Government Environmental Enforcement

By: Guy E. Wall



The EPA conducts inspections to determine compliance status with applicable laws, regulations, permits, and consent decrees, identify the need for remedial measures and enforcement actions, correct the causes of violations, evaluate a facility’s production and control of pollution, self-monitoring capability, recordkeeping practices, waste minimization and pollution prevention programs and obtain samples.


Most environmental statutes grant the EPA the right to inspect the premises and the records of persons whose activities bring them within the scope of the agency’s jurisdiction. See Clean Air Act (“CAA”) § 114(a)(2), 42 U.S.C. § 7414; Clean Water Act (“CWA”) § 308(a)(4)(B), 33 U.S.C. § 1318(a)(4)(B); Resource Conservation and Recovery Act (“RCRA”) §§ 3007(a), 9005(a)(1), 42 U.S.C. §§ 6927(a), 6991d(a). Inspections must be conducted promptly and at reasonable times. The EPA is generally not required to give advance notice of the inspection. Under the CWA and the CAA, the EPA is not required to provide sample splits, a receipt for the samples or a return of the analytical results. Under RCRA, the EPA is required to provide sample splits, if requested, to receipt for its samples, and to promptly disclose the analytical results. The EPA inspector is required to present his credentials prior to the inspection except for one conducted pursuant to RCRA.


In Marshall v. Barlow’s, 436 U.S. 307 (1978), the Court held that an OSHA inspector was not entitled to enter the non-public portions of a work site without either the owner’s consent or a warrant. There the inspection did not fall within the exception to the warrant requirement for searches of pervasively regulated industries such as liquor, e.g., Colonnade Catering Corp. v. United States, 397 U.S. 72 (1970), or firearms, e.g., United States v. Biswell, 406 U.S. 311 (1972). See also New York v. Burger, 482 U.S. 691 (1987) (vehicle dismantling business). The Court stated that an administrative warrant could issue upon probable cause to suspect a violation or pursuant to a routine policy for selecting facilities to be inspected. The EPA then issued a policy that sanctions will not be imposed upon owners who insist on a warrant before allowing inspections. EPA Memorandum on Inspection Procedures, April 11, 1979. In general, the EPA will obtain a warrant even before entry has been refused when surprise is crucial to the inspection or when a company’s prior conduct make it likely that warrantless entry will be refused.


Inspections are conducted as a series of tasks which usually include the formation of an inspection team and identification of objectives, a background information review, inspection plan preparation, an on-site field inspection, report preparation and enforcement case support. During the first phase, the inspectors will identify applicable laws, determine the evidence to be obtained, and identify the level of technical expertise required to evaluate the “target”. The background information review will include a review of applicable current and historic data, legal and technical information and, in some cases, a recognizance inspection of the facility. The inspection plan will include the background information, objectives, tasks and methods, quality assurance and quality control procedures, document control and chain of custody procedures, safety requirements and site safety plans and a schedule of investigation activities. After the inspection, a report will include the findings, supporting information, and recommendations. The report may be the basis for an enforcement action. The focus of this section is on the actual conduct of the inspection.


The following information is based upon the EPA’s Multi-Media Investigation Manual (Rev. 1992).

1. Entry.

The EPA team leader will ask to meet with the designated facility environmental contact to present official credentials and for an opening conference. However, in an unannounced inspection, the inspectors may immediately go to the regulated areas of concern to conduct an inspection before the facility has time to make changes.

If entry is denied, consent later withdrawn, or the inspection unreasonably limited, the team leader will attempt to gain entry by explaining his authority to conduct the investigation and verifying that the facility representative understands this authority. If the limitation persists, the team leader will attempt to record the name, title and phone number of the person denying entry and the circumstances of the denial. Inspectors are allowed to sign a visitor’s log but not a liability waiver.

2. Opening Conference.

The opening conference is held to advise the facility of the investigation objectives and to discuss logistics and scheduling. The EPA will attempt to encourage cooperation by setting the “proper tone.” During this conference, the EPA will:

a. Present inspection notices or forms if required.

b. Describe the investigation objectives so the company can identify the people and documents necessary to assist in the investigation.

c. Describe the inspection procedures, the personnel needed and develop schedules.

d. Discuss sampling and whether company splits will be made available.

e. Discuss safety issues.

f. Discuss how photos will be taken, duplicates for the facility and confidentiality.

g. Arrange for document availability and copying. Inspectors will either come with their own copier or attempt to use the facility’s copier. Refusal to provide documents is tantamount to a denial of entry. However, the company is NOT required to copy documents for the government even if it offers payment.

h. Request an overall explanation of the facilities operations.

3. General Facility Tour.

The inspectors may request that knowledgeable facility personnel guide them on an orientation tour of the facility so that they may become acquainted with the processes and material flow, look for operations, processes, materials, and waste management activities not previously identified, and document violations. The inspectors will ask to be shown key operations, waste management areas and areas where suspected violations are occurring, including raw material storage facilities, manufacturing areas, and waste management units.

4. Process/Waste Management Evaluation.

After the tour, the inspectors may focus on detailed process evaluations, specific media compliance or other activities such as sample collection. The inspectors will make visual observations and attempt to conduct interviews. They are trained in interviewing techniques, such as employing a “help me learn” attitude and asking open ended, not leading, questions. Major items of interest include:

a. Waste spillage, leaks and discharges.

b. How the facility differentiates regulated waste from unregulated waste.

c. Physical condition of pollution control equipment.

d. Units out of service.

e. Operation and maintenance issues.

f. Diversions, bypasses and overflows.

g. Emergency response capabilities.

5. Document Reviews.

Environmental regulations necessitate the creation and retention of numerous documents, including inspection logs, annual documents, operating reports, self monitoring procedures and data, spill clean-up reports, manifests, notifications and certifications, emergency response plans, training records, etc. Many inspections focus primarily on documents. The inspectors will conduct a document review to determine whether:

a. The required documents have been prepared and maintained.

b. The documents have been prepared on time.

c. The documents have been distributed to all necessary parties.

d. The documents are consistent by cross-checking information recorded on more than one document.

6. Sampling.

The inspectors may take samples and have them analyzed to document noncompliance. Here are some situations in which they may sample:

a. Routine permit compliance sampling requested by the program office.

b. Leaking drums, tanks, transformers, other containers holding hazardous waste, other toxic materials, or other unexpected or improper releases.

c. Unknown waste.

d. Questionable facility waste analysis data.

e. Suspected waste misclassification.

f. Unexplained suspicious stains or discoloration in waste production or management areas.

g. Unpermitted discharges.

h. Bad appearance of permitted discharges.

i. Suspected contamination of stormwater runoff.

j. Receiving waters or sediments are likely to contain toxic or hazardous pollutants.

k. Improper disposal of contaminated sludges or other waste residuals.

7. Closing Conference.

The inspectors will request a closing conference to discuss preliminary findings, verify information, and resolve any outstanding questions. They will make a written list of outstanding information requests that cannot be resolved by the time of the closing conference. They will usually tell the facility how and when a copy of the final inspection report can be obtained.


