IV. CIVIL LITIGATION
A. GENERAL
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IV.A.I
"Professional Obligations of Government Attorneys", dated April 19, 1976.
See GM-2.
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IV.A.2,
"General Operating Procedures for EPA's Civil Enforcement Program", dated
July 6, 1982. See GM-12.
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32*0
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IV.A.3.
"Clearance of Significant Enforcement Pleadings", dated January 25, 1983,
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. DC 20460
25 JAN 1983
OFFICE OF
LEGAL. AND ENFORCEMENT COL/NSCL.
MEMORANDUM
SUBJECT: Clearance of Significant Enforcement Pleadings
FROM: Robert M. Perry &tf<«* "T ~**r,
Associate Administrator and Genera l^ounsel
TO: All Regional Counsels
§
All Attorneys ^
. Office of Enforcement Counsel ^
^ I
Attached are copies of memoranda dated December 2 and -o <
October 27, 1982, setting forth procedures for clearance of31
significant pleadings in defensive cases. These procedures'^
ensure that the Deputy General Counsel and I have an f^J
opportunity to review all such pleadings before they are
filed.
The Office of Legal and Enforcement Counsel must speak
with one legal voice. Accordingly, I have decided to extend
similar review procedures to significant enforcement pleadings.
A revised concurrence request form is attached which will be
used for. all pleadings, whether filed in defensive or
enforcement cases. Please follow the procedures outlined
below.
1. Michael Brown's October 27 memorandum describes
defensive pleadings which require review. The same pleadings
require review in enforcement cases.
2. The time deadlines in paragraph 2, and the procedures
in paragraph 3, of the October 27 memorandum apply to
enforcement pleadings. However, a copy of the draft pleading
and the concurrence request form should be forwarded to the
Senior Litigator through the appropriate Associate Enforcement
Counsel rather than through the Associate General Counsel.
The Senior Litigator will submit the pleadings to me through
the Enforcement Counsel.
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-2-
3. As with defensive pleadings, these procedures apply
to significant enforcement pleadings drafted in regional
offices as well as in headquarters. The December 2 memorandum
applies, except that Regional Counsels will deal with the
appropriate Associate Enforcement Counsel rather than the
Associate General Counsel. Complaints need not be cleared
under this system, because they are already subject to review
as part of the referral process.
Attachments'
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IV.A.4.
"Regional Counsel Reporting Relationship", dated August 3, 1983. See GM-
16.
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IV.A.5.
"Implementing Nationally Managed or Coordinated Enforcement Actions", dated
December 26, 1984. See GM-35.
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IV.A.6. -
IV.A.10.
IV.A.6. "Guidance on Choosing Among Clean Water Act Administrative, Civil
and Criminal Enforcement Remedies", distributed August 28, 1987.
This document is reproduced at III.B.4., this compendium.
IV.A.7. "Guidance on State Action Preemption Civil Penalty Actions under
the Federal Clean Water Act", distributed August 28, 1987. This
document is reproduced at III.B.5., this compendium.
IV.A.8. "Guidance on "Claim-Splitting" in Enforcement Actions under the
Clean Water Act", distributed August 28, 1987. This document is
reproduced at III.B.6., this compendium.
IV.A.9. "Guidance on Retroactive Application of New Penalty Authorities
under the Clean Water Act", distributed August 28, 1987. This
document is reproduced at III.B.7., this compendium.
IV.A.10. "Guidance on Effect of Clean Water Amendment Civil Penalty
Assessment Language", distributed August 28, 1987. This document
is reproduced at III.B.8., this compendium.
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IV.A.11,
"Issuance of Guidance Interpreting 'Single Operational upset"1, dated
September 27, 1989.
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~.~ z
.5SB;
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
27 1969
OFFICE OF
ENFORCEMENT AND
COMPLIANCE MONITORING
MEMORANDUM
SUBJECT:
FROM:
Issuance of Guidance Interpreting "Single Operational
Upset"
Robert G. Heiss &&
Associate Enforcement Counsel
for Water
Keith A. Onsdorff
Associate Enforcement Counsel
for Criminal
TO:
James R. Elder.
Director
Office of ffcfter Enforcement
and Permits
Addressees
Attached is the final guidance document presenting the
Agency's interpretation of the "Single Operational Upset" (SOU)
provisions that were added to the Clean Water Act by Congress via
the Water Quality Act of 1987, now codified as CWA §§ 309(c)(5),
(d), and (g)(3), 33 U.S.C. §5 1319(c)(5), (d), and (g)(3) . It is
the purpose of this Guidance to provide EPA enforcement personnel
with an Agency interpretation of the SOU provisions for use in
determining under what circumstances SOU will apply to reduce the
statutory liability of a CWA violator.
This Guidance document was distributed in draft for comment
on April 21, 1989. Comments were received from nine EPA Regional
offices, the National Enforcement Investigations Center, the Office
of Criminal Enforcement Counsel, the Office of General Counsel, and
the Department of Justice, Land and Natural Resources Division.
The comments were generally very favorable and the Guidance has
been revised pursuant to those comments. In particular, there was
nearly unanimous agreement with the approach to the interpretation
-of SOU set forth in the Guidance. Agreement was unanimous that SOU
may not be limited to violations of technology-based effluent
limitations.
Printed on RecyszS Paper
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The Guidance set out in the attached document represents
Agency's authoritative interpretation of the Single Operationa.
Upset provisions contained in the Water Quality Act of 1987. It
is intended primarily for the use of government personnel. It is
not intended, and cannot be relied upon, to create any rights,
substantive or procedural, enforceable by any party in litigation
with the United States. The Agency reserves the right to change
this guidance at any time without public notice.
We encourage all Regions to discuss any instance in which sou
arises in an enforcement context with us. Please call either
Daniel Palmer, OECM-Water, (LE-134W), FTS 382-2849, Richard Kinch,
OWEP, (EN-338), FTS 475-8319, or, for potential criminal cases,
call Bette Ojala, OCEC, (LE-134X), FTS 475-9663.
Attachment
Addressees:
Regional Counsels, Regions I-X
Water Division Directors, Regions I-X
ORC Water Branch Chiefs, Regions I-X
Regional Water Management Compliance Branch Chiefs,
Regions I-X
Ed Reich, OECM
Paul Thomson, OECM
Enforcement Director, NEIC
Edmund J. Struzeski, NEIC
Susan Lepow, OGC
Ruth Bell, OGC
Richard Kozlowski, OWEP
Bette Ojala, OCEC
Ivy Main, OGC
David Buente, DOJ
Assistant Chiefs, DOJ Environmental Enforcement
OECM Water Attorneys
Philip Yeany, ORC, Region III
David Rankin, Region V
Hugh Barrel, Region IX
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GUIDANCE INTERPRETING
CLEAN WATER ACT SECTIONS 309feW5). 309rd). and 309fair:n;
SINGLE OPERATIONAL UPSET
I. Introduction and Summary of Contents
Congress, in amending the Clean Water Act in 1987 (via the
Water Quality Act of 1987), qualified the administrative, civil,
and criminal enforcement sections of the statute with the
following language:
For purposes of this subsection, a single operational upset
which leads to simultaneous violations of more than one
pollutant parameter shall be treated as a single violation.
Clean Water Act §§ 309(c)(5), 309(d), and 309(g)(3), 33 U.S.C. §§
1319(0)05), 1319(d), and 1319(g)(3). The effect of this language
is to limit, under certain circumstances, the penalty liability
of violators of the Clean Water Act. "Simultaneous" violations
of multiple pollutant parameters, established by an NPDES permit,
categorical standards, or local limits, each of which is
attributable to the same "single operational upset," are to be
counted as only one violation.
The term "upset" has been defined by regulation, 40 C.F.R.
§ 122.41(n), as an affirmative defense which, if affirmatively
raised and proved, completely relieves a regulatee of liability.
However, the term "single operational upset" ("SOU") has
absolutely no history predating its use in the Water Quality Act.
It is therefore the purpose of this guidance to interpret single
operational upset (SOU) for purposes of application by the
Environmental Protection Agency in pursuing penalties under
Sections 309(c), (d) and (g) of the CWA.
Following are the chief conclusions reached in this
guidance:
1. A "single operational upset" is defined in this guidance
as:
An exceptional incident which causes simultaneous,
unintentional, unknowing (not the result of a knowing
act or omission), temporary noncompliance with more
than one Clean Water Act effluent discharge pollutant
parameter. Single operational upset does not include
Clean Water Act violations involving discharge without
an NPDES or locally issued permit or noncompliance to
the extent caused by improperly designed or inadequate
treatment facilities.
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2. At the sentencing stage in a criminal prosecution, or at
the remedy stage in a civil enforcement proceeding (judicial
or administrative), violations of multiple pollutant
parameters, resulting from a single operational upset, will
be taken together in the aggregate in determining the
maximum criminal fine, the maximum term of imprisonment, or
the maximum civil penalty, which may be imposed or assessed,
for each day during which the defendant has been found
guilty of a criminal offense, or during which the defendant
(or respondent) has been found liable for civil violations.
3. This definition of Single Operational Upset applies
equally in the civil judicial, administrative, and criminal
contexts. Nonetheless, the extent of the availability of
SOU to limit penalty liability is less extensive in the
criminal context due to the requirement that the exceedance
must have been unintentional and unknowing. This
requirement eliminates the availability of SOU for "knowing"
criminal violations, CWA S 309(c)(2), (3), and (4).
4. Unintentional and unknowing operator error that results
in the occurrence of an SOU event may justify a limitation
on liability. SOU differs in this regard from the upset
defense, which does not recognize operator error as a basis
for raising the defense. The availability of SOU for
exceedances caused by unintentional operator error and
negligent acts or omissions is necessary in order to
SOU any practical application in the criminal enforcement
context.
5. "Simultaneous" is defined in this guidance as all
pollutant parameter exceedances attributable to a specific
single operational upset that occur during a single day.
Each day that such exceedances continue is considered to be
an additional day of violation subject to additional
penalties.
6. "Pollutant parameter" is defined as all effluent
1imitations and non-numeric limitations regulating the
content or amount of a regulatee's direct or indirect
discharge. These parameters may be contained in an NPDES
permit, a locally issued permit or other control mechanism
established in accordance with the pratreatment regulations,
40 C.F.R. Part 403, categorical prstreatment standards, etc.
The basis upon which the pollutant parameter is established
is irrelevant, i.e., one may claim SOU to limit liability
for exceedances of water quality-based, technology-based, or
otherwise derived pollutant parameters.
7. SOU serves to limit a CWA regulatee's potential
liability for exceedances of multiple pollutant parameters
J
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in situations where a regulatee who usually complies with
applicable effluent limits experiences an extraordinary,
temporary, and unintended "upset" event, i.e., some kind of
unusual interference with the industrial or municipal
treatment system, that results in noncompliance with more
than one effluent limitation. Under these circumstances,
EPA enforcement personnel, in calculating the maximum
allowable statutory penalty, will treat violations of
multiple pollutant parameters on a single day, attributable
to a specific SOU event, as one violation. It must be
stressed that an event will not constitute an upset for
purposes of the SOU limitation on liability unless the
regulatee can demonstrate a norm of compliance with his
permit effluent limitations.
8. In order to claim SOU, the "upset" event must be
exceptional, i.e. a non-routine, unusual malfunction of a
facility's usual proper and adequate operation. The event
must not be business as usual.
9. SOU is not available to limit liability where pollutant
parameter exceedances result from the installation of
inadequate treatment facilities or faulty design of the
treatment facilities. SOU is also not available to limit
liability of those who violate the CWA by discharging
without a permit, where a permit is legally required.
10. SOU is not available to limit the liability of any
regulated entity who, personally or by its agents or any
persons in any way associated with the regulated entity,
intentionally or knowingly causes violations of pollutant
effluent parameters.
11. The regulatee subject to a CWA enforcement action bears
the burden of coming forward with the claim that an SOU
event occurred causing the exceedances in question. The
regulatee also bears the burden of proving, by a
preponderance of the evidence, the occurrence of the SOU
event and its relationship to the effluent limitation
exceedances in question.
12. A regulatee may not claim SOU if he/she fails to take
timely corrective and/or mitigative action where possible or
practicable to reduce the effect of the upset event.
II. Deriving a Definition of "Single Operational Upset"
The tern "single operational upset11 has no history prior to
its use in the Water Quality Act of 1987. It has no history as a
statutory or regulatory term of art, nor does the term have a
single, precise, or authoritative common meaning. Therefore, in
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interpreting the meaning of SOU, EPA looks to three sources:
legislative history of the Water Quality Act, the regulatory
definition of "upset," and the plain meaning of the words in the
SOU provisions. We will look first to the legislative history.
A. The Legislative History of the Water Quality Act of 1987
Although the Clean Water Act was not amended until February
4, 1987, in the 100th Congress, the evolution of the Water
Quality Act to its final form took place primarily in the 99th
Congress. Representative Howard introduced H.R. 8, the Water
Quality Renewal Act of 1985, on January 3, 1985. The Senate
bill, S. 1128, was introduced May 14, 1985. Neither the House
nor the Senate bill as originally presented contained a provision
similar to the single operational upset provision. However, the
amended H.R. 8 reported out of the House Committee on Public
Works and Transportation contained the following language in its
administrative penalties provision:
The Administrator or the Secretary may not assess a
civil penalty under this subsection against any person
with respect to a violation if the Administrator or the
Secretary, as the case may be, has assessed a civil
penalty under this subsection against such person with
respect to the same violation or a violation having
substantially the same cause or arising out of
substantially the same conditions.
The Committee report on H.R. 8 contained the following
discussion:
If a series of closely related violations occurs due to
a single operational upset which leads to simultaneous
violations of several pollutant.parameters over a
period of several days, EPA may bring one enforcement
action, subject to the $125,000 maximum. EPA may not
seek to evade the $125,000 maximum by, tor example,
bringing separate enforcement actions for each of these
simultaneous violations. However, EPA is free to bring
separata actions for individual violations (or groups
of violations) which are not of this nature. H.R. Rep.
No. 189 at 33, 99th Cong., 1st Sess. (July 2, 1985)
However, the House Committee bill and report are not,
strictly speaking, part of the legislative history of the Water
Quality Act/ because the 100th Congress, which actually passed
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the legislation, did not incorporate them by reference, as it did
various other bills, reports, and debates.
On September 4, 1985, Congress passed a motion to agree to a
conference. The conference report was filed on October 15, 1986.
The bill reported out of committee contained the single
operational upset provisions, affecting civil, administrative and
criminal penalty assessment, as they appear in the Water Quality
Act as finally passed. The Conference report provides the
following discussion:
The [House] amendment provides that a civil penalty may
not be assessed with respect to a violation if a
penalty has been assessed with respect to the same
violation or a violation having substantially the same
cause. (bracketed word inserted) H.R. Rep. No. 1004,
99th Cong., 2d Sess., 132 Cong. Rec. H10569 (Oct. 15,
1986).... For all three classes of penalties covered
by the conference substitute—criminal, judicial civil,
and administrative civil - the conference substitute
provides that a single operational upset which leads to
simultaneous violations of more than one pollutant
parameter in an NPDES permit shall be treated as a
single violation. H.R. Rep. No. 1004, 99th Cong., 2d
Sess., 132 Cong. Rec. H10570 (Oct. 15, 1986).
Representative Snyder, a ranking minority member of the
House Committee on Public Works and Transportation, referring to
the SOU provisions, stated, "Under these penalty provision [sic],
multiple violations which stem from a single cause should be
considered as one 'violation1 for penalty assessment purposes."
H.R. Rep. No. 1004, 99th Cong., 2d Sess., 132 Cong. Rec. H10932
(October 15, 1986). Rep. Snyder did not identify the nature of
the "single cause" in this statement but from the plain language
of the statute it is clear that it must be an "operational
upset."2
S«« "Guidance on 'Claim-Splitting1 in Enforcement Actions
Under the Clean Water Act," August 28, 1987, for a discussion of
the application of the $125,000 statutory cap on administrative
(class II) penalties in the context of a series of violations.
2 Rep. Snyder could not have meant that anv single cause
that results in multiple violations is to be considered as one
violation for penalty assessment purposes. If anv cause would
suffice to limit penalty liability, then failure to install
necessary wastewater treatment equipment would constitute a
single cause for which penalty liability could be limited.
Failure to install treatment equipment is not an "operational
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Subsequently, S. 1128 was signed in both the House and the
Senate on October 23, 1986. The bill was vetoed by President
Reagan on November 6, 1986. In the 100th Congress, the identical
bill, redesignated H.R. 1, was again passed by both houses of
Congress and was again vetoed by the President, on January 30,
1987. However, five days later, on February 4, 1987, Congress
voted to over-ride the President's veto and the Water Quality Act
of 1987 became law.
Since H.R. 1 was identical to the conference bill placed
before the President in the 99th Congress, the legislative
history pertaining to that legislation was incorporated by
reference. Sen. Chafee stated:
Therefore, the statement of managers on that bill [S.
1128], which is found in Report No. 99-1004, contains
the primary legislative history on this bill. That
statement of managers, as explained by conferees on the
floor of the House and Senate last October, should be
viewed by courts as the most authoritative statement of
congressional intent. 133 Cong. Rec. S746 (daily ed.
Jan. 14, 1987) (statement of Sen. Chafee).
Specifically, the legislative history includes the conference
report, and the Senate debate on the conference report, as well
as the report of the Environment Committee on the committee bill
S.1128 and the Senate debate on the committee bill. 133 Cong.
Rec. S734-735 (daily ed. Jan. 14, 1987) (statement of Sen.
Mitchell).
The legislative history is thus largely a restatement of the
single operational upset provision. No discussion is found in
Congressional debate. At most, the discussion in the conference
report shows that the Conference Committee restated the previous
House concept of penalty limitation as a single operational upset
concept. Congress deleted the tern "substantially the same
cause" at the sane time. The change indicates that it was
Congress's intent that only a cause related to a single
operational upset could operate to limit liability. The
Conference Committee also incorporated the concept of
simultaneity, which operates to further limit the violations
which may b« treated as a single violation.
The new wording added by the Conference Committee indicates
the importance of the term "single operational upset" and of the
upset," nor is it at all likely that Congress would have desired
to limit a polluter's liability in this situation. The statute
must be construed as written, limiting liability where the cause
of multiple violations was single "operational upset."
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simultaneity concept. Nonetheless, Congress provided no guidance
on what it meant by these terms. It is therefore, primarily, the
regulatory definition of upset and the plain statutory language
that form the basis for EPA's interpretation of the SOU
provisions.
B. Regulatory Definition of Upset and the Upset Defense
The term "upset" has been defined by regulations promulgated
by the Environmental Protection Agency. 40 C.F.R. § 122.41(n).
These regulations were developed in response to the Federal
Circuit Court decision in Marathon Oil v. Environmental
Protection Agency. 564 F.2d 1253 (9th Cir. 1977). In Marathon
Oil, the court held that EPA was required to insert a special
"upset" provision into the permit of each of the defendants in
the case. The court concluded that a facility using proper
technology operated in an exemplary fashion would not necessarily
be able to comply with its technology-based effluent limitations
one hundred percent of the time. Further, the Act only required
dischargers to meet effluent limitations by application of "best
available technology." Therefore, lack of a mechanism providing
an excuse from liability for those rare circumstances when a
violation occurs that the discharger could not avoid set a
standard higher than that set by the Clean Water Act.
Based on the decision in Marathon Oil. EPA elected to
require by regulation that all federally-issued NPDES permits!
afford dischargers who have violated technology-based effluent
limitations in their permit a limited "upset defense." The
regulation defining upset states:
"Upset" means an exceptional incident in which there is
unintentional and temporary noncompliance with
technology based permit effluent limitations [or
categorical Pretreatment Standards] because of
factors beyond the reasonable control of the permittee
[or Industrial User]. An upset does not include
noncompliance to the extent caused by operational
error, improperly designed treatment facilities,
3 States are not required to include an upset provision in
state-issued pollution discharge elimination system permits under
§ 510 of the Act, 33 U.S.C. §1370, which allows states to adopt
or enforce more stringent standards. sierra Club v. Union oil
Co. . 813 F.2d 1480 (9th Cir. 1987). gee. also U.S. v. BP Oil,
Inc.. No. 86-0792 (E.D.Pa. July 29, 1988)(order granting
government's motion for partial summary judgment)("Absent
incorporation by either [defendant's federal or state issued]
permit of the upset defense . . . , the defense is unavailable to
defendant.")
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inadequate treatment facilities, lack of preventive
maintenance/ or careless or improper operation.
40 C.F.R. §§ 122.41(n) and 403.16(a).
The intent of the upset defense, as defined in the
regulations, is to provide those who violate technology-based
effluent limitations (contained in a federally-issued NPDES
permit or categorical pretreatment standards) with an affirmative
defense to allegations of permit noncompliance, if the exceedance
results from an exceptional, unintentional incident which is
beyond the control of the party who discharges in violation of
his permit. A party who successfully claims upset is not legally
liable for the exceedances at issue, and has not violated the
CWA, his NPDES permit, or categorical pretreatment standards.
An analysis of the SOU provisions in the Water Quality
Act and their application to the various enforcement sections to
which they were appended, makes it doubtful that Congress
intended single operational upset to have exactly the same
definition as regulatory upset. If SOU and regulatory upset are
given the same definition, two major problems arise. First, the
regulatory upset defense would render SOU almost meaningless,
providing a complete defense in the same situations where SOU
would serve only to limit a violator's liability. Second, the
regulatory definition of upset is inapplicable in the criminal
context. Criminal liability is predicated on proving certain
levels of culpability, either negligent or knowing. The
regulatory upset defense, by definition, is unavailable in those
situations where the event causing the violations is attributable
to negligence or greater culpability on the part of the
regulatee. Therefore, if one applies the regulatory definition
of upset to SOU in the 309 (c) criminal context, no criminal
defendant will ever be able to avail himself of the SOU
limitation on liability.
Because the regulatory definition of upset cannot
effectively apply to SOU, it is necessary to interpret this
statutory provision based primarily upon the plain meaning of the
words in the provision and a determination of how the provision
can effectively be interpreted to limit the extent of statutory
liability for certain violations of the CWA.
c.Plain Meaning of the Words in the Single Operational Upset
Provisions
1. The phrase "single operational upset,11, simply con-
strued, refers to a singular event, arising from some kind of
operational failure, that results in an "upset." An upset, in
industry terms; is an unusual event that temporarily disrupts the
usually satisfactory operation of a system. In the context of
SOU, an event, to constitute an upset, must disrupt the system in
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such a way that it results in violation of multiple pollutant
parameters.
2. "Simultaneous violations," resulting from an SOU, are
violations that occur at precisely (or nearly) the same time, and
result from the same cause, i.e., the same upset event.
3. "Pollutant parameters" are the effluent limitations
established in an NPDES or state-issued pollutant discharge
permit or categorical standards or other standards (i.e. local
limits) applying to indirect dischargers (industrial users).
III. Definitions
A. "Single Operational Upset"
Following is the definition of Single Operational
Upset which EPA enforcement personnel should use in the Civil
Judicial and Administrative, and Criminal contexts (CWA §§
309(d), 309(g)(3), and 309(c)(5)):
An exceptional incident which causes simultaneous,
unintentional, unknowing (not the result of a knowing
act or omission), temporary noncompliance with more
than one Clean Water Act effluent discharge pollutant
parameter. Single operational upset does not include
Clean Water Act violations involving discharge without
an NPDES or locally issued permit or noncompliance to
the extent caused by improperly designed or inadequate
treatment facilities.
B. "Exceptional"
In order to qualify as an SOU event, an incident must be
"exceptional," i.e., the incident must not be business as usual,
but must be a non-routine malfunctioning of an otherwise
generally compliant facility. The regulatee must normally be in
compliance with applicable effluent limitations. See Section
IV.D. below.
C. "Simultaneous"; Counting Violations where a Single
Operational Upset is Involved
The statutory language refers to "simultaneous violations"
of more than one pollutant parameter. For purposes of the SOU
provisions, violations of more than one pollutant parameter shall
be considered to be simultaneous if they occur during a single
day, and result from the same operational upset event. In other
words, all violations attributable to a specific SOU that occur
during a single day will be counted as only one violation for
purposes of determining the maximum penalty allowed under the
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10
CWA. Therefore, if an SOU results in the exceedance of more
one permit pollutant parameter, and these exceedances continue
for only one day, only one violation will be counted. If a
violation attributable to one SOU continues for two days, two
violations will be counted, and so on.
Congress, in establishing statutory penalty limits, set
those limits on a per day, per violation basis. See CWA §§
309(c) (1)(B) and (2)(B), 309(d), and 309(g)(2). Under the CWA,
each day that an effluent limitation exceedance or other CWA
violation continues is a new day of violation, for which the
regulatee may be assessed an additional day's statutory maximum
penalty. The SOU provisions do not breach this "per day, per
violation" rule. SOU does not seek to limit the counting of
violations so that multiple days of violation caused by an SOU
event is counted as only one violation, but rather, that the
violation of multiple parameters is counted as only one violation
for the purpose of determining the maximum allowable penalty.
Therefore, in defining "simultaneous," it is correct and in
compliance with Congress's desire that each day of violation
caused by an SOU event be counted as a separate violation.
D. "Unintentional"
The requirement that the noncompliance with effluent
parameters have been "unknowing and unintentional" restricts th?
availability of the SOU limitation on liability to upset event«j
other than those caused by the regulatee or his agents or othei
associated with the regulatee who knowingly intend to commit .he*
act that caused or led to violations of the CWA. For the purpose
of defining SOU, there is no distinction drawn between a
violation "intentionally" caused and a violation "knowingly"
caused. See IV.C. below.
E. "Temporary"
The requirement that noncompliance with effluent limitations
be "temporary" concerns the requirement that the regulatee takes
corrective and/or mitigative action on an expedited basis
following the SOU event. See IV.B. below.
F. "Pollutant Parameter"
For purposes of the SOU provisions, the term "pollutant
parameter" shall include all pollutant4 numerical effluent
limitations and non-numerical limitations regulating the content
or amount of a regulatee's discharge, such as flow limitations,
visible solids, etc. The term does not include permit or
4 "Pollutant" is defined at § 502(6) of the Act, 33 U.S.C
1362(6) .
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11
regulatory conditions not directly relating to pollutant
regulation, such as requirements to report, monitor, perform
studies, complete tasks on schedule, pretreatment program
implementation, etc.
The statute itself restricts the application of SOU to
violations of pollutant parameters. Therefore, liability for
violations involving discharge without a permit may not be
limited by a claim of SOU.
SOU, unlike the regulatory upset defense, is not limited to
violations of technology-based effluent parameters and applies
equally to water quality-based effluent parameters. Congress, in
enacting the three SOU provisions, did not make any distinction
between the bases upon which effluent limitations are formulated,
and there appears to be no basis upon which to make this
distinction in this guidance.
IV. Application of Single Operational Upset to Limit Liability
A. To Claim SOU, the Incident Must be Exceptional
To qualify for the SOU limitation, the "upset" incident must
be exceptional: a non-routine, unusual malfunction, breakdown or
disruption of a facility's usual proper and adequate operations.
It follows from Congress's use of the words "single" and "upset"
that a single operational upset cannot be business as usual. (The
concept of single operational upset is similar to that of
regulatory upset in this regard.)
B. To Claim SOU, a Discharger Must Normally Achieve its
Effluent Limitations
Several exceedances stemming from the same cause may
constitute evidence that the underlying cause or event was not an
"upset," i.e. an unusual or exceptional malfunction of an
ordinarily well functioning operation. Such a series of
exceedances indicates that proper equipment may not have been
installed, that the facility might be, as a matter of course,
improperly operated, or that the design of the facility is
deficient. It would also indicate that the discharger/violator
had notice that there was a problem with its treatment facility
and failed to take action to mitigate and avoid further
breakdowns leading to exceedances. Therefore, violations of the
CWA by dischargers who are frequently, repeatedly, ordinarily or
predictably not in compliance are not due to an "upset" within
the meaning of "single operational upset," even if associated
with an equipment breakdown or operational failure.
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C. To Claijn SOU, the Exeeedanee of Effluent Parameters
Have Been Unintentional and Unknowing
Only noncompliance with pollutant effluent parameters that
were unintended and unknowing are subject to the SOU limitation
on liability. This conclusion has a limiting effect on the
availability of SOU to limit liability, particularly in the
criminal context.
CWA § 309(c)(l) makes certain "negligent" violations
criminal misdemeanor offenses. CWA § 309(c)(2), (3), and (4)
make certain "knowing" violations criminal felony offenses.
The position of the Agency is that the state of mind a
defendant must have had in order to be convicted of a felony is
"general intent," not "specific intent." This means that the
United States need not prove that a defendant specifically
intended by his acts or omissions to violate the law, but that he
must have consciously or knowingly committed (or omitted) an act
that caused or led to the violation. (Of course, intentional
violations committed by one who has "specific intent" are also
punishable under the Clean Water Act penalty provisions.)
Congress could not have intended that knowing violations
could be mitigated at sentencing through use of the single
operational upset provision. In addition, it is contrary to th
ordinary meaning of the word "upset" to include events which ar
intentionally or knowingly caused. Finally, in cases in which
the felony provisions apply, it is the "knowing" acts or
omissions which "cause" or "lead to" the violations, not any
equipment breakdown which may have been associated with such
illegal acts. Thus, the SOU provision does not apply to mitigate
sentencing of felony violations of the Clean Water Act, although
it may apply to sentencing for misdemeanor violations
(negligence).
O. An Upset Event Caused by Unintentional Operational Error
or Careless or Improper Operation is Sublect to the SOU
Limitation on Liability
The upset defense is defined by regulation so that it may
not be raised if either operational error (intentional or
unintentional) or careless or improper operation was the cause of
the effluent limitation exceedances at issue. SOU, on the other
hand, is defined so that it may be claimed where operational
error or careless or improper operation was unknowingly or
unintentionally committed.
This deviation from the regulatory upset definition is
necessary in order to give SOU practical application in the
criminal enforcement context. Criminal liability under the Clean
Water Act is premised on either a "negligent" or "knowing" level.
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13
of culpability. CWA § 309(c)(l) and (2). If any exceedance that
is either intentional or knowing or caused by "error," or
"careless" or "improper" operation were to be excluded from the
definition of SOU, no situation in which one could be both
criminally culpable (minimally negligent) and able to raise the
SOU limitation on liability (less than negligent) would exist.
In order to give SOU meaning in the CWA criminal context as set
forth in the Act, its application has been expanded to cover
effluent parameter exceedances that are caused by negligence
attributable to the regulatee.
E. To Claim SOU, the Facility Must be Properly Designed and
Provide Adequate Treatment
Violations which occur because adequate treatment technology
has not been installed is not an upset as defined in the
regulations, particularly because poor design and inadequate
treatment do not constitute the type of exceptional circumstances
that qualify an event as an SOU or upset. EPA enforcement
personnel should take the same approach to interpreting the sou
provisions. Any other result improperly limits the penalty
liability of those who have not installed proper treatment
equipment and indirectly penalizes those who have done so.
Therefore, to successfully claim SOU, a violator must demonstrate
that a facility is properly designed and that it provides
adequate treatment.
F. SOU Mav Not Be Claimed Where the Clean Water Act
Violation is Discharge without a Permit
Because it is a prerequisite to claiming the SOU limitation
on liability that violations of multiple pollutant parameters
have been exceeded/ SOU can not be available to a.respondent or
defendant in an enforcement action brought for discharge without
a permit. Absent a permit (or some other similar control
mechanism), there are no pollutant parameters established for the
respondent or defendant to have exceeded.
G. Requirement That the Violator Take Timely Corrective
and/or Mitiqative Measures Where Possible or Practicable
in Order to Claim SOU
The regulatory upset defense is not available where a
noncompliance situation exists or is allowed to continue to
exist, when corrective or mitigative measures were possible or
practicable but were not taken. 40 C.F.R. § 122.41(n)(3)(iv).
EPA enforcement personnel should take the same approach to
interpreting single operational upset. The SOU provisions shall
not be construed to provide relief to regulatees who fail to take
timely mitigative or corrective measures to minimize the effects
caused by the 'SOU nor shall continuing days of violations,
originally caused by an SOU, be equitably attributable to the SOU
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if the violator has not taken whatever corrective or
actions are necessary to prevent the continuing violations. See
40 C.F.R § 122.4l(d) (duty to mitigate). This requirement is
necessary to compel regulatees who experience an upset event to
immediately correct the problem and not allow the violations to
continue for an entire day (a day during which no additional
penalties will accrue, if additional violations are attributable
to the upset event). Congress certainly did not intend to
establish a limitation on liability that grants a regulatee the
right to violate at will, even for a single day. Implying such
an intent on Congress is contrary to the logic and purpose of the
Clean Water Act and would make a mockery of Congress's carefully
devised regulatory scheme.
H. Procedural Requirements
1. The Nature of Single Operational Upset
The SOU provisions create a) a sentencing factor, in the
criminal context, to be considered by the sentencing judge? »nd
b) an equitable factor pertaining to appropriate relief, in ,.he
civil (judicial or administrative) context, to be considered by
the judge or presiding officer. As such, the issue of whether an
SOU provision applies is not a matter which should be presented
to or considered by a jury in a criminal or civil judicial case,
and it need not be addressed in a charging document or civil
complaint.
2. Establishing the Elements of SOU
If a respondent or defendant in an administrative, civil or
criminal enforcement action believes that certain simultaneous
violations of more than one pollutant parameter were caused by a
single operational upset, respondent or defendant is responsible
for asserting this claim. Respondents and defendants are in the
best position to produce information relating to whether given
violations resulted from an SOU event. A claim of occurrence of
an SOU is relevant to the size of the penalty imposed, not the
liability of an alleged violator, therefore SOU need not be
raised until the assessment of the penalty or sentencing phase of
the proceeding.
The respondent or defendant, to successfully assert the SOU
limitation on liability, must demonstrate, through properly
signed, contemporaneous operating logs, or other relevant
evidence, that:
a) A single operational upset occurred;
b) The permittee or violator has taken, in a timely
fashion, all corrective and/or mitigative
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15
measures where possible or practicable. (See
Section IV(G) above.)
Where a respondent or defendant has provided EPA with
prior notice of an SOU condition (e.g., in accordance with the 24
hour notice requirements of 40 C.F.R. 122.41(1)(6)) presumably
administrative and judicial decision-makers will give appropriate
weight to such prior notice in determining whether the occurrence
of an SOU has been proved.
3. Burden of Proof on Respondent/Defendant
Where a respondent or defendant desires to claim the
protection of a statutory exception or exemption, such as sou, it
is fair, reasonable, and within the Constitutional Due Process
Clause to require the claimant to come forward with some evidence
of its applicability, and to require the defendant to bear the
burden of proof. Although the "burden of persuasion" is not
often placed on defendants or respondents, particularly in
criminal cases, it does not offend notions of fundamental
fairness to place such a burden on defendants in this context, to
prove "by a preponderance of the evidence" that SOU should apply.
The information required to establish the occurrence of an SOU
event is within the possession and control of the claimant.
Further, the NPDES regulations already require reporting of many
noncompliance incidents. To require that the Agency determine
whether a single operational upset has occurred, and whether the
prerequisites to its assertion have been met would be quite
burdensome and would be contrary to the intent of Congress that
enforcement actions should not be bogged down in administrative
determinations or showing of fault. See A Legislative History of
the Clean Water Act of 1977, 95th Cong., 2d Sess. (1978) at
464-5.
I. Counting Violations Where a Single Operational Upset is
Involved
When an SOU results in the exceedance of multiple daily
maximum pollutant parameters, only one violation will be counted
for each day that the exceedance attributable to the sou
continues. Thus, an SOU that results in three days of
noncompliance with one or more permit effluent parameters will be
counted as three violations in determining the statutory maximum
penalty.
The counting of violations becomes more complicated when,
for example, a permit contains both daily maximum effluent
discharge limits and monthly (or weekly) average discharge
limits. The violation of a monthly average limitation is counted
as one day of violation for each day in the month, e.g. 30 days
of violation in a 30 day month. See Gwaltnev of Smithfield v.
Chesapeake Bav Foundation. 791 F.2d 304, 314-15 (4th Cir.
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16
1986), vacated on other grounds. 484 U.S. 49 (1987). The
question therefore arises about how to count the number of
violations where an SOU event causes exceedance of multiple
monthly averages or a combination of daily maximums and monthly
averages.
•In counting monthly average violations in the SOU context,
EPA enforcement personnel should abide by these rules:
1) If a monthly average limitation would not have been
exceeded but for the effluent limitation exceedances caused
by a specific SOU event, then that monthly average violation
merges with violations of any other pollutant parameter
exceedances caused by the same SOU event. This rule applies
to daily maximum parameter exceedances that are caused by
the SOU and to each day of each monthly average parameter
exceedance that would not have occurred but for the
exceedances caused by the SOU event. For example, if
monthly average parameters for pollutants A and B are
exceeded during the same month, as a result of the same SOU
event, and neither parameter would have been exceeded but
for discharges resulting from that SOU event, then only one
violation per day will be counted during that entire month
(assuming no other violations occurred during the month).
Further, if daily maximum violations are also attributable
to the same SOU event, still only one violation per day i§|
counted for each day in the month; and
2) If the monthly average pollutant parameters in the above
example would have been exceeded regardless of discharges
caused by an SOU event, the number of violations are counted
differently because multiple monthly average exceedances do
not merge, and multiple violations per day are still to be
counted for purposes of calculating the statutory penalty.
This is true of both daily maximum parameter exceedances and
days of monthly average exceedance. For example, if monthly
average parameters for pollutants A and B are exceeded
during the same month, and these monthly average exceedances
would have occurred regardless of any SOU event that
occurred during that month, two violations will be counted
for each day during that month. If daily maximum
exceedances occur during that month and are attributable to
the SOU event, they do not merge with the corresponding days
of monthly average violation either.
For further examples of counting violations on the context
of an SOU, see Appendices 1 and 2, below.
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V. Single Operational Upset Versus Regulatory rpset: Hov the
Two Concepts Differ
Because the regulatory upset defense and single
operational upset are similar concepts, it is helpful to compare
them and to examine the ways in which they substantively and
procedurally differ. Following is a comparison of the two
concepts focusing on their differences:
A. The purpose and effect of single operational upset
differs from the purpose and effect of the regulatory upset
defense. SOU provides that EPA, in determining the maximum
penalty liability of a regulatee, is to count as one violation
all those violations of multiple pollutant parameters stemming
from a single operational upset. The result is that a
regulatee's liability is limited to $25,000 per day ($10,000 per
day administratively), regardless of the number of pollutant
parameters violated.
Regulatory upset (as defined in EPA regulations,' 40 C.F.R. §
122.41(n)) differs in that its successful assertion constitutes a
complete affirmative defense (rather than a mere limitation on
total liability) to noncompliance with effluent limitations.
B. Single operational upset is available as a limitation on
liability for noncompliance with both technology-based and water
quality-based effluent limitations. This is not true of the
regulatory upset defense, which applies only to violations of
technology-based effluent discharge limitations.
C. Single Operational Upset need not be mentioned in an
NPDES permit, either federal or state issued, for a violator to
claim this limitation on liability in a federal enforcement
action for penalties. The regulatory upset defense, on the
But see Natural Resources Defense Council v.EPA. 859 F.2d
156 (C.A.D.C. 1988). In this decision the circuit court has
compelled EPA to conduct further proceedings to determine whether
to extend the upset defense to violations of water-quality based
effluent limitations. Id., 210. The court explicitly states
that EPA need not extend the upset defense to violations of
water-quality based effluent limitations if it chooses not to do
so. Id., 209. While EPA is making this determination, the upset
regulations, as they apply to violations of technology-based
standards, remain in effect. Id., 210.
6 In a state enforcement action, brought in accordance with
a state water protection statute, an upset defense will only be
available if provided for by state law, regulation, or as a NPDES
permit provision. Similarly, the SOU limitation on liability
does not apply to enforcement actions brought in accordance with
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18
contrary, must be expressly included in a state issued permit tc
be raised as an affirmative defense in a federal enforcement
action. This limitation on raising the regulatory upset defense
does not apply to a holder of a federally issued permit.7
D. The regulatory upset defense is not available where the
noncompliance is caused by operational error, improperly designed
or inadequate treatment facilities, lack of preventative
maintenance, or careless or improper operation. The upset
regulation also requires that the incident or event leading to
the exceedances be exceptional and that the resultant
noncompliance be both unintentional and temporary.
