The EPA recently announced a new Strategic Civil-Criminal Enforcement Policy, designed to achieve fairness in enforcement actions and ensure criminal enforcement is reserved for the “most egregious violations.”

 

For many, the policy is long overdue.

“The EPA’s determination of what facts justify criminal treatment has traditionally been inconsistent and dependent on local decision-making by regional criminal investigation divisions that refer cases to local U.S. Attorney’s offices,” according to a Lexology article by Barnes & Thornburg LLP. “If this new [policy] is implemented effectively, it should forge a more collaborative partnership between the EPA’s civil and criminal enforcement offices that leads to a coordinated and more consistent case selection process based on joint strategic planning, rigorous case screening and regular communication.”

The policy requires better coordination of activities between the Agency’s civil and criminal enforcement divisions to “promote collaborative strategic planning and ensure that EPA exercises its enforcement discretion fairly and consistently.”  Specific measures in the policy include:

• Increased collaboration between the civil and criminal enforcement programs on the development and implementation of the EPA’s national and regional priorities, including the National Enforcement and Compliance Initiatives (NECIs) and regional strategic plans;
• Enhanced case screening to promote fairness and consistency and robust discussion of what enforcement option should be used to address violations, including whether parallel proceedings should be initiated, and continued coordination throughout each enforcement action to ensure those initial case choices protect public health and the environment;
• Improved case management through enhanced tracking of case screening that promotes information-sharing about violations and ensures ready access to compliance histories and case developments while maintaining enforcement confidentiality; and
• Updated training programs to ensure effective partnership between civil and criminal enforcement offices that include the requirements of this policy; factors to consider in deciding whether to pursue criminal, civil, or administrative enforcement; and best practices for managing information-sharing and parallel proceedings to prevent case delays.

“The new Policy may well increase EPA’s criminal enforcement efforts, especially as the Agency’s Criminal Investigation Division (CID) faces increased internal and external pressure to show results,” a Beveridge & Diamond P.C. Lexology article says. “This could be especially true with respect to EPA’s stated national priorities, like Environmental Justice and PFAS. The information sharing contemplated and required by the new Policy will likely bolster the Agency’s civil enforcement program, and civil judicial proceedings could morph into criminal proceedings if civil prosecutions are met with [inflexibility].”

Background

“Historically, criminal case selection by the EPA was informed by several guidance documents, including the 1994 ‘Exercise of Investigative Discretion,’” according to Barnes & Thornburg. “Though this policy took a reasonable approach for identifying what environmental violations should be prosecuted as criminal conduct, it put in the hands of the criminal investigation division the final say on whether a case would be referred to the DOJ as criminal case.

“In stark contrast, the new policy encourages a strong partnership between EPA’s civil and criminal enforcement offices, arguing that cooperation and strategic planning will promote the efficacy of other enforcement processes, including case screening, national enforcement initiatives, regional strategic planning, and the PFAS Roadmap.”

Case assessment

The policy memorandum includes a one-page appendix with five questions (and sub-questions) to consider in determining whether the violation(s) merits criminal or civil enforcement:

• How significant is the violation(s)?
• What type of culpability is involved?
• What is the compliance history for the alleged violator(s)?
• How would you characterize the sophistication and company size of the alleged violator(s)?
• Does the matter involve a national or regional strategic priority?

Collaboration throughout the strategic planning process

The policy calls for coordinated strategic planning in the development of national initiatives and regional strategic plans. Strategic planning also should occur during regularly scheduled civil-criminal enforcement meetings to address how current or future matters fit into larger goals and to identify matters that may be appropriate for consideration by a different enforcement approach or handling by a state partner.

The directive calls for both enforcement programs to meet early in the annual regional strategic planning process to determine regional priorities.

“Both programs should be included as part of overall strategies, goals, objectives, roles, and measurable outcomes,” the policy states. “Planning should also include opportunities for appropriate training. Not every priority outlined in a regional strategic plan will require significant criminal enforcement resources. Regional strategic plans should, however, acknowledge the role of criminal enforcement in addressing specific regional threats or priorities. … Coordinated strategic planning also should lead to improved case selection, including identifying the enforcement approach that will best protect public health and the environment, as well as the steps needed to ensure the optimal use of existing resources for maximizing deterrence and promoting future compliance.”

Regular consultation throughout the enforcement process

To ensure successful implementation of national and regional priorities, it requires civil and criminal enforcement managers to meet regularly. The policy formalizes the current practice of monthly meetings, but sometimes, more frequent meetings are necessary. The following factors are outlined in the policy to determine the need for more frequent meetings:

• The volume of incoming matters (e.g., number of inspections, number of new criminal investigations, volume of state referrals, citizen complaints, or other leads);
• The current docket (e.g., docket volume, number of significant or complex investigations, number of parallel proceedings);
• Environmental media involved (e.g., a program may wish to have meetings with all enforcement units or specific media units); and
• External factors (e.g., environmental justice or community concerns, role of state and local enforcement authorities).