Responding to an EPA inspection requires planning. Key elements of planning include briefing employees on how to handle the inspection, providing environmental information and documents and exhibiting the proper attitude. Here are some tips from Bolstridge, “Surviving an EPA Inspection; Environmental Management,” 56 Occupational Hazards 37 (Dec. 1994).

1. Initial Contact.

The goal should be to give the inspectors the impression that the company is cooperative and environmentally responsible. Nevertheless, each inspector should be requested to identify themselves and to provide their background and affiliation. The EPA should be required to provide you with the scope and regulatory basis for the inspection. This will assist you in assembling the employees necessary to respond to information requests. When employees are introduced to the inspectors, everyone should be reminded of the scope and authority of the audit to appropriately limit inquiries.

2. Documents.

Many EPA inspections focus mainly on data and records. The document reviews include permit requirements, emergency response plans, reporting requirements, the availability of necessary records and the ability to explain that information. A file that includes a list of environmental permits, a brief discussion of the facilities status under environmental laws, descriptions of any environmentally beneficial programs and the names and phone numbers of key environmental managers may be helpful in responding to requests for information.

All information requested by, and provided to, the EPA should be documented. The requested documents should be pulled from the file and brought to the inspectors. It is preferable not to open file cabinets or operate environmental recordkeeping systems in front of the inspectors. Duplicate copies should be made of all documents copied for the inspectors and placed in a separate file.

3. Interviews.

Employees should be given the following advice on handling interviews:

a. Be courteous but keep discussions with regulators within the scope of the audit.

b. Make sure that the inspector’s questions are understood.

c. When not sure of an answer say “I’ll find out;” don’t guess.

d. Never admit noncompliance. Instead, state what you will do to correct the problem without admitting fault or apologizing.

e. Employees have the right not to answer or to have an attorney present during any questioning.

f. Do not underestimate the knowledge of audit team members, even those who act dumb.

4. Post-Inspection.

After the inspection, the company should debrief the employees involved to discuss the issues that the inspectors focused on, prepare for possible enforcement actions and determine any changes that need to be made in the environmental program.


A business should take a different attitude toward the execution of a search warrant. Unlike inspections, the company should not worry about making a good impression upon the FBI or EPA agents demanding to search the facility. They believe that the company has committed a crime and are violating its privacy. The company should immediately contact counsel. Aufhauser, “Searches – What Do You Do When They Don’t Bother to Knock?” 24 SONREEL News 4 (Jan./Feb. 1993).

There are three primary goals in responding to a search warrant: (a) assure that the warrant is honored and not exceeded by the agents, (b) create a record upon which to challenge the use of evidence gathered in the search, and (c) get the seized evidence back. Here are some steps suggested by the foregoing article to achieve these goals.

Counsel should demand to see the badges and identity cards of each agent and record their names and agencies. He should insist that all inquiries be directed to him.

The warrant should be closely inspected and a copy should be made. It must be signed by a magistrate or judge. The agents who are present must be authorized by the warrant to conduct the search. An attempt should be made to obtain copies of affidavits that were filed in support of the warrant.

The search party should be restricted to those portions of the facility described in the warrant. Deny them access to any other portion of the facility. Counsel and/or employees should accompany the agents and keep a log of where they go and what they search. Request copies of all photographs and videos.

Where the search warrant describes certain documents, the company should direct the agents to, and supervise the search for, those records. This will prevent the agents from being able to peruse all the company’s records. Otherwise, offer no assistance in the search.

The agents will often attempt to conduct interviews while on the premises. However, a search warrant does not give them a right to interview employees. Employees should be advised that they are not obliged to speak to the agents or to assist them in any manner. Furthermore, they should be advised that it would be in their best interest to have an attorney present before being interviewed. However, it may constitute obstruction of justice, 18 U.S.C. § 1612, to forbid employees from talking with agents on his or her own time.

A demand should be made for split samples equal in weight and volume, written receipts describing any samples, a description of the tests to be performed by the government and the results of all such tests. Document any refusal to provide such information and draw samples yourself to best approximate what is being taken.

After the search, the agents are required to provide an inventory of what is being taken. The company should interview all employees to know exactly what was searched and what was seized. Seized records can generally be copied once they are housed and inventoried. The prosecutors should be contacted to find out the purpose of the search.



The EPA has three options for enforcing environmental laws: criminal, civil and administrative proceedings. Civil and criminal proceedings must be brought in federal court and are governed by formal rules of procedure and evidence. Administrative proceedings are brought before an administrative law judge pursuant to somewhat relaxed rules of procedure and evidence. See Administrative Procedures Act, 5 U.S.C. §§ 554, 555, 556 (general rules for administrative proceedings).

Administrative enforcement is the option most frequently chosen. Criminal proceedings are usually limited to willful or knowing violations even though some environmental laws criminalize negligent conduct. Civil proceedings are generally used for injunctions or very large civil fines. This section will focus on administrative proceedings.


Administrative proceedings are brought before an administrative law judge, sometimes referred to as a presiding officer, who has authority similar to that of a Federal District Court judge in the conduct of trials. 40 C.F.R. § 22.03. They may not preside over a matter in which they have a financial interest or “any relationship with a party or with the subject matter which would make it inappropriate for them to act.” 40 C.F.R. § 22.04(d). After commencement of the proceeding, they may have no ex parte discussions on the merits of the proceeding with any EPA staff member who performs a prosecutorial or investigative function in such proceeding or a related proceeding. 40 C.F.R. § 22.08. A party has the right at any time to make a motion to disqualify the presiding officer for these reasons. Id.


An administrative proceeding to assess a penalty is commenced by filing a complaint with the Regional Hearing Clerk and serving it, along with a copy of the Rules of Practice, upon the respondent, either personally, or by certified mail, return receipt requested. 40 C.F.R. § 22.13. See also 40 C.F.R. § 22.37 (administrative complaint based on continuous RCRA hazardous waste violations may not be filed until 30 days after written notice to the violator). The complaint must include (1) a statement reciting the sections of the environmental act authorizing the issuance of the complaint, (2) specific reference to each provision of the act and implementing regulations which respondent is alleged to have violated, (3) a concise statement of the factual basis for alleging the violation, (4) the amount of the proposed civil penalty, (5) the reasoning behind the proposed penalty and (6) notice of respondent’s right to request a hearing. 40 C.F.R. § 22.14. The answer is due twenty days after service and should deny, admit or explain each of the allegations in the complaint (40 C.F.R. § 22.15), state any defense and request a hearing. The failure to admit, deny or explain a allegation in the complaint constitutes an admission. 40 C.F.R. § 22.15(d). Administrative pleadings are liberally construed and easily amended. Yaffe Iron & Metal Co. v. E.P.A., 774 f.2d 1008, 1012 (10th Cir. 1985).

A party may be found to be in default for failure to timely answer the complaint, failure to comply with a pre-hearing exchange of information or hearing order or failure to appear at a conference or hearing without good cause. 40 C.F.R. § 22.17. 40 C.F.R. § 22.17(d).

A person may intervene in an administrative proceeding if he demonstrates that his presence would not unduly prolong or otherwise prejudice the adjudication of the rights of the original parties, the movant will be adversely affected by final order and the interests of the movant are not adequately represented by the original parties. 40 C.F.R. § 22.11. The intervention must ordinarily be filed before the first pre-hearing conference. 40 C.F.R. § 22.11(b). See also 33 U.S.C. § 1319(g)(4); 40 C.F.R. § 22.38(f) (person who comments on penalty for CWA violations may have right to present evidence).