"Upset," in the context of single operational upset, picks
up some of these limitations based on the common understanding of
the type of event that constitutes an industrial operational
upset. The event must be exceptional or unusual, and it must be
unintentional and unknowing. Further, pollutant parameter
exceedances caused by failure to properly design and failure to
install adequate treatment facilities can not constitute an SOU.
Unlike the upset defense, in the SOU context operator error mav
be the basis of an SOU claim. See IV.D, infra.
E. To assert the regulatory upset defense, a regulatee must
give prior notice to EPA or the state in accordance with 40
C.F.R. §§ 122.41(n)(3)(iii) and 122.41(1)(6). A regulatee is ;
required to give prior notice of the SOU event in order to latl
assert the SOU limitation on liability.
F. Respondents and defendants may claim, in the same
judicial or administrative action, both regulatory upset and
single operational upset. If the upset defense is successfully
claimed, single operational upset is not applicable to those
violations since the respondent or defendant would be absolved of
liability for the violations at issue.
state law, unless the state law contains an SOU provision.
States may provide for more strict enforcement, including greater
penalty liability, than is provided by federal law.
On the contrary, the federal government, even when it
enforces against violations of state issued NPOES permits, must
allow an SOU claim because the federal government always sues
under the Clean Water Act which contains the SOU provision.
7 See Marathon Oil v. EPA. 564 F.2d 1253 (9th Cir. 1977);
but see U.S. v. BP Oil. Inc.. No. 86-0792 (E.D.Pa. July 27,
1988)(order granting government's motion for partial summary
judgment) ("Absent incorporation ... of the upset defense [into
either an EPA or state issued NPDES permit], the defense is
unavailable to defendant") .
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VIII. Conclusion
Single Operational Upset operates to limit the statutory
liability of Clean Water Act regulatees under a strictly defined
set of circumstances. If a regulatee's usually well functioning
process is somehow "upset" resulting in exceedances of multiple
pollutant parameters, the statutory liability for those
exceedances will be calculated as if only one pollutant parameter
had been exceeded. The "upset" must be an extraordinary event,
not routine or if any way usual, it must not have been an
intended result of the regulatee's action or inaction, and it
must not be attributable to inadequate treatment facilities or
faulty design of those facilities.
The regulatee who chooses to assert SOU in order to limit
his potential CWA liability has the burden of raising this claim.
In so doing, the regulatee must demonstrate that he/she took
timely corrective and/or mitigative measures if possible or
practicable to limit the environmental effect of the SOU event.
IX. Effect of Guidance
This guidance establishes the Agency's authoritative
interpretation of the Single Operational Upset provisions set
forth in the Water Quality Act of 1987. It is primarily intended
for the use of government personnel. It is not intended, and
cannot be relied upon, to create any rights, substantive or
procedural, enforceable by any party in litigation with the
United States. The Agency reserves the right to change this
guidance at any time without public notice.
In addition, the Agency's application of this guidance in
formulating an appropriate Clean Water Act penalty, done in
anticipation of litigation, is likely to be exempt from
disclosure under the Freedom of Information Act. As a matter of
public interest, the Agency may release this information in some
cases.
X. Contact
For further information, please contact Daniel Palmer,
Attorney/Advisor in the Office of Enforcement and Compliance
Monitoring - Water Division (FTS 382-2849).
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APPENDIX I
EXAMPLES OF THE APPLICATION OF SINGLE OPERATIONAL UPSET:
CALCULATING PENALTIES
A metal finisher encounters an operational problem—a
chelating agent is released to the wastewater in excess of
enforceable effluent limitations. The release of the pollutants
was an exceptional and unintended event and was not attributable
to faulty design or inadequate treatment facilities, and the
violator took timely corrective action. Consequently, the
violator in this case may claim SOU to limit his liability.
Because the wastewater contains significant concentrations of
chelated chromium, copper, and nickel, effluent parameters for
all three pollutants are violated. These violations continue for
3 days. Assume that EPA is seeking civil penalties at $25,000
per day for each violation.
A. Daily Maximum Violations
No SOU Limitation on Liability
The above example displays 3 violations (one for each
pollutant parameter violated), each violation continuing for 3
days. The statutory maximum penalty is calculated by multiplying
3 violations x 3 days x $25,000 per day for each violation—for a
total of $225,000.
SOU Limitation on Liability
Where the SOU limitation on liability applies, the three
pollutant parameter violations are counted as one violation for
purposes of calculating statutory penalties. This would not
impact "per day" penalties. The statutory maximum penalty in
this context is therefore calculated by multiplying 1 violation
(due to the single operational upset) x 3 days x $25,000 per day
for each violation—a total of $75,000.
B. Monthly Average violations
In addition to the daily maximum violations, monthly average
violation* nay also be counted. Assume the exceedances
attributable to the SOU also resulted in the violation of the
monthly average discharge limitation for each of the three
pollutants.
No SOU Limitation on Liability
Where no SOU is involved, the penalty for monthly
average violations is calculated by multiplying the number of
parameters violated (3) x 30 days per month x $25,000 per day—a
total of $2,250,000. To this number is added the penalty
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calculated for the daily maximum violations ($225,000), for a
grand total of $2,475,000.
Single Operational Upset Limitation
Application of SOU to limit liability for monthly average
violations turns on the question of whether the monthly average
pollutant parameter would not have been violated but for the
daily maximum exceedances that resulted from the SOU .event. If
all of the monthly average parameters would not have been
violated but for the exceedances resulting from the SOU event,
then only one violation is counted for each day during the month
that the monthly averages were violated, e.g. 30 days x 1
violation/day x $25,000/violation » $750,000 penalty. The daily
maximum violations that resulted from the SOU are not counted
separately.
If the monthly average pollutant parameter exceedances would
have occurred regardless of the SOU event, then the violations of
the monthly average parameters do not merge. Rather than
counting one violation per day for each day in the month for the
monthly average exceedances, three violations are counted. The
penalty for the daily maximum parameter exceedances, still
limited by the SOU, is added to the penalty calculated for the
monthly average violations. Therefore, in this example, the
statutory maximum penalty equals 30 days x 3 monthly average
violations/day x $25,000/violation + 3 days x 1 daily maximum
violation/day x $25,000, for a total penalty of $2,325,000.
C. Changes in parameters violated
Modify the example by having the "single operational upset"
cause the following: one chromium violation on day 1, one
chromium and one copper violation on day 2, and one nickel
violation on day 3, as well as a violation of the monthly average
for chromium.
No Single Operational Upset Limitation on Liability
To calculate this penalty, the penalties for daily maximum
and average violations for each parameter are added together. For
chromium there is 1 daily maximum violation x two days x $25,000
per day for each violation—a total of $50,000. In addition, for
chromium there is 1 monthly average violation x 30 days x $25,000
per day for each violation—a total of $750,000. For copper there
is 1 daily maximum violation x 1 day x $25,000 per violation for
each day—a total of $25,000. Likewise, for nickel there is l
daily maximum violation x 1 day x $25,000 per violation for each
day—a total -of $25,000. This results in a grand total of
$850,000.
Sincrle Operational Upset Limitation
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Again, the calculation of the penalty where an SOU is
involved depends on whether the monthly average violation would
not have been violated but for the exceedance attributable to the
SOU event. If this violation would not have occurred but for the
SOU related exceedances, all of the days of daily maximum
exceedance merge with the days of monthly average exceedance,
therefore the penalty is equal to 30 days x 1 violation per day x
$25,000, for a penalty.of $750,000.
If the monthly average violation would have occurred
regardless of the SOU related exceedance, then the days of daily
maximum exceedances do not merge with the days of monthly average
exceedance. In this example, the penalty, in this instance, is
computed by adding to the 30 days of monthly average violation
the three daily maximum violations (the two violations on day two
counted as one due to the SOU limitation) for a total penalty of
$750,000 + $75,000 - $825,000.
D. Violations not Associated With a Single Operational
Upset
Assume that an SOU occurs resulting in violations as
described in part A, above. In addition to the violations
described above, on day 2 the cyanide treatment system fails, due
to some cause other than a single operational upset, resulting in
a one day violation of the cyanide limit.
In this situation, the cyanide exceedance would not merge
with any other exceedance, either daily maximum or monthly
average, and would be counted as an additional $25,000 to be
added to the penalty.
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APPENDIX 2
More Examples of Calculating Penalties in the Context of a
Single Operational Upset
Consider the following scenario: during a single month,
Regulatee X, who owns and operates Facility X, and who possesses
an NPDES permit regulating discharges from Facility X,
experiences five separate and distinct SOU events. These events
occur on days 1-2, 10, 17, 23,and 29. The SOU events cause all
of the permit effluent limitation exceedances that take place
during this month. All the procedural preconditions for claiming
SOU have been satisfied including efforts to mitigate.
Regulatee X's NPDES permit controls discharges for two
pollutants, but establishes two parameters for each pollutant, a
daily maximum and a monthly average. The sampling for pollutant
A is taken daily, but for pollutant B samples are taken weekly.
On day 1, SOU Event I causes two days of violation of
the daily maximum effluent limitation for pollutant A, but not
pollutant B. (Pollutant B was sampled on these days. The
quantity of the discharge on both days was 77 Ibs/day). Although
Regulatee X takes all feasible mitigative steps the violation
continues for two days. On each of these days the daily maximum
limitation for pollutant A is violated. On day one the
concentration of the discharge is 40 mg/1; on day two it is 35
mg/1. These violations are so severe that, at month's end,
averaging the 30 pollutant A samples taken during the month, it
is determined that the monthly average would not have been
exceeded BUT FOR these two days of exceedance, caused by this SOU
event.
It is also determined at month's end that the monthly
average limit for pollutant B has been exceeded but, in this
case, the monthly average would have been exceeded regardless of
the exceedances caused by the SOU event that occurred on days one
and two.
On day 10, SOU Event II causes a violation of the daily
maximum affluent limitation for pollutant B (105 Ibs/day). This
is known because a sample was taken on this day. At month's end,
it is determined that the monthly average limitation for
pollutant B would not have been exceeded but for the exceedance
of Pollutant B caused by this SOU event.
On day 17, SOU Event III occurs. It does not cause an
exceedance of either the daily maximum or monthly average
limitations for pollutant A. It is unknown whether the daily
maximum or monthly average limitations for pollutant B are
exceeded because no sample of Pollutant B was taken on this day.
On day 23, SOU Event IV causes violations of the daily
maximum limitations for both pollutants A (5.0 mg/1) and B (115
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Ibs/day), both of which were sampled. At month's end it is
determined that the monthly averages for both of these poll
would not have been violated but for the exceedances caused
this SOU event.
On day 29, SOU Event V occurs. It does not cause a
violation of the daily maximum effluent limitation for either
pollutant A or B but the levels of the pollutants exceed the
monthly average limitation. As determined at month's end, the
monthly average limitation for Pollutant A would have been
violated regardless of this exceedance, as a result of the
exceedances caused by SOU event I. The monthly average
limitation for Pollutant B was exceeded by an amount such that
the average for the month would not have been violated but for
this discharge.
sou Event
I
II
III
IV
V
Dav
1
2
1
2
10
10
17
17
23
23
29
29
Pollutant Limit fPailv/Mthlvl Discharge Level
A
A
B
B
A
B
A
B
A
B
A
B
2.0/1.5 mg/1
2.0/1.5 mg/1
100/75 Ibs/day
100/75 Ibs/day
2.0/1.5 mg/1
100/75 Ibs/day
2.0/1.5 mg/1
100/75 Ibs/day
2.0/1.5 mg/1
100/75 Ibs/day
2.0/1.5 mg/1
100/75 Ibs/day
40 mg/1
35 mg/1
77 Ibs/day
77 Ibs/day
1.2 mg/1
105 Ibs/day
1.0 mg/1
NOT SAM
5.0 mg/1
115 Ibs/day
1.6 mg/1
98 Ibs/day
counting the Violation*
SOU Event Z: The only pollutant parameter violated is for
Pollutant A. Therefore, there is one daily maximum violation on
each of days one and two. In addition, the monthly average for
Pollutant A is exceeded and would not have been exceeded but for
the discharges related to SOU event I. In this case, for
Pollutant A, the monthly average violation on days one and two
merge with the daily maximum violation on those two days. The
total number of days of violation of Pollutant A, for both the
daily maximum and monthly average violations, is 30.
The daily maximum limitation for Pollutant B is NOT violated
on either day that SOU Event I is ongoing. Further, the monthly
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average violation for Pollutant B would have been violated
regardless of the violations attributable to SOU Event I.
Consequently, these days of monthly average violation do not
merge with the days of violation of Pollutant A.
SOU Event II: The daily maximum and monthly average parameters
for Pollutant B are violated as a result of this SOU event. The
monthly average parameter for Pollutant B would not have been
violated BUT FOR the exceedance caused by SOU Event II.
Therefore, the daily maximum violation on day 10 (the date of sou
Event II) and the day of monthly average violation for this date
merge, leaving a grand total of 30 days of violation attributable
to SOU event II. These days of monthly average violation do not
merge with the days of monthly average violation of Pollutant A,
caused by SOU Event 1, because the exceedances were caused by
different SOU events.
SOU Event III: The only issue presented by SOU Event III is what
effect, if any, does an SOU event whose consequences are unknown,
have on the determination of which pollutant parameter
exceedances merge. The answer is that without sampling data, a
regulatee will not be able to limit its liability based on the
occurrence of an SOU event.
SOU Event IV: The daily maximum and monthly average parameters
for both Pollutants A and B are exceeded. Both monthly averages
would not have been exceeded but for this SOU Event. As a
result, all of these violations merge, for a total of 30 days of
violation attributable to this SOU event. (Of course, the
greatest number of days of monthly average violation that may
occur in a given month is equal to the number of days in the
month. Therefore, as is the case here, because the monthly
average was already determined to have been violated for both
pollutants, no additional days of monthly average violation
actually accrue, although one more day of daily average violation
is tallied for this month.
SOU Event V: Ths discharges caused by SOU Event V result in
exceedancs of th« monthly average parameters for Pollutants A and
B. As determined at month's end, the monthly average parameter
for Pollutant A would have been violated regardless of the
exceedancs caused by this SOU event. The monthly average
parameter for Pollutant B would not have been violated BUT FOR
the exceedance caused by SOU Event V. Consequently, no days of
violation for pollutant A and B merge as a result of SOU Event v.
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APPENDIX 3
COMPARISON OF THE SINGLE OPERATIONAL UPSET LIMITATION
ON LIABILITY AND THE REGULATORY UPSET DEFENSE
SINGLE OPERATIONAL UPSET
DEFENSE
EFFECT: In calculation of
penalty liability, certain
violations are counted as
one violation.
Available by statute, no permit
permit provision necessary
in either state or federally
issued permit.
Available where violations are
violations
of either water quality or
technology-based effluent
limitations.
Proper pollution controls must
be in place (including proper
design and adequate treatment).
Available where permit limita-
tions are based on water
quality standards.
Prior notice not an explicit
requirement of proof.
Incident must be exceptional
and unintentional (unknowing) /
but not necessarily unavoidable.
Condition muat be temporary (i.e.
necessity to take timely
corrective and/or mitigative
measures where possible or
practical).
Lack of praventative maintenance
may not be the basis for a
claim of SOU.
Unless "knowing" or "intentional",
contributing operator error and
careless or improper operation
may be the cause of a single
operational upset.
REGULATORY UPSET
EFFECT: Certain exceedances
not considered to be
violations.
Must be present as provision
in state issued permit.
Available only where
are of technology-based
effluent limitations.
Same.
Not available where permit^
limitations are based ••
water quality standards^
Prior notice is explicitly
required.
Incident must be excep-
tional, unintentional,
and unavoidable.
Same.
Same.
Contributing operator error/
and careless or improper
operation may not be a
cause of a single
operational upset.
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IV. CIVIL LITIGATION
B. ENFORCEMENT CASE MANAGEMENT PROCEDURES
-------
IV.B.I,
"MEMORANDUM OF UNDERSTANDING BETWEEN THE DEPARTMENT OF JUSTICE AND THE
ENVIRONMENTAL PROTECTION AGENCY", dated June 15, 1977. See GM-3. (Amended
by IV.B.29)
-------
-------
IV.B.2.
"Memorandum of understanding Between the U.S. Coast Guard and the
Environmental Protection Agency" dated August 14, 1979. outdated (See this
index, Section VI.C.5.).
XL.
-------
-------
IV.B.3.
"Allocation of Litigation Responsibilities Between Regional and
Headquarters Components of Office of General Counsel11, dated December 14,
1979.
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!«322£~»*" UNir£D STATES ENVIRONMENTAL PROTECTION AGENCY
\ifaa,i?~ WASHINGTON. O.C. 20^60
December 14, 1979
.MEMORANDUM
arrtcs
GENERAL C
SUSJZCT: Allocation of Litigation Responsibilities
Between Regional and Headquarters Components-:
of Office of General Counsel "cp CT f~* CT I \/
^—. ^-? r\ c• w> c. i Y
FRCM: David 0. Bic.kartr
Deputy General Counsel nrp . Q ,GTQ
*»***^ J[ ^ I so / W
TO: Regional Counsels
Associate General Counsels REGION I
Deputy Associate General Counsels OFFiCI Or S!G/'CW.L CC-I!'K
Allocation of litigating responsibility "raises
difficult issues of management and professional pride,
both wirJiin the Office of General Counsel^/ and between
our office and the Justice Department. Our experience -
during the past two years of operating under our
Memorandum of Understanding with Justice convinced me
that those issues are resolved better by discussions
among peers who have a good deal of respect for each
others abilities than by scriptural citation. Sefcre
I set out what I believe is the appropriate approach'"to
this issue, I want to emphasize a number of .factors :thaf
I have considered.
1. I expect all attorneys .in" /th~is-voff ice . to be
technically equipped to writeTfi'Ie2:ble"briefs. £n\ the
Federal Courts. By "fileable"/ 'r.'mean^-b^ief/sil.that mee*
my standards of professional cbnse_tjehce>.vah.d-''tJiips;e-,:;'of.
the Assistant Attorney General- r'lii." 'headquarters/'" the
Associates .and their Deputies "are" responsible,.for" assuring
that .the standard is met^ in'the regions the .Regional
Counsels have that responsibility.
2. Regional Counsel staffs should be.involved in
any litigation arising out'of decisions mace in their
regionsi •' '
V The Office of General Counsel includes the-Regional
Counsels and their staffs.- ' ' •
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3. Legal positions taken in the Courts must be
consistent from region to region, and must be consistent
with the Agency's overall legal position. The Associate
General Counsels must be aware of, and must have an ade-
quate opportunity to consider, what arguments we will be
presenting to the Courts.
4. Determinations about the proper presentation
and staffing of litigation matters are to be made afte.r
consultation between the relevant Regional Counsel and
the relevant Associate (or a designee who has authority
to speak for the Associate). I will resolve any unresolvabie
disputes", but I expect these to be kept to a minimum.
With these factors in mind, I believe the following
procedures and principles should govern the allocation of
litigation responsibility between our regional and head-
quarters components.
1. When EPA receives a complaint or petition for
review in an action arising out of a regional action, the
office served (£.£- / regional or headquarters office) will
within 24 hours transmit the pleadings to the other office
and the Justice Department.
2. The Regional Counsel will telephone the Associate
General Counsel in the affected Division (or vice versa)
and will discuss who will be assigned to the case and the
general allocation of responsibilities for its presentation.
3. As a general rule, regional personnel should
ordinarily take the lead on issues concerning the propriety
of the manner in which discretion was e'xercised in a parti-
cular instance. Headquarters attorneys should ordinarily
take the lead on legal and policy issues that have a broad
impact on. the nationwide administration of EPA's programs.
I expect that in the many cases where both elements are
present, attorneys from both offices will be writing
different sections of the brief.
4. The "general rule" will undoubtedly have many
exceptions. I expect these to be developed on a case-by- -
case basis between the Associate General Counsel and the.
Regional Counsels-win a common-sense manner. .In particular,.
-------
I expect the Associates to be open-minded about asserting
territorial rights on an issue merely because it is arguably
"national". I will not look favorably upon appeals by
Associates that a matter be handled out of headquarters,
if the Associates can't demonstrate that a headquarters
attorney, by familiarity with similar cases or by superior
access to headquarters program people, will add signifi-
cantly to the thoroughness with which our position will be
presented to the Court. '
5. Headquarters attorneys are not forbidden to
contact regional program people directly. There are many
occasions where this may be the most efficient means of
gathering information. However, headquarters attorneys
should recognize that regional counsel attorneys will
frequently have a better feel for who the most knowledgeable
or authoritative person is in the region. If the headquarters
attorney has any doubt about who the best regional source of
information is, he should call the Regional Counsel. 'In
any event, when both headquarters and regional attorneys
are assigned to a case, the regional attorney should know
who has been contacted.
-------
-------
IV.B.4,
"Contacts with Defendants and Potential Defendants in Enforcement
Litigation", dated October 7, 1981. See GM-6.
Tl
-------
-------
IV.B.5.
"Quantico Guidelines for Enforcement Litigation", dated April 8, 1982. See
GM-8.
-------
-------
IV.B.6.
"Section Directives Concerning 60 Day Report and Processing New Referrals",
dated June 22, 1982.
-------
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Subject
Section Directives- Concerning 60-Day
Resort and Processing New Referrals
Dai:
June 22, 1932
To
All EIS/ED5 Attorneys
_ it r » , * ..*\ • * -*
S t eb n /;.-V. i L* .'-' i^§- s e y
ChipcC'Esv/r'or.menta.l En for eerie
.
Section
My recent review of selected hazardous waste
cases, the 60-day '"report and attorney time records for
enforcement
the last 6-
montn period has been completed. My review has
information and given me a better understanding
spending their
number
£
of
yielded much useful
of how attorneys are
time. It has also caused me serious concern about the
cases which appear not to be proceeding in an organized
lasnion to any foreseeable conclusion. For example, i vas shocked
to learn that in a hazardous waste case which was filed more than 2
years ago and
niontns ago, that no amended corr.p
settling parties nor has any discovery been conducted in the existing
case. In another case, despite being aware of the existence and
identity of generators for tnore than a year, no amended complaint
has been prepared nor has any meaningful discovery been conducted
against defendants or potential defendants.
in which a .partial settlement was obtained several
hat no anended complaint has been filed against non-
I have also become increasingly concerned that cases
referred to the Department by EPA have in some instances languished
for no identifiable reason. It is incumbent on each attorney to
manage his/her case docket so that cases are-analyzed promptly and
litigation is moved forward aggressively to an expeditious conclusion,
Accordingly, I am instituting the following procedures which are to
be followed in all enforcement cases. .
Handling Cases on the 60-Day Report;
My review of the 60-day report and a random check of the
accuracy of the entries leads me to the conclusion that the disparity
which exists between our version and EPA's version of which cases
are being held at EPA's request, for litigation strategy reasons
•or pending the receipt of additional information from EPA will not
withstand close scrutiny. In a recent meeting, Mrs. Dinkins
directed me to -insure that all cases on the 60-day report should
be filed or declined as soon as possible. She expressed her
displeasure with our delav in filing and
prosecuting EPA's
cases
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- 2 -
and instructed me to determine whether members of cur staff have
f-ailed to prepare the necessary pleadings or put forth the neci
effort to conduct EFA's enforcement litigation in a timely fashi
In short, it appears that despite ray requests some
staff attorneys have failed to manage their dockets or prosecute
existing cases in a timely manner. Accordingly, the following
general direct order is effective immediately for cases listed
by category on the 60-day report as unfiled:
1. Cases under review in Division and in United Statns
torneys' Grrices - Tnese cases are to be rererrec
to linitec States Attorneys within 30 days of this
•memorandum and expeditiously filed in district court.
Thereafter, they are to be vigorously prosecuted.
Staff attorneys are responsible for notifying the
Chie^ of the Environmental Enforcement Section in
writing of the date of filing; the identity of the
government attorney primarily responsible for handling
the case; the relief the government seeks; the amount
of section attorney time which will be required for
the next one year.
2. Cases held at request or agreement of EPA for settle-
-tnent. cisc-u-ssions or reasons of iitigative strategy -
Tnes3 cases are to be referred to Ur.itea States
Attorneys within 30 days and expeditiously filed
in district court and the same information provideJ'
as required in item 1 above or a memorandum shall
be provided to the Chief of the Environmental
Enforcement Section within 30 days from the date
of this memorandum indicating (a) the Iitigative
/strategy reasons that the case has not been filed;
(b) the identity of the EPA attorney who requested/
agrees with non-filing; (c) the date such request/
agreement was made; (d) written approval froro EPA
that this course continue, including the stated
reason therefor; (e) the progress which is being
made which in your view justifies continuing to
withhold the case from filing.
3. Cases in which additional factual or legal information
has been requested of EPA - Within 2 weei;s from the
date ofthis memorandum,a written memorandum shall
be provided to the Chief of the Environmental Enforce-
ment Section which shall contain (a) the information
and a discussion of its necessity for the case; (b)
the'dates on which it has been requested; (c) copies
of all written correspondence which has been sent/
received during the past year requesting and/or
refusing to provide the information; (d) the identity
of the i?A attornev. "~
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- 3 -
Karelins "ew Referrals;
.EPA ..has set referral of new cases as one of its highest:
priorities. Since March 30, 1982, EPA has.referred 20 new cases for
filing and expects to send an additional 100 cases for filing before
the end of this fiscal year. Department attorneys should give priori:
to expeditious handling of new referrals. The following procedures
are effective immediately:
1. Upon receipt of the informational copy of a referral
package, a DCJ attorney will be assigned to the cass
and EPA will be informed of the attorney's identity.
2. The DOJ attorney should contact the EPA regional attorne
. assigned to the case within 7 days to determine the
status of the case and anv important factual or legal
*> » ^
issues in the case.
«.
3. Within 30 calendar days after DOJ receives the formal
referral letter from EPA, the DOJ attorney is responsible
for analysing the case, preparing appropriate pleadings
(complaint; discovery; etc.) and recommencing to the
Assistant Attorney General that the case be filed or
declined* A staff recommendation that the' case be
declined or that additional information requested must
• be approved by the Chief, Environmental Enforcemen.t
Section. All requests for additional information should
be aade orally and confirmed in writing to the Regional
EPA attorneys and technical personnel with carbon copies
of such correspondence provided to the appropriate EPA
headquarters attorney and technical personnel.
4. Recommendations which will require more than 30 days to
prepare should be brought to the attention of the
appropriate Assistant Section Chief immediately. EPA
should be informed in writing of the reason for the delay
and given a date by which a recommendation wi.ll be mace.
5. VTherever possible, complaints should be accompanied by
appropriate discovery documents. The propriety of seek-
ing a preliminary injunction should be considered in
each case.
Filed Cases;
Cases which have been or will be filed are' to be vigorously
prosecuted. The goal in our cases is an expeditious settlement which
is favorable to the United States consistent with EPA's policies and
applicable law or a trial where resolution by settlement is not
possible^ Attorneys should remember that the United States is a
plaintiff in these cas-23 and should oush cases forward to
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- 4 -
.Attorneys should assume that v:hen a case is referred to the
ment by" EPA, attempts at settlement have essentially failed and
intends thr.t the case be filed promptly and actively litigated.
This does not mean we will refuse to negotiate with defendants.
It means tha t we will always prepare our cases for trial even
while negotiations are proceeding
'— »J ci _ _ ~
Ai
One cannot proceed as a plaintiff without a case
plan and strategy. Attorneys are responsible for the develop-
ment of a case plan and strategy an^ -or assignment of cr.gcir.r;
responsibilities to litigation team members to assure that tha
litigation strategy is followed. Attorneys are responsible for
identifying and requesting all necessary assistance from EPA.
If that assistance is not forthcoming, attorneys are responsible
for bringing this tc the attention or the Chief or Assistant
Chief for expeditious resolution with EPA. Similarly, attorneys
are responsible fo^r familiarizing themselves with relevant statut:
and regulatory provisions, understanding the technical issues
which are presentee, identifying policy or legal questions which
arise in litigation and seeking early advice on the appropriate
litigative/policy position from EPA and the section management.
Section attorneys must undertake and follow through
on case preparation. There is no acceptable reason for failing
to conduct necessary discovery or perform other phases of case
preparation. Any request by EPA or a United States Attorney
to stay trial preparation for any reason must be made in writing
and be personally approved by the Chief of the Environmental
Enforcement Section. Attorneys are responsible for identifying
and requesting needed litigation support.
Attorneys are responsible for making maximum use of
the Department's training and litigation support resources. The
Chief and Assistant Chiefs are available for consultation and
advice on all phases of case preparation and strategy. The
Section possesses substantial form files, technical information
and an expert witness file. The Department provides extensive
training through the Attorney General'ff Advocacy Institute for
trial preparation and techniques. EPA and other federal agencies
have vast quantities of technical material which nay be easily
obtained'and utilized in our cases. Attorneys should familiarize
themselves with sources of information and utilize them.
In the future, Carol, Lloyd and I will undertake
regular, periodic review of our docket to evaluate the progress
of our litigation. This periodic review is not, however, a
substitute for seeking our consultation on case specific or
generic issues which arise in your cases.
It is my intention that this memorandum serve as a
reminder tc each scctricr: attorney' that our primary obligation
is the expeditious, satisfactory handling of EPA's enforcement
-------
l.itigation. In raost of our cases, section attorneys are dcins
good work. In others, substantial improvement is necessarv to
tseet acceptable standards. I ask each of you to examine the
amount and quality of your effort expended on your cases and
to place increased emphasis on moving our cases fo'rward for
resolution by trial or settlement. Any questions about this
nerrorandun: should be addressed co ae.
I a- providing EPA tr.ar.age-ent with a copy of this
n en or and urn and the :nost recent 69-dav resort.
cc: Mrs. Carol E. Dinkins
Mr. Anthony C. Liotta
Ms. Harv L. VJalker
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-------
IV.B.7.
"Request to Department of Justice to Withhold Action in Referred Cases",
dated September 3, 1982.
\
-------
-------
V/ASHK c.TON, PC 2c/.c
or tier or
MEMORANDUM
SUBJECT: Requests to Department of Justice to
Withhold Action in Referred Cases
s f. _ i
— P I ) ^V I
FROM: Michael A. Brown Vjv'J.u.N ~>— L:
Acting Enforcer.er.t Counsel/
Deputy General Counsel
TO: . Regional Counsels
/Associate Enforcement Counsels
Robert Perry and I recently attended a meeting with
officials of the Department of Justice to discuss the status
of cases which had been referred to DOJ t'rcm the Agency.
During that discussion, we wore advised that in many cases,
action is being withheld by DOJ at the request of Regional
attorneys who are involved in the cases.
When a case has been referred to DOJ, it should have
been investigated, prepared and developed so that suit can
be filed and the case triad without inordinate delay. The
Department of Justice should be requested to v.'ithhold action
on a case only for good and sufficient reason.
I will be working closely with DOJ en a regular basis
to assure that we refer quality cases, and that they are
filed and prosecuted expediticusly. In order to avoid
misunderstandings among DCJ, Headquarters and the Regional
Offices as to the causes for particular cases not moving
forward, henceforth, any requests to DOJ to withhold or
delay action in referred casas must be concurred with in
writing by the Enforcement Counsel.
If you have any questions regarding this, please let
me know.
-------
\\r
-------
IV.B.8,
"Case Referrals for Civil Litigation", dated September 7, 1982. See GM-13.
-------
o
-------
IV.B.9.
"Procedure for Withholding filing of Referred Cases", dated September 8,
1982.
-------
-------
Procedure for Withhold ir.j; Filing
of Referred Cases
Septcr.-iber 8,
To
All Attorneys
En v i ;:onni en t a 1 £ri v. o r c oir.o n c
and
En v i r onr.ien t a I DC f or. s e
Sections
Stephen'--!); .'Uiirisoy
Chief:, !;,p.vir.->n~e:iLal Enforce.
Sect ion '
In a recent meeting with "rtob Perry, Mike Brovn, Mary
Walker, Mrs. Dinkins and myself the subject cf cases which have
been referred by EPA but not filed by the Dopar t::ic:n t was discussed.
We have been instructed by bob Perry, t:lio Associ.-tte Adrrinistracor
for Lepal and Enforcement Counuol tha': instruction? frc^i Kc<:iop.i:L
attorneys to the Department to abctiiiu i'roni filing ref rain; ^.y., fror.
or taking other action on referred casc-r: nay nt^t nr followed absor.c
concurrenrc in writinn, by He.^dc;-.:.-:rtery KPA. Mr. l!t-rry has sent, tru;
aUuachod ne^oranduiu on this subjccc to .-ill Ke^ionul Counsels.
Accordingly, in e-ich referred c<-sc in v.'hich you have l;et_:i
ri.-quos ted by the KPA RIM* icnnl r. 'ct.onu-y ::o \v'i thhc.'l.d iLlinc, o:" ttu'
co:.ipli.inr or withhold other cao-3 activity; p] eas-
-------
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IV.B.10.
"Clearance of Briefs and Significant Pleadings", dated October 27, 1982.
-------
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. DC 20460*
270CT1982
OfflCC OF
UCCAl. AND ENFORCCMENT
MEMORANDUM
SUBJECT: Clearance of Bniefs and Sinificant Pleadings
Si
U
FROM: Michael A.
Deputy General Counsel (A-130)
TO: All Attorneys
Office of General Counsel
Attached is a form that OGC will use for clearance of
briefs and significant pleadings. It is designed to provide
the background information which Mr. Perry and I need in order
to review the pleadings. This memorandum sets out instructions
for its use.
1. What pleadings require review by the General Counsel
or 'Deputy General Counsel?
.All significant pleadings must be submitted for review by
me or the General Counsel. .These include all dispositive
pleadings, such as appellate briefs, motions to dismiss,
motions for summary judgment-, and the like. Other significant
.pleadings include appellate reply briefs and reply memoranda
in district courts. In cases involving potential court-ordered
deadlines for EPA action, answers, motions for amendment or
extension of deadline orders, and any accompanying affidavits,
should be forwarded for review.
Examples of matters ordinarily not requiring review include
motions for extensions of time, motions to supplement (or opposi-
tions to motions to supplement) the administrative record, notices
of appearance, and other pleadings not directly related to the
merits.
2. When should pleadings be submitted?
Whenever possible, pleadings must be submitted seven days
before th«y are due to be filed. Sometimes, because of litigation
deadlines or when a draft is prepared at the Department of
Justice, less -time is available." In that case, submit the pleading
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- 2 -
-as soon as possible. Do not delay submitting a pleading until it
is letter-perfect. If a reasonably complete draft is available
at the seven-day deadline, submit it, but note under "Ccnunents"
any changes which will be made. Reviewers can deal with hand-
written inserts, cut-and-paste drafts, and the like, if necessary
to assure early review. ' '
3. How are pleadings submitted?
Fill out the attached fora, have the Associate General
Counsel initial it, and give the form and draft pleading to the
Senior Litigator. The Associate's initials signify that he has
read the draft and has approved it for filing, or that the draft
will be acceptable for filing after the changes noted on the fern
under "Comments," or on the draft itself, are made. Please initial
any comments.
Under "Draft Prepared by," be sure to note whether the draft
was entirely prepared by the EPA attorney or at the Department of
Justice, or, if drafting was shared, what portions were drafted
by the EPA attorney.
When the form is returned following review, it should be
retained permanently in the litigation file.
Attachment
-------
IV.B.ll
"Civil Litigation Referral Packages", dated December 2, 1982,
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-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. DC 20460
DEC 2 1932
OFF-ICE OF
LEGAL. ANO ENFORCEMENT COUNSEL.
MEMORANDUM
SUBJECT:
FROM :
TO :
Civil Litigation Ref^rraTA Packages
Louise D. Jacobs
. Associate Enforcement Counsel
for Water
All Water Enforcement Attorneys
At the staff meeting on November 23, Mike Brown
requested that we add a new paragraph to each cover memo
accompanying proposed civil referrals. The new paragraph
should state when we received the litigation report in
our division, and, if our review has exceeded 30 days,
explain the reason for the extended review.
Please include such a paragraph in the cover memo for
any new referral packages you may prepare.
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IV.B.12
"Headquarters Review of Pleadings", dated December 2, 1982.
-------
-------
I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
f WASHINGTON. DC 20460
2 DEC 1982
OFFICE or
LEGAL AND ENFORCEMENT COU*
MEMORANDUM
SUBJECT: Headquarters Review of Pleadings
FROM: Robert M. Perry
Associate Administrator and General Counsel
TO: All Regional Counsels
Attached is a copy of a memorandum recently distributed
to attorneys in the Office of General Counsel regarding
the requirement that I review and concur in all significant
pleadings filed on behalf of the Agency in defensive cases.
This memorandum sets out procedures for review of defensive
pleadings filed in cases in which an Office of Regional
Counsel has lead responsibility.
The attached memorandum describes which pleadings
require review. Please follow the procedures it describes,
ensuring that I have an opportunity to review and concur
in all such pleadings before they are filed. You should
work with the appropriate Associate General Counsel to
make sure that a draft is ready for my review not less
than seven days prior to the date on which a pleading must
be forwarded for filing. If the brief must be filed by
mail, be sure that the draft is submitted seven days before
it must be mailed. You have met this obligation only if a
draft satisfactory to both the Regional Counsel and the
appropriate Associate General Counsel is available for my
review within the seven day deadline. Regional Counsels
must personally review and concur in all significant
pleadings submitted for my review. Obviously, you will
need to coordinate with the Associate General Counsel well
before the deadline to assure that a satisfactory draft
will be available on time.
The Associate General Counsel will be responsible for
preparing a Concurrence Request form (attached) and submitting
the pleadings for review. For pleadings submitted' after the
deadline, I h.ave instructed the Associate General Counsels
to. indicate on the form the reasons for the delav.
Attachment
-------
The Administrator has affirmed that I urge OLEC staff at
Headquarters and in the Regions to caution their 'client" pr^jran
offices and others within .the Agency about the sensitivity
contacts with persons or firms that are involved in cases
referred to DOJ for filing. There are many matters unrelated
to a specific enforcement action—e.g., processing of grants,
development of rules—in which a party may be interested and
which may be discussed without counsel present. Cars should be
taken, however, to determine the purpose(s) for which meetings
are sought by defendants and potential defendants so that appro-
priate arrangements can be made. ,11 matters related to a pending
case are raised by such persons during the course of a meeting
arranged for other purposes, any discussion of the case should
be interrupted and continued only after consultation with an
Agency attorney assigned to the case.
XIII. Enforcing Consent Decrees and Final Orders
Following the entry of a consent decree or final order,
compliance assessment is the responsibility of the Regional
Administrator, in the same way that the Regional Administrator
assesses compliance with statutory or regulatory requirements.
In the event that a source violates a consent decree or order,
a motion for contempt or modification of the decree may be appro-
priate. The decision to file for contempt or to negotiate a"*
modification will normally be the Regional Administrator's,
based upon the advice of the Regional Counsel and subject to ^
national guidance issued by the responsible Assistant AdministB
or OLEC. Since the violation would concern a filed case and a
consent decree modification would involve a court order, DOJ and
the U.S. Attorney's Office should be given the opportunity to
take part in any of those discussions. Negotiations with affected
parties should be conducted in the manner described previously
in this document (with an opportunity for Assistant Administrator
participation). All modifications to consent decrees must be
approved in the same manner as the original consent decrees.
XIV. Appeals
oeneral Counsel attorneys serve as the Agency's principal
defense lawyers and are responsible for any matter before Courts of
Appeals, including appeals of decisions relating to enforcement
actions. In such cases, the lead General Counsel attorney will
continue to be determined in accordance with a memorandum of
December 14, 1979 on the subject from the Deputy General Counsel.
The lead Agency attorney on the appeal will be responsible- for
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-22-
working closely with the lead Agency attorney appointed to the
'original enforcement case, as well as the appropriate Regional, and
Headquarters program office .personnel. The lead Agency attorney
originally appointed to an administrative enforcement action
which is subsequently appealed normally will serve as co-counsel
with the General Counsel attorney in the Court of Appeals.
