Foster et al v. United States Environmental Protection Agency et al
Filing
114
MEMORANDUM OPINION AND ORDER granting in part and denying in part the EPA's 31 MOTION to Dismiss the Third, Fourth, and (in part) First Claims for Relief asserted in the 25 Amended Complaint; granting with respect to the plaintiffs' s ubstantive due process and equal protection claims; directing that the Fourth Claim for Relief is dismissed in its entirety; to the extent that the complaint seeks relief for these claims elsewhere in the complaint, directing that such claims are also dismissed; denying with respect to the plaintiffs' procedural due process claim. Signed by Judge John T. Copenhaver, Jr. on 9/30/2015. (cc: counsel of record; any unrepresented parties) (tmh)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF WEST VIRGINIA
AT CHARLESTON
RON FOSTER, MARKETING & PLANNING
SPECIALISTS LIMITED PARTNERSHIP, and
FOSTER FARMS, LLC.
Plaintiffs,
v.
Civil Action No. 2:14-cv-16744
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, and
GINA MCCARTHY, in her official capacity as Administrator,
Defendants.
MEMORANDUM OPINION AND ORDER
Pending is the motion to dismiss of defendants Gina
McCarthy and the United States Environmental Protection Agency
(collectively “the EPA”), filed December 3, 2014.
Background
Neal Run is a tributary stream that flows into the
Little Kanawha River near the city of Parkersburg, West
Virginia.
Pl. Am. Compl. ¶¶ 11-12.
The plaintiffs in this case
own and are engaged in the development of several parcels of
land (“the Property”) in “the vicinity of Neal Run.”
see also ¶ 8, ¶ 11.
Id. ¶ 12;
The EPA contends that in the course of
developing the Property, the plaintiffs discharged dredge and
fill materials into unnamed, semi-permanent,1 tributary streams
which flow into Neal Run, and, therefore, into the “waters of
the United States” without the necessary permit.
Id. ¶ 2; see
also Def. Mem. of Law in Supp. Mot. to Dismiss at * 1.
The EPA
issued a compliance order under section 309 of the Clean Water
Act (the “CWA”), 33 U.S.C § 1251 et seq., requiring the
plaintiffs to “restore [the relevant portions of the Property]
to pre-disturbance grade and conditions.”
12.2
Compliance Order ¶
The plaintiffs, who purchased the Property out of the
bankruptcy estate of the previous owner, initiated this action
seeking both declaratory and injunctive relief from that order.
The plaintiffs filed their complaint on May 21, 2014.
They invoke this court’s jurisdiction to adjudicate federal
questions, 28 U.S.C. § 1331, provide declaratory and injunctive
relief, 28 U.S.C. §§ 2201 & 2202, and invoke the relevant
section of the Administrative Procedures Act (“APA”), 5 U.S.C. §
1
The EPA contends that the plaintiffs discharged fill material
into eleven streams on the Property. See “April 5, 2012 Letter”
attached as “Exhibit G” to Pl. Am. Compl. (ECF 25-1). Three of
those streams are classified as “intermittent” and the eight
others “ephemeral.” Id. Intermittent streams “predictably flow
during some portion of every non-drought year” and therefore are
considered to be jurisdictional “waters of the United States” in
and of themselves. Id. The EPA claims jurisdiction over the
ephemeral streams due to the “significant nexus” between those
streams and the “traditional navigable waters,” namely Neal Run
and the Little Kanawha River, which are “approximately 3.2 miles
downstream.” Id.
2 Attached as “Exhibit F” to the Amended Complaint. ECF (25-1).
2
702, authorizing suits against federal government agencies that
have taken agency action which results in a “legal wrong.”
The
plaintiffs seek both review of the EPA’s compliance order under
the APA and either a declaration that the order is
unconstitutional or an injunction preventing its enforcement
until various constitutional deficiencies are addressed.
Pl.
Am. Compl. ¶ 1, ¶5, ¶ 57, ¶ 58, ¶ 63, ¶ 67.
The plaintiffs’ constitutional claims, the subject of
this motion to dismiss, flow from the Fifth Amendment.
The
plaintiffs allege that the issuance of the compliance order
infringed both their procedural and substantive due process
rights.
Additionally, they contend that the EPA’s enforcement
action was both motivated by improper animus and initiated in a
retaliatory manner, thereby violating the precepts of equal
protection.
Id. ¶ 63, ¶ 66.
The EPA’s motion asserts that
these constitutional claims fail to state a claim for which
relief can be granted.
The Motion to Dismiss Standard
Federal Rule of Civil Procedure 8(a)(2) requires a
plaintiff’s complaint to contain “a short and plain statement of
the claim showing . . . entitle[ment] to relief.”
