Environmental Crimes Blog

A Major Change to the Migratory Bird Treaty Act

On December 22, 2017 the Department of the Interior (“DOI”) issued its revised interpretation of the Migratory Bird Treaty Act’s (“MBTA”) prohibition on the take of migratory birds.  Opinion M-37050 is the result of the DOI Solicitor’s Office review of the MBTA’s prohibition on take.  It is a complete reversal of Opinion M-37041 which had concluded that “the MBTA’s broad prohibition on taking and killing migratory birds by any means and in any manner includes incidental taking and killing.”  No longer the case. 

Opinion M-37050 concludes that “consistent with the text, history, and purpose of the MBTA, the statute’s prohibitions on pursuing, hunting, taking, capturing, killing, or attempting to do the same apply only to affirmative actions that have as their purpose the taking or killing of migratory birds, their nests, or their eggs.” (emphasis added).  Stated plainly, if the take of a migratory bird, its nest, or eggs that is incidental to an activity that is lawful, it does not violate the MBTA.  And that means that the MBTA’s criminal provisions do not apply either.

Opinion M-37050 impact industries that have wrestled with MBTA compliance, particularly those facing potential incidental take of migratory birds.

More later.

As always, feel free to contact me at walter.james@jamespllc.com

WDJiii

Trump Administration EPA to Focus Criminal Enforcement on Significant and Egregious Violators, Citing 1994 “Devaney Memorandum”

This is a guest post by Andrew Brought of Spencer Fane in Kansas City.

A high-ranking Environmental Protection Agency (EPA) enforcement official in the Trump Administration recently cited a 1994 memorandum by Earl Devaney, then Director of EPA’s Office of Criminal Enforcement, as presenting guiding principles to select cases for criminal enforcement of environmental violations. The January 12, 1994, memorandum, “Exercise of Enforcement Discretion,” is often referred to as the “Devaney Memorandum,” and it is available at this link: https://www.epa.gov/sites/production/files/documents/exercise.pdf  This may signal that criminal enforcement of environmental laws under the Trump Administration will be limited to situations in which there has been significant actual or threatened environmental harm and truly culpable conduct.

Earlier during prepared remarks the official said, “We will be enforcing environmental laws in the Trump Administration,” although at that time he was not specifically discussing criminal enforcement.

The EPA official’s reference to the Devaney Memorandum came during a continuing education event hosted by the American Bar Association Section of Environment, Energy, and Resources attended by the authors and in response to a question posed by co-author Jim Price.  In his question, Price noted that environmental enforcement cases can be, and frequently are, brought under either civil or criminal provisions based on largely the same facts, a position echoed by the EPA official.

The Devaney Memorandum notes that EPA is obligated to “instill confidence that EPA’s criminal program has the proper mechanisms in place to ensure the discriminate use of the powerful law enforcement authority entrusted to us.”  The Devaney Memorandum further states,

“The criminal provisions of the environmental laws are the most powerful enforcement tools available to EPA.  Congressional intent underlying environmental criminal provisions is unequivocal: criminal enforcement authority should target the most significant and egregious violators.”

The Devaney Memorandum states that criminal case selection will be guided by two general measures.  The first is the presence of actual harm or the threat of significant harm to human health or the environment.  The Devaney Memorandum sets out four factors that comprise this measure, including illegal discharges that have an identifiable and significant harmful impact. The Devaney Memorandum states that failure to report a discharge may be an additional factor favoring criminal investigation but that generally the failure to report, alone and without actual or threatened environmental harm, should not cause an investigation to be criminal instead of civil. 

Culpable conduct is the second general measure guiding criminal case selection.  The Devaney Memorandum cites five factors comprising this measure, including a history of repeated violations, deliberate misconduct, concealment or falsification of records, tampering with equipment, and operating without a permit.