'With regard to hearings before an administrative law judge
or appeals of administrative actions to the Administrator, the
Regional Counsel will normally provide legal representation for the
Agency on matters arising in the Regions, including perr.it conditions
and administrative civil penalty decisions. However, in accordance
with the OL£C memorandum of May 7; 1982, on regional reorganization,
when issues of overriding national significance exist, or when
Headouarters initiates the administrative action, the lead may be
assigned to a Headquarters attorney, upon the agreement of the
Regional Counsel and the appropriate supervisor in the Enforcement
Counsel's office.
XV. Communications/Press Relations
Throughout the enforcement process, the Regional Administrator
is responsible for ensuring that the appropriate information
flow*? openly and smoothly to all. parties with a legitimate interest
in the final outcome. Once a matter is referred to DOJ, however,
all Agency personnel should exercise care in releasing any i.nfor- -
nation or statement, including press releases, in connection with
the matter without previously consulting DOJ. The lead Agency
attorney is responsible for the smooth and complete flow of
information to supporting attorneys within the Agency and in DCJ.
The Regional Administrator and the Regional program managers
are responsible for communicating with States, except if a State
is a party to a filed judicial action. In that case, the U.S.
Attorney and DOJ should participate in or be consulted about any
such communications.
Likewise, the Regional Administrator will normally be
responsible for handling any press inquiries or releases concerning
an enforcement action. The Regional Counsel is available to provide
legal advice on the handling of those matters. Upon occasion,
such inquiries or press releases may be handled best by the Enforce-
ment Counsel or the appropriate Assistant Administrator, but only
when all parties and the press office agree that this procedure is
the best course of action. For filed actions, DOJ or the U.S.
Attorney's office should be consulted before interacting with the
press.
C
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-2-
Operating Procedures" memorandum therefore also stressed the
need for OGC attorneys to work closely with OEC and Regional
attorneys in developing an enforcement action on appeal.
Today's memorandum provides greater detail on the respective
roles for each of these OLEC offices.
Regional Counsels generally have the lead on advising
program clients on contemplated enforcement actions, in de-
veloping an enforcement case for litigation, and for serving
as in-house Agency legal representative in settlement dis-
cussions or litigation activities associated with that case.
As a result, Regional Counsels are usually the OLEC officials
most familiar with the facts and proceedings associated with
a given action on appeal, as well as at the action's initial
-Stages.
Associate Enforcement Counsels are responsible for
ensuring that enforcement actions follow and promote Agency
policy on a nationwide basis. Appeals of enforcement actions,
even actions on which a Regional Counsel had initial lead
responsibility, often involve fundamental enforcement program
questions of national significance. Thus, OEC Associates
have an important role to play in enforcement appeals.
Finally, the fundamental questions often at stake in
enforcement appeals, whether or not initiated by EPA, typically
relate to appropriate interpretations of EPA's legal authority
The OGC Associates possess the best expertise for addressing
these issues of legal interpretation and for ensuring that tr.p
EPA position is consistent with and supportive of the positions
EPA has assumed in other legal proceedings.
In light of these respective areas of responsibility and
expertise, I believe it is important that each of these OLEC
officials make appropriate contributions to EPA's activities
in an appeal of an enforcement action. This means that all
three OLEC officials should confer once EPA learns that a
defendant has filed an appeal, or once EPA begins considering
whether, to pursue an appeal, to determine their respective
roles and responsibilities on matters related to that appeal.
Each of the OLEC officials must be involved from the start
of the appeal process (including the decision on whether to
file an appeal) to ensure that each can provide a meaningful
contribution and to ensure that any issues are raised and
resolved as early as possible.
For example, the OGC Associate as a general -rule must
participate .in any Agency decision to file an appeal, since
that decision and associated filings generally involve the •
development of legal theories which may affect other areas
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-3-
of EPA's programs. Similarly, the OGC Associate normally musi
participate in the development of any briefs to ensure that
they appropriately articulate EPA's legal position without
undermining the legal positions EPA may have adopted in
other matters. In any case, the OGC Senior Litigator should
have the opportunity to review any significant pleadings.*
OEC Associates and Regional Counsels also as a rule must
participate in the area relating to their respective respon-
sibilities and expertise. Thus, OEC Associates normally must
participate in aspects of the appeal which significantly
affect national enforcement policy or establish important
precedents. Regional Counsels normally must participate en
issues concerning the propriety of EPA's actions in the
context of the particular case at issue.
Appropriate exceptions to these rules undoubtedly will
arise on a case-by-case basis as the Regional Counsel, OEC
Associate, and OGC Associate take a-common sense approach" to
distributing responsibilities for appeal-related" activities.
In many instances, for example, different officials will be
responsible for preparing different sections of the brief.
I will be available to resolve any matters on which a
consensus cannot be reached.
In any action on appeal, there must be a clear under-
standing among participants as to who holds lead responsibil-
ity. Consistent with the "General Operating Procedures"
memorandum, the OGC Associate will have lead responsibility
for the action as a whole unless the participants make other
arrangements. If appropriate, the'participants may agree to
shift the lead on an action once it reaches a certain stage.
Let me conclude by emphasizing that each of the respon-
sible. OLEC officials must ensure that he or she is promoting
coordinated OLEC participation on an enforcement appeal by
keeping other appropriate OLEC officials involved and by
making appropriate contributions to the group effort involved
in that appeal. These measures are important to enable OLEC
to provide the best legal counsel possible as the Agency
pursues or defends appeals of enforcement actions.
*Even before an enforcement case reaches the appeal -stage-.
the appropriate OGC Associate should have at least.an
opportunity .to-review and comment On any dispositive
pleadings which the Federal government plans to.file in
which the government lays out. complete legal theories which
are likely'to form fb-» basis of a jud
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IV.B.13
"Responsibility for Handling Judicial Appeals Arising Under EPA's Civil
Enforcement Program", dated December 14, 1982.
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m-
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
'„:? WASHINGTON. DC 20460
OFFICE OF
LEGAL. AND ENFORCEMENT CO'Jf
MEMORANDUM
SUBJECT: Responsibilities for Handling Judicial Appeals
Arising unde r^_F?A ' s Civil Enforcement Procran
FROM: Robert M. Perr^TAs soci at e Administrator
and General Counsel
TO: Associate Enforcement Counsels
Associate General Counsels
Regional Counsels
OLEC Office Di rectors
This memorandum describes the distribution of responsi-
bilities within OLEC for handling appeals which arise from
EPA civil enforcement actions and in which a reviewing court
bases its decision on the record of an earlier proceeding
(judicial or administrative). The basic concept underlying
this guidance is that enforcement appeals require the coor-
dinated participation of the appropriate Regional Counsel,
Associate Enforcement Counsel, and Associate General Counsel
in .order for EPA to receive proper legal advice and represen
t a t i o n .
This guidance specifically is intended to clarify
discussion of this matter in my July 6, 1982, memorandum on
"General Operating Procedures for EPA's Civil Enforcement
Program". In that document, I stated,
"General Counsel attorneys serve as the
Agency's principal defense lawyers and are
responsible for any matter before Courts of
Appeals, including appeals of decisions
relating to enforcement actions".
Of course, appeals of enforcement actions clearly involve
matters relevant.to the responsibilities of the relevant
Associate Enforcement Counsel and the Regional Counsel,
as well as the Associate General Counsel. The "General
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IV.B.14.
"Deferral in Filing Cases at the Request of EPA Attorneys", dated January
31, 1983.
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-------
Subject
Date
Deferral in Filing Cases at
the Request of EPA Attorneys
January 31, 19S2
To
From
All Environmental Enforcement
Section Attorneys
S t epherx
Environn/eHtL
'sey, Chief
Enforcement
In some recent instances- EPA headquarters has complained
that section attorneys were accedeing to requests from regional
attorneys that cases not be processed or referred or filed.
Attorneys are reminded that any request to defer the referral or
filing of a case must come from headquarters and must be in
writing. (See my memo of June 22, 1982.) If you receive a request
from a regional staff attorney to defer a referral or filing of
a case please communicate that request to the EPA staff attorney
and to your Assistant Chief, however, you may not defer process
of the case until such time that EPA has communicated that deferral
in writing at the headquarter level.
cc: Michael Brown
Associate Enforcenent Counsels
Regional Counsels
/ —
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IV.B.15,
"Case Management Procedures for Civil Water Referrals", dated March 28,
1983.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. DC 20460
MAR 281983
OFFICE OF
t-ECAU AND ENFORCEMENT COUNS1
MEMORANDUM
SUBJECT: Case Management Procedures for Civil Water Referrals
L- /
FROM: Louise D. Jacobs ^ r „
Associate Enforcement Counsel
• for Water v
TO: Regional Counsels, Region I - X
As we approach the midpoint of Fiscal Year 83, I am sending
you our March 5, 1983, status report for active water referrals
and active cases. This report charts our current total active
case load of 118 cases* under the Clean Water Act and the Safe
Drinking Water Act. The chart is prepared on a Regional basis
to allow you to check your records against ours, and to compare
your enforcement status with that of other Regions.
I also want to take this opportunity to reemphasize the
importance of Michael Brown's memorandum on case referrals dated
September 7, 1982 (copy attached). In addition, I wish to discuss
several matters specifically affecting water referrals.
1. Early Notice of Planned Referrals
Page 2 of the September 7 memorandum stresses the importance
of informing Headquarters "of new cases which are under develp-
ment as soon as sufficient information is acquired about the
cases to enable a determination to be made that they have ;
potential for referral." Early notice to this Division allows
for better coordination between Regional and Headquarters staff
attorneys. It also helps to project this Division'-s upcoming
workload and to plan accordingly. Proper planning should
facilitate the processing of referrals when they are received.
* Cases fn which a consent decree has', been filed are
•hot inc-luded. -
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I am asking my staff to emphasize the importance of notice
of planned referrals in contacts with their Regional counterpart':
I will also attempt to visit as many Regions as possible during
the remainder of this fiscal year in order better to understand
how this Division can work with each Region to develop high
quality referrals and expedite processing. Staff attorneys will
be available as needed to participate. in individual cases. I
urge that my attorneys be given the opportunity to work with you
and the Regional program office on case development., especially
where non-routine questions arise.
2. Program Office Coordination
This Division is working closely with its Headquarters
program counterparts in processing referrals. We obtain concurrence
from the Office of Water (OW) for all Clean Water Act and Safe
Drinking Water Act referrals and consent decrees before forwarding
them to the Associate Administrator, OLEC for final Agency
concurrence.
We have found OW's technical review a valuable part of the
referral process and encourage you to make full use of the Region'.s
program office also in developing the referral package. I
specifically urge that your office consult on referrals with the
Regional water program office (1) to confirm existing permit
requirements, if any, (2) to describe technically the precise
nature of the violations and some specific methods for solving
them, (3) to develop "first-cut" information about the ability
of a municipality to pay for the Agency's proposed solution and
(4) to provide information about other significant technical
problems or issues.
3. Settlement Negotiations with the Defendant
Frankly, I have felt that too much time has been expended in
prefiling negotiations with potential defendants. The matter
breaks down into two areas (1) when to negotiate and (2) how long
to negotiate. " - ' .
A. When to Negotiate . • •
Prior to referral, it. is entirely up to you whether a •
Region should conduct negotiations with a potential defendant in
an effort to seek compliance or.compliance through warning letters
or administrative orders. However,-, once you .decide that court
action is needed, this Division and DOJ should be,, to some degree,
involved in all subsequent actions -on the case, including .any
efforts to negotiate a-consent decree. .. Involvement by this- r" .
Division, and by .DOJ is essential to. 'faci 1 itat? "approval of a-ny
consent decree, and to avoid .embarrassement .which, may result.'.
-from rejection of decrees negotiated,by the Region alone. Th^"
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involvement will probably not require Headquarters attendance at
negotiation sessions. However, an attorney in this Division
should be familiar with the general negotiation strategy and
should review draft negotiation documents prior to transmittal
to counsel for the potential defendant.
Once a referral has been made by the Region to
Headquarters, negotiations should continue only with the concur-
rence (and usually with the participation) of this Division and
DOJ. Negotiations after referral should not delay the filing of
a complaint. Negotiations may continue of course after filing.
They should (1) be extremely focussed, and (2) be coordinated
with my Division and with DOJ.
B. How Long to Negotiate
Prior to referral of a case by the Region to Headquarters,
the Region may negotiate for as long as seems appropriate to the
Region. However, this Division may wish to consult with the Region
if pre-referral negotiations are unnecessarily prolonged or if
there is a serious environmental problem which requires
immediate action.
Once a case has been formally referred by the Region to
Headquarters, negotiations may continue, but it should be clearly
understood (1) that the case is on a track to litigation and (2)
that the filing of the complaint should not be delayed while
negotiations continue. Obviously a consent decree can be filed
subsequent to the filing of a complaint. If real progress is
being made in the negotiations, the Court still will later be
able to accept the consent decree. This is consistent with the
Enforcement Counsel's memorandum of September 3, 1982, which
requires prompt filing of cases. I have attached this memorandum
and Stephen Ramsey's related memorandum of September 8, 1982,
for your reference.
4. Transmittal of Case Litigation Report
The Regions have followed varying policies concerning
transmittal of the case litigation report to Headquarters. We
recommend that you send the original and one copy of the litigation
report and attachments to the. .Associate Administrator,. OLEC,. and
another copy to me. Immediately upon receipt, we coordinate
with the water program office so. that it may also begin its
review of the referral... After OW .concurrence;;.on the referral
.package and the Associate Administrator.1 s concurrence•'-, OW returns
its copy, of the 'litigation report • to", us .for transmittal to'DOJ. .
Some Regions .are already following this procedure ,'• and it is'- '=•'..
.working well. ' .'.-'.-' '. . " .•-.•'.• .' .•'"•" '." - •
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I hope that this memorandum will expedite the referral
process for water cases and answer some of the questions raise
in recent months. I will continue to welcome your comments
suggestions.
d^
d^
Attachments
cc: Courtney M. Price
Michael A. Brown
Stephen D. Ramsey
Frederic A. Eidsness
Bruce R. Barrett
Victor J. Kimm
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IV.B.16.
"Program Concurrence on Civil Referrals", dated July 20, 1983,
-------
54
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. DC 20460
JUL 2 0 ;=-•:
O F F 1C C O e*
LEGAL. AND ENFORCEMENT CC'-J^SE
MEMORANDUM
SUBJECT: Program Concurrence .qn Civil Referrals
^ ;' '/
FROM: Louise D. Jacobs ;'^~'\'&
Associate Enforcement Counsel
for Water
TO: Robert W. Zeller, Director
Office of Water Enforcement
I appreciated the opportunity to meet with you on July 11,
concerning OWEP concurrences on civil case referrals to the Depart-
ment of Justice. As we agreed, it is essential that cases submitted
by the Regions be promptly referred to DOJ or rejected by Head-
quarters if inadequate. A recent delay in this process has sug-
gested the desirability of putting an understanding in writing.
Accordingly, this memorandum confirms that the tine for OWEP
case concurrence is five days after submission to OWE? of the
final referral package as prepared by my Division. We would hcr>e to
have your concurrence in less than that time, especially since OWE?
has the Region's referral package one to two weeks in advance of
the forwarding of it to you by my Division. In the absence of
concurrence or comment at the close of five days, I will assume
that OWEP has no comment on the referral. I will send the referral
forward at that time for final approval by the Special Counsel for
Enforcement.
I look forward to continuing to work with your office on the
case referral process.
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IV.B.17,
"Program Review of Civil Water Cases", dated July 20, 1983.
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UNITED »TES ENVIROMMENTAL PROTECTION .CENCY
.<:!>• 20 IS33
MEMORANDUM
SUBJECT: Program Review of Civil water Cases
FROM: Bruce R. Barrett, Director
Office of Water Enforcement and Permits
TO: Louise D. Jacobs
Associate Enforcement Counsel for Water
During the past several months my office has been reviewing
and concurring in the referral of civil Clean Water Act (CtoA) and
Safe Drinking Water Act (SDWA) cases to the Department of Justice
(DOJ), modifications to consent decrees arising from such
referrals, proposed settlements and the withdrawal of cases which
no longer merit prosecution.
In light of completion of the OW/OLfiC Flow Chart describing
Compliance/ Enforcement procedures for the NPDES program and the
Acting Administrator's recent decisions regarding delegation of
enforcement authority, I wish to formalize the concurrence process
between our two offices regarding the pre-referral review of
cases, consent decrees, settlement proposals and case withdrawals
by OW.
Based on the Office of Waters' responsibility as national
program manager for the Agency's water activities, pro-referral
review of cases performed by ray Office will focus on the following
subject areass
1. Does the case involve complex technical issues that
would require resources and/or technical expertise
beyond that available in the Region?
2. Does the case involve national policy issues important
to the office of Water?
3. Will the case set a precedent which may impact on
national programs managed by the Office of Hater?
4. Does the case conform to existing Office of Water
policies and rjuidance with respect to the initiation
oc juuodj. «<-<-<->ne0NCU)|)ieHCES
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-2-
Reviews which conform each of the four areas to be reviewed
will be concurred on by the Director of the Enforcement Division.
The Enforcement Division Director will also concur on those cases
involving issues in one or nore of the four specified areas of
interest if the Enforcement Division Director is able to resolve
the key issues after consultation with Enforcement Counsel and the
initiating Region. If the Division Director is unable to resolve
the problem(s), such cases will bo escalated to the office
Director and to the Assistant Administrator, if necessary, for
resolution of key issues and for concurrence or non-concurrence.
I have assigned overall responsibility for program review of
pre-referral packages to Robert W. Zeller, Ph.D., Director,
Enforcement Division. Reviews involving violations of sections
301 and 402 (NPDES) of the CWA will be assigned to David Lyons and
his staff. Reviews involving sections 311 and 404 of the CWA,
the SWA, and the Marino Protection Research and Sanctuaries Act
(MPRSA) will be assigned to Don Olson and his staff. The person
assigned to review each case will complete a review check sheet
(copy atached) which will document for the file the reviewer's
rationale for recommending concurrence/non-concurrence with the
request for referral.
I have Instituted two procedural changes in my Office which
will help to ensure timely responses to your requests for
concurrence. First, I have requested that the Water Division
Directors send copies of all referral requests to my office.
several Regions are currently following this procedure, with this
procedure in place, program reviews will proceed simultaneously
with legal reviews, and in most instances, be completed prior to
the drafting of the referral memorandum to DOJ. This procedure
has the advantage that O* can provide technical input into the
referral memo if requested by your staff, second, I have
instituted an internal tracking system which will allow my staff
to pin-point exactly where any case is in the review and
concurrence process. Copies of the pre-referral packages and OLEC
requests for concurrence will be logged in and out through the
Division Secretary, Judy Howell. I have established a time limit
of five workdays for review of pre-referral packages and two days
for response to OLEC concurrence requests.
I believe that these procedures will enable us to work
closely with your Office in the timely review and referral to
DOJ of requests by the Regions for the initiation of civil
actions.
Attachments
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Attachment A
Procedures for program Review of
judicial Referral Request
Office of Water Enforcement & Permits
Enforcement Division
1. Copies of pre-referral packages and concurrence documents will
be logged in and date-stamped when received by the Division
Secretary.
2. The logged documents will be delivered to Don Olson for
distribution to the appropriate reviewer. NPDES related
reviews will be conducted by the Compliance Branch, and
Technical Evaluation and Support Section staff. Non-NPDES,
SDWA and MPRSA reviews will be conducted by the Drinking Water
and Special Enforcement Branch staff.
3. Program reviews will be completed using the review rorro and
returned to Don Olson within five workdays unless additional
information not contained in the package is required to
complete the review.
4. It' the reviewer uncovers any tactual/policy issues that would
cause OWEP to non-concur in the Region's request for referral
to DOJ, the reviewer should document his/her reason for
recommendiny non-concurrence on the review form or in a
separate memorandum and immediately raise the matter to the
Division Director's attention thru Don Olson.
5. Completed review sheets and pre-referral packages will be
checked by Don Olson and held until the concurrence documents
are received.
6. Don Olson will review the concurrence documents for
consistency with the pre-referral package and any comments
from the reviewer, initial the official file copy and forward
the referral package to the Division Director for Program
Office concurrence.
7. Any issues that can not be resolved by the Division Director
should be immediately brought to the attention of OLEC - Water
so that they are aware of OWEP's concerns and recognize that
there may be a delay in the concurrence process.
Notes This entire review process should take no longer than seven
workdays unless additional information is required or the
matter contains issues that can not be resolved at the
Division level.
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IV.B.18.
"DIRECT REFERRAL MEMORANDUM", dated September 29, 1983.(Amended by IV.B.29)
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
VASMtMCTOM, OC «M«0
OCT | 7 DPI orrie«or
MEMORANDUM
SUBJECT: Direct Referral
FROM: Richard B. Mays>
Senior Enforcement Counsel
TO: Associate Enforcement Counsels
Attached is a letter of agreement betveen the Deputy-
Administrator, on behalf of EPA, and the Acting Assistant1
Attorney General for Land and Natural Resources, on behalf
of the Department of Justice, regarding the referral ef
certain types of cases froa the Regional Offices directly
to the Departaent of Justice for a period o'f one year on
an experimental basis.
You vill note that this agreement does not go into
effect until December 1, 1983, and that Courtney Price
vill distribute a memorandum within EPA explaining this
agreement and how it. vill be implemented vithin the Agency.
Courtney would like to have the assistance of each of you
.and your staffs in developing the guidance memorandum which
vill implement this agreement. Please review the agreement
in your respective offices and submit any suggestions you
may have for its implementation.
•
This office needs to closely monitor both the efficiency
and the effectiveness of this method of handling referrals.
Therefore, it is an important responsibility to assure that
this guidance memorandum receives careful and thoughtful
consideration. Please have your respective comments submitted
to me by Wednesday, October 26, 1983 to enable us to prepare
and distribute a guidance memorandum to the Regions veil In
advance of December 1« 1983.
Attachment
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UNITED1 STATES EKVlRON'f«'.EN'T~L PRO i ECT1ON AGENCY
WASHINGTON,'. D.C 2.1-Cr ^"
C"ICC Cr ~ - L
• •' — c-;
Honorable I. Henry n^oicht, II c ' '-~ -
Acting Assistant Attorney General ' ' • . - "'••" c..- • —
Land and Natural Resources Division ' L ' ' ""
U.S. Department of Justice .- '„". . ''" ' "" .- .-..
Washington, D.C. 20530 • - ."."'"'
Dear Kank: :. . . ;;• . '. .".7 ~ .1 p"
As a result of our meeting on Thursday, September 8," 198£-' -<
and the subsequent discussions of respective staffs, we are in
agreement that, subject to the conditions set forth below, the
classes of cases listed herein will be referred'directly from
EPA's Regional Offices to the Land and Natural Resources Division
of the Department of Justice in Washington, D.C.
The terms, conditions and procedures to be followed in
implementing this agreement are:
1. The Assistant Administrator for Enforcement and Compliance
Monitoring will waive for a period of one year the recuirerr.er. t
of the Assistant Administrator's prior concurrence for referral
to the Department of Justice for the following classes of
judicial enforcement cases:
(a) Cases under Section 1414(b) of the Safe Drinking Water
Act which involve violations of the National Interim
Primary Drinking Water Regulations, such as reporting or
monitoring violations, or maximum contaminant violations;
(b) The following cases under .the Clean Water Act:
(i) cases involving discharges without a permit
by industrial dischargers;
(ii) all cases against minor industrial dischargers;
(iii) cases involving failure to monitor'or report by
industrial dischargers;
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(iv) referrals to collect stipulated penalties from
industrials under consent decrees;
(v) referrals to collect administrative spill penalt:
under Section 311(j) of the CWA;
(c) All cases under the Clean Air Act except the following:
(i) cases involving the steel industry;
v'ii) cases involving non-ferro-JS smelters;
(iii) cases involving National Emissions Standards for
Hazardous Air Pollutants;
(iv) cases involving the post-1932 enforcement policy.
Cases described in Section 1, above, shall be referred
directly from the Regional Administrator to the Land and
Natural Resources Division of DOJ in the following manner:
(a) The referral package shall be forwarded to the Assistant
Attorney General for Land and Natural Resources, U.S.
Department of Justice (DOJ), with copies of the package
being simultaneously forwarded to the U.S. Attorney
(USA) for the appropriate judicial district in which
the proposed case is to be filed (marked "advance copy-
no action required at this time"), and the Assistant £
Administrator for Enforcement and Compliance Monitoringi
(OECM) at EPA Headquarters. OECM shall have the followi-g
functions with regard to said referral package:
(i) OECM-shall have no responsibility for review of
such referral packages,andthereferral shall be
; effective as of the date of receipt of the package
by DOJ; however, OECM shall comment to the Region
upon any apparent shortcomings or defects which
it may observe in the package. DOJ may, of course,
continue to consult with OECM on such referrals.
Otherwise, OECM shall be responsible only for
routine bversicht of the progress and management
of the case consistent with applicable present
and future guidance. OECM shall, however, retain
final authority to apr>rove___settleroents on-'behalf
pf_ EPA for these cases, as in other cases. -. -.-
(ii) The referral package shall be in the format and
contain information provided by guidance memoranda
as may be promulgated from time to time by OECM in
consultation with DOJ and Regional representatives.
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-3-
(iii) DOJ shall, within 30 cays from receipt, of the
referral package, determine (1) whether the Lar.~s
Division of DOJ will have lead responsibility for
the- case; or (2) whether the USA will have lead
responsibility for the case.
' ' •• . ' ' '
While it is agreed that to the extent feasible,
cases in which the USA will have the lead will be
transmitted to the USA for filing ar.c. handling
"; within this 30-cay period, if DOJ determines that
the case requires additional legal cr factual
. v development at DOJ prior to referring the nattc-r
to the USA, the case ir.ay be returned to the
Regional Office, or say be retained-at the Lands
Division of DOJ for further development, inci-dir.g
.; requesting additional information from the Regional
Office. In any event, DOJ will notify the Regional
• Office, O£CM and the USA of its determination"of
the lead role within the above-mentioned 30-day
period.
(iv) Regardless of whether DOJ or the USA.is determined
to have lead responsibility for management of
the case, the procedures and time limitations set
forth in the MOU and 28 CFR SO.65 et sec., shall
remain in effect and shall run concurrently with
the management determinations made pursuant tc
this agreement.
3. (a) All other cases not specifically described in paragraph
1, above, which the Regional Offices propose for judicial
enforcement shall first be forwarded to OECM and the
appropriate Headquarters program office for review.
A copy of the referral package shall be forwarded simul-
taneously by the Regional Office to the Lands Division of
DOJ and to the USA for the appropriate judicial district,
the USA's copy being marked "advance copy-no act ion .-required
at this time." .
(b) OECM shall review the referral package within twenty-one
(21) calendar days of the date of receipt of said package
from the Regional Administrator and shall, within said
time period, make a determination of whether the case
should be (a) formally referred to DOJ, (b) returned to
the Regional Administrator for any additional development
which may be required; or (c) whether the Regional
Administrator should be requested to provide any additional
material or information which may be required to satisfy
the necessary and essential legal and factual requirements
for that type of case.
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(c)
(d)
-4-
Any request for information, or return of the case
to the Region shall be transmitted by appropriate letter
or memorandum signed by the AA for OECM (or her Cesi/jto-j)
within the aforementioned twenty-one day period. Sh^P?"'
OEC.M concur in the proposed referral of the case to zc:
the actual referral shall be by letter from the AA for
OEC.M (or her designee> signed within fourteen days cf
the termination of the aforementioned twenty-one cay
review period. Copies of the letters referred to hereir.
shall be sent to the Assistant Attorney General for the-
Lands Division of DOJ.
Upon receipt of the referral package- by DOJ, the
procedures and time deadlines set forth in p^ragr^pr.
Nc. S of the MO'J shall apply.
In order to allow sufficient tine prior to implementation cf
this agreement to make the U.S. Attorneys, the Regional Offices
and our staffs aware of these provisions, it is agreed that this
agreement shall become effective December 1, 1953. Courtney Price
will distribute a memorandum within EPA explaining this agreement
and how it will be implemented within the Agency. (You will receive
a copy. ) ~*
I believe that this agreement will eliminate the necessity cf
formally amending the Memorandum of Understanding between our
respective agencies, and will provide necessary experience to
ascertain whether these procedures will result in significant
savings of time and resources. In that regard, I have asked ^^^
Courtney to establish criteria for measuring the efficacy cf thi^
agreement during the one year trial period, and I ask thot you
cooperate with her in providing such reasonable and necessary
information as she may request of. you in making that determ.ir.2t icr..
At the end of the trial period—or at any time in the interval—
we may propose such adjustments in the procedures set forth hereir.
as may be appropriate based on experience of all parties.
It is further understood that it -is the mutual desire of the
Agency and DOJ that cases be referred to the USA for filing as
expeditiously as possible.' : •
I appreciate your cooperation in arriving at this agreement.
If this meets with your approval, please sign the enclosed copy
in the space indicated below and return the copv to me for our
files.
Sincerely yours,
Alvin L. Air.
Deput Administrato
nenry I-^tcicr.t
:inc Assistant
.Land and Natural Resources Division
Actin Assistant Atfcrr.ey General
i 7*\
-------
IV.B.19,
"Implementation of Direct Referrals for Civil Cases", dated November 28,
1983. See GM-18.
-------
-------
IV.B.20,
"Guidance on Evidence Audit of Case Files", dated December 30, 1983* See
GM-20.
-------
-------
IV.B.21,
"Headquarters Review and Tracking of Civil Referrals", dated March 8,
1984.
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? UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20160
. 'WAR 8 1904
C**Onr» vt'.I -*O
MEMORANDUM ' co^.^rt wo-..ic^
SUBJECT: Headquarters Review^arid Tracking/*£ Civil Referrals
FROM: Courtney M. Price
Assistant Administrator
Office of Enforcement and Compliance Monitoring
TO: Regional Administrators
Regions I-X
Regional Counsels
Regions I-X
Associate Enforcement Counsels
The Office of Enforcement and Compliance Monitoring is
committed to working cooperatively with Regional Offices to
track civil enforcement litigation and to generally improve
management of EPA's enforcement litigation. The following
procedures provide for expedited handling of case referrals
which continue to be reviewed by Headquarters and for over-
sight of "direct" case referrals. They also clarify roles
in the management of various classes of judicial actions.
This guidance supplements and, where inconsistent, supersedes
previous guidance on review and tracking of civil referrals.
I. CLASSIFICATION OF REFERRALS
Four distinct classes of cases have evolved in the Agency's
civil judicial enforcement program. Those classes of cases and
roles in handling each class may be described as follows:
Class I: Nationally managed cases involving highly
significant and precedential issues of major
importance in the particular program, or
involving 'activities in more than one Region.
The lead legal and/or technical responsibilities
in such cases usually rest in Headquarters, with
assistance from the Regional office(s).
-------
Class II:
significance^^
i A 1 . Or- rjh i r^R^ri
Class III
Class IV:
-2-
Cases involving issues of
may be unique or precedential, or whicTf
important to establish or further Agency
enforcement goals. The lead legal and
technical responsibilities in such cases
usually rest in the Regional offices, with
substantial assistance and oversight from
Headquarters.
Cases which are significant and important to
Agency enforcement goals, but which are net
likely to raise issues which are unique or
precedential. The lead legal and technical
responsibilities in such cases rest in the
Regional offices. Headquarters involvement
will be limited to general oversight to ensu.
that Agency policies are followed and that
cases are being prosecuted in an expeditious
manner. Routine communications should take
place directly between Regional attorney
staff and the Department of Justice or U.S.
Attorneys.
Cases which may be referred directly frora t-h<
Regions to Department of Justice (DOJ)
Headquarters pursuant to the September
1983 letter agreement between Alvin L./
for EPA and F. Henry Habicht, II for
(copy attached). Direct referrals are
presently authorized for the more routine
cases in the Air and Water programs.
Headquarters attorney involvement in those
cases will be limited to summary review and
oversight as described herein. Routine
communications should take place between
Regional Attorney Staff and DOJ or U.S.
Attorneys.
The classes of cases which fall within the Class iv are
set forth with specificity in the letter agreement between
Alvin Aim and F. Henry Habicht, II dated September 29, 1983.
For all other cases, the initial determination of category
and lead responsibilities will be made by the Regional
Administrator at the time the referral package is forwarded
to Headquarters for review. That determination should be
included as a part of the cover memorandum accompanying and
summarizing the referral package. Unless' the Associate Enfor
ment Counsel for the appropriate OECM division disagrees, the
case, will be handled accordingly. Should the Associate
Enforcement Counsel believe that the case has been
miscategorized, he or she should consult with the Regional
Administrator or the designated Regional enforcement contact
V
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-3-
regarding the classification of the case or decision on lead
responsibilities. The Associate will also notify the Regional
Counsel of the issue. If agreement cannot be achieved, I win
determine the appropriate classification and lead responsi-
bilities after consultation with all relevant parties within
the Agency.
After the initial classification of a case, facts may
develop or issues arise which will justify a reclassification.
Either the Associate Enforcement Counsel or the Regional
Administrator (or the designated Regional enforcement contact
person) r.ay suggest reclassification of a case or modifi-
cation of lead responsibilities. The decision on reclassifi-
cation will be made as described above for original classifi-
cation .
II. EVALUATION OF DIRECT REFERRALS
On December 1, 1983 we started a one year trial period for
direct referral of certain types of enforcement litigation to
the Department of Justice. The types of civil enforcement
cases for which I have waived the requirement of concurrence
are listed in a September 29, 1983 letter from Alvin L. Aim to
F. Henry Habicht, II (copy attached). procedures for imple-
menting the direct referral process were detailed in a
November 28, 1983, memorandum I addressed to Regional
\f **J I I \~ \f ttl^/ \-f U W W X \J II «3 JTlCl V l»* ^ W •«—* hof ^ • * M • * N^ A V- U ivt W SJ ^ ^ ^r ^ ^f fc*Mte>vi»^M^.hJ ^ *_ ^.1"^
original case would meet the current criteria for direct referral
Headquarters will review and evaluate the information ccp\
required to be furnished to EPA Headquarters when each direct
referral is sent to the Department of justice. Associate
Enforcement Counsels for the programs where direct referrals
are utilized will prepare checklists which, at a minimum,
provide for review of the following criteria:
A. Appropriateness of direct referral
The case should be clearly within one of the categories
enumerated in the September 29, 1983, letter from Alvin Aim to
F. Henry Habicht, II for which direct referral may be used.
Contempt actions in cases which fit the direct referral cate-
gories may also be handled through direct referral procedures.
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-4-
B. Format of the cover memorandurn
The referral package should include the Case Data and
Facility Data forms and a cover memorandum which identifies
and discusses at least the following subjects: nature of the
case, cause of action, proposed remedy, issues of national
or precedential significance, description of consultation
for case development (including names of Headquarters and
DOJ attorneys contacted), identification of Regional contact
persons, and basis for treating case as a direct referral.
C. Substantive adequacy of direct referrals
Each direct referral package should contain the following
elements : - -
1. An adequate cause of action;
2. Description of evidence sufficient to prove the.
violations (copies of documentary evidence should
be attached, if possible, and the person(s) with
custody of all evidence should be identified);
3. Evaluation of potential defendants and a discussion
of why the named defendants were selected;
4. Discussion of State involvement in efforts to
resolve the violations;
5. Evaluation of potential defenses and how they can
be refuted;
6. Evaluation of issues of precedential significance
in the case, including a discussion about how the
positions proposed by the Regional Office are
consistent with law and national policy;
7. Description of the environmental harm to be remedied
or other reasons which justify prosecution of the
case at the time of referral;
8. Description of the remedy to be sought or the
specific discovery required to establish a remedy
in the case;
9. Discussion of-penalties to be sought (a) if the
case proceeds to trial and (b) as an initial
settlement position; and .
-------
10. Description of attempts made to settle the case,
problems encountered in settlement discussions,
and the date of the last contact with the source
owner or other potential defendant.
Within 30 calendar days after receiving the information
copy of a direct referral the Associate Enforcement Counsel
will send a copy of the completed checklist to the Regional
Office, maintaining a file copy to serve as a basis for
periodic evaluation.
If a case which is not within the category for direct
referral is erroneously sent through the direct referral pro-
cess, the Associate Enforcement Counsel will prepare a
response ranging from a sir.ple notice to the Region indicat-
ing why the direct referral was erroneous to a withdrawal
from the Department of Justice. if a case which should have
been directly referred to the Department of Justice is
erroneously sent to Headquarters for concurrence, the
Associate will, after consultation with the Region, forward
it to the Department of Justice as a direct referral. A copy
of the memorandum forwarding the case to the Department of
Justice will be sent to the Region.
III. TRACKING ALL REFERRALS IN THE COMPUTER DOCKET
All civil cases must be entered and tracked in the
Enforcement Docket System. Guidance on responsibilities for
docket procedures is contained in memoranda dated April 21,
1983, November 23, 1983, and November 28, 1983 (copies
attached). The following docket guidance supplements anc,
where inconsistent, supersedes those memoranda.
Each Regional attorney has primary responsibility for
updating all of his or her active cases as part of the monthl
update procedures. Headquarters attorneys will also continue
to provide information to the system. Case Status Update
reports will be sent on or about the first of each month to
the Regional Docket Control or Regional Coordinator for
distribution to the responsible Regional attorneys. By the
10th of each month, the Regional attorney must see that an
update is submitted to the Regional data analyst (if the
Region has -one) or is mailed to Headquarters Docket Control,
Bruce Rothrock (LE-130A).
As with all referrals, an information copy of direct
referrals must be sent to Headquarters, directed to my atten-
tion, and must include completed Case Data and Facility Data
Forms (copies of those forms are attached). The Correspondence
Control Unit -(CCU) will route the package to the appropriate
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-6-
OECM division, and will give the Case Data Form, the
Data Form, and a copy of the cover letter rotcrral
to Headquarters Docket Control Cor entry of the case
the Docket System. Regions with Regional Docket Control she1.
give copies of the Case and facility Data Forms and the
referral memorandum directly to regional data analyst for entry
into the system. Failure to attach those forms may result in
the cases not being entered in the Docket System, and the
Region not receiving credit for the case at the tine of
referral.
Copies of direct referral packages are to be sent simul-
taneously to the Department of justice and EPA Headquarters.
The "Date to EPA Headquarters" and the "Date Referred to
DOJ" shown in the Case Docket System will be the date' on the
cover letter from the Regional Administrator. The System is
being modified so that direct referrals will be identified
and can be separately retrieved from the System. A new
event for "Date Received EPA HQ" will also be added. This
event will be used as an approximate date when the Land
and Natural Resources Division, Department of justice,
receives the referral package and, consequently, when the
thirty day clock begins to run for determining whether
Headquarters DOJ or the U.S. Attorney will have the lead
litigation responsibilities as provided in the September 29,
1983 letter agreement between-Alvin Aim and Henry Habicht, II.
IV. REFERRALS REQUIRING CONCURRENCE
The review criteria for direct referrals contained in
this memorandum also apply to cases which require Headquarters
concurrence. Rather than incorporating the results of review
in a file checklist, however/ the results will be incorporated
in the memorandum that Associates prepare for me recoirjnending
whether to refer the case to the Department of justice or
return the case to the Region. A copy of the memorandum will
be sent to the Region. If the case represents a type that
should be considered for direct referral in the future, the
memorandum addressed to me should so indicate.
All settlements require Headquarters concurrence. Thus,
referrals which include a consent decree to be filed with
the complaint require Headquarters concurrence. Such referrals
should contain the following elements:
1. A clear statement of a cause of action;
2. Identification and discussion of any issues of
'national significance;
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-7-
3. Analysis justifying proposed penalties in terms of
applicable penalty policies; and
4. An enforceable consent decree which (a) resolves
the violation, (b) is in accordance with require-
ments of applicable statutes, regulations and
policies and (c) includes an appropriate termi-
nation date or specifies some other process for
concluding the court's jurisdiction. See "Guidance
for Drafting judicial Consent Decrees" (GM-17)
issued October 19, 1983 for a complete description
of consent decree requirements.