Fed. R. Civ.
P. 8(a)(2); Erickson v. Pardus, 551 U.S. 89, 93 (2007).
Rule
12(b)(6) correspondingly permits a defendant to challenge a
3
complaint when it “fail[s] to state a claim upon which relief
can be granted . . . .”
Fed. R. Civ. P. 12(b)(6).
The required “short and plain statement” must provide
“‘fair notice of what the . . . claim is and the grounds upon
which it rests.’”
Bell Atlantic Corp. v. Twombly, 550 U.S. 544,
555 (2007) (quoting Conley v. Gibson, 355 U.S. 41, 47 (1957),
overruled on other grounds, Twombly, 550 U.S. at 563); see also
Anderson v. Sara Lee Corp., 508 F.3d 181, 188 (4th Cir. 2007).
The showing of an “entitlement to relief” must amount to “more
than labels and conclusions . . . .”
Twombly, 550 U.S. at 555.
“[A] formulaic recitation of the elements of a cause of action
will not do.”
Id.; Giarratano v. Johnson, 521 F.3d 298, 304
(4th Cir. 2008).
To survive a motion to dismiss, “a complaint
must contain sufficient factual matter, accepted as true, to
‘state a claim to relief that is plausible on its face.’”
Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009) (quoting Twombly,
550 U.S. at 570); see also Monroe v. City of Charlottesville,
579 F.3d 380, 386 (4th Cir. 2009).
When evaluating the motion, a district court is
required to “‘accept as true all of the factual allegations
contained in the complaint . . . .’”
Erickson, 551 U.S. at 94
(quoting Twombly, 550 U.S. at 555-556); see also South Carolina
Dept. Of Health And Environmental Control v. Commerce and
4
Industry Ins. Co., 372 F.3d 245, 255 (4th Cir. 2004) (quoting
Franks v. Ross, 313 F.3d 184, 192 (4th Cir. 2002)).
Factual
allegations are to be distinguished from legal conclusions,
which the court need not accept as true.
Iqbal, 556 U.S. at 678
(“the tenet that a court must accept as true all of the
allegations contained in a complaint is inapplicable to legal
conclusions”).
The court must also “draw[] all reasonable . . .
inferences from th[e] facts in the plaintiff’s favor . . . .”
Edwards v. City of Goldsboro, 178 F.3d 231, 244 (4th Cir. 1999).
Discussion
The defense’s motion concerns three constitutional
arguments that are advanced by plaintiffs.
First, in the
complaint’s “Third Claim for Relief,” plaintiffs set forth a
procedural due process claim.
See Pl. Am. Compl. ¶ 63 (The
EPA’s “delay in providing a forum for hearing, irregular
sequencing of jurisdictional review . . . [and] threat[s] [to]
imminent[ly] impos[e] . . . civil and criminal penalties without
providing Plaintiffs a just, fair and impartial enforcement
process [limited] Plaintiffs' opportunity to appeal and be
heard.”).
Second, in the “Fourth Claim for Relief,” they advance
a substantive due process claim.
Id. ¶ 66 (The EPA’s “improper
. . . motivation . . . [as well as the] irregular sequencing of
5
jurisdictional review” coupled with the fact that the “standard
for issuance of a compliance order is impermissibly vague” has
resulted in the EPA “violat[ing] Plaintiffs’ . . . substantive
due process rights.”).
Finally, also in the “Fourth Claim for Relief,” the
plaintiffs make an equal protection argument, asserting that
they qualify as members of a “class of one” and have been
subjected to unlawful treatment based on that status.
Id.
(“[The EPA] ha[s], with improper, retaliatory and animus based
motivation . . . issued a compliance order against Plaintiffs .
. . [and] thereby violated Plaintiffs’ equal protection . . .
rights.”).
A. Procedural Due Process
1.
“The first inquiry in every due process challenge is
whether the plaintiff has been deprived of a protected interest
in ‘property’ or ‘liberty.’”
Am. Mfrs. Mut. Ins. Co. v.
Sullivan, 526 U.S. 40, 59 (1999).
The EPA argues that the
plaintiffs have not identified such an interest.
The plaintiffs
contend that they have a liberty interest to use and develop
their land in order to earn a living.
Pl. Mem. of Law in Supp.
Resp. in Opp’n * 13 (“[The] Plaintiffs' personal and business
6
livelihoods are earned through the development and management of
properties.
The freedom to conduct business and earn a living
are very much liberty interests long recognized under
Constitutional law.”)(citing Yick Wo v. Hopkins, 118 U.S. 356,
369-70 (1886)).
