[co-author: Randy Brogdon]*

On May 13, nine state attorneys general filed a complaint against the U.S. Environmental Protection Agency (EPA) challenging EPA’s COVID-19 enforcement discretion policy, which we discussed in previous articles here and here. The plaintiff states are New York, California, Illinois, Maryland, Michigan, Minnesota, Oregon, Vermont and Virginia. This article will discuss the complaint and what it means for regulated entities going forward.

Basis of the Complaint

The complaint levies four primary allegations against EPA and its policy: (1) the discretion that EPA allows in the policy exceeds EPA’s legal authority; (2) EPA is abdicating its environmental enforcement responsibility under the law; (3) EPA implemented the policy without first providing opportunity for notice and comment; and (4) the policy is arbitrary and capricious. For relief, the AGs first request a declaratory judgment that the “policy was adopted without observance of procedure required by law; is in excess of EPA’s statutory jurisdiction, authority, or limitations; is not in accordance with law; and is arbitrary and capricious.” Additionally, the AGs request (1) that the policy be vacated; (2) that EPA be enjoined from applying the policy; (3) lawsuit/attorneys’ fee reimbursement; and (4) any other relief deemed “just and proper.”

To support these allegations and prayers for relief, the AGs outline their grievances along relatively predictable lines. The complaint alleges — numerous times — that the policy does not provide enough transparency to states and citizens alike. EPA’s decision to not include overtly mandatory discretion recipient reporting requirements appears to be a major sticking point. Instead, the policy requires that entities must report to EPA when it is “reasonably practicable” to do so, but should, in any case, maintain internal documentation of noncompliance, to be made available to EPA on request.

The other major theme of the complaint deals with the general level of allegedly permissive language and compliance relaxation that the policy contains, leading, as the argument goes, to all-but-assured adverse public health impacts via increased pollution, as well as increased strain on state enforcement agencies. The AGs point to several specific allowances under the policy, such as the increased storage time allowance for generators of Resource Conservation and Recovery Act (RCRA) hazardous waste and the allowance for animal feeding operations (AFOs) to avoid designation as a concentrated AFO (CAFO). The complaint also takes issue with the policy’s treatment of public water system monitoring requirements, even though the policy explicitly states that “EPA expects operators of such systems to continue normal operations and maintenance as well as required sampling to ensure the safety of our drinking water supplies.”

For examples of what they would prefer EPA’s policy to look like, the AGs point to the enforcement discretion policies of Michigan (see its policy here; see our article on the policy here) and California (see a statement on its policy here), stating “that [those policies] set forth an expectation of compliance with all requirements but [also allow] for case-by-case consideration of regulatory flexibility where compliance is not feasible.” In states like Michigan, each entity receiving enforcement discretion is tracked on a publicly available spreadsheet posted on the state agency’s website.

What This Lawsuit Means for Enforcement Discretion

As we indicated in a previous article, lawsuits such as this are an unsurprising response to EPA’s policy. But while the lawsuits are anticipated, they should not be ignored. All companies and their counsel, regardless of the state in which company operations are located, should closely monitor this and other policy opposition actions (such as this April 16 lawsuit filed by an environmental group) as they continue to develop. All companies should also continue to remain cautious and thoughtful when relying on EPA’s policy for any sort of environmental enforcement relief. Thorough documentation tying noncompliance to COVID-19 will be critical for companies seeking to avail themselves of EPA’s policy or state policies. All events of noncompliance or other deviations from normal compliance conditions should be internally documented with an eye toward preserving all applicable legal defenses in the event of state or third-party environmental group lawsuits. Additionally, timely communication between EPA; state, tribal or local agencies; and parties’ environmental, health and safety (EHS) staff will remain vital to maintaining consistency with the policy.

However, companies that have operations located within the nine states that filed suit should proceed with additional caution. Given that these states have now taken legal action against EPA’s policy and its use, further reliance on the policy in these states may carry increased or additional risks. For example, these states may begin to show a heightened interest in making inquiries designed for public disclosure regarding policy-protected noncompliance, or they may otherwise direct state agencies to increase scrutiny of all regulated operations with a federal component, such as those authorized under Clean Air Act (CAA) Title V permits.

Finally, all parties should continue to understand that the benefits of the policy, such as they are, are limited only to EPA enforcement obligations. Nonfederal agencies remain separate and apart from the policy and are not bound by its terms. Continue to consider a close review of all applicable state, tribal and local agency enforcement discretion policies, where these policies exist.

*Troutman Sanders