V. MANAGING THE CIVIL ENFORCEMENT DOCKET
Involvement by the Associate Enforcement Counsels in ail
cases, including those that do and do not require Headquarters
concurrence, will provide a basis for developing national
expertise and will identify areas where national guidance is
needed. In addition it will prepare us to respond quickly
when settlement proposals are submitted for approval. We
must ensure that litigation is expeditiously prosecuted, that
national policies are implemented and that statutory require-
ments are scrupulously observed. Whenever Headquarters
identifies a problem, the Associate Enforcement Counsel
should communicate with the Regional Counsel and Department
of Justice. Where quick resolution cannot be informally
achieved, the Associate should corjnunicate in writing on the
subject to the Regional Office and Department of Justice and
place a copy of the memo in the Headquarters case file. I
rely on the judgment of each Associate as to when a matter is
of sufficient importance that it should be called to my
attention.
The Associate Enforcement Counsels will monitor the
activities of the Regions and the Department of Justice to
make sure that all cases are vigorously prosecuted after
referral. Extensive informal discussions and efforts at
voluntary resolution normally occur prior to referral. We
should move forward resolutely when litigation is required.
Settlement discussions may, of c rse, proceed on a parallel
track, but they generally should ,ot result in suspension of
litigation activities. My Novemoer 28, 1983 memorandum
describing procedures for implementation of direct referrals
specifically requires that I concur in any delay after a
case has been referred to the Department of justice. Whether
-------
-8-
or not the case was directly referred, the Associates shoul
identify and call to my attention any instance where the
government has caused or agreed to delay in the filing or
prosecution of any case without my consent.
The Associate Enforcement Counsels will use the
computerized enforcement docket and other available information
to monitor the overall litigation effort. In addition, they
and their staffs will make periodic visits to Regional offices
to fulfill this office's oversight role. unless action is
recuirea to ensure that an Agency policy or a legal require-
ment is followed, or that a case is prosecuted expeditiously,
this office will noc interject itself into individual Class
III or Class IV cases. Headquarters attorneys may, at.the
request of a Regional office to the Associate Enforcement
Counsel, provide assistance, consistent with resource
availability and other priorities.
My November 28, 1983 memorandum on direct referrals
indicates that Regional offices should obtain Headquarters
approval for settlement proposals before they are forwarded
to the defendant. This procedure should apply to to all
cases whether or not they were directly reffered. Each
Associate Enforcement Counsel is authorized to approve
settlements at this stage, using his or her judgment whether
to confer with me on critical issues before agreeing to a
proposal. The Associate will make sure the settlement mee
the criteria set forth above for consent decrees, complies
with all applicable policies and laws, and is consistent
with national program objectives. I must approve all
settlements before they are filed in court.
Attachments
cc: Office Directors, OECM
-------
IV.B.22,
"Delegation of Authorities to the Deputy Administrator", dated March 19,
1984.
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-------
? UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C 20460
March 19, 1984
THE ADMINISTRATOR
MEMORANDUM
SUBJECT: Delegation of Authorities to the Deputy Administrator
TO: Assistant Administrators
General Counsel
Inspector General
Associate Administrators
Regional Administrators
Staff Office Directors
In the interest of streamlining our management of the
Agency, I have today delegated to the Deputy Administrator the
authority to take certain actions relating to internal agency
management and organization or routine regulatory matters.
This delegation will be added to the EPA Delegations Manual
which is currently under revision.
This action is designed to relieve me of the burden of
acting on the volume of internal management decisions and other
relatively routine or pro forma signature items. As experience
suggests additional areas in which signature by the Deputy
Administrator may improve our management performance, I will
expand the scope of the current delegation. Beginning
immediately, decision documents addressing the following
matters should be prepared for Mr. Aim's signature:
~ Agency reorganizations;
— Agency directives and internal delegations of
authority;
— Advisory Board letters and charter actions
— Approval of Advance Treatment projects; and
»
— Concurrence in modifications of State Plans under
the Coal Mine Safety and Reclamation Act as
petitioned by the Department of the Interior.
William D. Ruckelshaus
-------
-------
(m
\ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
/ WASHINGTON, D.C. 20460
MAR I 3 1984
OFFICE OF
ADMINISTRATION
AND RESOURCES
MEMORANDUM MANAGEMENT
SUBJECT: General Delegation of Authority — ACTION MEMORANDUM
FROM: Howard M. Messnei
Assistant Adminstr'ator
TO: The Administrator
**-
THRU: AX /] /\
The Deputy Administrator r>/A
ISSUE
To allow the Deputy Administrator to exercise, at any time,
certain delegable authorities of the Administrator.
BACKGROUND
Reorganization Plan No. 3 of 1970 states that, "The Deputy
Administrator shall perform such functions as the Administrator
shall assign or delegate, and shall act as Administrator during
the absence or disability of the Administrator or in the event of .
a vacancy in the office of the Administrator."
As a part of our analysis of the Agency's current delegations
of authorities, my staff has identified a number of opportunities
to streamline Agency action by delegating signature authority
to the Deputy Administrator. Generally speaking, these matters
involve routine administrative decisions, minor regulatory actions,
and matters of internal management and organization. Examples of
such actions include:
0 Advisory Board letters and charter actions;
0 Agency reorganizations;
0 Agency directives and internal delegations;
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-2-
0 Approval of Advanced Treatment projects; and
• Concurrences in modifications of State Plans under the
Coal Mine Safety and Reclamation Act as petitioned by
the Department of the Interior.
The efficiencies associated with delegating signature authority
to the Deputy Administrator could be obtained by two means. On
one hand, you could delegate authority to act in these specific
areas set forth in a narrowly-prescribed delegation. On the other
hand, the delegation could be broadly drafted to authorize the
Deputy Administrator to perform any act not statutorily required
to be performed by the Administrator.
While our analysis favors the use of as broad a delegation as
possible, the General Counsel has made the point that delegation
language which is too general could cause confusion and possibly
conflict with other delegations as published. Within the context
of the attached delegation, you and the Deputy would determine
those actions you wish the Deputy to take without prior consulta-
tion with you, and we would publish those in the delegation. As
experience suggests additional areas in which you wish the Deputy
to act, he could be delegated such actions by amending this single
delegation.
The attached delegation authorizes the Deputy to exercise
certain authorities not reserved to the Administrator by statute.
It would give the Deputy full authority to act on your behalf at
any time. This is designed to relieve you of the burden of signing
or otherwise approving a volume of internal management actions or
relatively routine, pro forma signature items. This delegation
will become the initial delegation in the EPA Delegations Manual
which is currently undergoing a major revision.
RECOMMENDATIONS
I recommend you indicate your approval of Delegation 1-1 by
signing below.
*
Attachment
Approve:
Date: '2>//<7
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1200
DELEGATIONS
GENERAL, ADMINISTRATIVE AND MISCELLANEOUS
1-1. GENERAL DELEGATION
1. AUTHORITY. To exercise certain delegable authorities of the Administrator
including, tut not limited to the following:
a. signature of Advisory Board letters and charter actions;
b. approval of internal Agency reorganizations;
c. approval of Agency directives and internal delegations of authority;
d. decisions on Advanced Treatment (AT) projects; and
e. concurrences in modifications of State Plans under the Coal Mine
Safety and Reclamation Act as petitioned by the Department of Interior.
2. TO WHOM DELEGATED. The Deputy Administrator.
3. REDELEGATION. This authority may be redelegated with the concurrence of
the Administrator.
4. ADDITIONAL REFERENCES. This delegation does not supersede any other
delegation in this Manual. Delegation of other specific authorities will be
documented in revisions of this delegation.
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IV.B.23
"Races to the Courthouse", dated March 20, 1984.
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-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
MAR 2 0 1984
THE ADMINISTRATOR
MEMORANDUM
SUBJECT: Races to the Courthouse
FROM: The Administrator
TO: Assistant Administrators
Office Directors
Chief Judicial Officer
When EPA takes regulatory action, it is frequently sued.
Many of the statutes governing our Agency provide for such
suits to be filed only in one court, generally the United
States Court of Appeals for the District of Columbia Circuit.
However, a number of the statutes under which we operate
allow the Agency to be sued in any United States Court of
Appeals. This has led some litigants to sue in the court of
appeals they believe will be most likely to rule in their
favor, a practice known as forum shopping.
A federal statute, 28 U.S.C. 2112(a), requires all
lawsuits filed against a federal agency in courts of appeals
to be transferred to the court of appeals in which the first
suit was filed. That court may then transfer all the suits
to another court of appeals, but may, in its discretion,
decide all the cases itself. This statute has led some forum
shoppers to seek to be the first to file a lawsuit in the
court of their choice. This practice is known as racing
to the courthouse. Racers have adopted such measures as
stationing staff members for months in government offices
waiting for an action to be announced, maintaining open long
distance telephone lines to distant courthouses, and estab-
lishing lengthy human signalling chains to let lawyers know
when to file petitions for review.
EPA actions un.der the Clean Water Act are currently
subject to rules (40 CFR Part 100) that eliminate the most
abusive aspects of races to the courthouse by setting the
date of agency -action for judicial review purposes at two
weeks after the date of publication in the Federal Register.
» *"•
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- 2 -
However, races to the courthouse are possible under
other EPA-administered statutes. Races were recently run to
file lawsuits against two EPA regulatory actions under the
Uranium Mill Tailings Radiation Control Act and the Federal
Insecticide, Fungicide, and Rodenticide Act. The races
resulted in interference with EPA work and in unnecessary
litigation. Soon I expect to propose rules that will elimi-
nate some of the abusive practices associated with such
races. The rules, if adopted, will set the time and date of
a number of EPA actions, for purposes of judicial review, two
weeks or more after the action is signed or, for rules and
similar actions, published in the Federal Register. In the
meantime, I am asking each of you to take the following steps
to prevent races on regulatory actions that are taken before
these rules are adopted.
Rulemaking and Related Actions. In all final rules
and related actions listed in Attachment A/ include the
following statement in the "DATES" section of the preamble
to the final rule:
These regulations shall be promulgated for
purposes of judicial review at 1:00 p.m.
eastern time on [two weeks after the date
of publication in the Federal Register].
The bracketed material will be deleted by the Office of the
Federal Register and the actual date substituted. The
effective date should be changed to reflect this delay in
promulgation. Most rules should be made effective 60 days
after promulgation. In these cases, the following language
should also appear in the "DATES" section:
These regulations shall become effective on
[74 days after the date of publication in the
Federal Register].
Inclusion of an action in Attachment A does not constitute
an Agency opinion that it is rulemaking for purposes of the
Administrative Procedure Act.
Adjudication. All final orders in adjudications listed
in Attachment B should include the following language:
For purposes of judicial review, the date of
issuance or entry of this order shall be
fourteen days after the date it is signed.
Exceptions. The General Counsel, or the Judicial Officer,
may shorten the deferral period or waive these requirements
when special circumstances, such as the need- to comply with a
statutory or court-ordered deadline, so require.
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Attachment A
Rulemaking and Related Actions
Clean Water Act
Apply the requirements of 40 C.F.R. Part 100.
Resource Conservation and Recovery Act
Authorization and interim authorization of state
Hazardous Waste Management programs.
Toxic Substances Control Act
All final rules.
Safe Drinking Water Act
All final direct federal implementation underground
injection control programs.
Approval or disapproval of state-submitted
underground injection control programs.
Final agency action on petitions for designation
of aquifers under Section 1424(e).
Uranium Mill Tailings Radiation Control Act
All final rules.
Atomic Energy Act
All final rules.
Federal Food, Drug, and Cosmetic Act
All final rules.
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Attachment B
Adjudications
Clean Water Act
Decisions on appeal to the Administrator under 40 C.F.R,
§§124.91 or 124.125.
Resource Conservation and Recovery Act
Final decisions on EPA-issued or denied permits for
hazardous waste management facilities.
Federal Insecticide, Fungicide, and Rodenticide Act
Final orders following a public hearing in pesticide
cancellation or suspension proceedings.
Safe Drinking Water Act
Decisions on applications for variances or exemptions
under Sections 1415 or 1416
Federal Food, Drug, and Cosmetic Act
Final decisions on pesticides tolerances that are
reviewable under 21 U.S.C. 346a(i) or 348(g).
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IV.B.24,
"Guidance for Enforcing Federal District Court Orders", dated May 8, 1984
This document is reproduced at Section IV D.I., this compendium.
90'I
-------
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IV.B.25
"Guidance on Counting and Crediting Civil Judicial Referrals", dated June
15, 1984. See GM-29.
933
-------
-------
IV.B.26,
"Revised Regional Referral Package Cover Letter and Data Sheet" dated May
30, 1985. See GM-40.
-------
y
-------
IV.B.27
"FORM OF SETTLEMENT OF CIVIL JUDICIAL CASES", dated July 24, 1985. See
GM-42.
-------
-------
IV.B.28.
"Direct Referrals Clean Water Act - 'No Permit' Cases", dated September 11,
1985.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
\ / WASHINGTON, D.C. 20460
4. «N
*'*<.
OFFICE OF ENf-OBCEMENT
AND COMPLIANCE
MONITORING
MEMORANDUM
SUBJECT: Direct Referrals Clean Water Act .^"No Permit" Cases
FROM: Courtney M. Price ( ^,^x__/^ '"T^—^
Assistant Administrator for Enforcement
and Compliance Monitoring (LE-133)
TO: Henry L. Longest, II
Acting Assistant Administrator for Water (WH-556)
Regional Administrators
Regional Counsels
Tom Gallagher, Director
National Enforcement Investigation Center
Assistant Attorney General, F. Henry Habicht has recently
requested that all Clean Water Act "no permit" cases be care-
fully evaluated for possible criminal prosecution. As Henry
Habicht explains, the permit requirement has been in effect for
14 years; thus, it is highly unlikely that dischargers would
be unaware of the statute, and likely that any discharge without
a permit might be the result of a willful act. Furthermore,
the permit requirement is central to EPA's Water program.
I therefore am recommending that you implement the
following procedures to address his concerns.
1. The Regional Water Division Director in consultation
with the Regional Criminal Attorney and the
Special/Resident-Agent-in-charge, should carefully
scrutinize all "no permit" Clean Water Act cases for
potential criminal action prior to their referral for
civil .action.
2. If they decide to bring a criminal enforcement
action, the case will be developed and referred
as provided in the General Operating Procedures
for Criminal Enforcement.
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3. If» however, it is decided not to proceed with a
criminal prosecution, then that particular "no
permit" case will be directly referred for civil
action to the Department of Justice in accordance
with existing procedures.
These procedures will take effect on October 1, 1985.
If there are any questions, please contact Randall Lutz,
Director, Office of Criminal Enforcement. He may be reached
at FTS 557-7410; E-Mail Box EPA 2372.
Attachment
^
cc: Glenn Unterberger
Terrell Hunt
Randall M. Lutz
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IV.B.29,
"Direct Referrals", dated August 28, 1986.
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^
} UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O.C. 20460
O»»t« Of
I N*O*Cf M*NT AMO
COMPVIAMT.k MOMTOHMO
Honorable P. Henry Habicht, II
Assistant Attorney General
Land and Natural Resources Division
U.S. Department of Justice
Washington, D.C. 20530
Ret Direct Referrals
Dear Hank:
During the past year OECM has been holding discussions
with the Headquarters program offices and with the 10 Regional
Counsels on how to improve and expand the direct referral
program, wherein certain cases are referred directly from the
Regional Administrator to your office. Because the program
is working well* the consensus of the Associate Enforcement
Counsels, the program compliance division directors and the
Regional Counsels is to expand the classes of cases subject
to direct referral, we have also consulted with members of
your staff and understand that they acquiesce in this concept
insofar as the classes of cases set forth herein are concerned.
This letter, when signed by you, will serve as an amendment
to our September 29, 1983, agreement which set forth the condi-
tions of the initial direct referral pilot project. It will
also amend the June IS, 1977, Memorandum of Understanding
between our respective Agencies.
The following 8 classes of cases will be added to the
direct referral programs
1. All collection actions in which the relief
requested is solely for unpaid administratively or
judicially assessed penalties under any statute,
except for actions to assess penalties under CERCLA
and cases where there is little prior experience in
civil judicial enforcement (i.e., the Ocean Dumping
Act, underground injection control regulation under
RCRA/SDWA, Clean Air Act NESHAPs other than vinyl
chloride and asbestos).
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2. All actions in which the only relief sought is con-
tempt for violation of any consent decree or other
enforceable order, and/or to enforce the terms of any
consent decree or other enforceable order.V The pre-
ceding types of actions against governmental entities
shall continue to be referred to OECM.
3. Clean Air Act cases involving asbestos and vinyl
chloride National Emissions Standards for Hazardous
Air Pollutants.
4. All Clean Air Act post-1982 .ate cases except those
involving steel producers* smelters, and lead
sources. £/
5. All Clean Water Act cases involving NPDES permit
violations by industrial dischargers, except those
involving violations relating to or determined by
biological methods or techniques measuring effluent
toxicity.
6. All judicial actions alleging interim status vio-
lations under RCRA $3008(a) except cases involving
loss of interim status or closure. This authority
will take effect in each Region upon tfte successful
referral by the Region of two cases in order to
demonstrate the requisite experience. This author-
ity does not include corrective action cases under
S3008(h).
7. All RCRA judicial actions seeking penalties only,
except for underground injection control regulation
cases.
8. All actions to enforce final federal orders issued
under RCRA $3008(a). This authority will take ettect
in each Region upon the successful referral by the
Region of two cases in order to demonstrate the
requisite experience.
We will add these expansion cases to the 5 classes of cases
currently included in the direct referral program listed below:
T/All modifications of consent decrees which result from ••»-••
action (direct referral) in this paragraph shall continue t
require OECM approval and program office approval, where appro-
priate, prior to submission to DOJ for entry by the court.
2/ OECM approval will also be required when major changes are
made to SIPs due to a future change in the related NAAQS.
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1. Cases under Section 1414(b) of the Safe Drinking Water
Act which involve violations of the National Interim
Primary Drinking Water Regulations, such as reporting
or monitoring violations or maximum contaminant
violations. (Notes This category does not include any
causes of action under section 1414(b) established by
the SDWA Amendments of 1986.)
2. The following cases under the Clean Water Act:
a. cases involving discharges without a permit by
industrial dischargers;
b. all cases against minor industrial dischargers;
c. cases involving failure to monitor or report by
industrial dischargers;
d. referrals to collect stipulated penalties from
industrials under consent decrees;
e. referrals to collect administrative spill
penalties under Section 311(j) of the CWA.
3. All stationary source cases under the Clean Air Act
except the following:
a. cases involving the steel industry;
b. cases involving nonferrous smelters;
c. cases involving NESHAPs;
d. post - 1982 date cases.
4. All TSCA & PIFRA collection actions for unpaid
administratively assessed penalties.
5. All mobile source tampering and fuels cases (except
governmental entity cases) arising under the Clean
Air Act, Sections 203 and 211 respectively.
OECM will continue to play a substantive role in these
cases, especially in view of the increased size of the Agency's
case load and the need to ensure that our cases reflect the
Agency's priorities. OECM and DOJ will simultaneously review
these referrals.
Within 35 days of receipt of a copy of the direct referral
package, the appropriate AEC will comment on the merits of the
referral to DOJ and to the originating regional office, fie may
ask the Assistant Administrator of OECM to recommend to DOJ
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that the case be further developed before filing or returned to'
the regional office. OECM will also continue to oversee the
progress and development of these direct referral cases and will
continue to approve all judicial settlements on behalf of EPA.
All other agreed-upon conditions and procedures regarding direct
referrals and case management will remain in effect.
»
In order to allow sufficient time prior to implementation
of the expansion and to make the U.S. Attorneys , the regional
offices and our staffs aware of its provisions* it is agreed
that this agreement shall become effective for cases referred
trom a Region on or after September 2, 1986. I will distribute
a memorandum to the Regions* the Headquarters program offices
and within OECM explaining the expansion and how it will be
implemented.
I appreciate your cooperation in arriving at this amendment
to our agreement. If this direct referral case expansion meets
with your approval* please sign in the space provided below and
return a copy of the letter to me for our files.
Sincerely*
Thomas L. Adams* Jr.
Assistant Administrator
Approved:
HenrylHabicht* II
Assistant Attorney General
Land and Natural Resources Division
U.S. Department of Justice
cc: Richard H. Mays
Senior Enforcement Counsel
1
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IV.B.30.
'Expanded Civil Judicial Referral Procedures", dated
August 28, 1986. See also GM-50.*
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,
'-•'.•> r.TATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O.C. 20460
WJG 2 8 I98&
MEMORANDUM
SUBJECT: Expanded Civil Judicial Referral Procedures
o«ire of
T AMD
*. TV-
FROM: Thomas L. Adams, Jr. "
Assistant Administrator for Enforcement
and Compliance Monitoring
TO: Regional Administrators
Program Office Enforcement Division Directors
Purpose
The purpose of this memorandum is to provide guidance
on several issues regarding the procedures by which the Agency
refers civil judicial referrals to the Department of Justice
(DOJ). They are as follows: 1) expansion of the current
direct referral program, 2) pre-referral negotiations, 3) hold
action requests to DOJ for referred cases, and 4) filing proofs
of claim in bankruptcy by regional attorneys.
Expansion of Direct Referral Program
Last summer the Direct Referral Program^/ was expanded to
include, in the second year of operation, all TSCA and FIFRA
I/ As used here the term "direct referral" denotes case
referrals sent directly from the Regional Administrators to
the Assistant Attorney General for Land and Natural Resources
cf the Department of Justice, with simultaneous review by OECM
and DOJ. The current DOJ address for direct referrals is:
U.S. Department of Justice, Environmental Enforcement Section,
Box 7415, Ben Franklin Station, Washington, D.C. 20044, or, if
express delivery is used, U.S. Department of Justice, Land
and Natural Resources Division, Environmental Enforcement
Section, Room 1521, 9th. St. and Pennsylvania Ave, N.W.,
Washington, D.C. 20530.
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collection actions and all non-governmental mobile source tani-
oering and fuels cases. That expansion has been successful in
helping to expedite the judicial referral process. Effective
for cases referred on or after September 2, 1986, OECM with
DOJ encouragement is further expanding the categories of direct
referrals by adding the following 8 classes of cases (see
attached copy of my letter of August 28, 1986, to F. Henry
Habicht, Assistant Attorney General for Land and Natural
Resources) :
1. All collection actions in which the relief
requested is solely for unpaid administratively or
judicially assessed penalties under any statute,
except for actions to assess penalties under CERCLA
and cases where there is little prior experience in
civil judicial enforcement (i.e., the Ocean Dumping
Act, underground injection control regulation under
RCRA/SDWA, Clean Air Act NESHAPs other than vinyl
chloride and asbestos).
2. All actions in which the only relief sought is
contempt for violation of any consent decree or
other enforceable order, and/or to enforce the
terms of any consent decree or other enforceable
order.£/ The preceding types of actions against
governmental entities shall continue to be
referred to OECM.
3. Clean Air Act cases involving asbestos and vinyl
chloride National Emissions Standards for
Hazardous Air Pollutants.
4. All Clean Air Act post-1982 date cases except
those involving steel producers, smelters and
lead sources.£/
5. All Clean Water Act cases involving NPDES permit
violations by industrial dischargers, except those
involving violations relating to or determined by
biological methods or techniques measuring effluent
toxicity.
6. All judicial actions alleging interim status vio-
lations under RCRA $3008(a) except cases involving
2/ All modifications of consent decrees which result from any
action (direct referral) in this paragraph shall continue to
require OECM approval and program office approval, where
appropriate, prior to submission to DOJ for entry by the court,
>
V OECM approval will also be required when major changes are
made to SIPs due to a future change in the related NAAQS.
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loss of interim status or closure. This authority
will take effect in each Region upon the successful
referral by the Region of two cases in order to
demonstrate the requisite experience. This author-
ity does not include corrective action cases under
3008(h).
7. All RCRA judicial actions seeking penalties only,
except for underground injection control regulation
cases.
8. All actions to enforce final federal orders issued
under RCRA §3008(a). This authority will take effect
in each Region upon the successful referral by the
Region of two cases in order to demonstrate the
requisite experience.
We will add these expansion cases to the 5 classes of cases
currently included in the direct referral program listed below:
1. Cases under Section 1414(b) of the Safe Drinking-Water
Act which involve violations of the National Interim
Primary Drinking Water Regulations, such as reporting
or monitoring violations or maximum contaminant
violations. (Note: This category does not include
any causes of action under Section 1414(b) established
by the SDWA Amendments of 1986.)
2. The following cases under the Clean Water Act:
a. cases involving discharges without a permit by
industrial dischargers;
b. all cases against minor industrial dischargers;
c. cases involving failure «.j monitor or report by
industrial dischargers;
d. referrals to collect stipulated penalties from
industrials under consent decrees;
e. referrals to collect administrative spill
penalties under Section 311(j) of the CWA.
3. All stationary source cases under the Clean Air Act
except the following:
a. cases involving the steel industry;
•,
b. cases involving non-ferrous smelters;
c. cases involving NESHAPs; .
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d. post - 1982 date cases.
4. All TSCA & FIFRA collection actions for unpaid
administratively assessed penalties.^/
5. All racMle source tampering and fuels cases (except
governmental entity cases) arising under the Clean
Air Act, sections 203 and 211 respectively.
Attached for your convenience in Appendix A is a list of all
cases now covered under the direct r ferral program.
OECM will continue to play a substantive role in these
cases, especially in view of the incce*s«
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memorandurn entitled "Enforcement Settlement Negotiations,"
GM-39, dated May 22, 1985, which requires AEC review of draft
consent decrees before they are sent to the defendant. Draft
consent decrees must be reviewed by an. Assistant Chief or
senior lawyer in the DOJ Environmental Enforcement Section
before they are sent to the defendant.
"Held Action* Requests
With a more decentralized management of the Agency's
enforcement program, greater responsibility is placed on
the regional offices to develop and manage cases, particularly
in the pre-referral stage. The Regions are called upon to
sufficiently investigate, prepare and develop civil cases so
that DOJ can file then without delay. When EPA refers a case,
the referral results in the expenditure of time and resources
by OECM and DOJ. A request from the Region to hold action on
the filing of a case that results from inadequate case prepara-
tion or from the desire to conduct negotiations that could.
have been conducted prior to referral severely undercuts our
enforcement efforts and results in inefficient use of valuable
tims and resources in the Regions, in OECM and at DOJ.
Therefore, it is OECM policy that hold action requests
should be used only for strategic or tactical reasons, such as
where the defendant has made a significant settlement offer
after referral, or where settlement prior to filing will bo
advantageous to the government. A hold action request should
be in the form of a memorandum from the Regional Counsel to
the Assistant Administrator for OECM requesting and explaining
its use and the length of delay requested. The Assistant
Administrator, OECM, will determine whether the request is
justified, and if so, will ask DOJ to delay the filing of the
suit for a specified period ot time.
OECM will grant hold action requests only where there is
a clear benefit to the Agency resulting from the delay. In
those cases where there is no reasonable justification for
the requested delay, OECM will ask DOJ to proceed with filing
or consider recommending that the case be withdrawn from DOJ
=nd possibly will disallow credit for the referral.
Filing Proofs of Claim in Bankruptcy
EPA's judicial bankruptcy docket has grown enormously in
the last two-years. OECM and DOJ are very concerned about the
handling of these cases and future bankruptcy matters. The
law in this vital area is not well developed; little favorable
precedent exists on the issues of concern to us. Moreover, we
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must be very careful to avoid risking large resource expendi-
tures in bankruptcy cases where there may ^e little realistic
chance of obtaining material recoveries, even it we prevail o
legal issues. These concerns make it imperative that bankruptcj
cases be especially well prepared and that management review
time be adequate at both OECM and DOJ prior to filing. See,
e.g., OECM (Draft) Revised Hazardous Waste Bankruptcy Guidance,
May 23, 1986, at 1-4. In the past, numerous cases have been
referred with very little or no lead time for review and with-
out litigation reports. Although we appreciate the difficulties
of obtaining notice that bankruptcy proceedings have been
initiated by a regulated entity, it is still important that
EPA claims be forwarded for C"TM review and referral to DOJ
at the earliest possible time. These claims will be referred
by the Assistant Administrator, OECM and approved in writing
by the Assistant Attorney General, Land and Natural Resour es,
prior to filing.
If you have any questions regarding these procedures,
please contact Jonathan Libber who can be reached at
FTS 475-8777.
Attachments
cc: Administrator
Deputy Administrator
Assistant Administrators
Senior Enforcement Counsel
General Counsel
Associate Enforcement Counsels
Regional Counsels
Regional Enforcement Contacts
Regional Program Division Directors
F. Henry Habicht II, Assistant Attorney General
for Land and Natural Resources, Department of Justice
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IV.B.30.
"Expanded Civil Judicial Referral Procedures", dated August 28, 1986. See
also GM-50.
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IV.B.31.
"EPA Policy on the Inclusion of Environmental Auditing Provisions in
Enforcement Settlements", dated November 14, 1986; See GM-53. Supplements
GM-17.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. :
MOV ! 4 1986
MEMORANDUM
SUBJECT: Final EPA Policy on the Inclusion of Environmental
Auditing Provisions in Enforcement Settlements
FROM: Thomas L. Adams, Jr. «^s*^ww . «*>•• -^»&o—x v / •-
Assistant Administrator for Enforcement
and Compliance Monitoring '-.v__
TO: Addressees
On July 17, 1986, this Office circulated a draft EPA
Policy on the Inclusion of Environmental Auditing Provisions
in Enforcement Settlements. I am pleased to report that Agency
comments were almost uniformly supportive of the draft as
written. Attached please find a final version of the policy,
including summaries of the known auditing settlements that
Agency personnel have achieved to date and several model audit
provisions that Agency negotiators may use as a starting point
in fashioning settlements that address the circumstances of
each case.
I believe that the inclusion of environmental auditing
provisions in selected settlements offers EPA the ability
to accomplish more effectively its primary mission, namely,
to secure environmental compliance. Accordingly, I would
like to renew last July's call for EPA's Offices of Regional
Counsel and program enforcement offices to consider including
audit provisions in settlements where the underlying cases
meet the criteria of the attached policy statement.
Inquiries concerning this policy should be directed to
Neil Stoloff, Legal Enforcement Policy Branch, FTS 475-8777,
E-Mail box 2261, LE-130A • Thank you for your consideration of
this important matter.
Attachments
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Addresseea:
Assistant Administrators
Associate Administrator for Regional Operations
General Counsel
Associate Enforcement Counsels
Director, Office of Criminal Enforcement and Special Litigation
Director, Office of Compliance Analysis and Program Operations
Headquarters Compliance Program Division Directors
Director, NEIC
Regional Administrators, Regions I-X
Regional Counsels, Regions I-X
Regional Compliance Program Division Directors, Regions I-X
Principal Regional Enforcement Contacts, Regions I-X
Enforcement Policy Workgroup
cc: Administrator
Deputy Administrator
John Ulfelder
David Buente, Department of Justice (DOJ)
Nancy Firestone, DOJ
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THE POLICIES AND PROCEDURES ESTABLISHED IN THIS DOCUMENT ARE
INTENDED SOLELY AS GUIDANCE FOR GOVERNMENT PERSONNEL. THEY ARE
NOT INTENDED, AND CANNOT BE RELIED UPON, TO CREATE ANY RIGHTS,
SUBSTANTIVE OR PROCEDURAL, ENFORCEABLE BY ANY PARTY IN LITIGATION
WITH THE UNITED STATES. THE AGENCY RESERVES THE RIGHT TO ACT -
AT VARIANCE WITH THESE POLICIES AND PROCEDURES AND TO CHANGE
THEM AT ANY TIME WITHOUT PUBLIC NOTICE.
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EPA POLICY ON THE INCLUSION OF ENVIRONMENTAL AUDITING
PROVISIONS IN ENFORCEMENT SETTLEMENTS
I. Purpose
The purpose of this document is to provide Agency enforce-
ment personnel with general criteria for and guidance on selecting
judicial and administrative enforcement cases in which EPA will
seek to include environmental auditing provisions among the
terms of any settlement. This document supplements the "Guidance
for Drafting Judicial Consent Decrees."JY
II. Background
On July 9, 1986, EPA announced its environmental auditing
policy statement (Attachment A) which encourages the regulated
community's use of environmental auditing to help achieve and
maintain compliance with environmental laws and regulations.2/
That policy states that "EPA may propose environmental auditing
provisions in consent decrees and in other settlement negotiations
where auditing could provide a remedy for identified problems
and reduce the likelihood of similar problems recurring•in the
future. 'V3/
In recent years, Agency negotiators have achieved numerous
settlements that require regulated entities to audit their
operations. (Attachment B is a representative sample of the
auditing settlements that the Agency has achieved to date.)
These innovative settlements have been highly successful in
enabling the Agency to accomplish more effectively its primary
mission, namely, to secure environmental compliance. Indeed,
auditing provisions in enforcement settlements have provided
several important benefits to the Agency by enhancing its
ability to:
0 Address compliance at an entire facility or at all
facilities owned or operated by a party, rather than
just the violations discovered during inspections;
and identify and correct violations that may have gone
undetected (and uncorrected) otherwise.
0 Focus the attention of a regulated party's top-level
management on environmental compliance; produce corporate
policies and procedures that enable a party to achieve
and maintain compliance; and help a party to manage
pollution control affirmatively over tine instead of
reacting'to crises.
0 Provide a quality assurance check by verifying that
existing environmental management practices are in
place, functioning and adequate.
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III. Statement of Policy
It is the policy of EPA to settle its judicial and admin-
istrative enforcement cases only where violators can assure the
Agency that their noncompliance will be (or has been) corrected.4/
In some cases, such assurances nay, in part, take the form of
a party's commitment to conduct an environmental audit of its
operations. While this would not replace the need for correction
of the specific noncompliance that prompted an enforcement
action, EPA nonetheless considers auditing an appropriate part
of a settlement where heightened management attention could
lower the potential for noncompliance to recur. For that
reason, and as stated in the Agency's published policy,
"[environmental auditing provisions are most likely to be
proposed in settlement negotiations when:
0 A pattern of violations can be attributed, at least in
part, to the absence or poor functioning of an environ-
mental management system; or
e The type or nature of violations indicates a likelihood
that similar noncompliance problems may exist or occur
elsewhere in the facility or at other facilities operated
by the regulated entity."5/
This policy is particularly applicable in cases involving
the owner or operator of extensive or multiple facilities,
where inadequate environmental management practices are likely
to extend throughout those facilities.6/ Nevertheless, even
small, single-facility operations may face the types of compliance
problems that make an audit requirement an appropriate part of
a settlement.
The environmental statutes provide EPA broad authority to
compel regulated entities to collect and analyze compliance-
related information.7/ Given this statutory authority, and
the equitable grounds for imposing a requirement to audit
under the circumstances outlined in this policy statement,
such a requirement may be imposed as a condition of settlement
or, in the absence of a party's willingness to audit voluntarily,
sought from a court or administrative tribunal.
EPA encourages state and local regulatory agencies that
have independent jurisdiction over regulated entities to consider
applying this policy to their own enforcement activities, in
order to advance the consistent and effective use of environ-
mental auditing.8/
a. Scope of the Audit Requirement
In those cases where it may be appropriate to propose an
environmental audit as part of the remedy, negotiators must
decide which type(s) of audit to propose in negotiations. This
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determination will turn on the nature and extent of the environ-
mental management problem, which could range from a specific
management gap at a single facility 9/ to systematic, widespread,
multi-facility, multi-media environmental violations. H)/ In
most cases, either (or both) of the following two types of
environmental audits should be considered:
1. Compliance Audit: An independent assessment of the
current status of a party's compliance with applicable statutory
and regulatory requirements. This approach always entails a
requirement that effective measures be taken to remedy uncovered
compliance problems and is most effective when coupled with a
requirement that the root causes of noncompliance also be
remedied.1I/
2. Management Audit: An independent evaluation of a
party's environmental compliance policies, practices, and
controls. Such evaluation may encompass the need for:
(1> a formal corporate environmental compliance policy, and
procedures for implementation of that policy; (2) educational .
and training programs for employees; (3) equipment purchase,
operation and maintenance programs; (4) environmental compliance
officer programs (or other organizational structures relevant
to compliance); (5) budgeting and planning systems for environ-
mental compliance; (6) monitoring, recordkeeping and reporting
systems; (7) in-plant and community emergency plans; (8) interna
communications and control systems; and (9) hazard identifica-
tion and risk assessment.12/
Whether to seek a compliance audit, a management audit, or
both will depend upon the unique circumstances of each case. A
compliance audit usually will be appropriate where the violations
uncovered by Agency inspections raise the likelihood that
environmental noncompliance exists elsewhere within a party's
operations. A management audit should be sought where it
appears that a major contributing factor to noncompliance is
inadequate (or nonexistent) managerial attention to environmental
policies, procedures or staffing.13/ Both types of audits
should be sought where both current noncompliance and shortcomings
in a party's environmental management practices need to be
addressed.14/
In cases where EPA negotiators determine that an acceptable
settlement should include an audit provision, the attached
model provisions 15/ may be used as a starting point in fashion-
ing a settlement tailored to the specific circumstances of each
case. The model provisions are based on settlements addressing
a broad range of circumstances that give rise to audits.
3. Elements of Effective Audit Programs. Most environ-
mental audits conducted pursuant to enforcement settlements
should, at a minimum, meet the standards provided in "Elements
of Effective Environmental Auditing Programs," the Appendix to
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the Agency's published policy on auditing. Those elements
include:
0 Explicit top management support for environmental auditing
and commitment to follow-up on audit findings.
0 An environmental audit team separate from and independent
of the persons and activities to be audited.
0 Adequate team staffing and auditor training.
0 Explicit audit program objectives, scope, resources
and frequency.
0 A process which collects, analyzes, interprets and docu-
ments information sufficient to achieve audit objectives.
* A process which includes specific procedures to promptly
prepare candid, clear and appropriate written reports
on audit findings, corrective actions, and schedules
for implementation.
0 A process which includes quality assurance procedures
to ensure the accuracy and thoroughness of environmental
audits.16/
Agency negotiators may consult EPA's program and enforcement
offices and the National Enforcement Investigations Center,
which can provide technical advice to negotiators in fashioning
auditing provisions that meet the needs of both the party and
the regulatory program(s) to which it is subject. Additional
information on environmental auditing practices can be found in
various published materials.17/
A settlement's audit requirements may end after the party
meets the agreed-upon schedule for implementing them. Neverthe-
less, the Agency expects that most audit programs established
through settlements will continue beyond the life of the settle-
ment. After the settlement expires, the success of those
programs may be monitored indirectly through the routine inspec-
tion process.
b. Agency Oversight of the Audit Process
In most cases, resource and policy constraints will pre-
clude a high'level of Agency participation in the audit process.
Several successful audit settlements indicate that the benefits
of auditing may be realized simply by obtaining a party's
commitment to audit its operations for environmental compliance
or management problems (or both), remedy any problems uncovered,
and certify to the Agency that it has done so.ljJ/ Other recent.