“[D]ue process protection for deprivations of liberty
[extends] beyond the sort of formal constraints imposed by the
criminal process.”
Bd. of Regents of State Colleges v. Roth,
408 U.S. 564, 572 (1972).
There is a cognizable liberty
interest, protected by due process, implicated when a government
employer takes action that damages a government employee’s
ability to earn a living.
See e.g., Lentsch v. Marshall, 741
F.2d 301, 303-04 (10th Cir. 1984)(noting that an “individual's
freedom to earn a living,” is protected by due process and
explaining that “[w]hen a public employer . . . impose[s] a
stigma that forecloses the employee's freedom to take advantage
of other employment opportunities, due process requires that the
employee receive an opportunity to clear his or her name.”).
However, the plaintiffs have not cited any authority
demonstrating that the “right to earn a living” is a cognizable
liberty interest when the government is acting in a regulatory
capacity, as opposed to when it acts as an employer.
“[T]he
range of interests protected by procedural due process is not
7
infinite.”
Paul v. Davis, 424 U.S. 693, 709 (1976) (quoting
Roth, 408 U.S. at 570).
This court declines to cast so wide a
net.
Although 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.
The range of
“property interests protected by procedural due process extend
well beyond actual ownership of real estate, chattels, or
money.”
Roth, 408 U.S. at 571-72, see also Connecticut v.
Doehr, 501 U.S. 1, 12 (1991)(“[E]ven the temporary or partial
impairments to property rights that attachments, liens, and
similar encumbrances entail are sufficient to merit due process
protection.”) (emphasis added).
The EPA argues that the plaintiffs do not have a
protected property interest because an “alleged deprivation . .
. must come directly at the hands of the government.”
Mem. of Law in Supp. Mot. to Dismiss at * 10.
Def.
They claim that,
at most, the compliance order has an “indirect impact[]” on the
plaintiffs’ property rights and that indirect effects do not
trigger due process protection.
Id. at * 11 (citing O'Bannon v.
Town Court Nursing Ctr., 447 U.S. 773, 789 (1980)(holding that
decertification of nursing home constitutes only an indirect
8
impact on the residents who may locate elsewhere)).
Contrary to
the EPA’s characterization, a compliance order, as in this case,
has direct legal consequences that touch upon important property
rights possessed by the plaintiffs.
In Sackett v. E.P.A., 132 S. Ct. 1367 (2012), the
Supreme Court held that a compliance order issued under the CWA
constitutes “final agency action” and is reviewable, under the
APA, at least to the extent that the EPA’s jurisdiction over the
regulated party is challenged.3
The Court’s conclusion was
predicated on the fact that “legal consequences . . . flow from
issuance of [a compliance] order.”
quotation marks omitted).
Id. at 1371 (internal
The Court provided several examples
of such consequences, including “the legal obligation to
‘restore’ [the affected] property” according to the terms of an
3
As a general matter, the Supreme Court’s Sackett opinion
provides the most appropriate and analogous guidance for this
court to use in issuing a ruling on due process claims related
to a compliance order. Although our Court of Appeals, before
the ruling in Sackett, had denied due process claims based on
EPA compliance orders, no case where it did so is perfectly
analogous to the present matter. In Southern Pines Associates,
by Goldmeier v. United States, the Fourth Circuit affirmed a
dismissal of the plaintiffs’ procedural due process objections
to an EPA compliance order. 912 F.2d 713 (4th Cir. 1990). In
that case, however, the EPA’s compliance order was sent along
with a request that “asked Southern Pines to provide information
about the site for it to review in order to make a ‘final
determination of the boundaries of the wetlands that fall under
the jurisdiction of the Clean Water Act.’” Id. at 714. Since
the compliance order in this case was accompanied by no request
or statement of uncertainty, Southern Pines appears inapposite.
9
order, id., and the potential “expos[ure] . . . to double
penalties in a future enforcement proceeding,” id. at 1372.
The legal consequences described in Sackett provide
examples of the type of direct effect a compliance order can
have on a plaintiff’s property rights.
The plaintiffs here have
alleged the existence of similar effects.
Their complaint
states that the compliance order has “delay[ed] . . . the
completion of [planned] construction,” “rendered some portions
of the [P]roperty unusable,” and “effectively frozen the
[P]roperty, rendering it commercially undesirable to potential
purchasers or lessees.”
Pl. Am. Compl. § 40.
These significant effects on plaintiffs’ property
rights are sufficient to ground a due process claim.
The
Supreme Court has recognized that even a temporary or partial
impairment of a property right normally enjoyed by a landowner
can trigger the protections of due process.
