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CHAPTER 25: ENVIRONMENTAL LAW 11
CASE SYNOPSIS—
Case 25.3: Sackett v. Environmental Protection Agency
To build a home, Michael and Chantell Sackett filled in part of their lot. The EPA viewed the fill as
pollution of wetlands, ordered the Sacketts to restore the property, and imposed fines of up to $75,000 a day
until they complied. Denied a hearing by the EPA, the Sacketts filed a suit in a federal district court against
the agency, asserting that its order was “arbitrary and capricious.” The court held that it could not review the
EPA’s order until the agency brought an action to enforce it. A federal appellate court affirmed. The Sacketts
appealed.
The United States Supreme Court reversed. Under the Administrative Procedure Act, courts can review
any “final agency action for which there is no other adequate remedy in court.” The EPA’s order to the
Sacketts was a “final” agency action, because it determined their rights and obligations and they were denied
review of the order with the EPA. And the Sacketts had “no other adequate remedy in court”—considering the
daily fines, they could not “realistically” wait for an enforcement action.
..................................................................................................................................................
Notes and Questions
Does it seem appropriate to impose significant fines on citizens, or even imprison individuals,
when they violate environmental laws? Increasingly, businesspersons and others who violate
environmental, consumer, health and safety laws and regulations find themselves subject to not only hefty
fines but to prison terms. Whether large fines and prison terms are appropriate responses to such violations is
clearly debatable. To be sure, the more such sanctions are publicized, the more deterrent effect we will
observe on behavior. Some observers do argue, nonetheless, that such sanctions are inappropriate for
violations of environmental laws unless they result in serious and immediate physical harm to others.
ANSWER TO “THE LEGAL ENVIRONMENT DIMENSION”
QUESTION IN CASE 25.3
What does the Court’s decision in this case mean for people and businesses that face compliance
orders? Are they more or less likely to acquiesce to orders they find objectionable? The Court’s
decision facilitates challenges to compliance orders. After the Sackett case, parties have less incentive to
follow orders that they find objectionable. Under the Court’s decision, a party can sue the Environmental
Protection Agency (EPA) itself without waiting for the EPA to bring an enforcement action. Fewer parties will
likely cooperate with the EPA simply for the sake of minimizing fines.
ANSWER TO “THE ENVIRONMENTAL DIMENSION”
QUESTION IN CASE 25.3
Is it appropriate to impose significant fines on citizens when they violate environmental laws?
Discuss. Persons, including individual property owners, who violate environmental laws, may find themselves
12 INSTRUCTOR’S MANUAL FOR BUSINESS LAW: COMMERCIAL LAW FOR ACCOUNTANTS
subject to hefty fines in some cases. Whether a large fine is an appropriate response to a violation of an
environmental regulation is clearly debatable. The appropriateness may depend in part on the egregiousness
of the conduct—was the property owner’s action willful? Of course, when such a sanction is publicized, there
may be a deterrent effect on others’ behavior.
Some observers argue, however, that such sanctions are inappropriate for violations of environmental
laws unless those violations cause serious and immediate physical harm to other persons or property.
B. DRINKING WATER
CHAPTER 25: ENVIRONMENTAL LAW 13
whole or in part.
1. EPA Actions
The EPA can inspect factories where the chemicals are made and cancel or suspend registration of
substances that are identified as harmful—which means that there can be no greater than a one-in-
a-million chance of people developing cancer from exposure.
2. Violations and Penalties
Violations include selling substances that are not registered or that are labeled falsely. Penalties
include fines off up to $50,000 and imprisonment of up to on year for commercial dealers, with
lesser penalties for private users.
A. RESOURCE CONSERVATION AND RECOVERY ACT
The Resource Conservation and Recovery Act (RCRA) requires that the EPA determine which forms of
solid waste should be considered hazardous and regulate hazardous waste storage, disposal, and
treatment. Penalties for violations include up to $25,000 (civil) per violation, $50,000 (criminal) per day,
• Information gathering and analysis system that enables the government to identify chemical dump
sites and determine the appropriate action.
• EPA authority to respond to hazardous substance emergencies and to arrange for the cleanup of a
leaking site directly if the persons responsible fail to do so.
When a release or a threatened release occurs, the EPA can clean up a site and recover the cost
from—
• A party who generated the waste disposed of at the site.
• A party who transported the waste to the site.
14 INSTRUCTOR’S MANUAL FOR BUSINESS LAW: COMMERCIAL LAW FOR ACCOUNTANTS
b. Joint and Several Liability
One party can be charged with the entire cost (which that party may recover in a contribution
action against others).
2. Minimizing Liability
Businesses that conduct self-audits and promptly detect, disclose, and correct wrongdoing are
subject to lighter penalties. There may be no fines for small companies that correct violations within
180 days (360 days if pollution-prevention techniques are involved).
whole or in part.
3. When CERCLA was enacted, most legislators believed that cleaning up a site was relatively inexpensive
and involved removing containers and scraping a few inches of soil off the ground. Today, there is a
multibillion dollar Superfund industry. Should either of these facts make any difference in the
enforcement or the amendment of CERCLA?
4. Environmental law is inseparable from administrative law. It may be helpful when reviewing the law in this
chapter to remind students of the material in Chapter 23.
Cyberlaw Link
What are the legal issues surrounding the disposal of computers and related products, many of
which contain hazardous substances? Who should be liable if disposal results in harm to the envi-
ronment or to individuals?