Agency settlements, also successful, have entailed full disclosure
of the auditor's report of findings regarding noncompliance,
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and even access to the company records which the auditors
examined.19/ Audit settlements that require either self-
certificatTon or full disclosure of audit results may require
a party to submit to the Agency an environmental management
or compliance plan (or both) that addresses identified problems,
to be implemented on an enforceable schedule.20/
These approaches require the Agency neither to devote
significant resources to oversight of the audit process nor to
depart from its traditional means of enforcing the terms of
consent decrees and agreements. Although it may—and will—
evaluate audit proposals in terms of the elements described
in §111.a.3. above/ in all but the most extreme cases 21/
the Agency will not specify the details of a party's internal
management systems. Rather, an independent audit represents
one step a violator can take toward assuring the Agency that
compliance will be achieved and maintained.22/
Considerations such as the seriousness of the compliance
problems to be addressed by an audit provision, a party's
overall compliance history, and resource availability will
dictate the extent to which the Agency monitors the audit
process in particular cases. Thus, it will usually be approp-
riate to withhold approval of an audit plan for a party with
an extensive history of noncorapliance unless the plan requires:
0 Use of an independent third-pai-y auditor not affiliated
with the audited entity;
0 Adherence to detailed audit protocols; ~nd
0 More extensive Agency role in identifying corrective
action.23/
c. Agency Requests for Audit-Related Documents
The various environmental statutes provide EPA with broad
authority to gain access to documents and information necessary
to determine whether a regulated party is complying with the
requirements of a settlement.£4 Notwithstanding such statuto-y
authority. Agency negotiators should expressly eserve EPA's
right to review audit-related documents.25/
d. Stipulated Penalties for Audit-Discovered Violations
Settlements which require a party to report to EPA audit-
discovered violations IT.*/ include stipulations regarding the
amount of penalties for violations that are susceptible to
prediction and are promptly remedied, with the parties reserving
their respective rights and liabilities for other violations.26/
This policy does not authorize reductions of penalty amounts
below those that would otherwise be dictated by applicable
penalty policies, which take into account the circumstances
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-6-
surrounding violations in guiding the calculation of appropriate
penalty amounts. It is therefore important that stipulated
penalties only apply to those classes of violations whose
surrounding circumstances may be reasonably anticipated. The
application of stipulated penalties to violations discovered
during an audit is consistent with Agency policy.27/
e. Effect of Auditing on Agency Inspection and Enforcement
1. Inspections
The Agency's published policy on auditing states that
"EPA will not promise to forgo inspections, reduce enforcement
responses, or offer other such incentives in exchange for
implementation of environmental auditing or other sound environ-
mental practice. Indeed, a credible enforcement program provides
a strong incentive for regulated entities to audit."28/
Consistent with stated Agency policy, the inclusion of
audit provisions in settlements will not affect Agency inspec- .
tion and enforcement prerogatives. On the contrary, a party's
incentive to accept auditing requirements as part of a settlement
stems from the Agency's policy to inspect and enforce rigorously
against known violators who fail to assure the Agency that
they are taking steps to remedy their noncompliance. Auditing
settlements should explicitly provide that Agency (and State)
inspection and enforcement prerogatives, and a party's liability
for violations other than those cited in the underlying enforce-
ment action (or subject to stipulated penalties), are unaffected
by the settlement.29/
2. Civil Penalty Adjustments
Several audit settlements achieved to date have mitigated
penalties to reflect a party's agreement to audit. In view of
EPA's position that auditing fosters environmental compliance,
EPA negotiators may treat a commitment to audit as a demonstra-
tion of the violator's honest and genuine efforts to remedy
noncompliance. This may be taken into account when calculating
the dollar amount of a civil penalty.30/ In no case will a
party's agreement to audit result in a penalty amount lower
than the economic benefit of noncompliance.
For judicial settlements where penalties are proposed to
be mitigated in view of audit provisions, negotiators should
coordinate with the Department of Justice (DOJ) to ensure
consistency with applicable DOJ settlement policies.
3. Confidentiality
EPA does not view as confidential per se audit-related
'documents submitted to the Agency pursuant to enforcement
settlements. Such documents may, however, contain confidential
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-7-
business information (CBI). Auditing provisions should indicate
that EPA will treat such information in the same manner that
all other CBI is treated.3_1/ Where appropriate, negotiators
may consider defining in advance which categories of audit
information will qualify for CBI treatment. 3_2/ Such determina-
tions shall be concurred in by the Office of General Counsel,
in accordance with 40 CFR Part 2.
The Freedom of Information Act (FOIA) may provide additional
bases for protecting privileged information from disclosure.33/
However, determinations under FOIA are within the sole discretion
of the Agency and therefore are not an appropriate subject of
negotiation.
IV. Coordination of Multi-Facility Auditing Settlements
When negotiating with a party over facilities located in
more than one EPA region, Agency personnel should consult with
affected regions and states to ensure that pending or planned
enforcement actions in other regions will not be affected by .
the terms of an audit settlement. This may be done directly
(e.g., pursuant to existing State/EPA Enforcement Agreements)
or with the assistance of OECM's L=gal Enforcement Policy
Branch (LEPB), which will serve as a clearinghouse for infor-
mation on auditing in an enforcement context (contact: Neil
Stoloff, LEPB, FTS 475-8777, LE-130A, E-Mail Box EPA 2261).
In most cases, however, auditir settlements that embrace
facilities in more than one region will affect neither the
Agency's inspection and enforcement prerogatives nor a party's
liability for violations other than those which gave rise to
the underlying enforcement action.^4/ Accordingly, inter-office
consultation in most cases will be necessary only for informa-
tional purposes. Some multi-facility settlements will fall
within the scope of the guidance document, "Implementing
Nationally Managed or Coordinated Enforcement Actions."35/
Such settlements should be conducted in accordance with that
document and the memorandum, "Implementing the State/Federal
Partnership in Enforcements State/Federal Enforcement 'Agree-
ments. ' "36/
Attachments
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-8-
FOOTNOTES
1. EPA General Enforcement Policy No. GM-17, October 19, 1983.
2. 51 Fed. Reg. 25004 (1986).
3. 51 Fed. Reg. 25007 (1986).
4. See "Working Principles Underlying EPA's National Compliance/
Enforcement Programs," at 7 (EPA General Enforcement Policy
No. GM 24, November 22, 1983).
5. 51 Fed. Reg. 25007 (1986).
6. See, e.g., Owens-Corning Fiberglas Corp., Attachment B,
p. 1; and Attachments D-F.
7. See, e.g., the Clean Air Act (CAA) §§113 and 114, the Clean
Water Act (CWA) §§308 and 309, and the Resource Conservation
and Recovery Act (RCRA) §§3007 and 3008.
8. See 51 Fed. Reg. 25008 (1986).
9. See, e.g., BASF Systems Corp., Attachment B, p. 3.
10. See Attachment F.
11. See Attachment C.
12. See Attachment D.
13. See Chemical Waste Management, Inc., Vickery, Ohio and
Kettleman Hills, California facilities, Attachment B, pp. 1
and 2 respectively; and Attachment D.
14. See Attachments E and F.
15. Attachments C-G.
16. See 51 Fed. Reg. 25009 (1986).
17. See, e.g., "Current Practices in Environmental Auditing,"
EPA Report No. EPA-230-09-83-006, February 1984; "Annotated
Bibliography on Environmental Auditing," September 1935,
both available from EPA's Office of Policy, Planning and
Evaluation, Regulatory Reform Staff, PM-223, FTS 382-2685.
18. See, e.g., Crompton and Knowles Corp., Attachment B, p. 1;
and Attachments C-E).
.19. See, e.g., Chemical Waste Management, Inc., Vickery, Ohio
and Kettleman Hills, California facilities, Attachment B,
pp. 1 and 2 respectively; and Attachment E.
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-9-
20. See, e.g., United States v. Georgia Pacific Corp., Attachment
B, p. 2; Attachment D, §8.3; and Attachment F, §§6(1) and 9.
21. See, e.g., Attachment G.
22. See, e.g., Potlatch Corp., Attachment B, p. 1; and Attach-
ment C.
23. See Attachment F.
24. See, e.g., CAA §114, CWA §308, RCRA §3007, CERCLA §103,
the Toxic Substances Control Act §8, and the Federal Insec-
ticide, Fungicide and Rodenticide Act §8.
25. See, e.g., Attachment F, §IV, "Access to Documents."
26. See Attachment F, §§22, 23, 24, 34, and Appendix 2.
27. See "Guidance for Drafting Judicial Consent Decrees," at 22
(EPA General Enforcement Policy No. GM-17, October 19, 198.3).
28. 51 Fed. Reg. 25007 (1986).
29. See Attachment C, §A.3; Attachment D, §3; Attachment E,
"5c73; and Attachment F, §34.
30. See 51 Fed. Reg. 25007 (1986); EPA's Framework for Statute-
Specific Approaches to Penalty Assessments, General Enforce-
ment Policy No. GM-22, at p. 19; and applicable medium-
specific penalty policies, e.g., TSCA Settlement with
Conditions, November 15, 1983.
31. See "Guidance for Drafting Judicial Consent Decrees," at 28
TEPA General Enforcement Policy No. GM-17, October 19, 1983).
32. See Attachment F, §§5(2), 14, and 15.
33. See, e.g., 5 U.S.C. §552(b)(4), which encompasses voluntarily
submitted information the disclosure of which would impair
a Government interest such as EPA's interests in the settle-
ment of cases and in ensuring compliance with statutes
under its authority.
34. See Attachment F, §25.b.
35. General Enforcement Policy No. GM-35, January 4, 1985.
36. General Enforcement Policy No. GM-41, June 26, 1984.
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-10-
SUMMARY OF ATTACHMENTS
ATTACHMENT A: Environmental Auditing Policy Statement,
51 Fed. Reg. 25004, July 9, 1986.
ATTACHMENT Bt Representative Sample of Environmental Auditing
Settlements Achieved to Date, revised 10/9/86.
Attachment C; Model Environmental compliance audit provision,
with requirement for certification of compliance.
Attachment D: Model Environmental management audit provision,
with requirement for submission of plan for improvement of
environmental management practices, to be completed on an
enforceable schedule.
Attachment E; Model Environmental compliance and management
audit provision, with all audit results submitted to EPA, all
Agency enforcement prerogatives reserved.
Attachment F; Model Environmental compliance and management
audit provision, with extensive Agency oversight, audit results
disclosed, stipulated penalties applied to most prospective
violations, and all Agency enforcement prerogatives reserved
for other violations. [Most appropriate for party with an
extensive history of noncompliance.]
Attachment Gt Model Emergency environmental management reorgan-
ization provision. [Appropriate for cases where a party's
environmental management practices are wholly inadequate and
action is necessary without waiting for the results of an
audit.]
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IV.B.32,
"Interim Guidance on Joining States as Plaintiffs," dated December 24,
1986, as corrected February 4, 1987.
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-------
I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
f WASHINGTON. D.C. 20460
FEB 4 I98T
OFFICE OF
ENFORCEMENT AMD
COMPllAsrfc MONITORING
MEMORANDUM
SUBJECT: Correction to the December 24, 1986 Interim
Guidance on Joining States as Plaintiffs
FROM: Glenn L. Unterberger .
Associate Enforcement Counsel
for Water
TO: Regional Counsels, Regions I - X
Attached is the corrected Interim Guidance on Joining
States as Plaintiffs.
The second line in the first paragraph under the heading
Intervention by the State as Plaintiff under Rule 24(a)(2) and
24(b)(2) of the Federal Rules of Civil Procedures, page 3, was
inadvertantly dropped from the December 24, 1986, copy of the
guidance. I believe that this line, which reads "in the
litigation, EPA will support a State's motion to intervene",
is important to the understanding of EPA's position on State
intervention. I am, therefore, reissuing a corrected copy of
the Guidance.
Attachment
cc: Jim. Elder
Bill Jordan
David Buente
OECM/Water Attorneys
Cheryl Wasserman
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CORRECTED COPY
^*° Sf«>
^^^ «r
I ggE? S UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
\? ^ WASHINGTON. O.C. 2O460
DEC 2 4 1986
ENFORCEMENT AMO
COMPllANCt MONITOMIKG
MEMORANDUM
SUBJECT: Interim Guidance on Joining States as Plaintiffs
FROM: Glenn L. Unterberger
Associate Enforcement Counsel
for Water
TO: Regional Counsels, Regions I - X
Summary
This memorandum 'provides interim guidance on the conditions
under which States may participate as plaintiffs in Federal
lawsuits against municipalities for civil violations of the
Clean Water Act. EPA generally encourages State participation
as plaintiff in Federal Clean Water Act municipal enforcement
actions.
Background
Section 309 (e) of the Clean Water Act requires the
Federal government to join the State as a party in all civil
actions brought against a municipality for violations of the
Clean Water Act or the municipality '.s NPDES permit. The
State is a necessary party in such litigation because Section
309(e) further provides that the ". . . State shall be liable
for payment of any judgment/ or any expenses incurred as a
result of complying with any judgment/ entered against the
municipality in such action to the extent that the laws of
that State prevent the municipality from raising revenues
needed to comply with such judgment."
In the past/ the usual procedure has been to name the
State as a party defendant in a Federal suit against a
municipality under the Clean Water Act.1 In many instances,
Courts have uniformly held that joining the States as a
party under Section 309(e) is mandatory/ regardless of whether
the Federal government has alleged that a specific State law
(Continued)
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- 2 -
however, States have expressed a desire to participate in the
Federal action as a party plaintiff and have requested guidance
on procedures for doing so. The easiest way for the Federal
government to achieve this result is to file a complaint naminq
the State as a defendant, then support the State's motion for
realignment as a plaintiff.
In a number of instances, however, a State will be particu-
larly interested in not being named as defendant at the beginning
of a municipal enforcement lawsuit. As will be explained
below, the Federal government will actively support a State's
participation as a plaintiff from the outset in municipal
enforcement litigation under the Clean Water Act, and can agree
not to name the State as a defendant in the complaint, as lone
as the following general conditions are met: (1) The Federal
and State governments should jointly reach the decision to
support State participation as a plaintiff early in the referral
process and well before filing suit. If no such decision is
made, a State must be named as a defendant under Section 309(e).
(2) When the State intends to intervene as a plaintiff, the
State should agree in writing, to file an appropriate pleading
to intervene within 30 days after the United States files the
lawsuit, and agree not to assert as a defense, the United
States' failure to assert a claim against it under Section
309(e).
Because problems as to State liability still may arise,
the Federal government should assert a crossclaim against the
State co-plaintiff to preserve the State's liability under
Section 309(e) for payment of any judgment or expenses of
complying with any judgment which State law prevents the munici-
pality from paying.
prevents a municipality from raising revenues to comply
with a judgment. See: United States v. City of Geneva,
No. 85 C 3917 (N.D. 111., June 27, 1986) at 14 and; United
States v. City of Guymon, Oklahoma and the State of Oklahoma,
No. 84 C 2368 (W.D. Okla., March-18, 1985) (order denying
the State's motion to dismiss).
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Procedural Options for State Alignment As a Plaintiff
The State has two procedural options for becoming a
plaintiff. Those options are (1) intervention under Rule 24 of
the Federal Rules of Civil Procedure and (2) realignment under
Rule 21 of the Federal Rules.2
Intervention by the State as Plaintiff under Rule 24(a)(2)
and 24(b)(2) of the Federal Rules of Civil Procedure
In those situations where a State will participate actively
in the litigation, EPA will support a State's motion to intervene
as of right under Rule 24(a)(2), or permissive intervention
under Rule 24(b)(2). In addition, EPA will support a State's
right to share in civil penalties, where the State has actively
and publicly litigated the case and the State's claim to penalties
is founded on State law. See: EPA Guidance On The Division Of
Penalties With State And Local Government (October 30, 1985).
In order to meet the test for intervention of right, a
State must be able to satisfy the following Rule 24(a)(2)
requirements: (1) it must have an interest relating to the
property or transaction; (2) it must be so situated that the
disposition of. the action may, as a practical matter, impair or
impede its ability to protect that interest; and (3) its
interest may be inadequately represented by existing parties.
In most cases, a State which files a timely motion should be
able to make the necessary demonstrations.
Appropriate demonstrations (particularly in light of the
State's status as a necessary party under Section 309(e)) might
be (1) that the State, especially one delegated to administer
the NPDES program, has an interest in having its laws and
regulations upheld; (2) that a Federal court's disposition of
the matter may, as a pratical matter, impair or impede the
State's ability to protect this interest; and (3) that the
Federal Government's representation of the State's interest may
It has also been suggested that EPA and the State initiate
the suit jointly as co-plaintiffs, citing both Federal and
State law in the complaint. This guidance is not intended
to preclude joint filings. However, due to the extensive
coordination needed to arrange a joint filing, it is not
recommended as the mechanism of first choice where timely
filing of enforcement actions is desired.
-------
he inadequate since these interests are not identical. Inade-
quacy of: representation by the Federal Government is the most
difficult part of the test for the State to meet. If the State
can assert related State law claims, it has a better chance of
prevailing. At least one district court has held, however,
that in order to have subject matter jurisdiction over a State
claim, it must derive from a common nucleus of fact or a single
transaction or occurrence. See U.S. v. Dow Chemical Company,
CA No. 85-294-A (M.D. La., February 25, 1936) where the district
court denied the State's right to assert a State Clean Air Act
claim which was based on violations of the State's clean ait-
laws which occurred after the violations alleged in the Federal
Complaint.
In order to meet the test for permissive intervention
under Rule 24(b)(2), a State must be able to satisfy the
following two Rule 24(b)(2) requirements: (1) its motion for
intervention must be timely; and (2) its claims and the main
action must have a question of law or fact in common.
In our view, a State would normally be able to meet the
t }3t for permissive intervention with regard to its claims
under the test of common question of law or fact, keeping in
mind the discussion of U.S. v. Dow Chemical Company, supra. It
.3, however, entirely within the discretion of the Court to
grant such intervention, as well as to rule whether the tests
for intervention of right are met.
A recent case construing Section 309(e) and how it impacts
Rule 24 is United States v. City of York, 24 E.R.C. 1637 (M.D.
Pa., 1986). In the York opinion (copy attached) Pennsylvania's
motion to intervene under Rule 24 as a party plaintiff was
granted. The Court found that Section 309(e) required the
State to participate as a party, but that such participation
could be either as a plaintiff or defendant. In ruling that
the State could intervene as a plaintiff, the Court declined to
follow United States v. City of Hopewell, 508 F.Supp. 526 (E.D.
Va. 1980), which had held that a State could only be a defendant
under Section 309(e). The Court in York (1) found no legisla-
tive history to support the Hopewell decision and (2) noted
that the requirement of State participation as a "party" under
Section 309(e) could be met by the State as either plaintiff or
defendant.
In granting the State's motion to intervene'under Rule 24,
the Court in .York in effect found .that Section 309(e) created
(1) an obligation of the State to be a party and (2) a corres-
ponding right of the State to intervene under Rule 24 so that
it might fulfill its Section 309(e) obligation. Ultimately,
the Court determined that in this case the State's interests
were more closely aligned with the plaintiff. The Court did
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- 5 -
not explain whether it was granting intervention by right under
Rule 24(a)(2) or permissive intervention under Rule 24(b)(2).
Realignment of Parties Undar Rule 21 of the Federal Rules of
Civil Procedure
As a practical matter/ the State (once named as a party
defendant) may also attain plaintiff status by filing a motion
"of its own initiative, at any stage of the action ... on
such terms as are just," to be realigned as a plaintiff under
Rule 21 of the Federal Rules of Civil Procedure. Tn U.5. v.
City of Joliet, CA. No. 86 C 2512 (N.D. 111., June 5, 1986),
the Court granted Illinois' motion to realign in a Clean
Water Act pretreatment case. In granting the motion, the Court
ruled that (1) realignment does not preclude later submission
of evidence of the State's liability; (2) Section 309(e) does
not require a State to be joined as a defendant; and (3) realign-
ment is proper where the defendant is a nominal defendant, and
the party's true interests lie with those of the plaintiff.
See also Securities and Exchange Commission v. Quing N. Wong,
et al., 42 F.R.D. 599 (D.P.R. 1967).
Recommendation
Regional Counsels should work with States subject to
Section 309(e) claims to use whichever of the above methods
appears appropriate when the Agency determines that a State
merits status as a plaintiff in a civil lawsuit against a
publicly-owned treatment works under the Clean Water Act.
If you have any guestions regarding this interim guidance,
please contact Elyse DiBiagio-Wood of my staff at 475-8187.
Attachment
cc: Jim Elder
Bill Jordan
David Buente
OECM/Water Attorneys
Cheryl Wasserman
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—i-..
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IV.B.33
"Expansion of Direct Referral Cases to the Department of Justice", dated
January 14, 1988. See GM-69.
-------
-------
IV.B.34,
"Delegation of Concurrence and Signature Authority", dated January 14,
1988. See GM-70.
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IV.B.35,
"Enforcement Docket Maintenance", dated April 8, 1988.
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< ^ *?
UK
I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
f WASHINGTON. O.C. 20460
APR 81968
Office at
ENFORCEMENT AND
COMPLIANCE MOMlTOMIfcG
MEMORANDUM
*.
SUBJECT: Enforcement Docket Maintenance
FROM: Edward E. Reid
Acting Deputy Assistant Administrator
for Civil Enforcement
TO: Regional Counsels, Regions I - X
Associate Enforcement Counsels
As was discussed in Tom Adams' memo of February 8, entitled
"Responsibilities for Assuring Effective Civil Judicial
Enforcement" primary responsibility for the timeliness, accuracy
and completeness of information contained in the Enforcement
Docket lies with the Offices of Regional Counsel. Specifically:
(1) Regions are responsible for accurate updates, at
least monthly;
(2) Headquarters is responsible for accurate monthly
update of Headquarters - initiated data fields
(e.g., "checklist completed");
(3) Headquarters will not amend regional data entry;
(4) Headquarters will continue to monitor overall data
quality, on a monthly basis for the balance of
FY'88, and thereafter on a quarterly basis;
discrepancies will be brought to the attention of the
Regional Counsel;
(5) Docket -maintenance will be considered as part of the
annual performance assessment discussion with
Regional Counsels.
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-2-
To insure that all parties understand their responsi-
bilities, we have developed detailed procedures, which are
attached. I request that you distribute copies to all attorneys
in your office.
If you or your staff have any comments or questions, please
let me know, or contact Sally Mansbach or Bruce Rothrock at
8-382-3125.
My thanks for your cooperation.
9
Attachments
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GUIDELINES AND PROCEDURES FOR THE ENTRY AND
UPDATE OF CIVIL JUDICIAL CASES IN THE
ENFORCEMENT DOCKET SYSTEM
I. INTRODUCTION
"Responsibilities for Assuring Effective Civil Judicial
Enforcement" is the subject of a Tom Adams memorandum, FEB 08,
1988, which gives the Regions increased authority and
responsibility in the judicial enforcement process. One of these
responsibilities pertains to the maintenance of the Enforcement
Docket System.
The Regions also will take the lead in the
criticalfunction of maintaining the Agency's
Enforcement DocketSystem. Except in national lead case
or where this responsibility is undertaken by a
Headquarters attorney and this is so noted in the case
management plan, Offices of Regional Counsel will be
solely responsible for ensuring that accurate and up-
to-date information on each caseis maintained in the
System. OECM attorneys will no longer make separate
docket entries as a matter of course; instead we will
rely on the Regionally-entered casestatus information.
OECM will retain an oversight responsibility to
ensure, to the extent possible, thataccurate
information, consistent across the Regions,is available
from the Docket System....
This document describes the procedures and responsibilities
for entering cases in the DOCKET and for the regular, monthly
review and update of the Case Status Report. As stated in Mr.
Adams' memorandum, this responsibility is almost entirely that of
the Regional Attorney, who in most instances is designated the
Lead EPA Attorney.
II. DEFINITION OF A CASE
A. DOCKET Design and Assigning a Case Number.
The Enforcement Docket has been designed primarily as a
system for tracking civil judicial enforcement cases.. A case is
a matter which is developed and referred with the intent that it
will be filed in court as a separate and independent entity, will
receive its own court docket number and not be joined with any
other case. With th .s in mind, an enforcement matter which
involves multiple facilities, multiple statutory violations, or
multiple defendants is entered as one case if it is intended and
believed at the time of case development and case referral that
it should be handled as one action, filed in court as one case,
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and negotiated or litigated as one case. The Docket system has
been designed to handle and report on multiple law/section
violations, multiple facilities and multiple defendants, all
linked to the parent case.
B. Amendments to Ongoing Cases.
It may be necessary once a case has been initiated to
prepare and refer a related matter with the intent of amending
the original case. An example might be an additional statute
violation or other defendants. These matters should not be
entered as separate cases but as amendments. There is a separate
record in the Dqcket System that allows for entry and tracking of
amendments.
C. Use of DOCKET for SPMS, Accountability, and with the
Workload Model.
The numbers used in the SPMS and Accountability process are
based on cases, the fundamental ingredients of the Docket System.
These are the numbers that we also report to Congress and the
public. The numbers used in the workload model are based on
cases and their component parts, such as amendments, number of
facilities, etc. The Docket structure allows for tracking all
these separate activities for workload model counts, even though
they are included under a single case name and number.
III. INITIAL CASE ENTRY • '
A case should be entered in the system ( Opened ) as soon as
possible after the Regional program office refers the matter to
the Regional Counsel for civil litigation, and an attorney is
assigned and begins case development. The Regional Attorney is
responsible for completing the following and giving them to the
Regional data analyst for assignment of a case number and initial
data entry:
1. Case Data Form ( APPENDIX A ). Complete all items as
required.
2. Facility Data Form ( APPENDIX B ). Complete a separate
form for each violating facility.
3.. Case Summary ( APPENDIX C ). Develop a case summary that
contains the following information:
Case Name: The name of the case as specified in the
litigation report.
Facility Name: The name of the facility and
location where the violation(s) -occurred.
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- Nature of case 'and violations(s) upon which the case
is based. Include the laws and sections violated.
Proposed relief and remedy, including injunctive
and proposed penalty to be sought at settlement.
Enter penalty fields on the Case Data Form.
Significant national or precedential legal or
factual issues.
Previous enforcement actions (date, type).
- Recent contacts with defendant(s) (nature, outcome).
Other significant aspects.
These paragraphs will be entered in the DOCKET as narrative under
the heading "Case Summary." See APPENDIX C for an example.
The Regional Attorney is responsible for entering a new case
as soon as possible after case development is begun. While the
case is under development and prior to being referred (Initiated)
the case is in an overall status of "Opened." The earlier the
case is entered as an "Opened" case the sooner it will appear on
the DOCKET for use in case management. This procedure reduces
the end-of-quarter data entry crisis to record cases initiated (a
large proportion of which appear at the very end of the guarter).
If the case has been entered during case development it is
necessary to enter only the "Date Initiated" at the time the case
is referred. This eliminates the risk that a case might not be
counted because all of the appropriate information could not be
entered before accountability reports are run. Entry of "opened"
cases also facilitates management of actions which are the
subject of pre-referral negotiation.
IV. CASE STATUS REVIEW PROCEDURES
The Lead EPA Attorney has primary responsibility for the
review and update of all active cases. This is done at a minimum
monthly by reviewing the Case Status Report and making any
changes or updates directly on the report. The Lead EPA Attorney
receives update forms for all his/her cases from the Regional
data analyst once each month. The Lead EPA Attorney is
responsible for annotating the update forms. These forms are
returned by the Lead EPA Attorney to the data analyst for entry
by the last work .day of the month. The data analyst completes
corrections and updates and returns revised forms within five
work days to the Lead EPA Attorney for the next month's review
and update.
The Lead EPA Attorney should pay particular attention to the
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following areas:
Case Information
Major Milestone and Miscellaneous Events
Staff/ Attorney Names
Results
Penalties
Case Status Comments
An entry must be made in the attorney comment area every
month. Any issues which have been discussed or significant
events which occurred during the past month since the last update
must be included in the comments. An example of the nature and
method of entering status comments is contained in APPENDIX D.
If there has been no development or no activity in the case, "No
Change11 must be entered by the Lead EPA Attorney. The lead EPA
attorney gives the annotated monthly reports to the data analysts
for data entry and data base update. If the analyst does not
receive an update for an active case by the time the review
period has ended, he/she will enter "NO UPDATE RECEIVED."
\
Except in cases where the Headquarters attorney is the Lead
EPA Attorney, Headquarters attorneys will be responsible only for
updating HQ-specific data (e.g., received at EPA HQ, checklist
completed, for direct referrals and referred to DOJ for other '
than indirect referrals).
A chart display of roles and responsibilities is contained
in Appendix E. Summary "case code" tables are included in
Appendix F.
V. QUALITY ASSURANCE
The Lead EPA Attorney is responsible for assuring the
accurate, complete, and timely entry of all cases and for the
ongoing, monthly update and verification of case data. Regional
Counsel are responsible for periodic review of the Docket for
accuracy and completeness of all data elements, including
Attorney Comments.
Repeated problems with accuracy of data entry should be
brought to the attention of the Regional Counsel. The Regional
Counsel should notify Sally Mansbach or Bruce Rothrock if
problems merit further attention.
OECM Headquarters will review the overall Docket for
accuracy and completeness, on a monthly basis for the balance of
FY 1988 and quarterly thereafter. Obvious errors or omissions
will be brought to the attention of the Regional Counsel, for
appropriate Regional action. Headquarters data entry will be
restricted to those data elements which are Headquarters
responsibility. No amendment of Regional data will be made by
-------
V
Headquarters staff. .
Comments or questions regarding Docket update and
maintenance procedures should be addressed to Sally Mansbach
Bruce Rothrock.
-------
-------
ENFORCEMENT CASE DATA FORM
APPENDIX A
;ASE NO. :
- E
Date Entered:
"(Assigned by Docket Control
* CASE NAME:
* TYPE CASE:
(See Back for Adm.)
* HQ DIVISION:
* LAW/SECTION:
1. /
2. /
3. /
4. /
5. /
* TECHNICAL CONTACT:
* REGIONAL ATTORNEY:
* DEFENDANTS:
l
2.
3.
4.
* STATE:
VIOLATION TYPE:
DATE OPENED:
* DATE INITIATED:
(Civil)
DATE ISSUED:
(Adj. Adm.)
DATE CONCLUDED:
DATE VIOLATION
DETERMINED:
PROPOSED PENALTY:
CIV - Civil
CIT - Citizen Suit
BNK - Bankruptcy
AIR - Air
HAZ - Hazardous Waste
PES - Pesticides and Toxics
* (Please use the section
of the law VIOLATED,
NOT the section that
authorizes the action)
MOB - Mobile
WAT - Water
CFR/SECTION:
1. /
2. /
3. /
PHONE: FTS -
PHONE: FTS -
NAMED IN
POLLUTANT:
* REFERRAL INDICATOR
Direct Referral Lead: DOJ
RH: Region to HQ
RD; Region to DOJ
(Direct Referral)
USA
DATE DOCUMENTS
RECEIVED BY ORC:
Required fields - must be filled out for case entry
/(c -•>
-------
Appendix B
FACILITY DATA FORM
PLEASE USE THE ADDRESS OF THE SITE OF VIOLATION (NOT THE COMPANY MAILING
DDRESS) .
A SEPARATE FORM MUST BE COMPLETED FOR EACH FACILITY CITED IN THE CASE.
-E
CASE NO.: -
(Assigned by DOCKET analyst)
EPA ID #:
I
(Assigned by FINDS analyst) |
FACILITY NAME:
STREET ADDRESS:
CITY:
TYPE OWNERSHIP:
* STATE
ZIP:
P: Private industry or individual
F: Federal Government
S: State
C: County
M: Municipal
D: District
1C CODE(s):
(one required)
OPTIONAL
ARENT COMPANY:
PDES PERMIT NO.
JPERFUND SITE:
YTiTUDE:-
DNGITUDE:
(Y or N)
J
-------
APPENDIX C
CASE SUMMARY CONTENT AND FORMAT
The following is an example of a Case Summary. The summary
is written by the Regional Attorney and provided to the Regional
Data Analyst along with the Case Data Form and Facility Data Form
at the time the case is initially entered. The summary includes:
Case Name, Facility Name, Nature of case and violation(s) upon
which the case is based, Proposed relief and remedy, Significant
national or precedential legal or factual issues, Previous
enforcement actions, Recent contacts with defendants, Other
significant aspects.
- EXAMPLE -
CASE SUMMARY:
THIS IS A PROPOSED ACTION AGAINST THE ACME DISPOSAL CORP
(ADC) ET AL., UNDER SECTION 107 OR CERCLA TO RECOVER PAST COSTS
AND TO ESTABLISH LIABILITY AS TO FUTURE COSTS TO BE INCURRED
UNDER SECTION 104.
THIS CASE INVOLVED THE ADC SITE, LOCATED IN MODELTOWN, MA.
THE SITE WAS LISTED ON THE NPL ON 04/01/84. THE SITE IS A 100-
ACRE LANDFILL WHICH HAS BEEN OWNED BY ADC SINCE 03/05/75.
NUMEROUS INDUSTRIAL WASTES HAVE BEEN DISPOSED OF AT THIS FACILITY
SINCE 1942.
EPA CONDUCTED ON-SITE GROUNDWATER SAMPLING ON. 05/01/85.
ANALYSIS REVEALED THE PRESENCE OF HAZARDOUS SUBSTANCES INCLUDING
METHYL ISOBUTYL, KETONE, AND TOLUENE. A NOTICE LETTER WAS SENT
TO THE SITE OWNER/OPERATOR AND TO THE TEN KNOWN GENERATORS ON
05/20/87. NO RESPONSES WERE RECEIVED.
THE 1ST IMMEDIATE REMOVAL WAS COMMENCED ON 06/01/85 AND WAS
COMPLETED ON 06/25/85. ONE HUNDRED DRUMS AND 500 CU YDS OF SOIL
WERE REMOVED AND DISPOSED OF AT A RCRA-APPROVED FACILITY. THE
2ND IMMEDIATE REMOVAL ACTION WAS STARTED ON 08/01/85. FIFTY
DRUMS AND 100 CU YDS OF SOIL WERE REMOVED AND DISPOSED OF AT A
RCRA-APPROVED FACILITY. TOTAL FEDERAL GOVT COSTS AS OF 11/01/87
ARE $1,524,000.
A DEMAND LETTER FOR PAST COSTS WAS SENT TO ADC ON 12/01/87.
THE STATUTE OF LIMITATIONS MAY RUN ON 06/25/88. GENERAL NOTICE
LETTERS WERE SENT TO 143 PRP GENERATORS ON 09/01/87.
-------
APPENDIX D
CASE STATUS COMMENTS
The following are examples of attorney case status comments,
provided as part of the monthly review of active cases. Comments
are written by the attorney directly on the Case Status Report
directly below or in the margin beside the previous months entry.
- EXAMPLE -
HEADQUARTERS CASE STATUS:
REGIONAL CASE STATUS:
01-30-88: COMPLAINT FILED IN DIST. CT (EDMA) ON 01/15/88
AGAINST ADC, CITY OF MODELTOWN, GENERAL DISPOSAL CORP,, ET AL.
02-28-88: ADC FILED ANSWER ON 02/15/88; GENERAL DENIALS. ADC
FILED MOTION TO DISMISS ON 02/15/88.
03-30-88: ADC MOTION TO DISMISS DENIED ON 03/20/88. STATUS
CONF SCHEDULED TO BE HELD ON 04/18/88.
04-29-88: STATUS CONF HELD ON 04/18/88. GENERAL DISPOSAL 'CORP
REQUESTED TREATMENT AS DE MINIMIS GENERATOR. LITIGATION TEAM
PLANS TO MEET.ON 05/20/88. GOVT PLANNING TO FILE MOTION FOR SJ.
(1) It is important to add precise dites to update comments
both to be specific and to avoid confusion between the date of
the docket entry and the date of the event.
'(2) It is important to follow up on stated planned events
in subsequent monthly updates with comments as to whether or not
the planned event took place and, if so, when.
(3) Case status comments should reflect the general content
of settlement proposals and draft and final consent decrees,
including final construction deadlines, final compliance
deadlines, penalties, duration of the decree, and whether or not
stipulated penalties are included.
(4) If there are no updates during a month, enter "NO
CHANGE". -
-------
CIVIL JUDICIAL FNFORC^p DOCKET
DATA ENTRY MAINTENANCE^KlFICATIQN
RESPONSIBILITIES AND PROCEDURES
ACTIVITY
WHO
WHAT
When
HOW
Open a Case
Regional Attorney
assigned to Case
development or
Lead EPA Atty
Completes: Case Data Form,
Facility Data Form for each
violating Fac., Case Summary.
Case Is a matter which Is
filed, settled or litigated
separately from any other
Case.
Optional; When case Is
opened or any time up
to but no later than
when case Is referred
to HQ or directly to
DOJ
Attorney completes forms and
Case Summary. All items
marked with '*' oust he
completed. Gives to Regional
data analyst.
Initial Case
Entry
Regional Data
Analyst
Assign Case Numher: Enter
data from Case Data and
Facility Data Forms, Case
Summary
At time Regional
Attorney Completes
Forms.
On-line from Case Data and
Facility Data Forms, Case
Summary
Case Review
and Case Update
of all Active
Cases
a. Lead EPA Atty
Mai. Milestones/Misc. Events,
Dates, Staff, Status Comments
and Slgnflcant Case events
Monthly, Completed and
given to Regional
Analyst by 1st work
day of each month
Review & edit as appropriate
Case Update Report (using
clear notations in bright
colored Ink)
b HQ Attorney
HQ data fields (e.g. checklst
Monthly
complete, HQ Comments If appropriate)
Case Update Report, as above,
delivered by HQ data analyst
Data Entry;
Data Rase
Update
a. Reg. Analyst
Case Update Report as
reviewed and annotated by
Lead Attorney
b. HQ Analyst
As appropriate
Case/Data
Verification
HQ Attorney
Maior milestone Dates, Over-
all Status (see 3b), other
Case Level Data; Regular
Status Comment Update by
Lead Attorney
Monthly, Beginning the
1st of the month,
completed by the 5th
work day. Run new
Update Reports and
distribute by 8th work
day.
On-line, directly from Case
Update provided by Regional
Attorney. Update all active
cases even If no change made
or no update received.
Monthly for FY'88
quarterly thereafter
Scan Case Update Report
provided by HQ Analyst. Any
obvious errors or omissions
are brought to the attention
attention of Associate and
then Regional Counsel for
Lead EPA Atty to supply
corrections to Regional data
ana 1 VQ t-
-------
V
V
•f"
ACTIVITY
:king
lements
Litigation
its
DATA fcNTKY MAINTfcNANCF. VFRI FT CATION
RESPONSIBILITIES AND PROCEDURES
:ludir\g a
? (CD/Judge-
: Entered
;ing a Case
il Compli-
3, Case
tdrawn,
lined, Dis-
>ed or
)ined
a Returned
teg ion
e Rereferred
Ltor Case
iirned to
ion
nding a
e
eking CD
pliance
WHO
Lead EPA Atty
HQ Attorney
Lead F.PA Atty
Lead KPA Atty
Lead EPA Atty
Lead F.PA Atty
Lead EPA Atty
HQ Attorney
Lead EPA Atty
ad EPA Atty
WHAT
Significant events related
to settlement negotiation
or Litigation as required
by RC
HQ Events, as appropriate
Enter data about settle-
ment/Judgement Results,
Date, Penalty
Enter Data for Closed Case -
when final compliance
achieved or case is with-
drawn, declined or dismissed
Enter "Date Returned"
Enter n'Date Re-referral"
Determine cases returned and
pending > 60 days. Deter-
mine action to be taken:
Refer or close. Update Docket
Assess need to discuss cases
with Region
Add amendments to existing
case when matter is part
of on-going case and will
not be filed as a separate
matter for litigation
WHEN
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Monthly
Quarterly
When matter is referred
Monitor Compliance with
terms of CD or Court Order
jarterly
HOW
Part of monthly review of
Case Update Report.
monthly case review.
Part of monthly review of
Case Update Report, or as
events occur.
Part of monthly review of
Case Update Report, or as
events occur.