The Devaney Memorandum concludes with these statements and admonition:

“EPA has a full range of enforcement tools available—administrative, civil-judicial, and criminal.  There is universal consensus that less flagrant violations with lesser environmental consequences should be addressed through administrative or civil monetary penalties and remedial orders, while the most serious environmental violations ought to be investigated criminally.  The challenge in practice is to correctly distinguish the latter cases from the former.” (Emphasis added.)

The authors agree and trust that a renewed focus on the factors set forth in the Devaney Memorandum will guide EPA to choose only the most significant and egregious violations for criminal enforcement of environmental laws.

More later.

As always, feel free to contact me at walter.james@jamespllc.com

WDJiii

 

How the EPA Monitors Compliance

This is a guest post from Brett A. Podolsky. Mr. Podolsky is a criminal defense attorney in Houston, Texas, is Criminal Legal Specialist certified by the Texas Board of Legal Specialization and was the Assistant Criminal District Attorney for the State of Texas.

How the EPA Monitors Compliance

The Environmental Protection Agencies (EPA) ensures that a regulated entity complies with environmental regulations and laws. The EPA monitors compliance of regulatory agency actions performed in order to determine if a certain facility (or facilities group, e.g. plants in a geographic location, corporate structure, or sector) is compliant with the applicable law(s). 

EPA compliance monitoring includes 1) inspector support, 2) compliance monitoring (on-site), e.g. investigations, inspections, and evaluations (including review of documentation, permits, and data), 3) compliance monitoring (off-site), e.g. support, data collection, oversight, reviews, coordination of programs, and reporting, and 4) formulation and/or implementation of strategies for compliance monitoring.

What is EPA Compliance

Regardless of your facility’s location in the United States, you must adhere to certain regulations and rules put in place by the EPA.  Environmental compliance is a big deal. If you’re uncertain about what EPA compliance means, you might not be in compliance. Non-compliance can mean monetary fines, penalties, and violations. 

EPA compliance means conforming in the fulfillment of EPA’s requirements. Conformity simply means the business must meet the requirements set forth by EPA:

• This means the business must do everything required – it can’t pick and choose what to do with the EPA requirements.

• Compliance means the business must do everything it’s required to do – correctly and completely. EPA compliance might sound simple and straightforward, but it can be very difficult for many businesses. 

Compliance Monitoring

EPA encourages facilities and businesses to voluntarily identify and disclose its violations. EPA may also discover violations through complaints or tips received from the public. However, if the business or organization doesn’t speak up, it may later face civil or criminal violations and enforcement by EPA.

Inspections, civil investigations, information requests, record reviews, and other methods are used by the EPA to monitor compliance:

• Inspections are an essential component of EPA’s efforts to monitor compliance. EPA and/or regulatory partners perform compliance inspections. The inspection is a visit to the site or facility to gather information needed to ascertain if the entity is in compliance. Pre-inspection activities are typically included beforehand. An inspection may involve a short walk-through taking hours to an event taking weeks to complete.

• An evaluation under the Clean Air Act may involve a Full or Partial Compliance Evaluation (FCE/PCE). An FCE involves a complete evaluation of the facility’s compliance status. An FCE may occur through several PCEs. 

• A civil investigation is a detailed assessment of the facility’s compliance status. Such an investigation usually takes several weeks to complete.

• A record review involves EPA’s review of the facility’s records. Such a review occurs at the agency’s offices—either at EPA, local, or state offices. It may occur in tandem with an on-site inspection. 

• An information request is a written request for data when 1) an inspection, investigation or review indicates that a potential problem may exist, 2) EPA receives a referral concerning a potential problem, 3) a study conducted indicates a possible compliance issue, or 4) the facility/entity has demonstrated an ongoing “pattern of non-compliance.”

EPA’s audit policy underscores the importance of regulated entities’ willingness to discover, report, and ameliorate violations of U.S. environmental regulations and laws. If all regulated entities agreed to self-identify and disclose violations, formal investigations or enforcement actions would be unnecessary.