1. Agency Interpretations.

An agency’s interpretation of its own regulations is entitled to substantial deference unless it is plainly erroneous or inconsistent with the regulations. North American Fund Management Corp. v. F.D.I.C., 991 F.2d 873, 875 (D.C. Cir. 1993). However, litigating positions forwarded by agency counsel are not entitled to deference when they are merely post hoc rationalizations attempting to explain ambiguities in the regulations. Martin v. Occupational Safety and Health Review Comm’n, 499 U.S. 144, 156 (1991). While an agency is permitted to adopt an interpretation of a regulation for the first time in an adjudicatory proceeding, due process requires that those subject to the penalties must have fair warning of what conduct is prohibited. CWM Chemical Services, Inc., 1995 TSCA LEXIS 10 (EPA, May 15, 1995).

2. General Statute of Limitations.

The federal statute of limitation provides that a proceeding for enforcement of a civil penalty must be commenced within five years from when the claim accrued. 28 U.S.C. § 2462. This statute applies to administrative penalties sought by the EPA unless brought pursuant to a statute that contains a specific limitations period. 3M Company v. Browner, 17 F.3d 1453 (D.C. Cir. 1994). The limitation commences from the date of the violation, not the date of EPA’s discovery of the violation. Id.

3. Prerequisite to RCRA Enforcement.

The EPA may bring an enforcement action for violation of RCRA regulations even where the violation occurs in a state with an approval program. 42 U.S.C. § 6928(2). However, the EPA may not enforce a state’s regulation when its own regulation has been invalidated. See Hardin County, 1994 RCRA LEXIS 36 (EPA, Apr. 12, 1994) (EPA may not enforce state hazardous waste mixture rule when its own has been invalidated).

The EPA must give notice to a state with an approved RCRA program before bringing its own RCRA enforcement proceeding. 42 U.S.C. § 6928(2). This notice need not be in writing, Beaumont Co., 1994 RCRA LEXIS 51 (EPA, Oct. 20, 1994) and need not be pled in the administrative complaint. Gordon Redd Lumber Co., 1994 RCRA LEXIS 29 (EPA, June 6, 1994). While the notice to the state need not detail every violation, it should specify who is being charged with a violation, where the violations occurred and the type of activities that constituted the violation. Id. Failure to give such notice could result in dismissal of the EPA’s complaint.

4. Res Judicata and Collateral Estoppel Under RCRA.

“Overfiling” is the EPA’s practice of sometimes bringing its own enforcement proceeding when it considers a state proceeding inadequate. However, any RCRA enforcement proceeding commenced by a state with an authorized RCRA program will have the same force and effect as an action by the EPA. 42 U.S.C. § 6526(d); Beaumont Co., 1994 RCRA LEXIS 51 (EPA, Oct. 20, 1994). Since collateral estoppel and res judicata apply to administrative agencies, United States v. Utah Construction and Mining Co., 384 U.S. 394 (1966), the EPA may be barred from bringing an enforcement proceeding once a state proceeding based on the same events has been concluded. Beaumont Co., 1994 RCRA LEXIS 51 (Oct. 20, 1994). But see BKK Corp., RCRA Appeal No. 84-5 (May 10, 1985) (prior state enforcement action no bar to EPA enforcement action). Collateral estoppel and res judicata will only be applicable to the extent of the state’s authorization to administer the RCRA progress. See Cypress Aviation, Inc., 1994 RCRA LEXIS 43 (EPA, Sept. 24, 1994) (collateral estoppel not applicable to HSWA violation where state’s authorization does not include HSWA).

5. Paperwork Reduction Act.

The Paperwork Reduction Act requires that the EPA must in certain circumstances obtain approval from the Federal Office of Management and Budget (“OMB”) prior to making an information collection request to ten or more people 44 U.S.C. 3506(b)(6); 44 U.S.C. § 3507. The PRA governs regulatory, not statutory, requirements to provide information. Lackland Training Annex San Antonio, Texas, 1995 CWA LEXIS 2 (EPA, May 12, 1995). The EPA must include an OMB control number on any information request to ten or more people, or if the request is to less than ten, a disclaimer that one is needed. Information request is broadly defined to include a regulation or permit. 44 U.S.C. § 3502(11); TRW, Inc., 1995 RCRA LEXIS 8 (EPA, Apr. 20, 1995). Failure to include such number or the disclaimer will preclude an enforcement action for failing to comply with the request. 44 U.S.C. § 3512. TRW, Inc., supra (failure to include OMB number or disclaimer on permit approval which contained reporting requirement not explicitly contained in regulation which had OMB number resulted in dismissal of enforcement proceeding for failure to comply with request). However, a PRA violation will not prevent the EPA from recovering a penalty to conduct, as opposed to report, a violation. Id.


Generally, the administrative law judge will direct the parties and their counsel to appear at a pre-hearing conference to consider settlement and trial issues. 40 C.F.R. § 22.19. Unless otherwise ordered, the parties must make available to all other parties a list of witnesses together with a narrative summary of their testimony and copies of all documents and exhibits which each party intends to introduce into evidence. 40 C.F.R. § 22.19(b). See, e.g., Weddington, 199 CAA LEXIS 4 (EPA Jul. 17, 1995) (failure to produce evidence may result in default); But see Certified Oil Co., 1993 RCRA LEXIS 255 (EPA, Apr. 13, 1993) (de minimis or technical violation of prehearing exchange requirement will not result in default).

Additional discovery is obtained by motion and order only upon a showing that it will not unreasonably delay the proceedings and the information sought has significant probative value and is not otherwise obtainable. 40 C.F.R. § 22.19(f)(1). See E.I. duPont de Nemoursand Co., 1995 FIFRA LEXIS 13 (EPA, June 28, 1995) (Federal Rule of Evidence 401 regarding relevant evidence used to interpret “significant probative value”). Depositions may be taken only upon a showing of good cause and a finding that the information sought either cannot be obtained by alternative methods or the testimony may not otherwise be available at the hearing. 40 C.F.R. § 22.19(f)(2).


The complainant has the burden of going forward with and of proving by a preponderance of the evidence that a violation has occurred and the proposed civil penalty is appropriate. 40 C.F.R. § 22.24. Relaxed standards of evidence apply to administrative law proceedings. The presiding officer shall admit all evidence, other than settlement offers, which is not irrelevant, immaterial, unduly repetitious or otherwise unreliable or of little probative value. 40 C.F.R. § 22.22(a). Hearsay is admissible. Testimony may be admitted through live examination or verified statements or affidavits. The witness who presents the statement shall swear to or affirm it and shall be subject to cross examination if available. 40 C.F.R. § 22.22(c)(d).


The presiding officer shall make an initial decision containing his findings of fact, conclusions of law, a penalty determination, if appropriate, the reasons for increasing or decreasing the penalty sought in the complaint, and a proposed final order. 40 C.F.R. § 22.27(a). The dollar amount of any penalty shall be determined in accordance with criteria set forth in the act or guidelines issued pursuant thereto. 40 C.F.R. § 22.27(b). The initial decision may be an accelerated decision, akin to a summary judgment, or a dismissal of the action for failure to establish a prima facie case or other right to relief at the hearing. 40 C.F.R. § 22.20. A party has 20 days after the initial decision to file a motion to reopen the hearing. 40 C.F.R. § 22.28(a).