DISCUSSION QUESTIONS
1. How may a polluter be held liable on a common law nuisance theory? A polluter may be held liable for
the use of property in a way that unreasonably interferes with others’ rights to use or enjoy their property. A nuisance
may be public or private. A public nuisance is a cause of action based on harm to the public. A public authority (such
as a state’s attorney general) sues to abate a public nuisance. A private nuisance is a cause of action based on harm
distinct from that suffered by the public. An individual property owner may sue for relief on this theory. In some states,
which the environment may be polluted (by requiring changes in proposed developments, for instance). State laws
may restrict discharge of chemicals into the water or air, or regulate disposal of toxic wastes, or disposal or recycling
of other wastes. City, county, and other local governments may regulate waste and garbage removal and disposal,
the appearance of buildings and other structures, and noise.
4. How might an environmental impact statement be used? Private citizens, businesses, or others might use
an environmental impact statement to challenge an administrative agency’s action on the basis that the action
improperly threatens the environment.
5. The Clean Air Act provides a basis for regulating air pollution from what two kinds of sources? The
Clean Air Act provides a basis for regulating air pollution from mobile sources (motor vehicles) and stationary sources
(public utilities, industrial plants). Under the Clean Air Act, the Environmental Protection Agency sets standards for
12 INSTRUCTOR’S MANUAL FOR BUSINESS LAW: COMMERCIAL LAW FOR ACCOUNTANTS
subject to hefty fines in some cases. Whether a large fine is an appropriate response to a violation of an
environmental regulation is clearly debatable. The appropriateness may depend in part on the egregiousness
of the conduct—was the property owner’s action willful? Of course, when such a sanction is publicized, there
may be a deterrent effect on others’ behavior.
Some observers argue, however, that such sanctions are inappropriate for violations of environmental
laws unless those violations cause serious and immediate physical harm to other persons or property.
B. DRINKING WATER
CHAPTER 25: ENVIRONMENTAL LAW 13
whole or in part.
1. EPA Actions
The EPA can inspect factories where the chemicals are made and cancel or suspend registration of
substances that are identified as harmful—which means that there can be no greater than a one-in-
a-million chance of people developing cancer from exposure.
2. Violations and Penalties
Violations include selling substances that are not registered or that are labeled falsely. Penalties
include fines off up to $50,000 and imprisonment of up to on year for commercial dealers, with
lesser penalties for private users.
A. RESOURCE CONSERVATION AND RECOVERY ACT
The Resource Conservation and Recovery Act (RCRA) requires that the EPA determine which forms of
solid waste should be considered hazardous and regulate hazardous waste storage, disposal, and
treatment. Penalties for violations include up to $25,000 (civil) per violation, $50,000 (criminal) per day,
• Information gathering and analysis system that enables the government to identify chemical dump
sites and determine the appropriate action.
• EPA authority to respond to hazardous substance emergencies and to arrange for the cleanup of a
leaking site directly if the persons responsible fail to do so.
When a release or a threatened release occurs, the EPA can clean up a site and recover the cost
from—
• A party who generated the waste disposed of at the site.
• A party who transported the waste to the site.
14 INSTRUCTOR’S MANUAL FOR BUSINESS LAW: COMMERCIAL LAW FOR ACCOUNTANTS
b. Joint and Several Liability
One party can be charged with the entire cost (which that party may recover in a contribution
action against others).
2. Minimizing Liability
Businesses that conduct self-audits and promptly detect, disclose, and correct wrongdoing are
subject to lighter penalties. There may be no fines for small companies that correct violations within
180 days (360 days if pollution-prevention techniques are involved).
whole or in part.
3. When CERCLA was enacted, most legislators believed that cleaning up a site was relatively inexpensive
and involved removing containers and scraping a few inches of soil off the ground. Today, there is a
multibillion dollar Superfund industry. Should either of these facts make any difference in the
enforcement or the amendment of CERCLA?
4. Environmental law is inseparable from administrative law. It may be helpful when reviewing the law in this
chapter to remind students of the material in Chapter 23.
Cyberlaw Link
What are the legal issues surrounding the disposal of computers and related products, many of
which contain hazardous substances? Who should be liable if disposal results in harm to the envi-
ronment or to individuals?
DISCUSSION QUESTIONS
1. How may a polluter be held liable on a common law nuisance theory? A polluter may be held liable for
the use of property in a way that unreasonably interferes with others’ rights to use or enjoy their property. A nuisance
may be public or private. A public nuisance is a cause of action based on harm to the public. A public authority (such
as a state’s attorney general) sues to abate a public nuisance. A private nuisance is a cause of action based on harm
distinct from that suffered by the public. An individual property owner may sue for relief on this theory. In some states,
which the environment may be polluted (by requiring changes in proposed developments, for instance). State laws
may restrict discharge of chemicals into the water or air, or regulate disposal of toxic wastes, or disposal or recycling
of other wastes. City, county, and other local governments may regulate waste and garbage removal and disposal,
the appearance of buildings and other structures, and noise.
4. How might an environmental impact statement be used? Private citizens, businesses, or others might use
an environmental impact statement to challenge an administrative agency’s action on the basis that the action
improperly threatens the environment.
5. The Clean Air Act provides a basis for regulating air pollution from what two kinds of sources? The
Clean Air Act provides a basis for regulating air pollution from mobile sources (motor vehicles) and stationary sources
(public utilities, industrial plants). Under the Clean Air Act, the Environmental Protection Agency sets standards for
