- A recent memorandum from the U.S. Department of Justice's (DOJ) Environment and Natural Resources Division (ENRD) provides guidance on civil and criminal enforcement of environmental laws. DOJ will continue to pursue environmental enforcement, but will reserve criminal prosecution for more egregious violations and those that involve providing false information to the government.
- The ENRD memorandum implements recent DOJ guidance from the Attorney General and Associate Attorney General prohibiting the use of agency guidance documents as a basis for affirmative civil enforcement cases.
- The memorandum lists a series of enforcement principles and priorities.
The U.S. Department of Justice's (DOJ) Environment and Natural Resources Division (ENRD) recently implemented new DOJ policies at the Division level. ENRD Acting Assistant Attorney General Jeffrey H. Wood issued a memorandum on March 12, 2018, that applies earlier policy memoranda from the Attorney General and the Associate Attorney General. The ENRD memorandum titled "Enforcement Principles and Priorities" implements the broader DOJ policies at the Division level and provides more specifics about factors that should be considered in both civil and criminal enforcement cases.
The recent memorandum should guide company compliance efforts. Risk areas to focus on should obviously include the major federal environmental statutes, but they also should include internal controls to detect and prevent situations where false monitoring and other required information is provided to the government. Companies should be particularly vigilant with respect to the types of activities specifically mentioned in the memorandum: worker safety, illegal imports of endangered plants and animals, illegal fish harvesting, renewable fuel credit programs, vehicle emissions and lead-based paint. In unfortunate situations where companies find themselves under investigation, they should look to these principles to guide their discussions with enforcement authorities.
A number of the concepts in the recent ENRD memorandum are expressed in earlier guidance documents. The new memorandum does tie those principles to fundamental philosophies about the role of the DOJ and of the federal government, in general. ENRD can be expected to continue pursuing civil and criminal enforcement in the types of cases that make up the core of its traditional enforcement efforts, although it will likely pursue more cases through civil enforcement rather than criminal enforcement, and likely rely more on state-level enforcement where practicable. ENRD is also less likely to rely on novel legal theories that are not supported by plain statutory language to pursue enforcement cases.
Nothing has changed with respect to the tools that the DOJ has to pursue companies and individuals. Companies can still be held responsible for the actions of employees through the doctrine of respondeat superior for those actions that are within the scope of employment and for the benefit of the company. It remains DOJ policy to pursue criminal actions against individual corporate managers where warranted – not only where they personally engaged in the violations, but, in some cases, through the Responsible Corporate Officer doctrine to pursue managers who were in a position to prevent violations but failed to do so. It also is still the case that the "knowing" mental state standard for a number of environmental crimes requires only that a defendant knowingly did something that violated the law, and not that the defendant knew that the action violated the law. That standard creates a significant gray area between civil and criminal enforcement, and it provides the government with a considerable amount of discretion over how it will pursue enforcement cases.
Both DOJ and the U.S. Environmental Protection Agency (EPA) continue to provide incentives to conduct environmental compliance audits and voluntarily disclose violations. The ENRD memorandum references the U.S. Attorney's Manual sections on prosecutorial discretion,1 both of which include cooperation in an investigation as a factor to consider. The section pertaining to prosecution of business organizations also includes the timely and voluntary disclosure of wrongdoing. The ENRD memorandum also references a 1991 ENRD memorandum titled "Factors in Decisions on Criminal Prosecutions for Environmental Violations in the Context of Significant Voluntary Compliance or Disclosure Efforts by the Violator" that lists the following factors:
- Voluntary Disclosure
- Preventative Measures and Compliance Programs
- Pervasiveness of Noncompliance
- Internal Disciplinary Action
- Subsequent Compliance Efforts
EPA's 2000 Audit Policy2 reduces civil penalties and declines criminal referrals to DOJ under certain conditions where companies discover violations through environmental audits and compliance programs and promptly discloses them to the government.