Doehr, 501 U.S. at
12 (“temporary or partial impairments to property rights . . .
are sufficient to merit due process protection.”); Fuentes v.
Shevin, 407 U.S. 67, 84-85 (1972)(“it is now well settled that a
temporary, nonfinal deprivation of property is nonetheless a
‘deprivation’”); see also Gen. Elec. Co. v. Jackson, 610 F.3d
110, 120 (D.C. Cir. 2010)(discussing Doehr and explaining that
the Supreme Court therein held nonfinal interference with a
10
landowner’s property rights to be a “property deprivation”
because it “pluck[ed] a stick from the property owner's bundle
and hold[s] it as surety” and recognizing that “direct, partial
impairments of property rights . . . warrant due process
safeguards”), Reardon v. United States, 947 F.2d 1509, 1518 (1st
Cir. 1991)(en banc)(holding that the EPA’s “filing of a federal
lien” upon the appellant’s property in an effort to recoup the
costs of hazardous waste removal “amount[ed] to the deprivation
of a ‘significant property interest’ within the meaning of the
due process clause.”).
In Doehr, the Court provided a list of the effects
attributable to a nonfinal deprivation that could impinge upon a
landowner’s property rights.
Doehr, 501 U.S. at 11.
It then
explained that the deprivation suffered by the landowner in
Doehr – prejudgment attachment of real estate as surety against
a future judgment – “clouds title; impairs the ability to sell
or otherwise alienate the property; taints any credit rating;
reduces the chance of obtaining [a loan backed by the value of
the property]; and can even place an existing mortgage in
technical default.”
Id.
The plaintiffs’ complaint contains
allegations that the compliance order has wrought similar
effects.
Most significantly, as noted, the complaint contains
the allegation that the order has “effectively frozen the
11
[P]roperty, rendering it commercially undesirable to potential
purchasers or lessees.”
Pl. Am. Compl. § 40.
Hence, the
plaintiffs have identified a property interest – the ability to
freely alienate their land – that is cognizable under due
process.
Accordingly, the plaintiffs have shown a substantial
property interest of which they have been deprived by the
government’s issuance of the compliance order.
2.
The question, then, becomes, “what process is due[?]”
Morrissey v. Brewer, 408 U.S. 471, 481 (1972).
At this stage of
the litigation, the court need not answer that question in full.
For purposes of evaluating the motion to dismiss, a more apt
formulation of the question is: does APA review of a compliance
order, standing alone, satisfy due process?
If it does, the
plaintiffs’ procedural due process claim is not viable, and must
be dismissed.4
4
This due process issue was presented in the second of the two
certiorari questions granted in Sackett. See Sackett v. E.P.A.,
131 S. Ct. 3092, 180 L. Ed. 2d 911 (2011)(granting certiorari as
to two questions: “1. May petitioners seek pre-enforcement
judicial review of the administrative compliance order pursuant
to the Administrative Procedure Act, 5 U.S.C. § 704? 2. If not,
does petitioners' inability to seek pre-enforcement judicial
review of the administrative compliance order violate their
rights under the Due Process Clause?”). Since the Court issued
12
Plaintiffs argue that APA review is constitutionally
insufficient.
They assert that their due process claims are
“not cured” by “substantive review” of the “merits” of the
compliance order because “the improper and unlawful nature of
the EPA's actions leading up to the [o]rder are due process
violations in and of themselves.”
Opp’n at * 14-15.
Mem. of Law in Supp. Resp. in
That is, the EPA violated due process when it
“issued [the order] without providing Plaintiffs an
opportunity[:] to appeal, [to] be heard by an impartial decision
maker[,] and to contest [the EPA’s] findings.”
Pl. Am. Compl. ¶
4.
The plaintiffs contend that they are entitled to a
“just, fair and impartial administrative enforcement process”
before either “a neutral and independent administrative law
judge . . . or by this federal court.”
Relief” ¶ 2.
Id. ¶ 5, “Prayer for
Essentially, the plaintiffs argue that APA review
does not satisfy the fundamental tenet of procedural due
process, which is the opportunity to be heard at “a meaningful
time and in a meaningful manner.”
Armstrong v Manzo, 380 U.S.
545, 552 (1965).
In general, procedural due process is satisfied if
a ruling based on the first of the two questions, the second
question regarding due process did not come into play.
13
“some form of hearing [occurs] before an individual is finally
deprived of a property interest.”
319, 333 (1976).
Mathews v. Eldridge, 424 U.S.
Under most circumstances, that hearing must
take place before the deprivation of a significant property
interest actually occurs.
Memphis Light, Gas & Water Div. v.
