will still be held accountable," he said. The ruling "grants recipients of such orders, at a time of their choosing, a day in court to challenge them to promote speedy resolution of pollution problems."
The Supreme Court case is Sackett v EPA, No. 10-1062.