A respondent may receive an award for attorney’s fees and expenses when it prevails unless the EPA’s position was substantially justified. 40 C.F.R. Pt. 17. However, the request for attorneys’ fees must be made in an application made within thirty days of the voluntary dismissal or final disposition. See Del Val Ink & Color, Inc., 1994 RCRA LEXIS 49 (EPA, Nov. 3, 1994) (application for attorneys’ fees untimely when made after 45-day appeal delay had run because EPA’s voluntary dismissal with prejudice was final, unappealable disposition).

Settlements are to be placed in the form of a written consent agreement and consent order. 40 C.F.R. § 22.18. The consent agreement must state that the respondent admits the jurisdictional allegations of the complaint. No settlement or agreement shall dispose of any administrative law proceeding without a consent order from the regional administrator. 40 C.F.R. § 22.18. H. APPEALS.

Parties have a right to appeal to the environmental appeals board from a default order, an accelerated decision or decision to dismiss or an initial decision on all issues rendered after an evidentiary hearing. 40 C.F.R. § 22.30. The presiding officer’s decision will become final within 45 days after its service unless an appeal is taken to the environmental appeals board or the board elects sua sponte to review it. 40 C.F.R. § 22.27(c).

An interlocutory appeal may be taken when the presiding officer certifies that a preliminary ruling involves an important question of law or policy for which there is substantial grounds for difference of opinion and either (1) an immediate appeal from the ruling will materially advance the ultimate termination of the proceedings, or (2) review after the final order is issued will be inadequate. 40 C.F.R. § 22.29(b). See Dana Corp., 1994 RCRA LEXIS 42 (EPA, Aug. 1, 194) (interlocutory appeal not available to decide hypothetical question). A request for such a certification must be filed within six days of the ruling. 40 C.F.R. § 22.29(a). The appeal of an interlocutory ruling will not stay the proceedings absent an order from the presiding officer upon extraordinary circumstances. 40 C.F.R. § 22.20(d). A stay order of more than 30 days must be separately approved by the environmental appeals board. Id.

The respondent shall pay the full amount of the civil penalty assessed in the final order within 60 days after receipt unless otherwise agreed by the parties. 40 C.F.R. § 22.31(b). A motion to reconsider a final order issued by the environmental appeals board must be filed within 10 days after service of the final order.


1. In General

Any person wronged by action of an administrative agency has a right of judicial review. 5 U.S.C. § 702. The form and the venue of such review is that specified by the applicable statute or, where there is no specification, any appropriate venue. 5 U.S.C. § 703. The review is limited to judicial scrutiny of the record for the existence of errors of law or the absence of reasoned consideration of the record to support factual conclusions. Corrosion Proof Fittings v. EPA, 947 F.2d 1201 (5th Cir. 1991). There can be no judicial review of issues not presented to the agency. Id.

Where a statute provides for judicial review after administrative hearing, there can be no judicial review until all administrative remedies have been exhausted. Weinberger v. Salfi, 422 U.S. 749 (1975). However, when exhaustion is not statutorily mandated, it is discretionary. Wyoming Refining Co. v. United States Department of Interior, 547 F. Supp. 297, 301 (D. Wyo. 1982). See Sinclair Oil Corp. v. Scherer, No. C88-0190-B, 1989 U.S. Dist. LEXIS 16783 (D. Wyo. 1989) (exhaustion doctrine discretionary for RCRA orders). Judicial review is not waived by failing to request an administrative hearing. Hanson v. United States, 710 F. Supp. 1105 (E.D. Tex. 1989).

The sixth, fourth, and seventh circuits have held that district courts lack jurisdiction to review CWA or CAA compliance orders prior to the commencement of judicial enforcement proceedings. Southern Ohio Coal v. Office of Surface Mining, 20 F.3d 1418 (6th Cir. 1994); Southern Pines Associates v. United States, 912 F.2d 713 (4th Cir. 1990); Hoffman Group, Inc. v. EPA, 902 F.2d 567 (7th Cir. 1990). The rationale of these decisions is that congress intended to allow the EPA to act quickly to address environmental problems without becoming immediately entangled in litigation.

2. Clean Water Act

Judicial review of a CWA civil penalty is obtained by filing a notice of appeal within 30 days of the issuance of the penalty order in the United States District Court for the District of Columbia or the district in which the violation is alleged to have occurred for a Class I civil penalty or the United States Court of Appeals for the District of Columbia Circuit or any other circuit in which the appellant resides or transacts business in the case of the assessment of a Class II civil penalty. 33 U.S.C. § 1319(g)(8). Notice of the appeal must be given by certified mail to the administrator of the EPA or the secretary and the attorney general. Id. The penalty assessment will be affirmed unless the record lacks substantial evidence to support the finding of a violation or the amount of the penalty constitutes an abuse of discretion. Id.


Most environmental statutes give the EPA the right to order compliance with regulations and permits and to impose penalties for their violation. The EPA has adopted policies to ensure consistent Agency-wide civil penalty assessments and enforcement. On February 16, 1984, the EPA issued a Civil Penalty Policy that established a single set of goals for penalty assessments and provided guidance on how to write penalty assessment guidelines specific to a particular program. These goals are deterrence, fair and equitable treatment of the regulated community and swift resolution of environmental problems.


The EPA determined that to deter violations the penalty must place the violator in a worse position than those who have complied in a timely fashion. The EPA’s policy is that penalties should, at a minimum, remove any significant economic benefits resulting from noncompliance. Thus, the penalty will have a “benefit component”.

1. The Benefit Component.

There may be three economic benefits from violations: delayed costs, avoided costs, and a competitive advantage. The EPA uses the BEN computer model to determine the amount of delayed or avoided costs. The EPA’s policy is not to settle an enforcement proceeding for less than the benefit amount unless it is insignificant, there are compelling public concerns (risk of adverse precedent, plant closing of a large employer, etc.) or where it is highly unlikely that the EPA will be able to recover this amount in litigation.

a. Delayed costs.

One benefit of noncompliance is the ability to delay making the expenditures necessary to achieve compliance. Among the types of violations which result in savings from deferred cost are the following:

-failure to install equipment needed to meet discharge standards.

-failure to effect process changes needed to eliminate pollutants from waste streams.

-failure to test where testing must still be done to demonstrate compliance.

-improper disposal where proper disposal is still required.

-improper storage where proper storage is still required.

Before the use of BEN, the EPA’s rule of thumb used to be that the economic benefit of delayed compliance was 5% per year of the delayed one-time capital cost for the period from the date the violation began until the date compliance was achieved.

b. Avoided costs.

Avoided costs are expenditures which are permanently avoided by noncompliance. Examples include:

-Cost savings for operation and maintenance of equipment that was not installed.

-failure to perform periodic groundwater monitoring sampling and analysis.

-failure to employ a sufficient number of adequately trained staff.

-failure to conduct necessary testing.

c. Benefit from competitive advantage.

