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Change is coming to EPA enforcement. As detailed in EPA Acting Assistant Administrator Craig Pritzlaff’s sweeping memorandum on Dec. 5, “Reinforcing a ‘Compliance First’ Orientation for Compliance Assurance and Civil Enforcement Activities,” EPA’s Office of Enforcement and Compliance Assurance is pivoting from the previous administration’s enforcement posture as described in the 2021 memorandum “Using All Appropriate Injunctive Relief Tools In Civil Enforcement Settlements.”
OECA’s reach in environmental enforcement is broad, as Pritzlaff makes clear in his memo. From developing and prosecuting civil judicial and administrative enforcement actions; investigating violations of environmental laws; assisting the regulated community and co-regulators; and protecting human health and the environment by ensuring polluters are held responsible for the cost and effort of cleaning up polluted sites, Pritzlaff’s memo touches on almost the entire framework of EPA’s enforcement regime.
The memo boils down to a complete realignment of OECA’s mechanisms relying on a “compliance first” lodestar to shape all of its actions. In practice, this materializes around a few key guiding principles:
• Aligning with the current national priorities, including the “Powering the Great American Comeback” initiative and the “Five Pillars” policies of the current administration.
• The development and deployment of a compliance assistance tool kit for regulated entities.
• Increased deference and coordination with state authorities to eliminate duplicative efforts and foster greater co-regulator capacity.
• Greater communication between EPA, states, tribes and regulated entities.
• Applying a “Best Reading” of the applicable laws and regulations to clarify findings and avoid litigating expansive or ambiguous interpretations.
• Requiring OECA’s assistant administrator approval for various forms of injunctive relief, including third-party audits, verification, monitoring and any proposed settlement containing mitigation or stipulated remedies.
• Mandating that enforcement decisions are to be logical, transparent and based on a structured analysis that includes law, evidence, analysis, programmatic impact, and stakeholder impact (the “LEAPS” factors).
This sea change signals a whole host of considerations for corporations, municipalities, and state subdivisions that are subject to or involved in the enforcement by OECA.
Public entities
For public entities dealing with environmental issues, the importance of developing and maintaining good relationships with state and local regulators becomes even more crucial. Given Pritzlaff’s memo describing enhanced cooperation between EPA and state regulators, matters which EPA historically managed may soon become delegated to the state regulators.
With EPA’s pronouncement of closer working relationships with local regulators comes an opportunity for local communities. Depending on the issue, this changeup may prove beneficial to municipalities who have higher administrative burdens when making changes to their budgeting or approval processes for projects. With an emphasis on local regulator involvement comes an emphasis on familiarity and predictability between and amongst the local regulator and the regulated community. This allows public entities like municipalities to budget more accurately and plan new remediation and/or redevelopment projects.
For example, if a local/municipal landfill is facing an enforcement action due to the presence of federally regulated hazardous waste, the costs and administrative burdens of navigating a state/local enforcement action, as opposed to a federal enforcement action, can be significant. Due to its size and scope of their responsibilities, EPA response times can be longer than those of local regulators. With these elongated response times come certain costs—higher legal costs, interruptions to operations, missed opportunities and general uncertainty.
While the methods and scope for implementation of the principles and priorities discussed in Pritzlaff’s memo remains unknown, it is clear that EPA’s adjustment of its enforcement priorities presents possible opportunities for public entities to explore remediation and redevelopment projects to clean their communities and generate additional property tax income.
Private parties
On the private side, regulated entities, landowners facing enforcement actions and entities with long tail liabilities related to past operations may be able to benefit from EPA’s change in tack to a course of increased regulatory flexibility and opportunity for dialogue.
For instance, the memo’s point of applying a “Best Reading” of the applicable laws and regulations to clarify findings and avoid litigating expansive or ambiguous interpretations will present a unique opportunity for dialogue as to what that best reading is in various contexts. This may lead to regulatory and enforcement outcomes that were not previously possible under the past regulatory and enforcement posture.
Further, mandating that enforcement decisions are to be logical, transparent and based on a structured analysis that includes law, evidence, analysis, programmatic impact and stakeholder impact (the “LEAPS” factors) should keep regulatory efforts for enforcement within the guardrails. Indeed, those factors mandate that the interpretation of the law is “within the most defensible, clearest interpretation of the agency’s statutory and regulatory authority” that the decisions applying those laws are “based on the best evidence to ensure noncompliance determinations are supported by clear, unequivocal facts” while applying “analysis of the available evidence” and considering programmatic impacts to avoid “mission creep and expanding regulatory requirements through overly broad inspections and enforcement.” This mandate strongly controls the nature and extent of EPA’s future involvement in enforcement activities.
In reality, this programmatic shift is likely to have a second unintended consequence. Decreased federal enforcement will likely lead to greater attempts at private enforcement by NGOs and other third-parties. Regulated entities should be prepared to defend against citizen suits under the Clean Water, Clean Air and Resource Conservation and Recovery Acts by entities who believe that there is noncompliance with existing regulations and EPA is abdicating its alleged responsibilities. Entities involved in remedial efforts should be prepared for the potential of lawsuits under the Comprehensive Environmental Response, Compensation, and Liability Act sections 107(a), 113(f), and state equivalents as a private route to advance and bring long-tail environmental liabilities to a head and closure.
In the end, Pritzlaff’s memo signals both opportunity and caution — opportunity to those public and private parties that take advantage of the chance to have real discussions with EPA about the nature and extent of the enforcement activities at their given facility or site, and caution to those parties that rest on their laurels and do not properly anticipate the potential onslaught of third-party action that such a sea change will likely bring about.•
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Huldin and Sweet are attorneys in Taft’s Environmental practice group.
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