Part of Monthly Update, or
as returns occur by proper
notification of data analyst,
Part of Monthly Update
Analyst produces report
of all cases returned to
Region and pending >60 days
for Lead EPA Attorney review
HQ analyst prepares quarterly
report on cases rtd to Region
>60 days
Monthly Case Update, or on
amendment data form, to
Regional Analyst, when
amendment occurs
Contact with Regional
Program Office and rev' of
-------
VIOLATION TABLE
Appendix F
VIOLATION
TYPE
AOVIOL
CLO
FIFRA
FIN
GFR
GRANT
GWM
IMP
IND
INFO
LOT
MPRSA
NESHAP
NOPRMT
NORPTG
NSPS
NSR
PMN
PRETMT
PRMTVL
PSD
PWSM/R
PWSMCL
PWSNP
PWSSA
REC
REP
SIP
SPILL
UIC
UICCAC
UICMFL
UICMIN
UICMON
UICNPA
UICOIN
UICPRS
UICUNI
UICUNO
UICVPA
VHAP
404PMT
Air Po11utants
DESCRIPTION
Administrative Order Violation
Closure and Post-Closure Plan
FIFRA
Financial Responsibility
General Facilities Requirements
P.L. 92-500 Facility
Groundwater Monitoring
Import s •
Industrial Source
CAA/114 (INFO)
Land Disposal & Treatment
MPRSA
National Emission Stds. for Haz
Discharge w/o Permit
No Reporting or Monitoring
New Source Performance Standards
New Source Review
Pre-manufacturing Notice
Pret rea tment
PermitViolation
Prevention of Significant Deterioration
PWS Monitoring/Reporting
PWS Maximum Containment Level
PWS Notification to Publi:
PUS Sampling & Analyzing
Required Records Maintenance
Reporting Violations
State Implementation Plan
311/CWA
UIC/SDWA
UIC Casing & Cementing
UIC Fluid Movement in Underground Source
Drinking Water
UIC Mechanical Integrity
Moni to ri ng
No Approved Plugging & Abandonment Plan
Injection Between Outermost Casing
Injection Beyond Authorized Pressure
Unauthorized Injection
Unauthorized Operation of a Class IV Well
Compliance w/Plugging & Abandonment Plan
Hazardous Air Pollutants
of
UIC
UIC
UIC
UIC
UIC
UIC
UIC
Volatile
404/CWA
-------
POLLUTANT TABLE
Appendix F
POLLUTANT
TYPE
DESCRIPTION
ARSN
ASB
BENZ
BERY
CO
COE
CON
LEAD
MERC
NOX
OP
PCS
PM
RADON
RDNC
S02
VNCL
Arseni c
Asbes Cos
Benzene
BeryIi urn
Carbon Monoxide
Coke Oven Emissions
Containers (Drums, Tanks)
Lead
Mercury
Nitrogen Oxides
Opacity
Po1ych1orinaced Biphenyls
Particulace Matter
Radon
Radi onuc1 ides
Sulfur Dioxide
Vinyl Chloride
**
If you would like to see any more pollutants added to
the table, please contact Bruce Rothrock at
FTS-382-2614
-------
RESULT TABLE
Appendix F
RESULT
LEVEL
1- Before WR -
Referral to
DOJ DE -
2- After WE -
Referral to DJ -
DOJ/US Atty, DA -
Before filing
of Complaint
or CD
RESULT
CODE
Withdrawn by
Reg ion
Declined by HQ
Withdrawn by HQ
Declined by DOJ
Dec 1 i ned by US
at torney ».
RESULT
REASON
3- After filing LN
of Complaint
or CD CN
Litigated w/no
Penalty
CD w/no Penalty
CP - CD w/Penalty *RO
LP - Litigated w/Penalty *CO
*BO
.Penalty under
Penalty under
Pena1ty under
& CERCLA
RCRA
CERCLA
both RCRA
*CR
*LR
*CB
*LB
CD/Cost Recovery *OC -
Litigated/Cost *OT -
Recovery
CD w/Penalty & Cost *RC -
Recovery
Litigated w/Penalty *CC -
and Coat Recovery
*CT -
*RT -
*BC -
*BT -
Cost Recovery under CERCLA
Cost Recovery w/treble
damages under CERCLA
Penalty under RCRA & Cost
Recovery under CERCLA
Penalty and Cost Recovery
under CERCLA
Penalty under CERCLA, Cost
Recovery w/treble damages
under CERCLA
Penalty under RCRA, Cost
Recovery w/treble damages
under CERCLA
Penalty under both RCRA &
CERCLA, Cost Recovery under
CERCLA
Penalty under both RCRA &
CERCLA, Cost Recovery w/
treble damages under CERCLA
DC - Dismissed by Court
VD - Voluntarily Dismissed
CO - Combined
Result code and Result reason apply only to RCRA/CERCLA cases
-------
Appendix F
REFERRAL INDICATOR TABLE
REFERRAL
INDICATOR DESCRIPTION
RH Region to Headquarters
RD Region to DOJ
RU Region to US Attorney
HD Headquarters to DOJ
-------
IV.B.36
"Process for Conducting Pre-Referral Settlement Negotiations on Civil
Judicial Enforcement Cases", dated April 13,1988. See GM-73.
-------
-------
IV.B.37
"Criteria for Active OECM Attorney Involvement in Cases", dated May 22,
1988.
-------
-------
3 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
/ WASHINGTON. D.C. 20460
'*..-••• '.,./ ~"
• '"*••
MAY 2 !988
6NK>R.-6MI-Nf AMD
MEMORANDUM
SUBJECT: Criteria for Active OECM Attorney Involvement
in Cases
FROM: Thomas L. Adams, Jr. \. x VQ
Assistant Administrator ^=-^-*>~*-v W- v>*i«»
TO: Regional Administrators
Deputy Regional Administrators
Regional Counsels
The following criteria have been developed for evaluating
what cases warrant active OECM attorney involvement. Taken
together with the "guidance on the pre-referral negotiation
process and on the use of case management plans, the following
guidelines will significantly contribute to our efforts to
enhance the enforcement process.
Cases that meet one or more of the c- iteria listed below
are appropriate for active involvement by OECM attorneys. The
extent and nature of an OECM attorney's involvement in any
given case will depend on a number of factors, including
availability of legal resources in the Region, the expertise
and workload of the OECM attorney involved, and the reason
involvement is considered appropriate. OECM management, in
consultation with the Regional Office, will take all of these
factors into account in determining the level of active
involvement, if any, by the OECM attorney.
Cases which warrant active involvement by the OECM
attorney include those.cases:
1. that are nationally-managed or nationally-coordinated;
2. raising issues whose resolution may set a legal or
policy precedent of national significance;
3. which have unusually significant environmental impacts
or in which there is a particularly high level of Congressional
interest;
-------
- 2 -
•
4. jointly selected with the Regional Office which are
well-suited to serve as training vehicles for newer attorneys
or as a refresher for other attorneys in need of exposure to
particular elements of the negotiation or litigation process
related to their responsibilities;
5. where OECM's involvement would facilitate or support
a special enforcement initiative;
6. requiring the specialized expertise of an OECM
attorney that is not currently possessed within the Region;
7. for which the Region or DOJ has requested OECM
attorney involvement (e.g., where the Region cannot adequately
staff the case or where OECM's presence is desired for tactical
reasons) and it is OECM's judgment that its involvement is
warranted; and
8. where OECM's participation would directly further its
evaluation of the effectiveness of a particular national policy
and the need for modification or supplementation of that
policy.
Assuming that active involvement by the OECM attorney is
deemed warranted, the process for initial determination of the
degree of involvement will be based upon whether the case is
undergoing pre-referral negotiations. For rases that are the
subject of pre-referral negotiations, the initial 21-day review
process will be the vehicle for making the determination. For
cases that are not the subject of pre-referral negotiations,
the review within OECM of the case management plan will be the
vehicle for determining the degree of involvement. The role of
the OECM attorney may subsequently be modified as the case
evolves, through consultation with the Region and DOJ, to
increase or decrease the level of involvement in light of
changing circumstances.
Please feel free to contact Ed Reich (FTS-382-4137) if you
have any questions regarding the implementation of these
guidelines.
cc: Associate Enforcement Counsels
OECM Attorneys
Program Office Enforcement Directors
Roger J. Marzulla, Assistant Attorney General,
Land and Natural Resources Division,
U.S. Department of Justice
David T. Buente, Chief, Environmental Enforcement Section,.
Land and Natural Resources Division,
U.S. Department-, of Justice .
-------
IV.B.38,
"Withdrawal of Referrals and Issuance of 'Hold' Letters", dated February
24, 1989.
-------
-------
V(. r M
\SHIM.TOV
FEB 2 4 1989
MEMORANDUM
SUBJECT: Withdrawal of Referrals and Issuance of "Hold" letters
FROM:
TO:
Edward E. Reich
Acting Assistant Administrator
Regional Administrators
Deputy Regional Administrators
Regional Counsels
There has been some recent confusion about the process for
withdrawing directly referred cases from the Department 'of
Justice (DOJ) and the issuance of "hold" letters for cases
pending at DOJ. For clarification, please note the January 14,
1988, memorandum from Tom Adams entitled ' xpansion of Direct
Referral of Cases to the Department of Ju.-ice." In accordance
with that memorandum:
(a) In the unusual circumstance necessitating a withdrawal
of a directly referred case, the Regions are required to consult
with OECM prior to requesting a withdrawal. If a withdrawal is
determined to be appropriate, the Region should then send a
written request for withdrawal of the referral to DOJ with a copy
to the Assistant Administrator for OECM and the appropriate
program office; and
(b) In accordance with the December 24, 1987 Adams to
Marzulla letter attached to the January 14 memorandum, all "hold"
letters must continue to be requested in accordance with the
procedures contained in the memorandum entitled "Expanded Civil
Judicial Referral Procedures" dated August 28, 1986. Those
procedures outline at page 5 the narrow basis on which "hold"
actions will be considered and require the Regional Counsel to
submit a memorandum to the Assistant Administrator for OECM to
request a delay in filing. DOJ will not recognize-a "hold"
request not coming from the AA for OECM in accordance with these
procedures. '
-------
- 2 -
PI..- l«t »• Xnov if you hav. any questions about this
memorandum.
cc- Associate Enforcement Counsels
David Buente, DOJ
-------
IV.B.39
# "Agency Judicial Consent Decree Tracking and Follow-up Directive," dated
January 11, 1990. Attached to IV.D.4. this compendium.
-------
-------
IV. CIVIL LITIGATION
C. PENALTIES AND TERMS OF SETTLEMENT
991
-------
IV.C.I
"Civil Penalty Policy", dated July 8, 1980 (for reference only).
-------
-------
' ~ '*-. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
J WASHINGTON. DC. 20460
OFFICE OF ENFORCEMENT
CIVIL PENALTY POLICY
JULY 8, 1980
For application of Section 309(d) of the Clean Water
Act and Section 113 (b) of the -Clean Air Act to
Certain Water Act Violators and Air Act
Stationarv Source Violators
-------
-------
TABLE OF CONTENTS
CIVIL PENALTY POLICY - CLEAN WATER ACT VIOLATORS AND
STATIONARY SOURCE VIOLATORS OF THE CLEAN AIR ACT
I. Preamble . . 1
II. Statutory Basis for Civil Penalty 3
III. Types of Violations to Which Policy
Applies 3
IV. Use of the Penalty Policy in Enforcement
Actions 5
V. Determining the Amount of the Statutory
Maximum Penalty and of the Minimum Civil
Penalty .
VI. Determining the Minimum Penalty Acceptable
for Settlement " ,
VII. Explanation of Factors Considered in
Determining Minimum Amount of Civil
Penalty 10
A. Harm or Risk of Harm to Health or
the Environment 10
3. Economic Benefit of Delayed
Compliance - 11
C. Violator's Recalcitrance, Defiance,
or Indifference to the. Requirements
of . the Law 12
D. Extraordinary Costs of Enforcement
Action 12
E. Mitigation for Noncompliance Caused
bv the Government Itself ....... '13
-C
-------
F. Mitigation for Impossibility ...... 13
G. Other Bases for Mitigation ...... 14
K. Specified Clean Air Act Factors ..... 14
VIII. Approved Environmentally Beneficial
Expenditures in Lieu of Payment of
Penalty Sura to State or Federal Treasury
(i.e., "Credits Against Penalty") ..... 15
A. Use of Credit to Satisfy or
Offset Penalty ............ 15
B. Criteria for Acceptable Credits .... 16
C. Constraints on Federal Enforcement
Officials with Respect to Payment
of Penalties and Use of Credits in
Lieu of Penalties .......... 18
D. Discretionary Nature of Credit ..... 18
E. Consideration of After-Tax Effects
of Credit Expenditures ........ 18
IX. Penalty Postponement or Forgiveness Based
Upon Inability to Pay .......... 19
X. Time Period for Application of Civil
Penalty Policy .............. 2£
XI. Application of Civil Penalty Policy to
Different Types of Sources - Private,
Public, Regulated Utilities, etc ...... 22
A. Privately-Owned or Operated Sources
(other than Regulated Utilities) ... 22
.B. Publicly-Owned Utilities and Investor-
Owned, Regulated Utilities ...... 22
C. State and Municipal Facilities (Other
than Utilities) ........... 23
D. Federal Facilities (Other than '
Utilities .............. 23
-------
XII. Federal-State Cooperation in Implementing
this Policy 24
XIII. Effective Date of this Civil Penalty
Policy 24
XIV. Previous Civil Penalty Policy Superseded 25
-------
-------
I. Preamble
The objective of this civil penalty policy is to assist
in accomplishing the goals of environmental laws by deterring
violations and encouraging voluntary compliance.
The elements of the policy reflect years of experience
by federal, stata and local enforcement officials, adapted
to present conditions and needs. The policy has had the
benefit of much informed comment in meetings of federal, state,
and local officials in every region, in written comments, and
in a working group of federal and state enforcement officials.
The policy is based upon the main themes of the Clean Air
and Water Acts, in which Congress required all citizens, private
firms and public bodies to join in a common effort to restore
and maintain the quality of the nation's air and waters, and
to do so consistently in all parts of the country, in accordance
with statutorily mandated time schedules. The theme of national
consistency has been reinforced by the Clean Air Act Amendments
of 1977, which directed the Administrator of the Environmental
Protection Agency to promulgate.regulations designed to assure
fairness and uniformity in implementing and enforcing the Act
by the EPA Regional Offices and the states (Clean Air Act,
Section 301).
The national response to the Air and Water Acts is
encouraging. The overwhelming majority of citizens, private
firms and public bodies have met the deadlines and complied
with what was required of them. A minority have not. This
penalty policy will keep, faith with those who joined the
common effort. It will help maintain the voluntary compliance
on which achievement of our environmental goals depends.
The Clean Air and Water Acts authorize civil penalties
up to stated maximums. This policy enunciates general principles
for determining appropriate penalties that the government will
seek in individual cases. It is based primarily on four
considerations—the harm done to public health or the
environment; the economic benefit gained by the violator;
the degree of recalcitrance of the violator; and any unusual
or extraordinary enforcement costs thrust upon the public.
The policy recognizes appropriate mitigating circumstances
or factors. Each of these penalty considerations and each of
the mitigating factors is well founded in law and is consistent
with statutory recuirements.
ICG
-------
-2-
While fulfilling its primary objective to deter violations
and encourage compliance, this policy has very significant
additional justifications and benefits as well:
A. The policy is fair:
1. in an ethical sense, because it
will assure that violators of the
law do not economically benefit
from their violation,
2. in an economic sense, because it will
assure that violators do not gain an
economic advantage over others who
incurred costs to obey the law, and
3. in a geographic sense, for it will
assure that no area of the country can
offer lenient enforcement as an advantage
to its industries or a lure to the industries
of other areas.
B. The policy seeks to improve the operation of the
market sector of our economy by more fully
imposing onto polluting firms costs otherwise
thrust upon the public. By internalizing more
of the social costs of producing goods or
services, it makes prices of goods or services
better reflect the resources used in their
production, and allows the market system to
better allocate resources.
C. The policy seeks to compensate the public for
harm done to public health or the environment,
or for unusual or extraordinary enforcement expenses.
D. The policy seeks to make efficient use of govern-
ment resources by removing economic incentives to
violate environmental laws, t^ius maintaining high
voluntary compliance rates. Because there are
hundreds of thousands of pollution sources, even
a small decline in compliance rates brings major
new requirements for enforcement resources.
Because this policy is to be used by many federal, state
and local enforcement officials throughout the country, it has
been drafted.in general form. It is a policy for determining
what civil penalties the government will seek when civil
actions are taken, not a policy to determine which enforcement
actions should be taken. Enforcement s-tra.tegy or priorities
are determined elsewhere, not by this policy.
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II. Statutory Basis for Civil Penalty under Water and
Air Acts
Civil penalties are provided for in Section 309(b) of
the Clean Water Act, which subjects violators to civil penalties
of up to $10,000 per day of .such violation. The Water Act has
no further statutory criteria for determining the precise
amount of the penalty, leaving that to be determined by the
court. Authority for such civil penalties has been in the
Act since its passage in 1972.
Since 113(b)of the Clean Air Act provides for civil penalties
of up to $25,000 per day of violation and requires courts to "take
into consideration (in addition to other factors) the size of the
business, the economic impact of the penalty on the business and
the seriousness of the violation." The authority for civil
penalties was added by the Amendments of 1977. There was no
authority for civil penalties in the Air Act prior to these
amendments, at least for violations such as the ones within the
scope of this policy.
In addition to adding civil penalty authority in Section 113,
the Clean Air Act Amendments of 1977 also established, in Section 12.0,
mandatory administratively imposed, noncompliance penalties.
Regulations implementing Section 120 noncompliance penalties
'have now been promulgated. Such noncompliance penalties are not
covered by this civil penalty policy, and nothing stated in this
policy should be taken to refer to them in any way, except
that provision has been made in this civil penalty to avoid
duplication of penalties based upon the economic benefit of
delayed compliance during the same time period (see discussion
in part x below.J1
III. Types of Violations to Which Policy Applies
The civil penalty policy is to be used by federal, state
and local officials in enforcement actions involving certain
violations of the Clean Air Act, as amended, and.certain
violations of the Clean Water Act, as amended.
1
. The preamble to.EPA's final noncompliance penalty regulations
provides that no notices of noncompliance will be issued, or
penalties assessed, prior to January 1, 1981. For purposes
of determining an appropriate civil penalty, EPA will only
calculate the economic benefit of delayed compliance prior
to this date.
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The policy applies to major and minor water pollution
sources which violate those requirements of the Water Act made
subject to civil penalties by Section 309(d), and to major
and minor stationary air pollution sources which violated those
requirements of the C.ean Air Act made subject to civil penalties
by Section 113(b).3
The application of this civil penalty policy to situations
in which f---.ll compliance is required prior to operation (as,
e.g., under the New Source Performance Standards under Section 111
of the Clean Air Act) should not be interpreted as suggesting
that noncompliar.ee can be tolerated if penalties are paid.
1 cont.
With respect to any emission limitation or other requirement
approved or promulgated by the Administrator after August 7, 1977,
which is either more stringent than those in effect at that time
or which establishes a requirement where none existed before,
Section 120(g) of the Act provides that the effective date for
noncompliance penalties will be the date that full compliance
is required with such limitation or requirement (though not
later than three years from such approval or promulgation, nor
earlier -han the effective date that noncomplxzr.ee penalties
begin w^^h respect to violations of existing limitations) .
2
i.e., violators of effluent limitations under Section 301
of the Clean Water Act; water quality related effluent limitations
under Section 302; national standards of performance under Section 30
toxic and pretreatment standards under Section 307; monitoring
under Section 308; aquaculture under Section 310; disposal of
sewage sludge under Section 405; violators of permit conditions
or limitations under Section 402 and 404; and violators of orders
issued under Section 309(a).
3
i.e., violators of an administrative order issued under Section 113(
of the Clean Air Act; a stat.2 Implementation plan requirement
approved under Section 110; a New Source Performance Standard under
section 111; National Emission Standards for Hazardous Air Pollutants
under Section 112; a compliance date extension issued to a source
converting .to coal under 119(g) (as in effect prior to August 7, 1977
a delayed compliance order issued to a source converting to coal unde
113(d)(5); a nonferrous smelter order under Section 119; certain
requirements relating to monitoring under Section 114; a require-
ment imposed in a delayed compliance order under Section 113 (d.)
'and attempts to construct or modify a major stationary source
in any area for which the Administrator has found, under.
Section 113(a)(5), that the state is not acting in compliance with
applicable requirements for issuance of permits to construct or
modify sources in nonattaimnent areas.
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This policy applies to past and future violations of the
above-mentioned requirements of the Clean Air and Water Acts
where the violation results from the source's failure to make
capital or"operation and maintenance expenditures necessary to
bring itself into initial compliance with the requirements (e.g.,
failure to install equipment, buy and use complying fuel, carry
out a process change, etc.).
The policy does not apply to violations following initial
compliance or to violations of an intermittent or transient kind,
such as spills, violations of emission or discharge limits through
accidents or when attributable solely to the failure to adequately
operate or maintain pollution control equipment. Civil penalties
are probably desirable in most actions against such violations, but
the appropriate amount of such penalties is not set by this polio;/.
This policy does not apply, of course, to penalties for
criminal violations, nor for violations of court decrees. In
most cases that are settled, it will be desirable to include
stipulated contempt penalty amounts in the consent decree. Such
amounts are not subject to the civil penalty statutory limits and
are not covered by this policy.
While this policy has been limited at this time to circum-
stances where its application is clearly appropriate, experience
will undoubtedly indicate other circumstances to which it should
be extended. Such situations will be considered on a case-by-case
basis. Penalties appropriate for other violations under the Clean .
Air and Water Acts, and under other Acts, will be the subject of
future guidance.
IV. Use of the Penalty Policy in Enforcement Actions
This civil penalty policy is intended to be used by
federal and state enforcement officials and, in appropriate
cases, by local officials (e.g., local air pollution control
agencies operating under authority of state air pollution
laws). It is to be used in civil actions in'state and
federal courts, and in state and local administrative
proceedings.
• Enforcement actions must seek both expeditious compliance
and adequate civil penalties. The penalties to be sought in
accordance.with this policy are in no way a substitute for
compliance nor do they preclude injunctive relief or other
non-duplicative remedies.
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The goal of an enforcement action where this policy applies
is both compliance (including interim controls) and appropriate
penalties. Compliance and penalties should not be in any"way
traded off against each other. Compliance with the law is
mandatory, and whereas details of technology or schedules may
differ, enforcement officials should not bargain for compliance
(or interim controls) by offering any reduction in penalties.
Even in the period before the statutory deadlines, the
Clean Wa^er and Air Acts required compliance immediately or
as expeditiously as practicable. After the deadline has
passed, it is even more urgent that violators be brought
quickly into compliance.
The penalty policy, moreover, already is structured
to provide a strong economic incentive for rapid compliance,
for the more rapid the compliance the lower the penalties
under this policy. Such an effect is automatically built into
the method of calculating the economic benefit of delayed
compliance, for one of the major factors of the formula is
the length of the period of noncompliance. The penalty factors
of harm to the environment and recalcitrance of the violator
may also lead to penalty reductions as the speed of compliance
increases. In the case of major source violators of the Air A
moreover, the requirement of mandatory, administratively asses
noncompliance penalties adds additional economic incentive for
rapid compliance.
Additionally, it must be kept in mind that penalties are
authorized and intended to deter violations and encourage
compliance. Penalties are not effluent or discharge fees.
Payment of penalties does not give any right or privilege
to continue operation in violation of law or to slow down
compliance.
When civil enforcement actions are brought in courts, the
question of penalties will arise in three contexts—filing the
civil complaint, determining the minimum amount acceptable in
settlement, and presenting argument to the court (and possibly
affidavits or testimony, as well) for its consideration in setting
penalties at trial.
The Agency is prepared to settle enforcement actions brought
under this policy. Where settlement is not possible, the Agency
is obviously free to claim penalty amounts up to the statutory
maximum, which will generally be the amount claimed in the
complaint..
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The me^.-.odology of this penalty policy will be used to
determine a "minimum civil penalty" which would typically be
presented to the court as an appropriate penalty to be imposed.
In addition, the methodology will be used to determine a
lower "minimum civil penalty acceptable for settlement" (set out
in Part VI) to be used for settlement negotiations.
This policy will allow enforcement officials to arrive
at fair, consistent and rationally based penalty sums while
providing a lower minimum figure as an encouragement to settlement
if enforcement officials believe that settlement is desirable.
By providing them with a minimum settlement figure, this
policy gives the enforcement officials responsible for the action
a range in which to exercise their discretion to settle or not 1.0
settle (i.e., between the statutory maximum and the minimum sum
acceptable in settlement as determined by this policy).
Where the state or local administrative bodies are taking
enforcement actions and have authority to administratively impose
civil penalties, the minimum penalty figure determined for settle-
ment purposes in civil actions should also serve as the minimum to b
imposed in the administrative action. The administrative body,
however, will want to consider its statutory maximum penalty
authority and the minimum civil penalty and will probably want
to impose penalties above the settlement amount. This is
particularly the case since the administrative body will
probably have already decided the case regarding the violation,
and reductions for settlement will no longer be relevant.
V. Determining the Amount of the Statutory Maximum
Penalty and of the Minimum Civil Penalty
The minimum civil penalty should be determined by the factors
and method set out below. The civil penalty so determined will,
in most cases, be lower than the statutory maximum sum. Where
the civil penalty sum so determined is higher, this information
may be used in settlement negotiations or litigation but the
statutory maximum is, of course, all that may be requested by
the government or imposed by the court.
K /
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The amount of the minimum civil penalty should be determined
as follows:
Step 1 - Factors Comprising Penalty
Determine and add together the appropriate
sums for each of the four factors or elements
of this policy, namely:
the sum appropriate to redress
the harm or risk of harm to
public health or the environment,
the sum appropriate to remove the
economic benefit gained or to be
gained from delayed compliance,
the sum appropriate as a penalty
for the violator's degree of recalci-
trance, defiance, or indifference to
requirements of the law, and
the sum appropriate to recover unusual
or extraordinary enforcement costs
thrust upon the public.
Step 2 - Reductions for Mitigating Factors
Determine and add together sums appropriate
as reductions for mitigating factors, of ' ,
which the most typical are the following:
the sum, if any, appropriate to
reflect any part of the noncompliance
attributable to the government itself,
.the sum appropriate to reflect any
part of the noncompliance caused by
factors completely beyond the violator's
control (floods, fires, etc.).
Step 3 - Summing of Penalty Factors and Mitigating.
Reductions
Subtract the total reductions of Step 2 from
the total penalty of Step 1. The result is
the minimum civil penalty. If no settlement
can be reached with the defendant, this sum
would typically be presented to the court as
an appropriate penalty to be'imposed.
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In some unusual cases, the penalty amount determined in
this manner may be larger than the violator can reasonably
be. expected to pay while bringing itself expeditiously into
compliance and continuing to do business. In such cases,
enforcement officials may recommend that the penalty be post-
poned or forgiven in part or in total.
VI. Determining the Minimum Penalty Acceptable for Settlement
Many cases may, of course, be settled prior to trial and
result in consent decrees or orders, rather than being litigated
to conclusion. The objectives of the enforcement action are still
the same, however — full and expeditious compliance (including
interim controls), and penalties. In cases in which enforcement
officials think settlement is appropriate, they may, as an
encouragement to settlement, reduce the penalty below the lesser
of the statutory maxiir.um and the sum determined to be the
minimum civil penalty. This reduction, however, may not be
greater than the percentage which reflects the likelihood of
being unable to establish the violation or violations.
Example;
Assume statutory maximum penalty = $5,000,000
(200 days of violation 3 $25,000/day)
Assume minimum civil penalty = $2,000,000
Assume estimate of government's chance of proving
violation at trial = 80% (or, chance of being
unable to prove violation = 20%)
The maximum reduction permitted for settlement
is, therefore, $400,000 (20% X $2,000,000)
The minimum civil penalty acceptable for settlement
is, therefore, $1,600,000 (80% X $2,000,000 or
$2,000,000 - $400,000) (i.e., range for settlement
negotiation = $3,000,000 to $1,600,000)
It is assumed .that enforcement actions will not be taken
unless the evidence of violation is strong; therefore, in most
cases, the percentage of reduction should not be large—probably
not more than 25%. Unusual circumstances may, however, exist
where larger reductions are appropriate.
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It is not required, of course, that enforcement officials
handling an enforcement action reduce the penalty for settlement,
or that they reduce it in any given amount. Defendants who
settle quickly will undoubtedly stand better chances of receiving
such reductions than those who do not.
It should be noted, moreover/ that the reduction relates
only to the degree of uncertainty of proving that the violation
or violations resulted from the source's failure to make capital
or operation and maintenance expenditures necessary to bring
itself into initial compliance. It does not relate to uncertainty
as to the court's decision on compliance schedules and penalties.
Enforcement officials should carefully and thoroughly prepare
the facts and reasoning supporting their penalty request, and
should not be reluctant to present these arguments to the court.
Judges are accustomed to deciding such matters, and will
make better decisons after receiving well-reasoned recommendations
based on fair principles consistently applied.
There may be extraordinary instances where the minimum
settlement penalty amount is more than the violator is able to
pay. In such cases, it may be appropriate to agree to a post-
ponement of the penalty or payment over time, or, in an extreme
case, to a further reduction of the penalty. Further guidance
on handling .these extraordinary instances is set out below.
VII. Explanation of Factors Considered in Determining
Minimum Amount of Civil Penalty
A. Harm or Risk of Harm to Health or the Environment
The extent that the violation harms or poses risks
of harm to public health or the environment must be carefully
considered in setting the appropriate penalty, for violations
which involve such harm or risk are certainly very serious.
For example, a violation involving discharges of toxic chemicals
into waters which enter or threaten to enter public drinking
water supplies certainly causes or threatens serious harm to
public health. It may also destroy or threaten valuable
fishing or recreational resources.
Similarly, a violating air pollution source in an area
which has not attained the primary (i.e., health protective)
ambient air standard is contributing to a health hazard or is
actually causing harm to residents of the area.
* All pollutants introduced into the environment create
some harm or risk, of course, and it will be difficult in many
cases to precisely quantify the harm or risk caused by the
violation in question. The penalty amount attributable to
•such public harm or risk will have to be determined on the facts
.of each specific case. - .
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Estimated costs of environmental restoration may be
useful in quantifying harm to the public, and traditional
personal injury damage concepts may be helpful in quantifying
injuries to public health. It may also be possible to use
the recreational values developed by various public agencies
to assist in quantifying environmental harm.
B. Economic Benefit of Delayed Compliance
Violations which are the subject of this policy
usually consist of a failure to install and operate required
pollution control equipment within time limits set by law,
or a failure to utilize fuels or raw ma-arials with lower
pollutant content.
Delaying the purchase and operation of pollution
control equipment results in economic savings or gains to
rhe owner or operator of a facility. These savings or gains
arise from two distinct sources:
the opportunity to invest the capital
funds not spent to purchase and install
pollution control equipment during the
period of noncompliance, and
the avoidance of the operation and main-
tenance expenses associated with the
pollution control equipment during the
period of delayed compliance (labor,
materials, energy, etc.). These costs
avoided represent a permanent savings
to the owner or operator;, they may, of
course, also be invested in income-producing
ways.
The economic benefits attributable to delaying capital
expenditures and avoiding operation and. maintenance expenses have
been, combined in a single formula. Because these benefits occur
over a period of time, both past and future in some cases, the
formula reduces these benefits to a present dollar value by
standard accounting methods, and also takes into account tax
effects, and other appropriate economic factors. The formula
is further described in a technical support document dated
September 27, 1973, subject: Computation of Economic Benefit
of Delayed Compliance, under Civil Penalty Policy. ' The formula
described in that memorandum should be utilized in calculating.
economic benefit for the purpose of arriving at appropriate
penalty amounts. It is recognized, however, that there may be
unusual circumstances in which a different method of measuring
economic benefit may be appropriate. The acceptability of any •
such method will have to be determined on a case-by-case basiso
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C. • Violator's Recalcitrance, Defiance, or Indifference
to the Requirements of the Law "~
Good faith efforts to obey the law are expected of
all subject to its jurisdiction. Except as provided below
in Sections E and F (pp. 13 and 14) assertions of "good
faith" should not be considered as a basis for reducing the
otherwise appropriate penalty. Courts traditionally consider
the degree of the violator's recalcitrance, defiance,
purposeful delay or indifference to its legal obligations
in setting penalties. Enforcement officials should do so also,
and should not hesitate to include a sum in the civil penalty
to reflect such factors where they exist.
Care should be exercised, however, not to seek to
add such an element of penalty on a person, firm, or entity
for exercising, without purpose of delay, its lawful rights
to challenge agency determinations in administrative or
court proceedings. A violator which has complied with all
requirements that were not disputed while challenging the
rest has not been, on these grounds alone, recalcitrant,
defiant or indifferent. Such a violator is on a different .
footing from one which used a challenge of one aspect of its
compliance requirement to delay all compliance,' or which
made frivolous challenges for purposes of delay. This latter
mode of behavior may indeed constitute recalcitrance, defiance,
or indifference so as to justify adding an element of penalty.
If a violator, in good faith, did challenge agency
determinations without purpose of delay, but did not prevail,
and by virtue of the litigation has missed a deadline, or other-
wise failed to comply, it is nevertheless in violation, and
subject to the civil penalty factors other than the one related
to the recalcitrance, defiance, or indifference of the violator —
i.e., harm or risk to public health or the environment, economic
benefit of delayed compliance, and extraordinary enforcement
costs. When a source decides to challenge an agency requirement,
it assumes the risks of not prevailing in its challenge. Violators
"litigate on their own time." U.S. Steel v. Train, 556 2d 822,
(7th Cir. 1977).
D. Extraordinary Costs of Enforcement Action
Although.attorney's fees and court costs cannot be
recovered by .the federal government in civil enforcement actions,
there are situations when it is appropriate to consider unusual
expenses incurred in detecting the violation, defining its
extent, and'in bringing the enforcement action.
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Where, for example, a source hi., disregarded its
obligation to identify its own pollutant discharges, and apply
for a permit, and the government, as a result, must undertake
such work, the government's costs in identifying the discharges
may be included in the amount sought. Or, for example, where
the violator's sampling and analytical procedures are so
deficient that the government must conduct significant sampling
on its own to confirm dz-charge levels, the expense of such
sampling may be added tc the sum of civil penalties sought.
Those cos-s which are routinely incurred by state and federal
enforcement officials need not, however, be sought as part of
a civil penalty.
E. Mitigation for Noncompliance Caused by the
Government Itself
When failure to comply or compliance delay was caused
by, requested by, or attributable to the government, civil
penalties are not appropriate. . When the failure to delay
was partially caused by the government, the penalties may
be reduced in proportion to the relative share of government
responsibility or in proportion to the period of delay caused
fay the government. It is expected that mitigation on this
basis will only be .permitted when the government was clearly
responsible for the delay, as, for example, it may have been
in a small number of cases under the Water Act. In these
instances, a discharger challenged conditions of an NPDES
permit, requested an adjudicatory hearing, prosecuted its
request expeditiously and in good faith, and may have been
delayed by the Agency's lack of resources tc provide prompt
hearings for all those who challenged their permits.
States and the federal government are not bound by
the acts of the other, but they will, of course, want to be
informed of and consider carefully the acts of the other in
connection with penalty decisions.
F. Mitigation for Impossibility
Where delayed compliance was, in fact, attributable
to causes absolutely beyond the control of the violator (such as
floods, fires, and other acts of nature) and was not due to
fault or negligence, a civil penalty is not required—even in
instances where as a result of -he impossibility the violator
has enjoyed an economic benefit:. If only a portion of the
period of delayed compliance is attributable to such factors
beyond the violator's control, a civil penalty should be
sought only for that period of noncompliance that was not
attributable to such factors.
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G. Other Bases for Mitigation
There may also be other unforeseeable mitigation
circumstances because of which all or a part of'the otherwise
appropriate civil penalty should not be sought, as, for example/
when it was not technically possible to comply. Acceptability
of such a situation as a mitigating circumstance will have to be
considered on a case-by-case basis, keeping in mind also the
"technology forcing" aspects of the laws. Another instance
in which all or part of an otherwise appropriate civil penalty
might not be sought would be where emergency needs require that
sources be operated even though they fail to comply with discharge
or emission limitations. Obviously, situations involving unusual
mitigating circumstances must be looked at individually since the
full range of such circumstances cannot be predicted.
Since the Water Act and the Air Act impose absolute
duties of compliance, requiring sources to take whatever measures
are possible to come into compliance by the legally established
dates, the-burden is clearly upon the violator to establish a
compelling reason why a civil penalty should be mitigated. This
burden should only be considered satisfied where urgent efforts
are made to comply but actual impossibility or government conduct
alone precluded compliance, or where a similar mitigating circumj|^.nc
caused the delay. Only in these instances have violators reallj^B t
made what should be considered a "good faith" effort that excuse^^
noncompliance. All dischargers must be held to a standard that
requires careful and diligent planning and an urgent, serious
effort to come into compliance in a timely manner.
H. Specified Clean Air Act Factors
The civil penalty policy factors described above
include consideration of the three factors specified in Section 113
of the Clean Air Act. The "size of the business" is reflected
in.the' economic benefit of delayed compliance since less expensive
control equipment is typically required for smaller businesses
and the benefit of delaying installation of such equipment is
correspondingly less. The "economic impact of the penalty on
the business" is considered by the penalty deferral or reduction
that is allowable where violators lack the ability to immediately
pay the full amount of the penalty (see section IX below). The
third factor, the "seriousness of the violation," is taken into
account by looking at the harm done to public health and the
environment (violations may, though, be considered as serious,
even though they do no measurable or quantifiable harm to the
environment) and the violator's recalcitrance, defiance or
indifference to the requirments of the law.
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VIII. Approved Environmentally 3enefic:.-1 Expenditures
In Lieu of Payment of Penalty SUIT, to State or
Federal Treasury (i.e., "Credits Against. Penalty")
A. Use of Cr:iit to Satisfy or Offset Penalty
Occasions have arisen in enforcement actions where
violators have offered to make expenditures for environmentally
beneficial purposes above and beyond expenditures made to comply
with all existing legal requirements, in lieu of paying penalties
to the treasury of the enforcing government. Courts have
sometimes accepted such payments, and in some circumstances
such arrangements are acceptable under this penalty policy.
For ease of reference (but without characterizing them for
any other legal purposes—e.g., tax deductibility) such
alternative ways for a violator to satisfy the penalty instead
of paying the penalty sum to the federal, state, or local
treasury are referred to herein as "credits" against the
penalty.
Examples of possible credits against a penalty
might be:
(1) construction and operation of approved
pollution control equipment in addition to that
required for compliance with existing requirements
which will achieve a significant further increment
of environmental benefit above all present require-
ments of federal, state or local law.
(2) financial contributions to a private or
governmental body or agency for environmentally
approved uses—e.g., restoring fish and wildlife
resources, carrying out environmental studies or
research of a high priority need, improving the
ability of citizen or public interest groups
to monitor and assist in enforcing the law.
Credits, however, will not be given for expen-
ditures that would properly be required as part of
equitable relief being sought for the violations,
such as cleaning up the pollution, restoring the
areas affected, or reimbursing the government's .
costs of doing so, unless these costs have been
included in the penalty sum. In all events, the
financial contributions must be acceptable to the
enforcing agency. Credits for high priority research
are desirable, but the research must be closely
scrutinized to insure it is beneficial from the
point of view of .the enforcing agency, not merely
from the point of view of the violator.
'••y-
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B. Criteria for Acceptable Credits
In determining whether a proposed expenditure is
creditable against the penalty/ the following criteria must
be satisfied:
(1) The penalty sum itself will generally be
stated in the order, decree or judgment as
determined, before any credits are allowed, and
this amount should be clearly identified as a
penalty.
(2) The expenditure proposed for credit must.
be approved by enforcement officials in advance
of the entry of the decree, order, or judgment
in the case, must be clearly, delineated therein, and
must be enforceable along with other elements of
the decree, e.g., subject to stipulated contempt
penalties or to the court's continued contempt authority
for the full length of time over which expenditures
are to be made.
(3) The item to be acquired by additional expendi-
ture for which credit is given must be described
with sufficient precision to bind the violator
to the agreed expenditure level. Where the
credit is for the construction and operation of
additional pollution control equipment that
will bring about a greater degree of control than-
that required by law (and a considerably reduced
discharge or emission level) an agreement should
be obtained from the violator that it will treat
the reduced discharge or emission, in all respects,.
as a requirement of law for the period that it has
agreed to operate such equipment.
(4) The proposed expenditure must be clearly
for environmental benefits above and beyond
the requirements of law. Interim controls and
expeditious compliance are required by law (not
just waiting for the last day before the
statutory deadline) and are not appropriate for credit.
(5). Environmental laws require compliance at all
times.' Good engineering practice, therefore,
includes design of pollution control systems
with sufficient capacity and reliability to provide
a margin of safety to ensure such continuous com-
pliance.. Expenditures for this margin of safety
are5 to assure compliance with the requirements of
law and are not eligible for credits.
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(6) If in accomplishing the required level of
pollution control, the violator necessarily
will accomplish a higher level of control,*there
can be no credit for such incidental benefit.