Noncompliance sometimes allows the violator to provide goods or services which are not available elsewhere or are more attractive the consumer. Examples include:

-selling banned products.

-removing air altering pollution control equipment for a fee.

-selling products without required labels or warnings.

The EPA’s policy is to include in the penalty an amount equal to the net profits made from the improper transactions.

2. Gravity Component.

The removal of the economic benefit only places the violator in the same position he would have been if compliance had been achieved on time. To deter violations, the EPA requires that the penalty include an additional amount to ensure that the violator is economically worse off than if it had obeyed the law. This additional amount, known as the “gravity” component, reflects the seriousness of the violation. The gravity component of the penalty is based upon:

a. Actual or possible harm.

-the amount of pollutant

-toxicity of the pollutant

-sensitivity of the environment

-length of time violation continues

b. Importance to the regulatory scheme.

c. Availability of data from other sources.

d. Size of the violator.


To promote the equitable treatment of the regulated community, the EPA adjusts the penalty by considering factors that distinguish cases, such as the degree of willfulness and/or negligence, the degree of cooperation, the history of noncompliance and the ability to pay. Normally, the adjustments will apply only to the gravity component. The EPA’s general policy is that violators bear the burden of justifying mitigation adjustments. But see 33 U.S.C. § 1319(9)(3) (EPA required to consider penalty adjustment factors under Clean Water Act); 42 U.S.C. § 7413(e) (EPA required to consider penalty adjustment factors under Clean Air Act).

1. Degree of Willfulness or Negligence.

In assessing this factor, the EPA considers the following points:

a. How much control the violator had over the violation.

b. The foreseeability of the violation.

c. Whether the violator took reasonable precautions against the violation.

d. Whether the violator knew or should have known of the hazards associated with the conduct.

e. The level of sophistication in the industry in dealing with the issues.

f. Whether the violator knew that he was violating a regulation (may only increase penalty).

2. The Degree of Cooperation.

The EPA will adjust the penalty up or down depending upon the violator’s cooperation, primarily as reflected in three factors:

a. Prompt reporting of noncompliance.

This factor may be used to reduce a penalty only where self-reporting is not required by law. Since most programs require reporting, this factor will most often result in an upward adjustment. The EPA case development team has discretion to adjust the gravity component by +/- 10% based on the degree of cooperation.

b. Prompt correction of environmental problems.

The earlier the violator institutes corrective action after discovery of the violation and the more complete the corrective action instituted, the larger the penalty reduction EPA will consider. The EPA may reduce the gravity component of the penalty by up to 50% by virtue of this component. However, if the violator chooses to contest the violation, the EPA recommends that the adjustment for this factor not exceed 25%.

c. Delaying compliance.

The longer the violation remains uncorrected, the greater the penalty. The reductions for prompt correction should only apply to compliance achieved prior to litigation.

3. History of Noncompliance.

The penalty will be adjusted upward where there is a history of violations. Previous violations not only include formal enforcement proceedings but also any notifications, however informal, that the EPA believes a violation exists. For a small number of dissimilar violations, the case development team has discretion to raise the penalty by up to 35%; for a large number, 70%. The team may increase the penalty by 35% for one similar violation and by up to 70% for further repeated violations. The size of this adjustment will depend upon these factors:

a. The similarity to previous violations.

Similar violations include violations involving the same permit, the same substance, the same process points, the same statutory or regulatory provisions or a similar act or omission

b. The age of previous violations.

c. The number of previous violations.

d. The violator’s response to previous violations.

4. Ability to pay.

The EPA will generally not request penalties that are clearly beyond the means of the violator except in limited circumstances. The EPA will require financial information before it reduces the penalty based on this factor. The EPA will explore a delayed payment schedule and joining the violator’s individual owners before reducing the penalty.

5. Alternative Payments.

The EPA will in some circumstances accept various environmentally beneficial expenditures in settlement of a case. For instance, the EPA might reduce a penalty for a wetlands violation if the violator restores a wetland. The EPA will consider such a project where the project is not required by law, the project benefits primarily the public as opposed to the violator and the violator would not normally perform such a project as part of its normal business. The EPA limits the penalty reduction to no more than the violator’s after tax cost of the project.


The 1990 RCRA Civil Penalty Policy will be used to illustrate how the EPA applies the foregoing policy to particular programs. The EPA employs the following formula for determining the amount of a penalty for violations of RCRA regulations:

Penalty = gravity + multiday + adjustments + economic benefit.

In administrative proceedings, the EPA will perform this calculation twice, once to determine the amount to seek in the complaint and another to document the process by which it arrived at a settlement amount. In determining the amount to seek in the administrative complaint, the EPA will resolve any doubts against the violator. RCRA requires the EPA to consider a violator’s good faith efforts to comply. RCRA § 3008. See Mayline Co., 1994 RCRA LEXIS 53 (EPA, Dec. 12, 1994) (while EPA’s failure to consider good faith is no basis for dismissing complaint, good faith adjustment should not be used by EPA as bargaining chip; EPA must make adjustment in penalty even if evidence of good faith discovered after proceedings commenced). However, it will ordinarily not make any other downward adjustments in arriving at the amount to seek in the complaint.

1. Disclosure of Calculation.

The EPA will generally not disclose penalty computations and supporting documents. It asserts the deliberative process privilege pursuant to exemption 5 of the Freedom of Information Act which protects attorney work product as well as pre-decisional deliberative documents. See 40 C.F.R. § 2.118(a)(5).

2. Assessment of the Gravity Component.

The gravity component is calculated based on two factors, the potential for harm and the extent of deviation from a statutory or regulatory requirement. Each violation is classified as a major, moderate or minor violation with respect to both of these factors. Thus, the risk of harm will be major, when there is a substantial risk of exposure of people or the environment to hazardous substance or a substantial adverse effect on the regulatory program, moderate when the exposure risk or adverse effect is significant, and minor when the violation poses a relatively low exposure risk or a small adverse effect on the program. Likewise, the extent of deviation is classified as major for substantial noncompliance, moderate for significant deviation and minor where most (or all important aspects) of the requirements are met.

3. Penalty Matrix.

The gravity component is determined from a matrix where one axis is the potential for harm and the other axis is the extent of deviation from the requirements.

MAJOR $25,000 $19,999 $14,999
to to to
20,000 15,000 11,000
MODERATE $10,999 $7,999 $4,999
to to to
$8,000 5,000 3,000
MINOR $2,999 $1,499 $499
to to to
$1,500 500 100

4. Multiple Penalties.

The EPA’s policy is to calculate a penalty for each separate violation that results from an independent act and is substantially distinguishable from the other charges in the complaint. A charge is independent and distinguishable when it requires an element of proof not needed by the others. Different violations of the same sections can lead to separate penalties. For instance, a violation of the same requirement in different locations will lead to separate penalties.

5. Multi-Day Penalties.

The EPA’s policy is to enhance the penalty by a factor to account for the number of days it can document that the violation persisted. Multi-day penalties are mandatory for days 2-180 of all violations with the following gravity based designations: major-major, major-moderate, moderate-major. Multi-day penalties are presumed appropriate for days 2-180 of violations with the following gravity based designations: major-minor, moderate-moderate, minor-major. Multi-day penalties are discretionary for all days of all violations with the following gravity-based designations: moderate-minor, minor-moderate, minor-minor. Multi-day penalties for days 181+ are discretionary.