Craft, 436 U.S. 1, 19 (1978)(“Ordinarily, due process of law
requires an opportunity for ‘some kind of hearing’ prior to the
deprivation of a significant property interest.”); see also U.S.
v. James Daniel Good Real Property, 510 U.S. 43, 48 (1993) (“Our
precedents establish the general rule that individuals must
receive notice and an opportunity to be heard before the
Government deprives them of property.”)
In the present case,
however, the government contends that post-deprivation judicial
review pursuant to the APA is sufficient.
In effect, the government requests that the court give
the EPA power unprecedented in the body of administrative law.
The government cites no case 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.
Although the federal courts “tolerate some exceptions
to the general rule requiring predeprivation notice and hearing,
[it is] only in extraordinary situations,” James Daniel Good
Real Property, 510 U.S. at 53 (emphasis added), and these
14
“extraordinary situations” almost uniformly require an unusual
government interest in speedy action as well as a postdeprivation remedy beyond APA judicial review.
See, e.g., North
Am. Cold Storage Co. v. City of Chicago, 211 U.S. 306, 315-16
(1908) (allowing seizure of food “not fit to be eaten,” and
noting that plaintiff will have post-deprivation recourse to a
tort-law jury “trial in an action brought for the destruction of
his property”); Ingraham v. Wright, 430 U.S. 651 (1977)
(allowing corporal punishment for schoolchildren without a
hearing, and noting the availability of state-law remedies in
the form of both civil damages and criminal penalties); Hodel v.
Virginia Surface Min. & Reclamation Ass'n, Inc., 452 U.S. 264,
300 (1981) (allowing for pre-deprivation hearing to be waived
“in [an] emergency situation[]” where the aggrieved party would
receive a post-deprivation agency hearing); cf. Hudson v.
Palmer, 468 U.S. 517, 533 (1984) (“[U]nauthorized intentional
deprivation of property by a state employee does not constitute
a violation of the procedural requirements of the Due Process
Clause of the Fourteenth Amendment if a meaningful
postdeprivation remedy for the loss is available.”).
These cases illustrate that some remedy beyond APA
judicial review, even if it is state-law relief, has been
present even in emergency situations where the courts allow
15
agencies to dispense with pre-deprivation hearings.
The one
arguable break in this line of authority, which the government
does cite in passing, is Ewing v. Mytinger & Casselberry, 339
U.S. 594 (1950).
In Ewing, the court allowed a pre-deprivation
seizure of property where the only remedy was a judicial
proceeding at a later time.
But in that case, the Court’s
opinion was based on its view that the seizures were the nonfinal first step in a judicial proceeding rather than a final
agency action.
Id. at 598.
Obviously, that argument cannot be
made here, given the Supreme Court’s clarification in Sackett
that compliance orders constitute final agency action.
Beyond failing to explain how APA judicial review
could be sufficient, the government has not made even the less
demanding argument that this is one of the few unusual cases (in
the vein of Cold Storage and Ingraham) in which the agency
itself may dispense with providing internal due process
protections, and instead leave plaintiffs with only an outside
remedy such as state law.
A basic principle of administrative
law is that, barring extraordinary circumstances, the agency
itself must supply appropriate due process protections in the
first instance.
See, e.g., Gerator Corp. v. EEOC, 592 F.2d 765,
768 (4th Cir. 1979) (“[W]hen governmental agencies adjudicate or
make binding determinations which directly affect the legal
16
rights of individuals, it is imperative that those agencies use
the procedures which have traditionally been associated with the
judicial process.”)(quoting Hannah v. Larche, 363 U.S. 420, 442
(1960), reh’g denied, 364 U.S. 855 (1960)); Londoner v. City and
County of Denver, 210 U.S. 373 (1908) (establishing that the
government body effecting deprivation must supply procedure to
the persons to be deprived).
In this proceeding, the government’s main authority
for its contention that the agency itself need not provide due
process protections, and that a process outside the agency will
be sufficient, is Hodel v. Va. Surface Mining.
In Hodel,
however, the Supreme Court did not find that the aggrieved party
could be deprived of its property with recourse only to
procedures outside the agency.
To the contrary, the court
allowed the agency to dispense with predeprivation procedures in
an emergency situation given that the party would “receive[] a
full adjudicatory hearing before an administrative law judge,
with a right of appeal to an administrative board,” after the
agency’s action.
Hodel, 452 U.S. at 304.
Similarly, even if a
pre-deprivation hearing were not required in the present case,
the government has not persuaded the court that the agency may
dispense with any internal due process protections and throw the
matter into the judicial system.
17
Beyond its lack of support in federal administrative
law, the government’s request also asks the court to run afoul
of traditional rules prohibiting the government from cutting off
an aggrieved party’s access to judicial relief as a practical,
if not a formal, matter.
