Three Important Memos Affecting EPA Enforcement Actions

by Jackson Walker
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Jackson Walker

Three memos with potentially important implications for enforcement were recently issued—one by EPA and two by the U.S. Department of Justice (DOJ).

On January 9, Jeffrey Wood issued a memo to all Deputy Assistant Attorneys General and Section Chiefs in the Environmental and Natural Resources Division concerning settlement payments to third parties in environmental cases.  The Wood memo is a specific application to ENRD cases of a more general DOJ memo from June 2017 prohibiting settlement payments to third parties except were certain narrowly defined exceptions are met.  The Wood memo has the effect of prohibiting so-call Supplemental Environmental Projects (SEPs) to settle civil or criminal cases except where the purpose of the SEP is to “directly and effectively” remedy the environmental harm sought to be remedied by the action being settled.  A settlement provision stating that certain monies paid in settlement of a claim will fund habitat improvements by a particular non-governmental organization that is not a party to the action will not meet this standard.

The memo applies only to non-governmental agencies, so there would be no prohibition against SEPs involving payment to a governmental entity.

Also, there is an exception for joint state-federal and tribal-federal actions.  In those cases, ENRD would not be prohibited from entering into an agreement that included a SEP in settlement of the state or tribe’s claims, even if the SEP involved payments to a non-governmental third party.  With respect to Texas, however, some years ago then-Attorney General and now Governor Greg Abbott determined that Texas state law prohibits using SEPs to settle state-law environmental claims.

The second memo was issued on January 22 by Susan Bodine, the Assistant Administrator for the Office of Enforcement and Compliance.  This memo provides interim guidance to EPA regional administrators on “Enhancing State Planning and Communication on Compliance Assurance Work in Authorized States.”  The Bodine memo states that EPA’s twin goals are cooperative federalism and compliance with the law.  The memo recognizes states as the primary day-to-day implementers of their authorized programs.  It also instructs regional EPA administrators to conduct senior leadership meetings with each of their states on a regular basis to ensure that there are no surprises, and it includes a non-exhaustive list of topic areas to be discussed.

Cooperative federalism is not, of course, a new concept.  Many federal environmental statutes, including the Clean Air and Water Acts, require it.  However, critics have complained that, in the recent past, EPA has given only lip service to cooperative federalism and has, in fact, regulated from the top down using rules, policies, and standards crafted by EPA with little or no meaningful state input.  The Bodine memo appears to reflect a renewed commitment to a more robust cooperative relationship between EPA and the states.

Finally, on January 25, the DOJ issued a memo stating that, in representing federal agencies (which would include EPA), DOJ will not treat agency guidance documents, which have not gone through notice and comment rulemaking like regulations must, as binding on the public. Therefore, an enforcement action cannot be brought for failing to comply with agency guidance, and the failure to comply with such guidance cannot be used to prove a violation of a statute or regulation.

This memo addresses a long standing complaint that agencies often adopt so called interpretive rules, which explain how the agency interprets the law or regulations and which are supposed to be non-binding, but then treat them as if they are binding legal authority, just like statutes and rules enacted after notice and comment.

One thing not addressed by this memo is the complaint often made by both states and private parties that, in the past, EPA has departed from its guidance documents to reject state plans submitted for EPA approval, even though the state has followed EPA’s guidance in crafting the plan.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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