(e.g., to accomplish 80% removal of a pollutant,
the violator must necessarily purchase and operate
equipment which removes 85% of the pollutant.)
(7) Studies or research and development which are
necessary parts of compliance with legal require-
ments are not eligible for credits (e.g., studies
assessing the feasibility and costs of alternative
methods of compliance or prototype research and
development). Research and development work
eligible for credit should be work from which
-he public in general can benefit. To insure this,
the following measures should be required:
(a) the enforcing agency should insure
that adequate reporting procedures are
required. These procedures should include
an initial research and development plan,
periodic progress reports, and a comprehensive
final report that documents startup and the
first year of operations if a facility was
involved;
(b) the enforcement agency or its contractors
should be given the right to obtain first hand
information about the work by inspecting all
documents associated with it and by making
on-site inspections; and
(c) the source should agree that all domestic
patents, design rights and trade secrets that
result from the work will be placed in the
public domain.
In most instances the research and development should
be related to the violation, but other instances can be considered
on a case-by-case basis. As stated above, credits for research
or studies will be closely scrutinized.
(9) Expenditures accepted for credit may only
be expenditures that the violator agrees'it may
not later use (or sell to anyone else to be
' used) as a credit against any other existing
provisions of environmental law (such as emis-
sion offset to allow the construction or modifica-
tion of a major stationary source in an area where
national air quality standards are not being
satisfied) and the decree must so provide.
! '
' 'J
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C. Constraints on Federal Enforcement Officials
With Respect to Payment of Penalties and Use
of Credits In Lieu'of Penalties
The Air and Water Acts both authorize civil penalties
which are payable only to the United States Treasury. State
statutes may differ, but most provide for payment of the penalties
to the State Treasury.
Civil enforcement actions to enforce the Air or
Water Acts whether settled or litigated to conclusion will
end in orders, decrees, or judgments of a court. In such
actions there are limitations governing the positions to be
taken by federal enforcement officials. In settling cases,
federal enforcement officials may accept proposals for
expenditures as credits against penalties and recite them,
as well as the penalty sum, in the proposed consent decree,
but it must be kept in mind that such provisions as well as
the entire decree are subject to approval by the court.
with respect to credit for proposed contributions
to third parties, federal enforcement officials may not
agree with defendants as to such payments in lieu of paying
the penalty to the United States Treasury, for that prefers
a third party as recipient of the payment over the United
States, and prefers one third party potential recipient over
another.
State and local enforcement officials may or may
not be as constrained with respect to proposing contributions
to third parties. Accordingly, the appropriateness of state
or local government officials proposing credits'for contributions
to third parties must be governed by their own policies.
D. Discretionary Nature of Credit
Acceptance of a proposed credit is purely discretionary
with federal, state, and local enforcement officials. Enforcement
officials may, of course, insist on payment of the penalty into
the treasury. The statutes provide for penalties. Violators
have no "rights" to credits against these penalties.
E. Consideration of After-Tax Effects of Credit
Expenditures
The amount of the credit to be given for proposed
expenditures is governed by the rule that it must have the
. same after-tax effect on the violator as payment of the penalty
. sum would have. Since the penalty sum is immediately payable
entry of the order, decree or judgment, any proposed credit
includes other than immediate oavment of the full sum must be
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reduced to an equivalent present value by standard accounting
methods. Where the expenditure proposed for credit is construction
and operation of additional pollution control equipment, the formula
for computing economic benefit of delayed compliance (see paragraph
VII.B. above) should be used to compute the present value of the
credit. It should be noted that this formula assumes that the
expenditures will receive normal tax treatment (deductibility or
credit against tax) and accounts for that. The 'present value rasultirv
from use of this formula may, therefore, be used dollar-for-dollar
as credit against the penalty.
IX. Penalty Postponement c~ Forgiveness Based Upon Inability
To Pav" " * " *~
In some instances, the indicated appropriate civil penalty
may be so severely disproportionate to the resources of the
owner or operator of the violating facility that its imposition
would cause the owner or operator very serious economic hardship,
In such unusual cases, enforcement officials may recommend to
the court thac it postpone or forgive the otherwise appropriate
penalty, in part or in total as circumstances may indicate.
While the appropriate civil penalty amount may be post-
poned or reduced in such circumstances, no such concession
may be made with respect to the cost of coming into com-
pliance. Except as the Air and Water Acts may themselves
provide, compliance is required in every case, regardless of
cost and regardless of the violator's financial situation.
Clearly the burden is on the violator to establish its
inability to pay. This burden can only be satisfied when
the violator has produced adequate evidence to establish
its financial condition and when the enforcement officials
involved have obtained a competent review of the violator's
financial condition. Mere statements of inability to pay
are not enough, and.a violator making such a claim must be
willing to make- full disclosure of its financial affairs to
enforcement officials and the court under circumstances that
assure such disclosure is accurate and complete.
If review by persons competent to assess the violator's
financial condition and.prospects indicates that the violator's
resources would not permit it. to finance its compliance, and
also pay the penalty, then, if adequate interest can be arranged,
the penalty may be paid over time.
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If even payment over time is not possible, then the
penalty may be reduced to an amount commensurate with the
resources of the violator (taking into account the cost of
compliance).
In making a determination of the violator's ability to
pay, it is important to insure that the economic condition
of the violator has not been distorted by transactions with
parent companies or shareholders or by unusual or uncon-
ventional accounting practices. Where such distortion has
taken place, parent company and shareholder or other owners'
resources should be considered in determining whether or not
the violator is able to pay the civil penalty. In all cases,
review of financial information by persons competent in
financial affairs should be obtained. . _.
X. Time Period for Application of Civil Penalty Policy
In general, this civil penalty policy would appropriately
apply to violations of the kinds covered which have occurred
since enactment of the Air Act in 1970 and the Water Act in 1972.
In determining the penalty sum, both with respect to the
statutory maximum and the minimum civil penalty, the period of
violation should begin with the earliest provable date of
violation and continue until the violator has installed and
operated the required equipment, made the required process chan
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penalties are authorized in civil enforcement actions commenced
or amended after August 7, 1977, for violations occurring before
August 7, 1977, may be debated, but regardless of that, and
without conceding any issue of law, as a decision of policy, this
civil penalty policy will be applied by federal enforcement
officials only to those violations of the Air Act occurring
after August 7, 1977.
Accordingly, under the Air Act, for purposes of computing
the statutory maximum penalty, the period of noncompliance will
commence with August 7, 1977, or the date of earliest provable
violation, whichever is later. For purposes of computing
the minimum civil penalty, the period of noncompliance used will
also be as stated in the previous sentence, except that when
considering the sum to be included for the violator's recalcitrance,
defiance, or indifference to its legal obligations, the entire
record of the violator should be considered.
When determining a civil penalty under the Air Act a
special consideration also applies concerning the end date of
the period of noncompliance, but only with respect to the
element of the penalty based on removing the economic benefit
of delayed compliance.
As indicated earlier, Section 120 of the Air Act requires
EPA to assess and collect noncompliance penalties against certain
categories of stationary sources. The purpose of these admin-
istratively imposed penalties is to recapture the economic value
which a delay in compliance may have to the source owner or operator
EPA will not issue any notices of noncompliance or assess and
collect any noncompliance penalties prior to January 1, 1981.
While the authority to collect noncompliance penalties (Section 120;
is independent of and additional to the authority to seek civil
penalties (Section 113), federal enforcement officials will not
seek double recovery of any portion of the economic value attribo.^air--
to delayed compliance. Accordingly, when the period of noncompij...inc.
will extend beyond January 1, -1981, the economic benefit element >..:'
the civil penalty should be based, only upon the noncompliance that
will have occurred prior to that date.
Sources subject to judicial orders or that have negotiated
consent decrees with EPA, will not have their civil penalties
recalculated. Additionally, even if a consent decree has not
been approved by the court, the amount of the penalty need not '~e
recomputed if it is clear that agreement has been reached on ail
material terms, including the penalty amount, and among all parti
economic benefit components of the civil penalty will be based
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upon noncompliance which will occur up to January 1, 1981, or thfl
date for final compliance specified in the consent decree,
whichever is earlier. In this way the policy will provide an
incentive for expeditious and fair settlements, while honoring
the Agency's commitment not to seek double recovery of any
portion of the economic benefit element attributable to delayed
compliance.
In all other respects, however, in Air Act cases, both when
computing the statutory maximum penalty and when determining
the mir.'jnum civil penalty (or the minimum acceptable for
settlement) , the period of noncompliance continues until the
violator has brought itself into full compliance with the
requirements of the law.
Where state or local government civil penalty authority
existed prior to August 7, 1977, then that additional authority
might, of course, be used by the state to extend the period of
noncompliance.
XI. Application of Civil Penalty Policy to Different Types of
Sources - Private, Public, Regulated Utilities, etc'.
Congress, in enacting the civil penalty provisions of the Air
and Water Acts, and in the Air Act's (Section 120) administratively
imposed noncompliance penalties, made no exemptions or distincti^J| *
for classes or -ypes of violators on the basis of ownership or
form of organization. This civil penalty policy seeks to carry out
Congress* fair, evenhanded, consistent approach, but recognizes
obstacles in a few situations.
A. Privately-Owned or Operated Sources (other than
Regulated Utilities)
This penalty policy, as described above, applies in
full in civil enforcement actions against privately-owned and
operated .sources other than regulated utilities. Extraordinary
situations, if any, can be handled on a case-by-case basis.
B. Publicly-Owned Utilities and Investor-Owned,
Regulated Utilities'
Publicly-owned utilities and investor-owned, regulated
utilities are to be treated equally.
Penalties will be sought from utilities whose violations
come within the"scope of this policy. The focus of these penalties
will be on deterrence. That is., penalties should be in sufficient
amounts to deter future violations. Penalties should include
appropriate amounts for environmental harm or risk of harm caused
• by the source's violations and recalcitrance or indifference o
source to its legal obligations as well as any extraordinary
enforcement costs which the government has been forced to pay.
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C. State and Municipal Facilities
In enforcement actions against state or municipal
facilities, including publicly-owned treatment works, this civil
penalty policy applies, except with respect to the penalty element
for economic benefit of delayed compliance.
Because state and municipal budgeting and financial
. acisions are generally concerned wi :.r. the allocation of tax
.erivec public funds to provision of public services, rather than
the sale of goods or services for profit, recovering the economic
benefit of delayed compliance is somewhat less applicable. In ail
such cases, the economic benefit of delayed compliance should be
calculated and considered as a guide, but in determining the
minimum civil penal-y and the minimum civil penalty acceptable for
settlement, enforcement officials may recommend that this factor
be discounted or eliminated in cases where they think it is
appropriate. Because the other elements (harm or risk; recalci-
trance; extraordinary enforcement expense) are not always susceptible
to precise quantification, the appropriate minimum civil penalty
or the minimum civil penalty acceptable in settlement for such
facilities can only be determined on a case-by-case basis.
The only further guidance with respect to penalties
in such cases is as follows:
1. Enforcement officials should not excuse all
civil penalties except in extraordinary situations,
for that would create a double standard of more
lenient treatment for public agencies than private
individuals or firms.
2. Civil penalties for violations by state or
municipal facilities should be in sufficient amounts
to deter future violations, considering the element?
of this penalty policy, size of the facility, and the
duration of the violation, and in a municipal case, the
size and the resources of the municipality. To
achieve a deterrent effect, civil penalties for
violations by state or municipal facilities should
bear some relationship to the population served by
the violating facility and upon which the burden
of the penalty will fall.
D. Federal Facilities (Other than Utilities)
Because of recent amendments to the Air Act and
the Water Act and the federal mechanism that exists for the
.payment of penalties, federal facilities present a significantly
.different problem from other violating sources. Accordingly,
guidance as to them will be provided elsewhere.
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XII. Federal-State Cooperation in Implementing this Policy
As part of their efforts to enforce air and water pollution
laws, many federal, state, and local enforcement officials will
be using this penalty policy. To assist in achieving consistency
in its application, a method of consultation among federal, state
and/or local enforcement officials has been devised to insure
that appropriate penalties will be sought in specific cases.
XIII. Effective Date of this Civil Penalty Policy
Many of the factors comprising this penalty policy have
been used by federal and state enforcement officials for years.
EPA's civil penalty policy has been more fully articulated over
the last year. . .. • .
On June 3, 1977, guidance was provided to EPA regional
offices by the Office of Enforcement regarding criteria for
settlement of civil penalty-aspects of enforcement cases under
the Water Act. This guidance included most of the factors now
more fully explained in this document, including, for example,
recovery of the economic benefit of delayed compliance, harm
to the public, and recalcitrance of the violator. EPA's intention
to take enforcement action against major source violators of
the Water Act and to seek civil penalties, including sums to t
away the economic benefit of delayed compliance, was announced
at a press conference on June 21, 1977, by Assistant Administrator
Thomas C. Jorling.
Further elaboration of this Water Act civil penalty policy
was provided by an Office of Enforcement memorandum to EPA
regional offices dated June 28, 1977.
The Air Act Amendments became effective on August 7, 1977,
including authority for civil penalties, and regions were
advised on September 2, 1977 that civil penalties should only
be sought for violations occurring or. continuing after
August 7, 1977.
The first comprehensive version of this consolidated Air
and Water Act civil penalty policy was distributed to federal
and state enforcement officials on November 23, 1977, and took
effect on that date.
In addition to these general communications, this civil
penalty policy was explained at meetings and workshops of
federal, state, and local-officials, at press conferences
and other gatherings at Washington, D.C., and in all regions
of the country in the last half of 1977 and early 1973. This
policy has had the benefit of comments, discussion and analysi-s
over rnanv months.
—-r
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-25- - -
The civil penalty policy (including its predecessors as
explained above) covers all Air and Water Act cases within
its scope, as follows:
all Water Act cases not concluded prior
to June 3, 1977, and
all Air Act cases not concluded prior to
August 7, 1977.
The application to Water Act cases concluded after
June 3, 1977 and Air Act cases concluded after August 1, 1977,
but prior to the date- of this memorandum, is governed by
the guidance extant and in effect at the time the case was
concluded, including any case-by-case guidance given.
For purposes of this policy, a case was concluded if it
is clear'that agreement had been reached on all material terms,
including penalties, and among all the parties, including EPA
where it was a party. Where the agreement had been reduced to
writing so as to memorialize its terms, it was clearly concluded.
Other situations will have to be individually considered.
Enforcement officials aware of civil enforcement actions
which they believe should not be included within the coverage
of this policy or'its predecessors should present the facts
or circumstances for consideration.
XIV. Previous Civil Penalty Policy Superseded
This civil penalty policy supersedes all previous Air Act
stationary source and Water Act civil penalty policy, including
the following, but only to the extent that such previous policy
was inconsistent herewith:
(1) U.S. Environmental Protection Agency, Office
of Enforcement guidance letter entitled "Settlement
. of Section 309 (d) Enforcement Cases for Monetary Air,.jur. ts"
dated June 3, 1977, signed by Stanley W. Legro, Assistant
Administrator for Enforcement.
(2) U.S. Environmental Protection Agency, Office
of Enforcement guidance letter entitled "Settlement
of Section 309(d) Enforcement Cases for Monetary
"Amounts—Policy Background" dated June 23, 1977
signed by Stanley W. Legro, Assistant Administrator
for Enforcement.
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-26-
(3) U.S. Environmental Protection Agency, Office
of Enforcement guidance letter entitled "Civil
Penalties under Section 113(b) of the Clean Air
Act Amendments of 1977," dated September 2, 1977,
signed by Richard D. Wilson, Acting Assistant
Administrator for Enforcement.
Jeffrey G. Miller
Acting Assistant Administrator for Enforcement
U.S. Environmental Protection Agency
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IV.C.2,
"GUIDANCE FOR DRAFTING JUDICIAL CONSENT DECREES", dated October 19, 1983.
See GM-17.
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IV.C.3
"New Civil Penalty Policy", dated February 16, 1984. See GM-21.
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^ -7
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J UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
MEMORANDUM
SUBJECT: New Civil Penalty Policy
FROM: Courtney M. Price \ .. j.-. ^L ^i 'Y
Assistant Administrator fof Enforcement
and Compliance Monitoring
TO: Associate Administrators
Assistant Administrators
General Counsel
Inspector General
Regional Administrators
Staff Office Directors
Attached is the Agency's new civil penalty policy. This
new penalty policy will establish a consistent Agency-wide
approach to the assessment of civil penalties while allowing
substantial flexibility for individual cases within certain
guidelines. It is designed to promote the goals of deterrence,
fair and equitable treatment of the regulated community and
swift resolution of environmental problems. No attempt is
made to address issues specific to each statute the Agency
administers. Instead, this will be left to guidance developed
by each program.
The policy consists of two documents: Policy on Civil
Penalties and A Framework for Statute-Specific Approaches to
Penalty Assessments. The first document focuses on the
general philosophy behind the penalty policy. The Framework
provides guidance to each program on how to develop medium-
specific penalty policies.
The new penalty policy will not be truly effective until
the medium-specific penalty policies are completed. Thus it
is important that work begin on the medium-specific policies
as soon as possible. I am therefore requesting that each
program office meet with their counterparts in OECM and develop
workplans for the development of those policies. Please submit
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-2-
those workplans to me by March 31, 1984. The Deputy Adminis-
trator has requested that we add the workplans to the Action
Tracking System as we receive them. If you have any questions
regarding this memorandum or the new civil penalty policy,
please contact Jonathan Libber of the Office of Legal and
Enforcement Policy. He may be reached at 426-7503.
Attachment
cc: Enforcement Policy Workgroup Members
Associate Enforcement Counsels
OECM Office Directors
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-1-
Introduction ~
This document, Policy on Civil Penalties, establishes a
single set of goals for penalty assessment in EPA administrative
and judicial enforcement actions. These goals - deterrence,
fair and equitable treatment of the regulated community, and
swift resolution of environmental problems - are presented here
in general terms. An outlinevof the general process for the
assessment of penalties is contained in Attachment A.
A companion document, A Framework for Statute-Specific
Approaches to Penalty Assessments, will also be issued today.
This document provides guidance to the user of the policy on
how to write penalty assessment guidance specific to the user's
particular program. The first part of the Framework provides
general guidance on developing program-specific guidance; the
second part contains a detailed appendix which explains the basis
for that guidance. Thus, the user need only refer to the appendix
when he wants an explanation of the guidance in the first part of
the Framework.
In order to achieve the above Agency policy goals, all
administratively imposed penalties and settlements of civil
penalty actions should, where possible, be consistent with the
guidance contained in the Framework document. Deviations from
the Framework's methodology, where merited, are authorized as
long as the reasons for the deviations are documented. Documen-
tation for deviations from the Framework in program-specific
guidance should be located in that guidance. Documentation for
deviations from the program-specific guidance in calculating
individual penalties should be contained in both the case files
and in any memoranda that accompany the settlements.
The Agency will make every effort to urge administrative
law judges to impose penalties consistent with this policy and
any medium-specific implementing guidance. For cases that go
to court, the Agency will request the statutory maximum penalty
in the filed complaint. And, as proceedings warrant, EPA will
continue to pursue a penalty no less than that supported by the
applicable program policy. Of course, all penalties must be consis-
tent with applicable statutory provisions, based upon the number
and duration of the violations at issue.
Applicability
This policy statement does not attempt to address the
specific mechanisms for achieving the goals set out for penalty
assessment. Nor does it prescribe a negotiation strategy to
achieve the penalty target figures. Similarly, it does not
ec?dress differences between statutes or between priorities cf
different programs. Accordingly, it cannot be used, by itself,
as a basis for determining an appropriate penalty in a specific
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action. Each EPA program office, in a joint effort with the
Office of Enforcement and Compliance Monitoring, will revise
existing policies, or write new policies as needed. These
policies will guide the assessment of penalties under each
statute in a manner consistent with this document and, to the
extent reasonable, the accompanying Framework.
Until new program-specific policies are issued, the
current penalty policies will remain in effect. Once new
program-specific policies are issued, the Agency should
calculate penalties as follows:
• For cases that are substantially settled,
apply the old policy.
• For cases that will require further sub-
stantial negotfation, apply the new policy
if that will not be too disruptive.
Because of the unique issues associated with civil penal-
ties in certain types of cases, this policy does not apply to
the following areas:
0 CERCLA 5107. This is an area in which
Congress has directed a particular kind
of response explicitly oriented toward
recovering the cost of Government cleanup
activity and natural resource damage.
• Clean Water Act S311(f) and (q). This also
is cost recovery in nature. As in CERCLA
S107 actions, the penalty assessment
approach is inappropriate.
• Clean Air Act $120. Congress has set out in
considerable detail the level of recovery
under this section. It has been implemented
with regulations which, as required by law,
prescribe a non-exclusive remedy which
focuses on recovery of the economic benefit
of noncompli* ce. It should be noted, how-
ever, that t s general penalty policy builds
upon, and is consistent with the approach
Congress took in that section.
Much of the rationale supporting this policy generally
applies to non-profit institutions, including government entities,
In applying this policy to such entities, EPA must exercise judg-
ment case-by-case in deciding, for example, how to apply the
economic benefit and ability to pay sanctions, if at all.
guidance cm the is>s-e of scchirj -er.?!ties ?~airst non-orofit
entities will be forthcoming.
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Deterrence
The first goal of penalty assessment is to deter people from
violating the law. Specifically, the penalty should persuade the
violator to take precautions against falling into noncompliance
again (specific deterrence) and dissuade others from violating the
law (general deterrence). Successful deterrence is important
because it provides the best protection for the environment. In
addition, it reduces the resources necessary to administer the
laws by addressing noncompliance before it occurs.
If a penalty is to achieve deterrence, both the violator and
the general public must be convinced that the penalty places the
violator in a worse position than those who have complied in a
timely fashion. Neither the violator nor the general public
is likely to believe this if the violator is able to retain an
overall advantage from noncompliance. Moreover, allowing a
violator to benefit from noncompliance punishes those who have
complied by placing them at a competitive disadvantage. This
creates a disincentive for compliance. For these reasons, it
is Agency policy that penalties generally should, at a minimum,
remove any significant economic benefits resulting from failure
to comply with the law. This amount will be referred to as the
"benefit component" of the penalty.
Where the penalty fails to remove the significant economic
benefit, as defined by the program-specific guidance, the case
development team must explain in the case file why it fails to do
so. The case development team must then include this explanation
in the memorandum accompanying each settlement for the signature
of the Assistant Administrator of Enforcement and Compliance
Monitoring, or the appropriate Regional official.
The removal of the economic benefit of noncompliance only
places the violator in the same position as he would have been if
compliance had been achieved on time. Both deterrence and funda-
mental fairness require 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 should reflect
the seriousness of the violation. In doing so, the penalty will
be perceived as fair. In addition the penalty's size will tend
to deter other potential violators.
In some classes of cases, the normal gravity calculation may
be insufficient to effect general deterrence. This could happen
if, for example, there was extensive noncompliance with certain
regulatory programs in specific areas of the United states. This
would demonstrate that the normal penalty assessments had not been
achieving general deterrence. In such cases, the case development
team should consider increasing the gravity component sufficient to
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achieve general deterrence. These extra assessments should
balance the other goals of this policy, particularly equitable
treatment of the regulated community.
This approach is consistent with the civil penalty
provisions in the environmental laws. Almost all of them
require consideration of the s<- iousness 'of the violation.
This additional amount which reflects the seriousness of the
violation is referred to as the "gravity component*. The
combination of the benefit and gravity components yields the
•preliminary deterrence figure."
As explained later in this policy, the case development
team will adjust this figure as appropriate. Nevertheless, EPA
typically should seek to recover, at a minimum, a penalty which
includes the benefit component plus some non-trivial gravity
component. This is important because otherwise regulated
parties would have a general economic incentive to delay
compliance until the Agency commenced an enforcement action.
Once the Agency brought the action, the violator could then
settle for a penalty less than their economic benefit of
noncompliance. This incentive would directly undermine the
goal of deterrence.
i
Fair and Equitable Treatment of the Regulated Community
The second goal of penalty assessment is the fair and
equitable treatment of the regulated community. Fair and
equitable treatment requires that the Agency's penalties must
display both consistency and flexibility. The consistent
application of a penalty policy is important because otherwise
the resulting penalties might be seen as being arbitrarily
assessed. Thus violators would be more inclined to litigate
over those penalties. This would consume Agency resources and
make swift resolution of environmental problems less likely.
But any system for calculating penal ies must have enough
flexibility to make adjustments to reflecc legitimate differences
between similar violations. Otherwise the policy migvt be
viewed as unfair. Again, the result would be to undermine
the goals of the Agency to achieve swift and equitable resolu-
tions of environmental problems.
Methods for quantifying the benefit and gravity components
are explained in the Framework guidance. These methods signifi-
cantly further the goal of equitable treatment of violators.
To begin with, the benefit component promotes equity by re-
moving the unfair economic advantage which a violator may have
gained over complying parties. Furthermore, because the
and gravity roTpo«*Tt.« are> ce-prsted systematically, thev
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-5-
will exhibit relative consistency from case to case. Because
the methodologies account for a wide range of relevant factors,
the penalties generated will be responsive to legitimate
differences between cases.
However, not all the possibly relevant differences between
cases are accounted for in generating the preliminary deterrence
amount. Accordingly, all preliminary deterrence amounts should
be increased or mitigated for the following factors to account
for differences between cases:
• Degree of willfulness and/or negligence
• History of noncompliance.
• Ability to pay.
>
0 Degree of cooperation/noncooperation.
• Other unique factors specific to the
violator or the case.
Mitigation based on these factors is appropriate to the extent
the violator clearly demonstrates that it is entitled to miti-
gation.
The preliminary deterrence amount adjusted prior to the
start of settlement negotiations yields the "initial penalty
target figure". In administrative actions, this figure
generally is the penalty assessed in the complaint. In judicial
actions, EPA will use this figure as the first settlement goal.
This settlement goal is an internal target and should not be
revealed to the violator unless the case development team feels
that it is appropriate. The initial penalty target may be
further adjusted as negotiations proceed and additional
information becomes available or as the original information is
reassessed.
Swift Resolution of Environmental Problems
The third goal of penalty assessment is swift* resolution
of environmental problems. The Agency's primary mission is to
protect the environment. As long as an environmental violation
continues, precious natural resources, and possibly public
health, are at risk. For this reason, swift correction of
identified environmental problems must be an important goal of
any enforcement action. In addition, swift compliance conserves
Agency personnel and resources.
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The Agency will pursue two basic approaches to promoting
quick settlements which include swift resolution of environmental
problems without undermining deterrence. Those two approaches
are as follows:
1. Provide incentives to settle and institute prompt
remedial action.
EPA policy will be to provide specific incentives to settle,
including the following:
• The Agency will consider reducing the
gravity component of the penalty for
settlements in which the violator already
has instituted expeditious remedies to
the identified violations prior to the
commencement of litigation.^/ This would
be.considered in the adjustment factor
called degree of cocperation/noncoocera-
tion discussed above.
• The Agency will consider accepting additional
environmental cleanup, and mitigating the
penalty figures accordingly. But normally,
the Agency will only accept this arrangement
if agreed to in pre-litigation settlement.
Other incentives can be used, as long as they do not result in
allowing the violator to retain a significant economic benefit.
2. Provide disincentives to delay*.- 3 compliance.
The preliminary deterrence amount is based in part upon
the expected duration of the violation. If that projected period
of time is extended during the course of settlement negotiations
due to the defendant's actions, the case development team should
adjust that figure upward. The case development team should
consider making this fact known to the violator early in the negoti
ation process. This will provide a strong disincentive to delay
compliance.
T7For the purposes of this document, litigation is deemed to
Begin:
• for administrative actions - when the
respondent files a response to an adminis-
trative complaint or when the time to
file expires or
• for judicial actions - when an Assistant
United States Attorney files a com-
plaint in court. .
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Intent of Policy and Information Requests for Penalty Calculations
The policies and procedures set out in this document and in
the Framework for Statute-Specific Approaches to Penalty Assessment
are intended solely for the guidance of government personnel.
They are not intended and cannot be relied upon to create any
rights* substantive or procedural, enforceable by any party in
litigation with the United States. The Agency reserves the right
to act at variance with these policies and procedures and to change
them at any time without public notice. In addition, any penalty
calculations under this policy made in anticipation of litigation
are exempt from disclosure under the Freedom of Information Act.
Nevertheless as a matter of public interest, the Agency may
elect to release this information in some cases.
Courtney M. Price
Assistant Administrator for
Enforcement and Compliance Monitoring
Attachment
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ATTACHMENT A
Outline of Civil Penalty Assessment
I. Calculate Preliminary Deterrence Amount
A. Economic benefit component and
B. Gravity component
(This yields the preliminary deterrence amount.)
II. Apply Adjustment Factors
A. Degree of cooperation/noncooperation (indicated through
pre-settlement action.)
B. Degree of willfulness and/or negligence.
C. History of noncompliance'.
D. Ability to pay (optional at this stage.)
E. Other unique factors (including strength of case,
competing public policy concerns.)
(This yields the initial penalty target figure.)
III. Adjustments to Initial Penalty Target Figure After
Negotiations Have Begun
A. Ability to pay (to the extent not considered in
calculating initial penalty target.)
B. Reassess adjustments used in calculating initial
penalty target. (Agency may want to reexamine
evidence used as a basis for the penalty in the
light of new information.)
C. Reassess preliminary deterrence amount to reflect
continued periods of noncompliance not reflected
in the original calculation.
D. Alternative payments agreed upon prior to the
commencement of litigation.
(This yields the adjusted penalty target figure.)
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IV.C.4.
"A Framework for Statute Specific Approaches to Penalty Assessment", dated
February 16, 1984. See GM-22.
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A FRAMEWORK FOR STATUTE-SPECIFIC APPROACHES
TO PENALTY ASSESSMENTS;
IMPLEMENTING EPA'S POLICY ON CIVIL PENALTIES
EPA GENERAL ENFORCEMENT POLICY #GM - 22
UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY
FEB I 6 1984
EFFECTIVE DATE: ______
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Contents Paoe
Introduction
Writing a Program-Specific Policy 2
I. Developing a Penalty Figure 2
II. Calculating a Preliminary Deterrence Amount 2
HI. Adjusting the Preliminary Deterrence Amount 3
to Derive the Initial Penalty Target Figure
IV. Adjusting the Initial Penalty Target Figure 4
During Negotiations
Use of the Policy in Litigation
Use of the Policy as a Feedback Device
Appendix • 6
Introduction 6
The Preliminary Deterrence Amount 6
I. The Benefit Component 6
A. Benefit from delayed costs 7
B. Benefit from avoided costs 9
C. Benefit from competitive advantage 10
D. Settling a case for an amount less than 11
• the economic benefit component
II. The Gravity Component 13
A. Quantifying the gravity of a violation 13
B. Gravity factors 14
Initial and Adjusted Penalty Target Figure 16
.1. Flexibility-Adjustment Factors 17
A. Degree of willfulness and/or negligence 17
B. Degree of cooperation/noncooperation 19
C. History of noncompliance 21
D. Aoiiity to pcj. "^
E. Other unique factors 24
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ii
Appendix (Con't)
II. Alternative Payments 24
III. Promoting Consistency 27
Use of Penalty Figure in Settlement Negotiations 28
\ A- O
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Introduction
This document, A Framework for Statute-Specific Approaches
to Penalty Assessment, provides guidance to the user of the
Policy on Civil Penalties on how to develop a medium-specific
penalty policy. Such policies will apply to administratively
imposed penalties and settlements of both administrative and
judicial penalty actions.
In the Policy on Civil Penalties, the Environmental
Protection Agency establishes a single set of goals for penalty
assessment. Those goals - deterrence, fair and equitable
treatment of the regulated community, and swift resolution of
environmental problems - will be substantially impaired unless
they are pursued in a consistent fashion. Even different
terminology could cause confusion that would detract from the
achievement of these goals. At the same time, too much'rigidity
.will stifle negotiation and make settlement impossible.
The purpose of this document is to promote the goals of
the Policy on Civil Penalties by providing a framework for
medium-specific penalty policies. The Framework is detailed
enough to allow individual programs to develop policies that
will consistently further the Agency's goals and be easy to
administer. In addition, it is general enough to allow each
program to tailor- the policy to the relevant statutory provi-
sions and the particular priorities of each program.
While this document contains detailed guidance, it is not
cast in absolute terms. Nevertheless, the policy does not
encourage deviation from this guidance in either the development
of medium-specific policies or in developing actual penalty
figures. Where there are deviations in developing medium-
specific policies, the reasons for those changes must be
recorded in the actual policy. Where there are deviations from
medium-specific policies in calculating a penalty figure, the
case development team must detail the reasons for those changes
in the case file. In addition, the rationale behind the deviations
must be incorporated in the memorandum accompanying the settlement
package to Headquarters or the appropriate Regional official.
This document is divided into two sections. The first one
gives brief instructions to the user on how to write a medium-
specific policy. The second section is an appendix that gives
detailed guidance on implementing each section of the instruc-
tions and explains how the instructions are intended to further
the goals of the policy.
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Writing a Program Specific Policy
Summarized below are those elements that should be present
in a program-specific penalty policy. For a detailed discus-
sion of each of these ideas, the corresponding £ :ions of the
appendix should be consulted.
I. Developing a Penalty Figure
The development of a penalty figure is a two step process.
First the case development team must calculate a preliminary
deterrence figure. This figure is composed of the economic
benefit component (where applicable) and the gravity component.
The second step is to adjust the preliminary deterrence figure
through a number of factors. The resulting penalty figure is
the initial penalty target figure. In judicial actions, the
initial penalty target figure is the penalty amount which the
government normally sets as a goal at the outset of settlement
negotiations. It is essentially an internal settlement goal and
should not be revealed to the violator unless the case develop
team feels it is appropriate. In administrative actions,
figure generally is the penalty assessed in the complaint
While in judicial actions, the government's complaint will reques^
the maximum penalty authorized by law.
This initial penalty target figure may be further adjusted
in the course of negotiations. Each policy should ensure that
the penalty assessed or requested is within any applicable
statutory constraints, based upon the number and duration of
violations at issue.
II. Calculating a Preliminary Deterrence Amount
Each program-specific policy nu. t contain a section on
calculating the preliminary deterrence figure. That section
should contain materials on each of the following areas:
0 Benefit Component. This section should
explain:
a. the relevent measure of economic benefit
for various types of violations,
b. the information needed,
c. where to get assistance in computing
this figure and
d. how to use available computer systems
to compare a case with imilar previous
violations.
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• Gravity Component. This section should first
rank different types of violations according
to the seriousness of the act. In creating
that ranking, the following factors should be
considered:
a. actual or possible harm/
b. importance to the regulatory
scheme and
c. availability of data from other
sources.
In evaluating actual or possible harm, your scheme should
consider the following facts:
amount of pollutant,
toxicity of pollutant,
sensitivity of the environment,
length of time of a violation and
size of the violator*
The policy then should assign appropriate dollar amounts
or ranges of amounts to the different ranked violations to
constitute the "gravity component". This amount, added to the
amount reflecting economic benefit, constitutes the preliminary
deterrence figure.
III. Adjusting the Preliminary Deterrence Amount to Derive the
Initial Penalty Target Figure (Prenegotiation Adjustment)
Each program-specific penalty policy should give detailed
guidance on applying the appropriate adjustments to the pre-
liminary deterrence figure. This is to ensure that penalties also
further Agency goals besides deterrence (i.e. equity and swift
correction of environmental problems). Those guidelines should
be consistent with the approach described in the appendix. The
factors nay be separated according to whether they can be con-
sidered before or after negotiation has begun or both.
Adjustments (increases or decreases, as appropriate) that
can be made to the preliminary deterrence penalty to develop an
initial penaly target to use at the outset of negotiation include:
• Degree of willfulness and/or negligence
• Cooperation/noncooperation through pre-
settlement action.
0 History of noncompliance.
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• Ability to pay.
• Other unique factors (including strength of
case, competing public policy considerations).
The policy nay permit consideration of the violator's ability
to pay as an adjustment factor before negotiations begin. It
may also postpone consideration of that factor until after negoti-
ations have begun. This would allow the violator to produce
evidence substantiating its inability to pay.
The policy should prescribe appropriate amounts, or ranges
of amounts, by which the preliminary deterrence penalty should
be adjusted. Adjustments will depend on the extent to which
certain factors are pertinent. In order to preserve the penalty's
deterrent effect, the policy should also ensure that, except for
the specific exceptions described in this document, the adjusted
penalty will: 1) always remove any significant economic benefit
of noncompliance and 2) contain some non-trivial amount as a
gravity component.
IV. Adjusting the Initial Penalty Target During Negotiations
Each program-specific policy should call for periodic real
sessment of these adjustments during the course of negotiations.
This would occur as additional relevant information becomes avail-
able and the old evidence is re-evaluated in the light of new
evidence. Once negotiations have begun, the policy also should
permit adjustment of the penalty target to reflect "alternative
payments" the violator agrees to make in settlement of the case.
Adjustments for alternative payments and pre-settlement corrective
action are generally permissible only before litigation has
begun.
Again, the policy should be structured to ensure that any
settlement made after negotiations have begun reflects the
economic benefit of noncoropliance up to the date of compliance
plus some non-trivial gravity component. This means that if
lengthy settlement negotiations cause the violation to continue
longer than initially anticipated, the penalty target figure
should be increased. The increase would be based upon the extent
that the violations continue to produce ongoing environmental
risk and increasing economic benefit.
Use of the Policy In Litigation
Each program-specific policy should contain a section on
the use of the policy in litigation. Requests for penaltiesi
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should account for all the factors identified in the relevant
statute and still allow for compromises in settlement without
exceeding the parameters outlined in this document. (For each
program, all the statutory factors are contained in the Frame-
work either explicitly or as part of broader factors.) For admin-
istrative proceedings, the policy should explain how to formulate
a penalty figure, consistent with the policy. The case develop-
ment team will put this figure in the administrative complaint.
In judicial .actions, the EPA will use the initial penalty
target figure as its first settlement goal. This settlement
goal is an internal target and should not .be revealed to the
violator unless the case development team feels it is appro-
priate. In judicial litigation, the government should request
the maximum penalty authorized by law in its complaint. The
policy should also explain how it and any applicable precedents
should be used in responding to any explicit requests from a
court for a minimum assesment which the Agency would deem
appropriate.
•
Use of the Policy as a Feedback Device
Each program-specific policy should first explain in detail
what information needs to be put into the case file and into the
relevant computer tracking system. Furthermore, each policy
should cover how to use that system to examine penalty assessments
in other cases. This would thereby assist the Agency in making
judgments about the size of adjustments to the penalty for the
case at hand. Each policy should also explain how to present
penalty calculations in litigation reports.
Courtney M. Price
Assistant Administrator for
Enforcement and Compliance Monitoring
Attachment
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APPENDIX
Introduction
This appendix contains three sections. The first two sections
set out guidelines for achieving the goals of the Policy on Civil
Penalties. The first section focuses on achieving deterrence by
assuring that the penalty first removes any economic benefit from
noncompliance. Then it adds an amount to the penalty which reflects
the seriousness of the violation. The second section provides
adjustment factors so that both a fair and equitable penalty will
result and that there will be a swift resolution of the environmental
problem. The third section of the framework presents some practical
advice on the use of the penalty figures generated by the policy.
The Preliminary Deterrence Amount
The Policy on Civil Penalties establishes deterrence as an
important goal of penalty assessment. More specifically, it speci-
fies that any penalty should, at a minimum, remove any significant
benefits resulting from noncompliance. In addition, it should
include an amount beyond removal of economic benefit to reflect
the seriousness of the violation. That portion of the penalty
which removes the economic benefi 3f noncomplia.-ce is referred
as the "benefit component;" that p-rt of the penalty which ref!
the seriousness of the violation is referred to as the "gravity
component." When.combined, these two components yield the "prelim-
inary deterrence amount."
This section of the document provides guidelines for calcu-
lating the benefit component and the gravity component. It will
also present and discuss a simplified version of the economic
benefit calculation for use in developing quick penalty deter-
minations. This se :tion will also discuss the limited circum-
stances which justify settling for less than the benefit component.
The uses of the preliminary deterrence amount will be explained
in subsequent portions of this document.