As discussed above, the Supreme Court
in Sackett highlighted several examples of the significant legal
consequences that flow directly from a compliance order,
including the potential exposure to “double penalties”: a
plaintiff who judicially challenges a compliance order and loses
on the merits could be subjected to a fine of up to $37,500 per
day for the underlying violation and an additional fine of up to
$37,500 per day simply for being in violation of the order
itself. See Sackett, 132 S. Ct. at 1375 (Alito, J., concurring).
This double penalty clarifies the insufficiency of APA
review for alleviating plaintiffs’ plight.
Yes, plaintiffs may
be entitled to APA review, but that review takes time.
While
plaintiffs await the outcome of an APA challenge, they have two
options: 1) they can undertake the necessary effort to comply
with the order, or 2) they can do nothing and remain in
violation.
Compliance is burdensome: it would require the
plaintiffs to engage in expensive environmental remediation in
order to “restore [the] impacted streams . . . to predisturbance grade and conditions,” Compliance Order ¶ 12,
18
representing both an outlay of money and the destruction of the
investment the plaintiffs have in the development efforts
already undertaken on the Property.
Moreover, if plaintiffs
complete the physical actions that the government has required,
such as submitting plans and restoring parts of the property,
review of those requirements under the APA will be useless,
since APA lawsuits cannot give rise to compensatory money
damages.
See 5 U.S.C. § 702 (providing review for “relief other
than money damages”); Bowen v. Massachusetts, 487 U.S. 879
(1988) (explaining that the APA does not allow monetary damages
in compensation for injuries).
On the other hand, noncompliance
creates the risk of an ever-increasing fine – possibly $75,000 a
day – if the APA challenge is ultimately unsuccessful.
Faced
with such a choice, the plaintiffs may essentially be deprived
of judicial review because the risks associated with noncompliance are so high, and compliance would mean that they must
expend huge sums of money and also lose the possibility of
enjoying judicial review as to some parts of the order.
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.
See Ex parte Young, 209 U.S.
123, 144-45, 147 (1908)(holding that “enormous fines and
19
possible imprisonment as a result of an unsuccessful effort to
test the validity of [a] law[]” have the same practical effect
as an outright prohibition on judicial review and therefore
violate due process); see also Thunder Basin Coal Co. v. Reich,
510 U.S. 200, 218 (1994)(describing the “situation confronted in
Ex parte Young” as one in which “the practical effect of
coercive penalties for noncompliance [with a statute] was to
foreclose all access to the courts.”); Yakus v. United States,
321 U.S. 414, 438 (1944) (explaining that the doctrine announced
in Ex parte Young is intended to prevent plaintiffs from being
forced to choose between “abandoning their businesses or
subjecting themselves to the penalties of [a statute] before
they have sought and secured a determination of the [statute’s]
validity.”).
The persons in Ex parte Young could only seek judicial
review after violating a law and exposing themselves to enormous
penalties, which led the Supreme Court to hold that their due
process rights had been violated.
144-45, 147.
Ex Parte Young, 209 U.S. at
Much like those in Ex parte Young, the plaintiffs
here face an illusory choice: although they can ostensibly
comply with the order or challenge it under the APA, the
extravagant and ever-increasing fine assessable for
noncompliance has the practical effect of forcing them to comply
20
with the very order they are challenging, at great expense, lest
they face economic ruin if their challenge is unsuccessful.
Sackett 132 S. Ct. at 1375 (Alito, J., concurring).5
See
And like
the persons in Ex parte Young, once the plaintiffs here have
complied, they will lose judicial review of any part of the
statute where compensatory money damages would be the only
suitable remedy, since those damages cannot be recovered under
the APA.
See 5 U.S.C. § 702.
Moreover, even if plaintiffs could receive review of
5
In his concurrence, Justice Alito described in detail the
contours of the dilemma faced by plaintiffs such as the
appellants in Sackett and the plaintiffs in this case:
The reach of the Clean Water Act is notoriously unclear.
Any piece of land that is wet at least part of the year
is in danger of being classified by EPA employees as
wetlands . . . [I]f property owners begin [construction]
on a lot that the [EPA] thinks possesses the requisite
wetness, the property owners are at the agency's mercy.
The EPA may issue a compliance order demanding that the
owners cease construction, engage in expensive remedial
measures, and abandon any use of the property. If the
owners do not do the EPA's bidding, they may be fined up
to $75,000 per day ($37,500 for violating the Act and
another $37,500 for violating the compliance order).