How the EPA Enforces Compliance

If a regulated entity doesn’t comply, or the EPA orders cleanup, enforcement actions will be initiated. Because EPA is empowered to protect the environment and human health, it will attempt to enforce the law. Environmental justice (EJ) works to protect those communities “disproportionately affected” by pollution. In addition, EJ:

• Plans, implements, and enforces EPA compliance

• Identifies cases of interest to pursue

• Develops solutions

Enforcement Programs

Many federal environmental statutes have both civil and criminal components to address violations:

1. Civil administrative actions involve non-judicial enforcement actions by EPA (or a state). An administrative action may take the form of: • An order, with or without penalties, directing a business, individual, or other entity to come into EPA compliance, e.g. clean up a site. • A notice of violation, e.g. a Superfund notice.
2. 2. Civil judicial actions involve the court. These lawsuits are filed in a court of law, against entities or persons who failed to 1) comply with regulatory or statutory requirements, 2) comply with a prior administrative order, or 3) compensate EPA for costs relating to the cleanup of a Superfund site (or commit to performing clean up tasks). Civil judicial cases are filed on behalf of EPA by the U.S. Department of Justice.
3. Civil cases are usually filed by a State Attorney General’s Office on behalf of a state government.
4. Criminal actions may occur when a state or EPA enforces against an entity or individual by bringing a criminal action. A criminal action is typically reserved for more serious violations – those considered to be “willfully” or “knowingly” committed by the offender. If convicted, the offender faces imprisonment and/or significant fines.

What Enforcement Issues Does EPA Face?

The author of “Enforcement at the EPA: High Stakes and Hard Choices,” (Revised Edition, 2012) writes that the EPA is challenged by a static or declining workforce. 

EPA’s FY 2018 budget proposes to do more with much less. In July 2017, a House bill proposed to cut EPA’s funding by more than $500 million. 

That said, a civil or criminal action by the EPA must be taken extremely seriously. It’s relatively easy for businesses and organizations to conflict with EPA’s seven statutes and 44 programs.

Thanks for the information Brett! 

More later.

As always, please feel free to contact me at walter.james@jamespllc.com

WDJiii

Criminal Enforcement under the Trump/Pruitt USEPA

On November 16, 2017, the ABA sponsored a “brown bag” session that featured USEPA Deputy Assistant Administrator for OECA, Patrick Traylor. After some opening remarks in which he assured the audience that the Trump Administration will be enforcing the environmental laws, he took questions from the participants.

My good friend, Jim Price (Spencer Fane, out of Kansas City) asked Traylor a question regarding the Trump Administration’s enforcement position on which types of cases will head in the criminal direction as opposed to civil enforcement.  In particular, the question focused on how will the current USEPA decide which cases are brought as criminal cases versus those brought as civil cases (in the past there has been a sense that the primary distinguishing factor has been how the case initially arose – USEPA CID or the civil side).

After allowing that, because of the general intent mens rea, there is no real difference between a civil and a criminal matter, Traylor specifically referenced the 1994 Devaney Memorandum as the key directive for the Trump Administration in determining whether a case should go criminal versus civil.   The 1994 Devaney Memorandum concludes that only the most significant and egregious violators ought to be investigated and prosecuted criminally.  The 1994 Devaney Memorandum can be found here: https://www.epa.gov/sites/production/files/documents/exercise.pdf

A BIG SHOUT OUT to the ABA and the fine people at Sidley (Ben Tannen, Justin Savage) for organizing/hosting/moderating (as well as all of the others behind the scenes) for making the event a success.

Also, a shout out to my friend Andrew Brought (also Spencer Fane, out of Kansas City) for inspiring this blog post.

More later.

As always, feel free to contact me at walter.james@jamespllc.com

WDJiii

Cell Phone Searches as Evidence

Smartphones are everywhere. One question regarding smart phones is whether law enforcement can force an individual to provide the password or personal identification number to unlock your phone.  So far, most courts say no.  The reasoning is that having to provide your passcode is tantamount to self-incriminating testimony. 