To compute the multi-day component, the number of days of the violation is multiplied by the dollar value selected from the following matrix:

MAJOR $5,000 $4,000 $3,000
to to to
1,000 750 550
MODERATE $2,200 $1,600 $1,000
to to to
400 250 150
MINOR $600 $300 $100
to to
100 100


Clean Water Act Penalty Policy: Calculation Methodology



Step 1: Calculate the Statutory Maximum Penalty

Step 2: Calculate the Economic Benefit Using “BEN” (3), (4)

Step 3: Calculate the Total Gravity Component (5)

— Monthly Gravity Component = ($1,000) x (1+A+B+C+D)

— Total = Sum of Monthly Gravity Components


A. Significance to Violation (6)

% Exceedence % Exceedence % Exceedence Conventional/

Monthly Avg. 7-Day Avg. Daily Max. Toxic Non-Toxic

0 – 20 0 – 30 0 – 50 0 – 3 0 – 2

21 – 40 31 – 60 51 – 100 1 – 4 1 – 3

41 – 100 61 – 150 101 – 200 3 – 7 2 – 5

101 – 300 151 – 450 201 – 600 5 – 15 3 – 6

300 – > 451 – > 601 – > 10 – 20 5 – 15

B. Health and Environmental Harm (7)

(i) Impact on Human Health; or 10 – Stat. Max.

(ii) Impact on Aquatic Environment 1 – 10

C. Number of Violations (8) 0 – 5

D. Duration of Noncompliance (9) 0 – 5

Step 4: Include Adjustment Factors

A. History of Recalcitrance (10) (Addition)

— Penalty may be increased by up to 150 percent based upon the past and present recalcitrance of the defendant.

B. Ability to Pay (Subtraction)

— Penalty may be adjusted downward to represent the defendant’s ability to pay.

C. Litigation Considerations (Subtraction) (11)

— Penalty may be adjusted downward to reflect the maximum amount which the court might assess if the case proceeds to trial.

CWA Penalty Summary Worksheet

(1) No. of Violations = ________

x $10,000 = Stat. Max. = $_______

(2) Economic Benefit (“BEN”)

(period covered/months) = ________ $_______

(3) Total of Monthly Gravity

Components $_______

(4) Benefit + Gravity TOTAL $_______

(5) Recalcitrance Factor _____%

(O-150%) X Total (Line 4) = $_______

(6) Preliminary TOTAL (Line 4+ Line 5) $_______


(7) Litigation Considerations

(Amount of reduction) $_______

(8) Ability to Pay

(Amount of reduction) $_______



Name and Location _________________________________

of Facility _________________________________

Date of Calculation _________________________________



1. Clean Water Act.

The Clean Water Act (“CWA”) provides for misdemeanor penalties of up to one year of imprisonment and a $25,000 fine for negligent violations of permit conditions or statutes and regulations regarding point source discharges, effluent limitations, water quality standards, technology requirements, recordkeeping, discharge of oil or hazardous substances, aquaculture and sewerage sludge. 33 U.S.C. §§ 1319(c)(1). A knowing violation of these statutes, regulations or permit conditions is a felony punishable by imprisonment for not more than 3 years and a fine of not less than $5,000 nor more than $50,000 per day of violation. 33 U.S.C. § 1319(c)(2). The crime of knowing endangerment is a knowing violation where the violator knowingly placing another person in imminent danger of death or serious bodily injury and carries a penalty of imprisonment for not more than 15 years and a fine of not more than $250,000. 33 U.S.C. § 1319(c)(3). Anyone who knowingly makes a false material statement in any application, record, report, plan, or other document filed or required to be maintained under the CWA is guilty of a felony punishable by imprisonment of up to two years and a fine of up to $10,000. 33 U.S.C. § 1319(c)(4). For subsequent convictions under these sections, the maximum penalty is doubled.

2. Resource Conservation and Recovery Act.

RCRA provides for felony penalties of up to five years imprisonment and up to $50,000 per day in fines for knowingly (a) transporting, or causing the transportation of, hazardous waste, either without a manifest or to a unpermitted facility or (b) treating, storing or disposing of hazardous waste or used oil without a permit or in knowing violation of a permit or interim status requirement. 42 U.S.C. §§ 6928(d)(1-2), (5), (7). Anyone who knowingly makes a false material statement in, or alters, conceals or destroys, any a application, record, report, plan, to other document filed or required to be maintained under the RCRA is guilty of a felony punishable by imprisonment of up to two years and a fine of up to $50,000 ret day. 42 U.S.C. §§ 6928(d)(3), (4). Subsequent convictions under the foregoing sections carry twice the maximum punishment. 42 U.S.C. § 6928(d). The crime of knowing endangerment carries a felony penalty of not more than 15 years imprisonment and a fine of not more than $250,000. 42 U.S.C. § 6928(e).

3. Clean Air Act.

A knowing violation of any Clean Air Act (“CAA”) provision or regulation relating to an air quality implementation plan, New Source Performance Standards, hazardous air pollutants, inspections, solid waste combustion, preconstruction requirements, emergency orders, acid rain control, ozone control or the prevention of significant deterioration is punishable by imprisonment of up to five years and a fine of up to $250,000. 42 U.S.C. § 7413(c)(1). Any person who knowingly makes any false material statement or omission in, or fails to file or maintain any document required under the CAA, or who tampers with monitoring equipment, may be imprisoned for up to two years or fined up to $250,000. 42 U.S.C. § 7413(c)(2). Negligent endangerment occurs when a person negligently releases a hazardous air pollutant and thereby places another person in imminent danger of death or serious bodily injury and is punishable by imprisonment of up to one year and a fine of up to $100,000. 42 U.S.C. § 7413(c)(4). Knowing endangerment carries a penalty of up to fifteen years imprisonment and a fine of up to $250,000. 42 U.S.C. § 7413(c)(5). The knowing failure to pay a fee owed to the United States under title I, III, IV or V of the CAA is a misdemeanor punishable by imprisonment of up to one year and a fine of up to $250,000. 42 U.S.C. § 7413(c)(3). These maximum penalties are doubled for subsequent convictions.

4. Comprehensive Environmental Response Compensation and Liability Act.

Knowing or reporting recordkeeping violations, such as failure to report a hazardous substance release, falsifying or destroying records required by regulations, falsifying or refusing emergency information under the Emergency Planning and Community Right to Know Act or submitting a false claim for fund reimbursement, carry a penalty of imprisonment of up to three years for the first conviction and five years for subsequent convictions. 42 U.S.C. § 9603(b)(d)(2).


Environmental crimes are felonies when they are committed knowingly. Thus, the meaning of the word “knowingly” is critical in the prosecution of environmental crimes. The circuits have split on what knowledge is required for a “knowing” RCRA conviction.