And if the owners want their day in court to show that
their lot does not include covered wetlands, well, as a
practical matter, that is just too bad. [Under the
EPA’s litigating position,] [u]ntil the EPA sues [the
property owners], they are blocked from access to the
courts, and the EPA may wait as long as it wants before
deciding to sue. By that time, the potential fines may
easily have reached the millions. In a nation that
values due process, not to mention private property,
such treatment is unthinkable.
21
the whole order under the APA after complying with it, the
Supreme Court has clarified that when “compliance is
sufficiently onerous and coercive penalties sufficiently potent
. . . a constitutionally intolerable choice [may] be presented.”
Thunder Basin, 510 U.S at 218.
Thus, compliance with the order
need not foreclose judicial review to the plaintiffs altogether
in order to violate their right to due process.
It is enough
that they face “sufficiently onerous” costs both to comply with
the statute and to violate it, and that they have no option for
review before facing this choice.
When a statutory scheme
forces a plaintiff into this situation, the scheme violates due
process.
In sum, the plaintiffs have identified property
interests, protected by due process, that are affected by the
EPA’s compliance order.
Firmly-established rules of
administrative law show that judicial review under the APA,
standing alone, does not provide a process sufficient to satisfy
the plaintiffs’ constitutional rights.
Moreover, if they wish
to challenge the validity of the government’s order, via the APA
or otherwise, the plaintiffs appear to face an implacable
choice: incur significant expense and comply with the terms of
what they believe to be a facially invalid order, thereby giving
up the possibility of effective judicial review of significant
22
parts of the order, or challenge the order and face a ruinous
fine if they lose their case.
Ex Parte Young and its progeny
stand for the proposition that being forced to make such a
choice is, in some circumstances, an abridgement of the Fifth
Amendment’s guarantee of procedural due process.
Accordingly,
the plaintiffs have alleged a plausible procedural due process
claim and the EPA’s motion to dismiss that claim is denied.
B. Substantive Due Process
The protection afforded by the substantive component
of Fifth Amendment due process “prevents the government from
engaging in conduct that ‘shocks the conscience,’ or interferes
with rights ‘implicit in the concept of ordered liberty.’”
United States v. Salerno, 481 U.S. 739, 746 (1987)(internal
citations omitted).
“[S]ubstantive due process [protections]
have for the most part been accorded to matters relating to
marriage, family, procreation, and the right to bodily
integrity.”
Albright v. Oliver, 510 U.S. 266, 271-72 (1994).
“In a due process challenge to executive action, the
threshold question is whether the behavior of the governmental
official is so egregious, so outrageous, that it may fairly be
said to shock the contemporary conscience.”
23
County of
Sacramento v. Lewis, 523 U.S. 833, 847 n. 8 (1998)6 ; see e.g.,
Rochin v. California, 342 U.S. 165, 172(1952)(forcible stomach
pumping of suspect in an effort to produce swallowed evidence
“shock[ed] the conscience” and was held to be a violation of
substantive due process.).
met.
This is a high standard not easily
As the Eighth Circuit explained in Golden ex rel. Balch v.
Anders:
Substantive due process is concerned with violations of
personal rights [...] so severe [...] so
disproportionate to the need presented, and [...] so
inspired by malice or sadism rather than a merely
careless or unwise excess of zeal that it amounted to
brutal and inhumane abuse of official power literally
shocking to the conscience.
324 F.3d 650, 652-53 (8th Cir. 2003)(internal quotation marks
omitted).
One may question the scope of the EPA’s authority
under the CWA and even take umbrage with the methods employed by
the agency in an effort to vindicate its expansive
interpretation of the statute’s jurisdictional mandate.
6
See
Although Lewis involved evaluation of a substantive due process
claim arising under the Fourteenth Amendment, the standard is
equally applicable to a claim arising under the Fifth Amendment.
See Piechowicz v. United States, 885 F.2d 1207, 1214 n. 9 (4th
Cir. 1989); see also Malloy v. Hogan, 378 U.S. 1, 26 (1964)
(Harlan, J., dissenting)(noting that “‘Due process of law is
secured against invasion by the federal Government by the Fifth
Amendment and is safeguarded against state action in identical
words by the Fourteenth.’”)(internal citations omitted).
24
Sackett, 132 S. Ct. at 1375 (Alito, J., concurring)(noting that
“[t]he reach of the Clean Water Act is notoriously unclear” and
stating that “[w]hen Congress passed the Clean Water Act in
1972, it provided that the Act covers ‘the waters of the United
States.’ But Congress did not define what it meant by ‘the
waters of the United States’ . . . . Unsurprisingly, the EPA . .
. interpreted the phrase as an essentially limitless grant of
authority. We [have previously] rejected [the EPA’s] boundless
view . . . but the precise reach of the Act remains
unclear.”)(internal citations omitted).