Generally speaking, law enforcement is required to obtain a search warrant before it can search electronic devices. Even the use of biometric information to unlock a phone still requires a search warrant to access the smart phone (you may be compelled to give up your fingerprint under certain “reasonable suspicion” conditions and that could also apply to facial recognition).  The warrantless searching of cellphones was ruled unconstitutional by the SCOTUS in 2014, see Riley v. California, 134 S.Ct. 2473 (2014).  Remember, however, there is the so-called “border search” exception which allows federal authorities to conduct searches within one hundred (100) miles of a U.S. border without a search warrant, though and that includes smartphones.  I know of no case where this has been applied in an environmental criminal investigation; however, it is not beyond the pale.  Ask yourself if your facility is within one hundred (100) miles of a US border. 

This also becomes important because of the prevalence of individuals bringing their smartphone to work and the use of their personal smartphone for company business.

So, how do you protect your company and yourself from a warrantless search of your smartphone? Require the criminal investigator to have a search warrant.  When the search warrant is presented, get a copy of it and READ IT.  If it does not allow for the collection of cell phones and cell phone pass codes, do not give up your cell phone or the pass code.  Second, your company needs to have a policy in place that requires the employee to use the “pass code” setting on the smartphone to set up a pass code (preferably a six-digit pass code) to unlock the cell phone.  Without a warrant, you cannot be compelled to provide the pass code (this is different than facial recognition or thumbprint).  So be forewarned.

More later.

As always, feel free to contact me at walter.james@jamespllc.com

WDJiii

Election Anniversary: Regulatory Rollback, Stories Over Statistics, and Pressure for Local Enforcement

Back on September 6, 2017, I wrote about the downturn in enforcement by the USEPA. Below is a guest post from my good friend James Smith with Schirrmeister Diaz-Arrastia Brem LLP in Houston, Texas, that somewhat confirms the downturn in federal enforcement.

. . .

While the EPA is rolling back some significant regulations, and is emphasizing stories over enforcement statistics, the pressure for environmental enforcement at the local level appears to be staying strong. In interviews, EPA Administrator Pruitt does not seem to challenge the statistics that show lessened enforcement; rather, he points to individual cases as evidence of his personal commitment to environmental enforcement. In essence, he wants to show his commitment with stories, not statistics.  One case that he has specifically mentioned is the San Jacinto Waste Pits Superfund Site.  Mr. Pruitt points to his insistence on a removal remedy, over the objection of the companies who will be paying for the removal, as showing his commitment.

Anecdotal evidence indicates many local environmental authorities are trying to increase environmental enforcement in this context. For example, I have heard of local environmental enforcement professionals being asked to show increased action, and of them needing to remind their supervisors that environmental cases are often difficult and time consuming to prepare.  I see no indication that the pressure in local communities to increase environmental enforcement will lessen.  Indeed, I sense that this pressure is ongoing even in some “red” state communities.

. . .

More later.

As always, feel free to contact me at walter.james@jamespllc.com

WDJiii

Position of USEPA Region 6 Administrator

Following somewhat of a trend, I would like to announce that I am not interested in the USEPA Region 6 Administrator job. To paraphrase President Lyndon Johnson: “I will not seek and I will not accept” the job as Administrator for the USEPA Region 6.  The job as the Administrator of Region 6 is a very important job; however, it is not one that I seek even though I would have some very great ideas about how to run Region 6 administratively. 

More later.

As always, feel free to contact me at walter.james@jamespllc.com

WDJiii 

Illegal Storage in Tennessee

On October 17, 2017, Phillip Huddleston pled guilty to one count of illegal storage of hazardous waste without a permit at Protech Metal Finishing, LLC, a metal plating facility he owned and operated in Vonore, Tennessee.  Huddleston was represented by David M Eldridge of Eldridge & Blakney PC out of Knoxville, TN.

On October 2, 2017, John Hatfield, the Protech production manager, pled guilty to being an accessory after-the-fact to Protech’s illegal storage of hazardous waste.  Hatfield was represented by Robert R Kurtz of Stanley & Kurtz, PLLC out of Knoxville, TN. Hatfield represented that containers of hazardous waste were accurately labeled when he knew that they were not and that it was done in order to hinder the investigation of Protech’s compliance.