In United States v. Baytank (Houston), Inc., 934 F.2d 599 (5th Cir.1991), the Fifth Circuit held that “knowingly” in RCRA means that the defendant knows (a) what he is doing (e.g., storing, treating, disposing, etc.), (b) what substance is being managed, (c) the substance has the potential to harm people or the environment and (d) he has no permit. However, the court held that the defendant need not know that there is a regulation that characterizes the substance as hazardous. See also United States v. Johnson & Towers, 741 F.2d 662, 664 (3d Cir. 1984) (government must prove that defendants knew hazardous waste being treated, stored or disposed without permit and that permit required). But see United States v. Wagner, 29 F.3d (7th Cir. 1994) (government not required to prove defendant knew RCRA permit required for hazardous waste storage); United States v. Hoflin, 880 F.2d 1033 (9th Cir. 1989), cert. denied, 110 S.Ct. 1143 (1990) (knowledge of permit requirement or lack of permit not an element of the offense; government need only prove defendant knew material was hazardous); United States v. Hayes International Corp., 786 F.2d 1499 (11th Cir. 1986) (knowledge of need for permit not an element of the offense). This knowledge can be established by circumstantial evidence, including a defendant’s job responsibilities that would ordinarily make him aware of permit requirements.

At one time, the government contended that proof of a defendant’s position of responsibility could substitute for proof of knowledge. In United States v. MacDonald & Watson Waste Oil Co., 933 F.2d 35 (1st Cir. 1991), the court reversed the RCRA conviction because the trial court charged the jury that the government could satisfy its burden of proving knowledge merely by showing that the defendant was a responsible corporate officer. The court held that while a defendant’s responsibilities could be used to infer knowledge, proof of responsibilities was not tantamount to knowledge in the absence of such an inference. The Department of Justice has informally stated that it will not prosecute solely based on the responsible corporate officer doctrine. In United States v. Weitzenhoff, 35 F.3d 1275 (9th Cir. 1993), cert. denied, No. 94-6683, 1994 WL 649416 (U.S. Jan. 23, 1995), the court upheld a CWA conviction for the discharge of a non-toxic pollutant slightly in excess of the NPDES permit’s limit. The court held that the government need only prove that defendants knew they were discharging materials, not that their acts violated the permit or the Clean Water Act. The court held that the mistaken but good faith belief that discharges were allowed under the NPDES permit was not a defense. Thus, under this decision it is not necessary for the government to prove that the defendant knew that the discharges being made were not in conformance with the law or the permit.


Federal criminal sentences are determined from a sentencing matrix, the vertical axis being an offense level depending upon the characteristics of the offense and the horizontal axis being criminal history, based upon the defendant’s prior convictions. United States Sentencing Commission, Guidelines Manual, § 5A. Part Q of the Federal Sentencing Guidelines establishes the offense levels for environmental crimes. The most serious environmental crimes are (1) knowing endangerment from mishandling toxic or hazardous substances and (2) mishandling of toxic or hazardous substances or falsification of related recordkeeping. U.S.S.G. §§ 2Q1.1, 2Q1.2.

A conviction for knowing endangerment carries a base offense level of 24 which means that a person in criminal history category I (no criminal history or one misdemeanor conviction) will receive a sentence of between 51 and 63 months before considering any departures. Where death or serious bodily injury occurs, an upward departure may be warranted. U.S.S.G. § 2Q1.1 comment (n.1).

Guideline Section 2Q1.2 sets offense levels for mishandling of toxic or hazardous substances and/or falsification of records relating to them. The base offense level for this violation is eight (minimum of 0 to 6 months in prison). However, in most cases, this level will be increased because of specific offense characteristics. If the offense resulted in a release of toxic or hazardous substances, then the level is increased by four; if the discharge was continuous or ongoing, then the level is increased by six. If the offense resulted in a substantial likelihood of death or serious bodily injury, then the level is increased by nine. If the offense resulted in evacuation of a community or a cleanup requiring substantial expenditures, then the level is increased by four. If the offense involved a discharge without a permit, then the level is increased by another four. Thus, a conviction for an ongoing unpermitted discharge of a hazardous substance which resulted in a substantial likelihood of serious bodily injury and a substantial cleanup expenditure will carry an offense level of 31. For an individual with no prior criminal history, this would result in a 108 to 135 month sentence.

The offense level may be reduced by two levels for acceptance of responsibility, i.e., pleading guilty, or three levels if the guilty plea occurs early in the case. U.S.S.G. § 3E1.1. The offense level can be decreased by up to four levels for minimal or minor participation. U.S.S.G. § 3B1.2. Since Guideline Section 2Q1.2 is based on knowing conduct, a downward departure from the offense level may be warranted for negligent conduct. U.S.S.G. § 2Q1.2 comment (n.4).

On the other hand, the offense level may be increased by two, or, if there are five or more participants, up to four levels for being the leader of a criminal activity. U.S.S.G. § 3B1.1. Additionally, obstructing justice, such as destroying documents or concealing evidence, can result in a two level increase. U.S.S.G. § 3C1.1.

Straight probation is authorized if the final offense level is 1 through 8. U.S.S.G. § 5B1.1. For offense levels 9 through 10, probation may be given only if additional requirements are placed on the defendant such as home detention, halfway house, spending weekends in jail. U.S.S.G. § 5C1.1. Offense levels 11 and 12 allow for some time to be spent in jail and some time in probation. Id. Levels 13 and up, however, do not allow for probation or even split sentences. Id. There is no parole in the federal system; good time is limited to 54 days per year.


A conviction for violating an environmental law may render the violator ineligible to receive, or renew, government contracts or to participate in federal assistance programs. Criminal violations of the Clean Water Act or the Clean Air Act will automatically result in ineligibility. Furthermore, mere indictment for criminal violation of these or other acts could lead to a discretionary finding of ineligibility.


Federal agencies may not enter into a procurement contract for goods, materials and services with a person convicted of violating Section 309(c) of the Clean Water Act if the contract is to be performed at the facility where the violation occurred and the facility is owned, leased or supervised by the defendant. 33 U.S.C. § 1368(a). Likewise any person convicted of a crime under Section 113(c) of the Clean Air Act will be automatically ineligible to contract with a federal agency for the procurement of goods, materials and services to be performed at the facility at which the violation occurred. 42 U.S.C. § 7606. Unlike the Clean Water Act, the prohibition arising from a Clean Air Act conviction may be extended to other facilities owned or operated by the convicted person. Id.

The EPA publishes a list of violating facilities in the Federal Register. 40 C.F.R. § 15. Additionally, the Government Services Administration includes this list in a consolidated “List of Parties Excluded from Federal Procurement or Nonprocurement Programs” which is disseminated to all federal agencies. See also 48 C.F.R. § 52.209-5 (offeror for government contract in excess of $25,000 must certify that it is not suspended, debarred or ineligible); 48 C.F.R. § 52.209-6 (prohibition applies to subcontractors). Listing bars the involved facility from being awarded any contract, from having an existing contract renewed or from receiving federal grants, loans or loan guarantees.

Though rarely used, the EPA has discretionary authority to list a facility where the owner or operator (1) has been convicted by a state court of a state clean water or air violation, (2) has received an injunction as a result of noncompliance with the Clean Water Act or Clean Air Act, (3) has violated an administrative order under the Clean Water or Clean Air Act or (4) the EPA has filed an enforcement action for violation of the Clean Water or Clean Air Act. 40 C.F.R. § 15.11. Unlike the mandatory listing upon a criminal conviction, the EPA has promulgated regulations that provide a procedure to challenge a proposed discretionary listing. 40 C.F.R. § 15.12.