Earlier Guidance from the Attorney General and Associate Attorney General
As discussed in an earlier Holland & Knight alert (see "Recent Changes Expected to Impact Environmental Enforcement"), the Attorney General issued a memorandum on Nov. 16, 2017, titled "Prohibition on Improper Guidance Documents" that prohibited DOJ from issuing "guidance documents that purport to create rights or obligations" that would circumvent the formal rule-making process.
On Jan. 25, 2018, then-Associate Attorney General Rachel Brand issued a memorandum titled "Limiting Use of Agency Guidance Documents in Affirmative Civil Enforcement Cases." The Associate Attorney General oversees several DOJ components, including the Civil Division and ENRD. Brand also served as the Chair of DOJ's Regulatory Reform Task Force. The January 2018 memorandum expanded on the Attorney General's memorandum by prohibiting the use of other agencies' non-rule guidance documents in affirmative civil enforcement cases. That expanded guidance has particular relevance in the context of Civil False Claims Act cases brought by the Civil Division (e.g., cases based on U.S. Department of Defense "guidance" about what is expected from government contractors) and in the context of civil environmental enforcement by ENRD (e.g., reliance on "guidance" from EPA).
The ENRD Memorandum
The seven enforcement principles and five enforcement priorities of the ENRD memorandum are listed below, along with some comments:
1. Adhering to the Impartial Rule of Law
Comment: This principle references both the November 2017 Attorney General memorandum and the March 2018 Associate Attorney General memorandum, as well as the Attorney General's June 2017 prohibition against requiring payments to non-profit organizations and other third parties as part of case resolutions.
2. Enhancing Cooperative Federalism
Comment: Encourages state enforcement and joint federal/state partnerships.
3. Exercising Pragmatic Decisionmaking
Comment: This principle emphasizes exercising "sound enforcement discretion" and references a quote from Deputy Attorney General Rod Rosenstein: "The ideal prosecutor is dogged, but not an automaton who proceeds at all costs. Nor is the ideal prosecutor a zealot who demands criminal punishment for every arguable violation of the law."
4. Employing the Full Range of Enforcement Tools
Comment: Encourages informal and formal agency-level resolutions where possible, explaining the process of civil enforcement referrals to ENRD, and stating that criminal prosecution is reserved for situations "where the facts show a requisite criminal intent, and the conduct creates a serious danger or risk of danger, has severe environmental effects, disregards human safety or the environment, involves dishonest or false conduct that undermines the statutory scheme, or involves repetitive significant violations notwithstanding administrative and civil enforcement efforts." It is this section that references factors that DOJ and EPA consider in their exercise of discretion.
5. Coordinating with Agencies
Comment: States that ENRD will continue to follow enforcement priorities of referring agencies, but reserving DOJ's authority to "pursue a given case and, if so, on what terms."
6. Collaborating with United States Attorneys' Offices
7. Protecting Taxpayers and the Public Fisc
1. Advancing the "Back to Basics" Focus on Clean Water, Clean Air, and Clean Land
Comment: Focuses on core statutory violations. Prioritizes referrals tied to client-agency priorities, such as lead-based paint contamination. Emphasizes protection of natural resources and public lands.
2. Maintaining the Integrity of Environmental Laws and Programs
Comment: Emphasizes enforcement of self-monitoring and reporting requirements, and prosecuting false reports (e.g., fraud in EPA's Renewable Fuel Standard program and devices that cheat on vehicle emissions tests).
3. Fighting Fraud and Recovering Taxpayer Funds
4. Fighting Violent and/or Organized Crime
5. Protecting America's Workers, Competitiveness, and Infrastructure
Comment: Continues the focus on workplace safety violations that can be prosecuted under environmental statutes (e.g., asbestos removal prosecutions under the Clean Air Act) as well as on prosecutions for illegally sourced products (e.g., timber and seafood) and "acts of sabotage or damage against domestic energy pipelines and other critical infrastructure."
Conclusion and Considerations
Companies are encouraged to review their compliance programs to ensure that environmental risks are addressed, to conduct compliance audits to confirm that their policies and procedures are adequate and are being followed, and to consider disclosing violations in order to avoid or mitigate impact to their businesses.