Huddleston faces a maximum penalty under RCRA of five years in prison and a fine of $250,000.00. Huddleston is scheduled to be sentenced on January 8, 2017.  Hatfield faces a maximum penalty (for accessory-after-the-fact) of one year in prison and a fine of $25,000.00.  Hatfield is scheduled to be sentenced on January 10, 2017.

The prosecution was the result of an investigation by the IRS, EPA-CID, TVA-OIG, the US Department of Defense and the US Department of Energy.

More later.

As always, feel free to contact me at walter.james@jamespllc.com

WDJiii

Private Enforcement

Recently, the Environmental Integrity Project issued report that used a review of federal records to document a significant decline in environmental enforcement during the first six months of the Trump Administration. Is there a commitment to environmental enforcement in the Trump Administration? The number of criminal investigators at the USEPA is at about three-fourths of what Congress has statutorily mandated.  While it is too early to tell make any real conclusions regarding federal enforcement, there are mechanisms for private party enforcement under federal environmental laws.  In other words, just because there are fewer criminal investigators, industry should not get too comfortable. 

The perceived lack of enforcement by the federal government may just provide the added incentive for private, non-governmental organizations to intensify enforcement efforts under the citizen suit provisions of federal environmental statutes.  While the concept of “standing” is a hurdle (and always has been), it is not an insurmountable hurdle.  The major environmental statutes allow private party enforcement, including the CWA, the CAA, the RCRA, the SDWA and the TSCA.  And there are few limitations on who can pursue a citizen suit.  Notice is required to the government and prospective defendants of the alleged violations before filing the citizen suit.  In the absence of government enforcement, the citizen suit may proceed and may also allow the recovery of attorney fees. 

When faced with a citizen’s suit, industry needs to be prepared to test the adequacy of citizen suit complaint.

More later.

As always, please feel free to contact me at walter.james@jamespllc.com.

WDJiii

Third Party Payments and Supplemental Environmental Projects Under Scrutiny

On June 5, 2017, Attorney General Jeff Sessions (“Sessions Memo”) issued his memorandum that stated that the USDOJ will no longer agree to settlements that include “payments” by a defendant to a third party organization. On July 28, 2017, he issued another memorandum, directing a compilation of a list of all civil or criminal settlement agreements that include payments to third parties.

While this certainly suggests that the USDOJ will be less inclined to include third party payments or SEPs in settlements, I would suggest that the practice should not be abandoned.

I previously posted about this on June 12, 2017. Certain “news” outlets have depicted these types of payments as “slush funds” for left wing groups.  As a friend of mine (Jim Smith) noted in a Linked-in post: “An article posted by the Competitive Enterprise Institute (“CEI”) in its Energy and Environment section specifically mentions settlements in environmental cases, describing them as a ‘Billion Dollar Green Energy Rip-Off.’ The CEI article identifies 18 settlements that required companies to pay ‘$1.55 billion in private sector funding on renewable energy, energy efficiency, and electric vehicles.’”  Without having seen the settlements described, it is hard to imagine that it is truly a billion dollar rip-off. 

One settlement I was involved in required a payment to the Southern Environmental Enforcement Network for its training fund. It also included a payment to the municipality in which the business operated for its fire and rescue unit with a directive that the payment “shall be for the exclusive use of [municipality] exclusively for the acquisition, purchase, lease, contracting for, maintenance, calibration, testing, transport, staging, or storage of specialized equipment and gear. . . .  None of the funds should be used for any vehicle, firearm, gasoline, diesel fuel, or to pay for the salary, benefits, or overtime of a City of Hutchins employee.”

It is hard to imagine that these types of payments are “slush funds” for left wing groups. Let us hope that cooler heads prevail and that the Attorney General takes a broader view of third-party payments in settlements. 

More later.

As always, feel free to contact me at walter.james@jamespllc.com

WDJiii