The main two purposes for the meetings are:

• To ensure the civil and criminal enforcement programs consult about which cases will be investigated criminally, which will be referred to the Department of Justice for civil enforcement, and which will be handled as administrative matters. In addition, civil and criminal enforcement managers should discuss whether parallel proceedings are appropriate, as well as the timeline for any follow-up discussions.
• After initial case screening, civil and criminal enforcement offices must continue to coordinate throughout the life of any resulting enforcement action, regardless of whether there’s a formal parallel proceeding. The goal is to have clear direction in the first year about how the action will be handled so that most judicial cases, to the extent circumstances allow, will be filed, charged, or concluded within 2 to 3 years—and within 12 to 18 months for administrative matters.

The policy outlines the types of information that civil and criminal enforcement managers should exchange:

• Discuss information obtained during criminal investigations that may indicate a need for injunctive relief or other remedial action, as well as updates on the current timelines or progress on the criminal investigation.
• Address any developments during civil investigations that uncover evidence of conduct that may warrant the opening of a criminal investigation.
• Review shared goals and provide regular updates about the status of any parallel proceedings, including any requests from regulated entities to consider global settlements.

Improved case management through enhanced tracking and information-sharing

As part of ongoing EPA data management modernization efforts, the Agency is developing a national case tracking system.

“Until that process is completed, all civil and criminal enforcement offices shall utilize a tracking system that ensures non-criminally sensitive information can be entered by the civil and criminal enforcement programs in a manner that is secure and accessible to both programs,” the policy states.

The policy outlines the type of data to be collected:

• Name of the entity or individual
• Facility and facility ID (if applicable)
• Location of facility
• Relevant environmental statute(s)
• Alleged violations
• Compliance history
• Referring office
• Reason for referral
• Status updates
• Next steps
• Statute of limitations/tolling date

Training to strengthen the criminal and civil enforcement programs’ partnership

In addition to strengthening civil-criminal relationships, additional goals for training are to address the circumstances that warrant criminal versus civil responses; ensure proficiency in managing parallel proceedings, including training on criminal discovery rules; and promote heightened awareness about maintaining grand jury secrecy and the limitations on access to grand jury material.

Specific areas of training under the policy are:

• Best practices for collaboration between civil and criminal enforcement programs on strategic planning, including national initiatives and regional priorities;
• Procedures for compliance with this policy, including how and when screenings occur in the relevant region, tracking, resources, regional planning, and case selection;
• Factors that warrant the civil enforcement program’s sharing information with its criminal enforcement program counterparts, including evidence of knowing or negligent conduct, as well as chronic violations;
• Factors that warrant the criminal enforcement program’s sharing information with its civil enforcement counterparts, such as imminent and substantial endangerment; ongoing discharge, emissions, or release; or acts that may cause harm or risk of harm to human health and the environment; and
• Protection of programmatic integrity, including ensuring criminal enforcement personnel can’t use civil enforcement tools to gather evidence for a criminal case and steps that criminal enforcement personnel must take to protect the secrecy of grand jury information.

Takeaways

The EPA’s goal with the policy is to provide better organization, collaboration, and tracking of the Agency’s enforcement efforts, which is expected to result in more enforcement cases, Beveridge & Diamond notes.

In addition, Beveridge & Diamond notes that the “EPA’s new measures include several initiatives to facilitate better communication and more efficient and effective use of government enforcement resources, including:

• Enhanced case screening, including specific factors to consider when evaluating a matter for civil versus criminal enforcement
• Improved case management
• Updated training programs for EPA program managers and staff.”

With this policy comes the opportunity to distinguish a company as “law-abiding” and worthy of EPA protection so as not to be placed “at a competitive disadvantage with polluters,” according to the policy.

For a company to make this distinction, Beveridge & Diamond advises companies to “focus on, stress-test, and improve compliance programs, including:

• Reviewing—and continuously testing the efficacy of—the resources and authority provided to the compliance function
• Ensuring that ‘lessons learned’ from inside the company, as well as from the relevant industry and region, are continuously tracked and incorporated into operations to avoid allegations of repeat violations
• Considering whether compliance program policies and IT infrastructure support continuous gathering and monitoring of compliance-related data across functions.”

“Companies should understand their compliance profiles and ensure a constant process of improvement to address non-compliance, including evaluating the potential need for equipment upgrades, updated procedures, and training.”