Even after fully crediting the plaintiffs’ assertions
that the EPA’s decision to issue the order was predicated on
“irrational animus and improper retaliatory motivation,” see Pl.
Am. Compl. ¶¶ 4, 5, 21, 22, the complaint contains no
allegations of conduct of a sufficient egregiousness that rises
to the level of a substantive due process violation.
Quite
simply, the complaint’s allegations concerning the EPA’s
enforcement efforts do not shock the conscience.
Accordingly,
the plaintiffs’ substantive due process claim fails as a matter
of law.
C. Equal Protection
The Equal Protection Clause of the Fourteenth
Amendment does not apply to the Federal Government; however, it
25
has long been established that the Fifth Amendment’s guarantee
of due process contains an equal protection component.
See
Bolling v. Sharpe, 347 U.S. 497 (1954); Adarand Constructors,
Inc. v. Pena, 515 U.S. 200, 217 (1995) (holding “the equal
protection obligations imposed by the Fifth and the Fourteenth
Amendments [to be] indistinguishable” and citing cases).
In Village of Willowbrook v. Olech, the Supreme Court
held that an equal protection claim arises for a “class of one”
when a “plaintiff . . . has been intentionally treated
differently from others similarly situated and . . . there is no
rational basis for the difference in treatment.”
Village of
Willowbrook v. Olech, 528 U.S. 562, 564 (2000)(per curiam).
The plaintiffs assert that they have a “class of one”
claim because the EPA’s decision to issue a compliance order was
based on “improper” and “irrational animus.”
¶¶ 4, 5, 21, 22, 63, 66.
See Pl. Am. Compl.
But an allegation of animus is not
enough: a “class of one” claim cannot survive a motion to
dismiss if it is not supported by an allegation that the
plaintiff was treated differently than some similarly situated
party.
See Olech, 528 U.S. at 564; Ruttenberg v. Jones, 283 F.
App'x 121, 131 (4th Cir. 2008).
Ruttenberg is instructive on this point.
In
Ruttenberg, the plaintiffs, who owned a once-successful billiard
26
club, alleged that outrageous actions by a police officer
seriously damaged the club’s commercial viability.
283 F. App'x at 124-129.
Ruttenberg,
The officer allegedly disliked his
girlfriend’s friendship with Ruttenberg, the club owner, and set
out to harm Ruttenberg and his business.
See Id.
The officer’s
campaign included steps such as offering to dismiss charges
against criminal suspects if they would “help facilitate drug
transactions on the premises” of Ruttenberg’s club, so that the
officer could then arrange for a raid of the club when drug
transactions were occurring.
Id. at 125.
Despite these
allegations, the Fourth Circuit rejected a “class of one” claim
because, among other defects, “the complaint fails to allege the
existence of similarly situated individuals.”
Id. at 131.
Thus, even where the alleged conduct is outrageous and plainly
motivated by animus, plaintiffs must state that similarly
situated persons were treated differently to make a successful
“class of one” claim.
In this case, plaintiffs have likewise failed to point
out some similarly situated party who received different
treatment.
opposite.
If anything, the plaintiffs actually allege the
The attached bankruptcy order demonstrates that the
plaintiffs’ predecessors in interest were subject to some form
of EPA regulatory enforcement action involving the CWA.
27
See
“Bankruptcy Order”7 at * 5 (limiting carryover liability for CWA
violations incurred by prior owners to $50,000 remediation
fund).
The fact that the EPA pursued regulatory action under
the CWA against the prior owners, who are about as “similarly
situated” as one could be to the current plaintiffs,
demonstrates that the plaintiffs have not been singled out in
the fashion necessary for a “class of one” claim.
Accordingly,
the plaintiffs’ equal protection claim fails as a matter of law.
Conclusion and Order
For the foregoing reasons, the EPA’s motion to dismiss
is granted in part and denied in part.
The motion is granted with respect to the plaintiffs’
substantive due process and equal protection claims.
As both
claims are primarily set forth in the complaint’s Fourth Claim
for Relief, the court hereby ORDERS that the Fourth Claim for
Relief is dismissed in its entirety.
To the extent that the
complaint seeks relief for these claims elsewhere in the
complaint, the court ORDERS that such claims are also dismissed.
The motion is denied with respect to the plaintiffs’
procedural due process claim.
7
Attached as “Exhibit C” to plaintiffs’ complaint. (ECF 1-1).
28
The Clerk is directed to transmit copies of this
order to counsel of record and any unrepresented parties.
ENTER: September 30, 2015
John T. Copenhaver, Jr.
United States District Judge
29
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