The listing continues until the EPA certifies that the condition giving rise to the conviction has been corrected. 33 U.S.C. § 1368; 40 C.F.R § 15.20. The facility will be listed for some period of time even if the violation has been corrected at the time of conviction. To get off the list, either the facility’s owner or the EPA official who originally did the listing must request removal. 40 C.F.R. § 15.22(a). See also 40 C.F.R. § 15.24 (owner or operator may request removal hearing upon EPA’s refusal to delist).

According to EPA guidelines, the conditions giving rise to the violation include corporate attitude toward compliance with environmental laws. 56 Fed. Reg. 64,785 (1991). Corporate attitude is demonstrated by written policies and procedures that define an effective corporate compliance program and a commitment to make that program work. The EPA requires a commitment to such a program before it will delist.


Federal acquisition regulations prohibit procurement contracts for materials and services with a contractor lacking a satisfactory record of integrity and business ethics. 48 C.F.R. § 9.104-1(d). In addition, Executive Order No. 12549 and a Common Rule of the Office of Management and Budget disqualifies a person lacking a satisfactory record of integrity and business ethics from receiving grants, loans, loan guarantees or other forms of federal assistance. Criminal environmental violations are considered evidence of a lack of business ethics.

Suspension, a temporary refusal to contract with a company pending receipt of additional information, may occur when adequate evidence exists to believe that the contractor has committed an offense which may give rise to debarment. 48 C.F.R. § 9.403; 48 C.F.R. § 9.407-4. Typically such evidence is the return of an indictment. 48 C.F.R. § 9.407-2(b). Suspension may also be based upon facts discovered in civil or administrative actions. 48 C.F.R. § 9.407-20.

Debarment is the disqualification of a contractor for a time not to exceed three years. 48 C.F.R. § 9.406-4. A company convicted of a violation which calls into question its business ethics will be proposed for debarment. This proposal will bar the company from receiving any contracts until a final decision is made. The company then has 30 days from such a proposal in which to present argument and evidence in opposition to the proposed debarment.

Suspension or debarment may be limited to that part of the company responsible for the offense or may extend to the entire corporation. 48 C.F.R. § 9.406-1(b). Normally, debarment is limited to the division of the company guilty of misconduct unless the corporate headquarters was also involved. Suspension and debarment can also be extended to affiliates. 48 C.F.R. § 9.406-1(b).


An Assistant United States Attorney does not have authority to resolve listing and debarment issues. This must be handled by the lead agency, which, in the environmental context is usually the EPA. 48 C.F.R. § 9.402(c); 40 C.F.R. § 32.115(c). To avoid or minimize listing or debarment issues, the EPA should be involved in plea negotiations. Plea agreements should, if possible, be crafted so that any convictions are based on other statutes, such as RCRA, that do not require listing.


Most environmental statutes provide that all records, reports or information obtained by the EPA from any person under its jurisdiction is available to the public. However, exceptions are made where a person can show that the information is entitled to protection as confidential. E.g., RCRA § 307(b), 42 U.S.C. § 6927; CAA § 114(c), 42 U.S.C. § 7414(c); CWA § 308(b), 33 U.S.C. § 1318(b). Information which may be deemed confidential includes trade secrets, processes, operations, style of work, statistical data, amount or sources of income, profits, losses or expenditures and income tax returns. See 18 U.S.C. § 1905 (government disclosure of confidential information). In an administrative enforcement proceeding, the presiding officer must preserve the confidentiality of any confidential information used in that proceeding. 40 C.F.R. § 22.22.

The EPA requires a business asserting a confidentiality claim to submit the confidential information with a cover sheet or stamp or other legend stating that it is confidential, proprietary or trade secret. 40 C.F.R. § 2.203. The EPA must advise the business of the requirement to identify and label confidential documents in any information request it makes or form it prescribes for use. Id. Failure to include an assertion of confidentiality at the time the information is submitted may impair confidentiality. 40 C.F.R. § 2.203(c).

The initial determination of confidentiality is made by the EPA office. 40 C.F.R. § 2.204(d). Prior to making a determination, the EPA must afford the affected business an opportunity to comment. 40 C.F.R. § 2.204(e). Any confidential information submitted as part of its comment will be treated as confidential. 40 C.F.R. § 2.205(c). Failure to comment will constitute a waiver of a claim of privilege of confidentiality. 40 C.F.R. § 2.205(d).

The EPA Legal Office, usually regional counsel, is responsible for making the final administrative determination of whether or not business information is entitled to confidential treatment. 40 C.F.R. § 2.205(a)(i). The EPA must notify the business in writing of a denial of confidentiality. 40 C.F.R. § 2.205(f). The notice of the denial must state that it may be subject to judicial review under Title 5 of the United States Code. Id.

The information will be deemed confidential if (a) the business has asserted a confidentiality claim which is not expired by its terms, waived or withdrawn; (b) the business has shown that it has taken reasonable measures, and intends to continue to take such measures, to protect the confidentiality of the information; (c) the information is not reasonably obtainable without the business’ consent; (d) no statute specifically requires disclosure of the information; and (e) either (1) the business has satisfactorily shown that disclosure is likely to cause substantial harm to the business’ competitive position, or (2) the information is voluntarily submitted and its disclosure would impair the government’s ability to obtain the necessary information in the future. 40 C.F.R. § 2.208. Generally, emissions and effluent data are not subject to confidential treatment.

1. In general, the Settlement Penalty amount shall be at least the Economic Benefit of Noncompliance plus a gravity component.

2. The maximum Settlement Penalty shall not exceed the amount provided by Section 309(d), $10,000 per day of such violation.

3. Calculate all economic benefits using BEN. There is no minimum amount triggering the use of BEN.

4. Economic benefit is to be calculated as the estimated savings accrued to the facility; i.e., it is to be based upon the total amount which should have been spent by the facility. (All capital and expense costs, direct and indirect, are to be considered.)

5. The Total Gravity Component equals the sum of each Monthly Gravity Component for a month in which a violation has occurred.

6. The Significance of Violation is assigned a factor based on the percent by which the pollutant exceeds the monthly or 7-day average or daily maximum permit limitation and whether the pollutant is classified as toxic, non-toxic or conventional.

7. Where evidence of actual or potential harm to human health exists, a factor from “10” to a value which results in the statutory maximum penalty should be assessed. Where the identified impact relates only to the aquatic environment, a factor from “1” to “10” should be used.

8. The Region has the flexibility to assign a high penalty factor where an excessive number of violations occur in any month (effluent limit, reporting schedule, unauthorized discharge, bypass, etc.).

9. The Duration of Noncompliance factor allows the Region to increase the monthly gravity component for continuing, long-term violations of the same parameter(s) or requirement(s). Generally, a “long-term” violation is one which continues for three or more consecutive months.

10. A factor ranging from “0” (good compliance record, cooperation in remedying the violation) to 150 percent of the total of the Economic Benefit and Gravity Component may be added based upon the history of recalcitrance exhibited by the violator.

11. In addition, the penalty should be reduced by any amount which defendant paid as a penalty to a State or local agency on the same violations.

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