I. The Benefit Component
In order to ensure that penalties remove any significant
economic benefit of noncompliance, it is necessary to have
reliable methods to calculate that benefit. The existence of
reliable methods also strengthens the Agency's position in both
litigation and negotiation. This section sets out guidelines for
computing the benefit component. It first addresses costs which
are delayed by noncompliance. Then it addresses costs which are
avoided completely by noncompliance. It also identifies issue,i
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to be considered when computing the benefit component for those
violations where the benefit of noncompliance results from factors
other than cost savings. This section concludes with a discussion
of the proper use of the benefit component in developing penalty
figures and in settlement negotiations.
A. Benefit from delayed costs
In many instances, the economic advantage to be derived from
noncompliance is the ability to delay making the expenditures
necessary to achieve compliance. For example, a facility which
fails to construct required settling ponds will eventually have to
spend the money needed to build those ponds in order to achieve
compliance. But, by deferring these one-time nonrecurring costs
until EPA or a State takes an enforcement action, that facility
has achieved an economic benefit. Among the types of violations
which result in savings from deferred cost are the following:
• Failure to install equipment needed to meet
discharge or emission control standards.
• Failure to effect process changes needed
to eliminate pollutants from products or
waste streams.
0 Testing violations, where the testing still
must be done to demonstrate achieved com-
pliance.
0 Improper disposal, where proper disposal is
still required to achieve compliance.
0 Improper storage where- proper storage is still
required to achieve compliance.
0 Failure to obtain necessary permits for dis-
charge, where such permits would probably be
granted. (While the avoided cost for many
programs would be negligible, there are pro-
grams where the the permit process can be
expensive).
The Agency has a substantial amount of experience under
the air and water programs in calculating the economic benefit
that results from delaying costs necessary to achieve compliance.
This experience indicates that it is possible to estimate the
benefit of delayed compliance through the use of a simple formula.
Specifically, the economic benefit of delayed compliance may be
estimated at: 5% per year of the delayed one-time capital cost
for the period from the date the violation began until the date
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compliance was or is expected to be achieved. This will be
referred to as the "rule of thumb for delayed compliance" method.
Each program may adopt its own "rule of thumb" if appropriate.
The applicable medium-specific guidance should state what that
method is.
The rule of thumb method can usually be used in making
decisions on whether to develop a case or in setting a penalty
target for settlement negotiations. In using this rule of thumb
method in settlement negotiations, the Agency may want to make
the violator fully aware t:..:t it is using an estimate and not
a more precise penalty determination procedure. The decision
whether to reveal this information is up to the negotiators.
The "rule of thumb" method only provides a first-cut estimate
of the benefit of delayed compliance. For this reason, its use
is probably inappropriate in situations where a detailed analysis
of the economic effect of noncompliance is needed to support or
defend the Agency's position. Accordingly, this "rule of thumt"
method generally should not be used in any of the following cir-
cumstances:
0 A hearing is likely on the amount of the
penalty.
0 The defendant wishes to negotiate over the
amount of the economic benefit on the basis
of factors unique to the financial condition
of the company.
• The case development team has reason to
believe it will-produce a substantially
inaccurate estimate; for example, where the
defendant is in a highly unusual financial
position, or where noncompliance has or will
continue for an unusually long period.
There usually are avoided costs associated with this type
of situation. Therefore, the "rule of thumb for avoided costs"
should also be applied. (See pages 9-10). For most cases, both
figures are needed to yield the major portion of the economic
benefit component.
When the. rule of thumb method is not applicable, the ecor.onic
benefit of delayed compliance should be computed using the Meth-
odology for Computing the Economic Benefit of Noncompliance.
This document, which is under development, provides a method
for computing the economic benefit of noncompliance based on a
detailed economic analysis. The method will largely be a re*
version of the method used in the previous Civil Penalty Poli<
issued July 6, 19£0, for the Clean Water Act and Title I or tnl
Clean Air Act. It will also be consistent witn tne rec,-
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implementing Section 120 of the Clean Air Act. A computer
program will be available to the Regions to perform the analysis,
together with instructions for its use. Until the Methodology
is issued, the economic model contained in the July 8, 1980,
Civil Penalty Policy should be used. It should be noted that
the Agency recently modified this guidance to reflect changes in
the tax law.
B. Benefit from avoided costs
Many kinds of violations enable a violator to permanently
avoid certain costs associated with compliance.
• Cost savings for operation and maintenance of
equipment that the violator failed to install.
0 Failure to properly operate and maintain
existing control equipment.
0 Failure to employ sufficient number of
adequately trained staff.
• Failure to establish or follow precautionary
methods required by regulations or permits.
0 Improper storage, where commercial storage is
reasonably available.
4 Improper disposal, where redisposal or cleanup
is not possible.
• Process, operational, or maintenance savings
from removing pollution equipment.
• Failure to conduct necessary testing.
As with the benefit from delayed costs, the benefit com-
ponent for avoided costs may be estimated by another "rule of
thumb* method. Since these costs will never be incurred, the
estimate is the expenses avoided until the date compliance is
achieved less any tax savings. The use of this "rule of thumb"
method is subject to the same limitations as those discussed in
the preceding section.
Where the "rule of thumb for avoided costs" method cannot
be used, the benefit from avoided costs must be computed using
the Methodology for Computing the Economic Benefit of Noncoin-
pliance.Again, until the Metholology is issued, the metfroc
contained in the July 8, 1980, Civil Penalty Policy should be
used as modified to reflect recent changes In the tax law.
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C. Benefit from competitive advantage
For most violations, removing the savings which accrue
from noncompliance will usually be sufficient to remove the
competitive advantage the violator clearly has gained from
noncompliance. But there are some situations in which noncom-
pliance allows the violator to provide goods or services which
are not available elsewhere or are more attractive to the
consumer. Examples of such violations include:
• Selling banned products.
• Selling products for banned uses.
• Selling products without required labelling
or warnings.
• Removing or altering pollution cc~trol
equipment for a fee, (e.g., tampering with
automobile emission controls.)
• Selling products without required regula-
tory clearance, (e.g., pesticice registra-
tion or premanufacture notice under TSCA.)
To adequately re.nove the economic incentive for such viola-
tions, it is helpful to estim^ie the net profits made from the
improper transactions (i.e. those transactions which would not
have occurred if the party had complied). The case development
team is responsible for identifying violations in which this
element of economic benefit clearly is present and significant.
This calculation may be substantially different depending on the
type of violation. Consequently the program-specific policies
should contain guidance on identifying these types of violations
and estimating these profits. In formulating that guidance, the
following principles should be followed:
• The amount of the profit should be based on
the best information available concerning
the number of transactions resulting from
noncompliance.
• Where available, information about the
average profit per transaction may be used.
'In some cases, this may be available from
the rulemaking record of the provision
violated.
0 The benefit derived should be adjusted to
reflect the present value of net profits
derived in the past.
„—,
• t •
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lt is recognized that the methods developed for estimating
the profit from those transactions will sometimes rely substan-
tially on expertise rather than verifiable data. Nevertheless,
the programs should make all reasonable efforts to ensure that
the estimates developed are defensible. The programs are encour-
aged to work with the Office of Policy* Planning and Evaluation
to ensure that the methods developed are consistent with the
forthcoming Methodology for Computing the Economic Benefit of
Koncompliance and with methods developed by other programs.The
programs should also ensure that sufficient contract funds are
available to obtain expert advice in this area as needed to
support penalty development, negotiation and trial of these kinds
of cases.
D. Settling cases for an amount less than the economic
benefit
As noted above, settling for an amount which does not remove
the economic benefit of noncompliance can encourage people to
wait until EPA or the State begins an enforcement action before
complying. For this reason, it is general Agency policy not to
settle for less than this amount. There are three general areas
where settling for less than economic benefit may be appropriate.
But in any individual case where the Agency decides to settle for
less than enconomic benefit, the case development team must detail
those reasons in the case file and in any memoranda accompanying •
the-settlement.
1. Benefit component involves insignificant amount
It is clear that assessing the benefit component and
negotiating over it will often represent a substantial commitment
of resources. Such a commitment of resources may not be warranted
in cases where the magnitude of the benefit component is not likely
to be significant, (e.g. not likely to have a substantial impact on
the violator's competitive positions). For this reason, the case
development team has the discretion not to seek the benefit com-
ponent where it appears that the amount of that component is
likely to be less than $10,000. (A program may determine that
other cut-off points are more reasonable based on the likelihood
that retaining the benefit could encourage noncomplying behavior.)
In exercising that discretion, the case development team should
consider the following factors:
• Impact on violator: The likelihood that
assessing the benefit component as part
of- the penalty will have a noticeable
effect on the violator's competitive
position or overall profits. If no such
effect appears likely, the benefit com-
ponent should probably not be pursued.
0 The size of the gravity component; If the
gravity component i» itli^ivcly cr.i.11, i*
may not provide a sufficient deterrent, by
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itself, to achieve the goals of this policy.
• The certainty of the size of the benefit
component: I£ the economic benefit is quite
well defined, it is not likely to require
as much effort to seek to include it in the
penalty assessment. Such circumstances also
increase the likelihood that the economic
benefit was a substantial motivation for the
noncompliance. This would make the inclusion
of the benefit component more necessary to
achieve specific deterrence.
It may be appropriate not to seek the benefit component in
an entire class of violation. In that situation, the rationale
behind that approach should be clearly stated in the appropriate
medium-specific policy. For example, the most appropriate way
to handle a small non-recurring operation and maintenance vio-
lation may be a small penalty. Obviously it makes little sense
to assess in detail the economic benefit for each individual
violation because the benefit is likely to be so small. The
medium-specific policy would state this as the rationale.
2. Compelling public concerns
The Agency recognizes that there may be some instances wherjj
there are compelling public concerns that would not be served b^fl
taking a case to trial. In such instances, it may become necess?
to consider settling a case for less than the benefit component.
This may be done only if it is absolutely necessary to preserve
the countervailing public interests. Such settlements might be
appropriate where the following circumstances occur:
0 There is a very substantial risk of creating
precedent which will have a significant
adverse effect upon the Agency's ability
to enforce the law or clean up pollution
if the case is taken to trial.
• Settlement will avoid or terminate an
imminent risk to human health or ' :
environment. This is an adequate
justification only if injunctive relief
is unavailable for some reason, and if
settlement on remedial responsibilities
could not be reached independent of any
settlement of civil penalty liability.
0 Remc.al of the economic benefit would
result in plant closings, bankruptcy, or
other extreme financial burden, and there
is an important public interest i*- allow-
ino the firm to continue in busin s.
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Alternative payment plans should be fully
explored before resorting to this option.
Otherwise, the Agency will give the per-
ception that shirking one's environmental
responsibilities is a way to keep a failing
enterprise afloat. This exemption does not
apply to situations where the plant was
likely to close anyway, or where there is a
likelihood of continued harmful noncompliance.
3. Litigation practicalities
The Agency realizes that in certain cases, it is highly unlikely
the EPA will be able to recover the economic benefit in litigation.
This may be due to applicable precedent, competing public interest
considerations, or the specific facts, equities, or evidentiary
issues pertaining to a particular case. In such a situation it is
unrealistic to expect EPA to obtain a penalty in litigation which
would remove the economic benefit. The case development team then
may pursue a lower penalty amount.
II. The Gravity Component
As noted above, the Policy on Civil Penalties specifies that
a penalty,.to achieve deterrence, should not only remove any eco-
nomic benefit of noncompliance, but also include an amount reflecting
the seriousness of the violation. This latter amount is referred
to as the "gravity component." The purpose of this section of the
document is to establish an approach to quantifying the gravity
component. This approach can encompass the differences between
programs and still provide the basis for a sound consistent treat-
ment of this issue.
A. Quantifying the gravity of a violation
Assigning a dollar figure to represent the gravity of a vio-
lation is an essentially subjective process. Nevertheless, the
relative seriousness of different violations can be fairly
accurately determined in most cases. This can be accomplished
by reference to the goals of the specific regulatory scheme and
the facts of each particular violation. Thus, linking the dollar
amount of the gravity component to these objective factors is a
useful way of insuring that violations of approximately equal
seriousness are treated the same way.
Such a linkage promotes consistency. This consistency
strengthens the Agency's position both in negotiation and before
a trier of fact. This approach consequently also encourages
swift resolution of environmental problems.
Each prcsrar?. must develop a system for quantifying the
gravity ot vioiat-ior.t ±2 ti.c laws ar.i regulaticr.s it ^-•"is
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This development must occur within the context of the penalty
amounts authorized by law for that program. That system must
be based, whenever possible, on objective indicators of the
seriousness of the violation. Examples of such indicators are
given below. The seriousness of the violation should be based
primarily on: 1) .he risk of harm inherent in the violation at
the time it was committed and 2) the actual harm that resulted
from the violation. In some cases, the seriousness of the
risk of harm will exceed that of the actual harm Thus, each
system should provide enough flexibility to allow EPA to consider
both factors in assessing penalties.
Each system must also be designed to minimize the possi-
bility that two persons applying th? system to the same set of
facts would come up with substantially different numbers. Thus,
to the extent the system depends on categorizing events, those
categories must be clearly defined. That way there is little
possibility for argument over the category in which a violation
belongs. In addition, the cat --jorization of the events relevant
to the penalty decision shoulc .e noted in the penalty develop-
ment portion of the case file.
B. Gravity Factors
In quantifying the gravity of a violation, a program-speci
policy should rank different types of violations according to t
seriousness of the act. The following is a sug sted approach to
ranking the seriousness of violations. In this approach to rank-
ing, the following factors should be considered:
• Actual or possible harm: This factor
focuses on whether (and to what extent)
the activity of the defendant actually
resulted or was likely to result in an
unpermitted discharge or exposure.
• Importance to the regulatory scheme: This
factor focuses on the importance of the
requirement to achieving the goal cf the
statute or regulation. For example, if
labelling is the only method used to pre-
vent dangerous exposure to a chemical,
then failure to label should result in a
relatively high penalty. By contrast, a
warning sign that was visibly posted but
was smaller than the required size would
not normally be considered as serious.
• Availability of data from other sources;
The violation of any recordkeeping or
reporting requirement is a very serious
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matter. But if the involved requirement
is the only source of information, the
violation is far more serious. By contrast,
if the Agency has another readily available
and cheap source for the necessary infor-
mation, a smaller penalty may be appro-
priate. (E.g. a customer of the violator
purchased all the violator's illegally
produced substance. Even though the
violator does not have the required
records, the customer does.)
• Size of violator; In some cases, the
gravity component should be increased
where it is clear that the resultant
penalty will otherwise have little
impact on the violator in light of the
risk of harm posed by the violation.
This factor is only relevant to the
extent it is not taken into account by
other factors.
The assessment of the first gravity factor listed above,
risk or harm arising from a violation, is a complex matter. For
purposes of ranking violations according to seriousness, it is
possible to distinguish violations within a category on the basis
of certain considerations, including the following:
• Amount of pollutant; Adjustments for the
concentration of the pollutant may be
appropriate, depending on the regulatory
scheme and the characteristics of the
pollutant. Such adjustments need not be
linear, especially if the pollutant can
be harmful at low concentrations.
• Toxicity of the pollutant; Violations
involving highly toxic pollutants are more
serious and should result in relatively
larger penalties.
• Sensitivity of the environment; This
factor focuses on the location where the
violation was committed. For example,
improper discharge into waters near a
drinking water intake or a recreational
beach is usually more serious than dis-
charge into waters not near any such use.
0 The length of time a violation continues;
In most circumstances, the longer a
violation continues uncorrected, the
greater is th? ri?V .of harrr..
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-16-
Although each program-specific policy should address each
of the factors listed above, or determine why it is not relevant,
the factors listed above are not meant to be exhaustive. The
programs should make every effort to identify all factors rele-
vant to assessing the seriousness of any violation. .The programs
should then systematically prescribe a dollar amount to yield a
gravity component for the penalty* The program-specific policies
may prescribe a dollar range for a certain category of violation
rather than a precise dollar.amount within that range based on
the specific facts of an individual case.
The process by which the gravity component was computed must
be memorialized in the case file. Combining the benefit component
with the gravity component yields the preliminary deterrence amount.
In some classes of cases, the normal gravity calculation may
be insufficient to effect general deterrence. This could happen
if there was extensive noncotnpliance with certain regulatory
programs in specific, areas of the United states. This would
demonstrate that the .normal penalty assessments had not been
achieving general deterrence. The medium specific policies should
address this issue. One possible Approach would be to direct the
case development team to consider .ncreasing the gravity component
within a certain range to achieve general deterrence. These extra
assessments should be consistent with the other goals of this
policy.
Initial and Adjusted Penalty Target Figure
The second goal of the Policy on Civil Penalties is the
equitable treatment of the regulated community.One important
mechanism for promoting equitable treatment is to include the
benefit component discussed above in a civil penalty assessment.
This approach would prevent violators from benefitting economi-
cally from their noncompliance relative to parties which have
complied with environmental requirements.
In addition, in order to promote equity, the system for
penalty assessment must have enough flexibility to account for
the unique facts of each case. Yet it still must produce enough
consistent results to treat similarly-situated violators similarly.
This is accomplished by identifying many of the legitimate differ-
ences between cases and providing guidelines for how to adjust
the preliminary deterrence amount when those facts occur. The
application of these adjustments to the preliminary deterrence
amount prior to the commencement of negotiation yields the initial
penalty target figure. During the course of negotiation, the case
development team may further adjust this figure to yield the
adjusted penalty target figure.
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Nevertheless, it should be noted that equitable treatment is
a two-edged sword. While it means that a particular violator will
receive no higher penalty than a similarly situated violator, it
also means that the penalty will be no lower.
1. Flexibility-Adjustment Factors
The purpose of this section of the document is to establish
additional adjustment factors to promote flexibility and to iden-
tify management techniques that will promote consistency. This
section sets out guidelines for adjusting penalties to account for
some factors that frequently distinguish different cases. Those
factors are: degree of willfulness and/or negligence, degree of
cooperation/noncooperation, history of noncompliance, ability to
pay, and other unique factors. Unless otherwise specified, these
adjustment factors will apply only to the gravity component and
not to the economic benefit component. Violators bear the burden
of justifying mitigation adjustments they propose based on these
factors.
Within each factor there are three suggested ranges of
adjustment. The actual ranges for each medium-specific policy
will be determined by those developing the policy. The actual
ranges may differ from these suggested ranges based upon program
specific needs. The first, typically a 0-20% adjustment of the
gravity component, is within the absolute discretion of the case
development team. £/ The second, typically a 21-30% adjustment,
is only appropriate in unusual circumstances. The third range,
typically beyond 30% adjustment, is only appropriate in extra-
ordinary circumstances. Adjustments in the latter two ranges,
unusual and extraordinary circumstances, will be subject to scrutiny
in any performance audit. The case development team may wish to
reevaluate these adjustment factors as the negotiations progress.
This allows the team to reconsider evidence used as a basis for
the penalty in light of new information.
Where the Region develops the penalty figure, the appli-
cation of adjustment factors will be part of the planned Regional
audits. Headquarters will be responsible for proper application
of these factors in nationally-managed cases. A detailed dis-
cussion of these factors follows.
A. Degree of Willfulness and/or Negligence
Although most of the statutes which EPA administers are
strict liability statutes, this does not render the violator's
I/ Absolute discretion means that the case development team
may make penalty development decisions independent of EPA
Headquarters. Nevertheless it is understood that in all
judicial matters, the Department of Justice can still review
thebe ocwcrz.ir.ct.ic-c if tr.cy sr tfe=5r*. " Of course the authority
to exercise the Agency's concurrence in final settlements is
covered by the applicable delegations.
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•
willfulness and/or negligence irrelevant. Knowing or willful
violations can give rise to criminal liability* and the lack
of any culpability may, depending upon the particular program,
indicate that no penalty action is appropriate. Between these
two extremes, the willfulness and/or negligence of the violator
should be reflected in the amount of the penalty.
In assessing the degree of willfulness and/or negligence,
all of the following points should be considered in most cases:
• How much control the violator had over the
events constituting the violation.
• The forseeability of the events consti-
tuting the violation.
0 Whether the violator took reasonable
precautions against the events con-
stituting the violation.
0 Whether the violator knew or should have
known of the hazards associated with the
conduct.
• The level of sophistication within the
industry in dealing with compliance issues
and/or the accessibility of appropriate
cor .rol technology (if this information is
reauily available). This should be balanced
against the technology forcing nature of the
statute, where applicable.
• Whether the violator in fact knew of the
legal requirement which was violated.
It should be noted that this last point, lack of knowledge
of the legal requirement, should never be used as a basis to
reduce the penalty. To do so would encourage ignorance of
the law. Rather, knowledge of the law should serve only to
enhance the penalty.
The amount of control which the violator had over'how
quickly the violation was remedied is also relevent in certain
circumstances. Specifically, if correction of the environmental
problem was delayed by factors which the violator can clearly
show were not reasonably foreseeable and out of its control, the
penalty may be reduced.
The suggested approach for this factor is for the case
development team to have at volute discretion to adjust the
pe.-c.ity up cr £?«••- by 70* of the gravity component.
in the £ 21-30% range should only be made in unusual circur«s>
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Adjustments for this factor beyond ± 30% should be made only in
extraordinary circumstances. Adjustments in the unusual or
extraordinary circumstance range will be subject to scrutiny in
any audit of performance.
B. Degree of Cooperation/Noncooperation
The degree of cooperation or noncooperation of the violator
in remedying the violation is an appropriate factor to consider in
adjusting the penalty. Such adjustments are mandated by both the
goals of equitable treatment and swift resolution of environmental
problems. There are three areas where this factor is relevant.
1. Prompt reporting of noncompliance
Cooperation can be manifested by the violator promptly
reporting its noncompliance. Assuming such self-reporting is not
required by law, such behavior should result in the mitigation of
any penalty.
The suggested ranges of adjustment are as follows. The case
'development team has absolute discretion on any adjustments up to
i 10% of the gravity component for cooperation/noncooperation.
Adjustments can be made up to +. 20% of the gravity component, but
only in unusual circumstances." In extraordinary circumstances,
such as self reporting of a TSCA premanufacture notice violation,
the case development team may adjust the penalty beyond the ^ 20%
factor. Adjustments in the unusual or extraordinary circumstances
ranges will be subject to scrutiny in any performance audit.
2. Prompt correction of environmental problems
The Agency should provide incentives for the violator to
commit to correcting the problem promptly. This correction must
take place before litigation is begun, except in extraordinary
circumstances.£/ But since these incentives must be consistent
with deterrence, they must be used judiciously.
2/ For the purposes of this document, litigation is deemed to
begin:
• for administrative actions - when the
respondent files a response to an adminis-
trative complaint or when the time to
file expires or
• for judicial actions - when an Assistant
United States Attorney files a com-
plaint in court.
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-20-
The circumstances under which the penalty is reduced depend!
on the type of violation involved and the source's response to
the problem. A straightforward reduction in the amount of the
gravity component of the penalty is most appropriate in those
cases where either: 1) the environmental problem is actually cor-
rected prior to initiating litigation, or 2) ideally, immediately
upon discovery of the violation. Under this approach, the reduction
typically should be a substantial portion of the unadjusted gravity
component.
In general, the earlier the violator instituted corrective
action after discovery of the violation and the more complete
the corrective action instituted, the larger the penalty
reduction EPA will consider. At the discretion of the case
development team, the unadjusted gravity component may be
reduced up to 50%. This would depend on how long the environ-
mental problem continued before correction and the amount of any
environmental damage. Adjustments greater than 50% are permitted,
but will be the subject of close scrutiny in auditing performance.
It should be noted that in some instances, the violator
will take all necessary steps toward correcting the problem but
may refuse to reach any agreement on penalties. Similarly, a
violator may take some steps to ameliorate the problem, but
choose to litigate over what constitutes compliance. In such
cases, the-gravity component of the penalty may be reduced up
to 25% at the discretion of the case development team. This
smaller adjustment still recognizes the efforts made to correct
the environmental problem, but the benefit to the source is not
as great as if a complete settlement is reached. Adjustments
greater than 25% are permitted, but will be tne subject of close
scrutiny in auditing performance.
In all instances, the facts and rationale justifying the
penalty reduction must be recorded in the case file and in-
cluded in any memoranda accompanying settlement.
3. Delaying compliance
Swift resolution of environmental problems will be encour-
aged if the violator clearly sees that it will be financially
disadvantageous for the violator to litigate without remedying
noncompliance. The settlement terms described in the preceding
section are only available to parties who take steps to correct a
problem prior to initiation of litigation. To some extent, this
is an incentive to comply as soon as possible. Nevertheless, once
litigation has commenced, it should be clear that the defendant
litigates at its own risk.
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In addition, the methods for computing the benefit component
and the gravity component are both structured so that the penalty
target increases the longer the violation remains uncorrected.
The larger penalty for longer noncompliance is systematically
linked to the benefits accruing to the violator and to the con-
tinuing risk to human health and the environment. This occurs
even after litigation has commenced. This linkage will put the
Agency in a strong position to convince the. trier of fact to
impose such larger penalties. For these reasons, the Policy
on Civil Penalties provides substantial disincentives to litigat-
ing without complying.
C. History of noncompliance
Where a party has violated a similar environmental require-
ment before, this is usually clear evidence that the party was
not deterred by the Agency's previous enforcement response.
Unless the previous violation was caused by factors entirely out
of the control of the violator, this is an indication that the
penalty should be adjusted upwards.
In deciding how large these adjustments should be, the case
development team should consider the following points:
° How similar the previous violation was.
0 How recent the previous violation was.
0 The number of previous violations.
0 Violator's response to previous violation(s)
in regard to correction of the previous
problem.
Detailed criteria for what constitutes a "similar violation"
should be contained in each program-specific policy. Neverthe-
less a violation should generally be considered "similar" if the
Agency's previous enforcement response should have alerted the
party to a particular type of compliance problem. Some facts
that indicate a "similar violation" was committed are as follows:
• The same permit was violated.
• The same substance was involved.
0 The same process points were the source
of the violation.
e The same statutory or regulatory provision
was violated.
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• A similar act or omission (e.g. the failure
to properly store chemicals) was the basis
of the violation.
For purposes of this section, a "prior violation* includes
any act or omission for which a formal enforcement response has
occurred (e.g. notice of violation, warning letter, complaint,
consent decree, consent agreement, or final order). It also
includes any act or omission for which the violator has pre-
viously been given written notification, however informal, that
the Agency believes a violation exists.
In the case of large corporations with many divisions or
wholly-owned subsidiaries, it is sometimes difficult to deter-
mine whether a previous instance of noncompliance should trigger
the adjustments described '« this section. New ownership often
raises similar problems. ..i making this determination, the case
development team should ascertain who in the organization had
control and oversight responsibility for the conduct resulting
in the violation. In some situations the same persons or the
same organizational unit had or reasonably should have had
control or oversight responsibility for violative conduct. In
those cases, the violation will be considered part of the com-
pliance history of that regulated party.
In general, the case development team should begin with
the assumption that if the same corporation was involved, the
adjustments for history of noncompliance should apply. In
addition, the case development team should be wary of a party
changing operators or shifting responsibility for compliance to
different groups as a way of avoiding increased penalties. The
Agency may find a consistent pattern of noncompliance by many
divisions or subsidiaries of a corporation even though the
facilities are at different geographic locations. This often
reflects, at best, a corporate-wide indifference to environmental
protection. Consequently, the adjustment for history of noncom-
pliance should probably apply unless the violat r can demonstrate
that the other violating corporate facilities are independent.
The following are the Framework * s suggested adjustment
ranges. If the pattern is one of "dissimilar" violations,
relatively few in number, the case development team has absolute
discretion to raise the penalty amount by 35%. For a relatively
large number of dissimilar violations, the gravity component
be increased up to 70%. If the pattern is one of "similar"
violations, the case development team has absolute discretion .
raise the penalty amount up to 35% for the first repeat violation,
and up to 70% for further repeated similar violations. The case
development team may make higher adjustments ir extraordinary
circumstances, but such adjustments will be su:ject to scrut.
in any performance audit.
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2
D. Ability to pay
The Agency will generally not request penalties that are
clearly beyond the means of the violator. Therefore EPA should
consider the ability to pay a penalty in arriving at a specific
final penalty assessment. At the same time, it is important
that the regulated community not see the violation of environ-
mental requirements as a way of aiding a financially troubled
business. EPA reserves the option, in appropriate circumstances,
of seeking a penalty that might put a company out of business.
For example, it is unlikely that EPA would reduce a penalty
where a facility refuses to correct a serious violation. The same
could be said for a violator with a long history of previous vio-
lations. That long history would demonstrate that less severe
measures are ineffective.
The financial ability adjustment will normally require a
significant amount of financial information specific to the
violator. If this information is available prior to commence-
ment of negotiations, it should be assessed as part of the
initial penalty target figure. If it is not available, the
case development team should assess this factor after commence-
ment of negotiation with the source.
The burden to demonstrate inability to pay, as with the
burden of demonstrating the presence of any mitigating circum-
stances, rests on the defendant. If the violator fails to
provide sufficient information, then the case development team
should disregard this factor in adjusting the penalty. The
National Enforcement Investigations Center (NEIC) has developed
the capability to assist the Regions in determining a firm's
ability to pay. Further information on this system will be made
available shortly under separate cover.
When it is determined that a violator cannot afford the
penalty prescribed by this policy, the following options should
be considered:
• Consider a delayed payment schedule; Such a
schedule might even be contingent upon an
increase in sales or some other indicator of
improved business. This approach is a real
burden on the Agency and should only be
considered on rare occasions.
* Consider non-monetary alternatives, such as
public service activities: For example» in
the mobile source program, fleet operators
who tampered with pollution control devices
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-24-
on their vehicles agreed to display anti-
tampering ads on their vehicles. Similar
solutions may be possible in other industries.
• Consider straight penalty reductions as a last
recourset If this approach is necessary, the
reasons for the case development team's
conclusion as to the size of the necessary
reduction should be made a part of the formal
enforcement file and the memorandum accompany-
ing the settlement. £/
• Consider joinder of the violator's individual
owners: This is appropriate if joinder is
legally possible and justified under the
circumstances.
Regardless of the Agency's determination of an appropriate
penalty amount to pursue based on ability to pay considerations,
the violator is still expected to comply with the law.
£. Other unique factors
Individual programs may be able to predict other factors
that can be expected to affect the appropriate penalty amount.
Those factors should be identified and guidelines for their use
set out in the program-specific policies. Nevertheless, eac\jjf
policy should allow for adjustment for unanticipated factors
which might affect the penalty in each case.
It is suggested that there be absolute discretion to adjust
penalties up or down by 10% of the gravity component for such
reasons. Adjustments beyond the absolute discretion range will
be subject to scrutiny during audits. In addition, they will
primarily be allowed for compelling public policy concerns or the
strengths and equities of the case. The rationale for the reducti
must be expressed in writing in the case file and in any memoranda
accompanying the settlement. See the discussion on pages 12 and
13 for further specifics on adjustments appropriate on the basis
of either compelling public policy concerns or the strengths and
equities of the case.
II. Alternative Payments
in the past, the Agency has accepted various environmentally
beneficial .expenditures in settlement of a case and chosen not to
3/ If a firm fails to pay the agreed-to penalty in an adminis-
trative or judicial final order, then the Agency must follow
the Federal Claims Collection Act procedures for obtaining t
penalty ar.c'jr.t. i
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pursue more severe penalties. In general, the regulated community
has been very receptive to this practice. In many cases,
violators have found "alternative payments" to be more attrac-
tive than a traditional penalty. Many useful projects have been
accomplished with such funds. But in some instances, EPA has
accepted for credit certain expenditures whose actual environ-
mental benefit has been somewhat speculative.
The Agency believes that these alternative payment projects
should be reserved as an incentive to settlement before litigation,
For this reason, such arrangements will be allowed only in preliti-
gation agreements except in extraordinary circumstances.
In addition, the acceptance of alternative payments for
environmentally beneficial expenditures is subject to certain
conditions. The Agency has designed these conditions to prevent
the abuse of this procedure. Most of the conditions below applied
in the past, but some are new. All of these conditions must be
met before alternative payments may be accepteds.j/
0 No credits can be given for activities
that currently are or will be required
under current law or are likely to be re-
quired under existing statutory authority
in the forseeable future (e.g., through
upcoming rulemaking).
0 The majority of the project's environmental
benefit should accrue to the general public
rather than to the source or any particular
governmental unit.
e The project cannot be something which the
violator could reasonably be expected to do
as part of sound business practices.
4/ In extraordinary circumstances, the Agency may choose not to
pursue higher penalties for "alternative" work done prior to
commencement of negotiations. For example, a firm may recall a
product found to be in violation despite the fact that such
recall is not required. In order for EPA to forgo seeking
higher penalties, the violator must prove that it has met the
other conditions herein stated. If the violator fails to prove
this in a satisfactory manner, the case development team has the
discretion to completely disallow the credit project. As with
all alternative projects, the case development team has the dis-
cretion to still pursue some penalties in settlement.
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-26-
EPA must not lower the amount it decides
to accept in penalties by more than the
after-tax amount the violator spends on
the project. £/
In all cases where alternative payments are allowed, the
case file should contain documentation showing that each of
the conditions listed above have been met in that particular
case. In addition when considering penalty credits. Agency
negotiators should take into account the following points:
• The project should not require a large
amount of EPA oversight for its comple-
tion. In general the less oversight
the proposed credit project would
require from EPA to ensure proper
completion, the more receptive EPA
can be toward accepting the project
in settlement.
• The project should receive stronger
consideration if it will result in the
abatement of existing pollution,
ameliorate the pollution problem that
is the basis of the government's claim
and involve an activity that could be
ordered by a judge as equitable relief.
0 The project should receive stronger
consideration if undertaken at the
facility where the violation took place.
• The company should agree that any publicity
it disseminates regarding its funding of
the project must include a statement that
such funding is in settlement of a lawsuit
brought by EPA or the State.
£/ This limitation does not apply :o public awareness activities
ljuch as those employed for fuel switching and tampering violatic
under the Clean Air Act. The purpose of the limitation is to
preserve the deterrent value of the settlement. But these viol?
tions are often the result of public misconceptions about the
economic value of these violations. Consequently, the public
awareness activities can be effective in preventing others from
violating- the law. Thus, the high general deterrent value of
public awareness activities in these circumstances obviates the
need for the one-to-one requirement on penalty credits.
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-27-
Each alternative payment plan must entail an identified
project to be completely performed by the defendant. Under the
plan, EPA must not hold any funds which are to be spent at EPA's
discretion unless the relevant statute specifically provides
that authority. The final order, decree or judgment should
state what financial penalty the violator is actually paying and
describe as precisely as possible the credit project the violator
is expected to perform.
III. Promoting Consistency
Treating similar situations in a similar fashion is central
to the credibility of EPA's enforcement effort and to the success
of achieving the goal of equitable treatment. This document has
established several mechanisms to promote such consistency. Yet
it still leaves enough flexibility for settlement and for tailor-
ing the penalty to particular circumstances. Perhaps the most
important mechanisms for achieving consistency are the systematic
methods for calculating the benefit component and gravity compo-
nent of the penalty. Together, they add up to the preliminary
deterrence amount. The document also sets out guidance on unifor:
approaches for applying adjustment factors to arrive at an initis
penalty target prior to beginning settlement negotiations or an
adjusted penalty target after negotiations have begun.
Nevertheless, if the Agency is to promote consistency, it
is essential that each case file contain a complete description
of how each penalty was developed. This description should cover
how the preliminary deterrence amount was calculated and any
adjustments made to the preliminary deterrence amount. It should
also describe the facts and reasons which support such adjustment
Only through such complete documentation can enforcement attorney
program staff and their managers- learn from each others' experier,
and promote the fairness required by the Policy on Civil Penaltie
To facilitate the use of this information, Office of Legal
and Enforcement Policy will pursue integration of penalty infor-
mation from judicial enforcement actions into a computer system.
Both Headquarters and all Regional offices will have access to
the system through terminals. This would make it possible fcr
the Regions to compare the handling of their cases with those of
other Regions. It could potentially allow the Regions, as well
as Headquarters, to learn from each others' experience and to
identify problem areas where policy change or further guidance
is needed.
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-28-
Use of Penalty Figure in settlement Discussions
The Policy and Framework do not seek to constrain negotiation!
Their goal is to set settlement target figures for the internal
use of Agency negotiators. Consequently* the penalty figures
under negotiation do not necessarily have to be as low as the
internal target figures. Nevertheless, the final settlement
figures should go no lower than the internal target figures unless
either: 1) the medium-specific penalty policy so provides or
2) the reasons for the deviation are properly documented.
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POLICY ON CIVIL PENALTIES
EPA GENERAL ENFORCEMENT POLICY #GM - 21
UNITED STATES ENVIRONMENTAL
PROTECTION AGENCY
EFFECTIVE DATE:
-------
-------
IV.C.8,
"Headquarters Approval of Proposed Civil Penalties", dated May 31, 1985,
-------
\ too
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
MAY 3 I 1985
OFFICE OF F.VFORCEMENT
AND COMPLIANCE
MONITORING
MEMORANDUM
SUBJECT: Headquarters Approval of Proposed Civil
Penalty Settlements in Water Cases
FROM: Glenn L. Unterberger -
Associate Enforcement Counsel
for Water
TO: James Moore
Regional Counsel, Region X
This memorandum addresses what I understand to be the
belief of certain Regional staff that, if preliminary settlement
penalty figures in water cases are cleared with this office,
any final settlement submitted with a higher figure may be
disapproved by Headquarters as too high.
Let me clarify Headquarters policy -in this area: OECM's
explicit approval of a Regional preliminary settlement figure,
whether in a Headquarters referral to the Department of Justice,
a separate OECM letter to DOJ following a direct referral, or
during negotiations with a water defendant, will not under any
circumstances preclude the Region from negotiating or accepting
a larger penalty settlement. What OECM approves is a minimum
settlement amount, not a maximum or an exact amount. This
office, for example, readily approved a $10,000 per day of
violation settlement in the 1983 Mobil Oil case, and we would
be happy to approve other settlements with similarly successful
outcomes.
In order to facilitate clear and timely feedback from ray
office on proposed minimum settlement amounts, I strongly
encourage Regional staff to include those proposed amounts in
all litigation reports and to discuss informal settlement
proposals with my staff prior to raising them with defendants,
as called for by Agency policy. Under these circumstances,
the Regional attorney can negotiate with a defendant confident
that all elements of the Agency will stand behind his or her
penalty proposals, so long as (1) they are at or greater than
the figure previously approved by OECM and (2) no new, material
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-2-
information surfaces chat requires a reconsideration of Che
Agency's minimum civil penalty settlement figure. The Regional^
attorney should routinely keep this office well informed on thdf
progress of negotiations or litigation.
If new information indicates that a Headquarters-approved
penalty settlement figure should be adjusted, the Region should
inform this office to receive advance approval of a new figure
before negotiations with the defendant continue.
I hope that this explanation will answer any questions
Region X may have had on this subject. If you have any
questions, please call me at 475-8180 or David Drelich of my
staff.
cc: Richard H. Mays, OECM
Robert Burd, Water Division Director, Region X
Jim Dragna, DOJ
John Hohn, Region X
\ if?
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IV.C.9.
"Division of Penalties with State and Local Governments", dated October 30,
1985.
103
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\V04-
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C 20460
OCT30
OFFICE OF ENFORCEMENT
AND COMPLIANCE
MONITORING
MEMORANDUM
SUBJECT: Division of Penalties with State and iocal Governments
FROM: Courtney M. Price C
Assistant Administrator "for Enforcement
and Compliance Monitoring
TO: Regional Administrators
Associate Enforcement Counsels
Program Enforcement Division Directors
Regional Counsels
This memorandum provides guidance to Agency enforcement
attorneys on the division of civil penalties with state and
local governments, when appropriate. In his "Policy Framework
for State/EPA Enforcement Agreements" of June 26, 1984, Deputy
Administrator Al Aim stated that the EPA should arrange for
penalties to accrue to states where permitted by law. This
statement generated a number of inquiries from states and from
the Regions. Both the states and the Regions were particularly
interested in what factors EPA would consider in dividing
penalties with state and local governments. In addition, the
issue was raised in two recent cases, U.S. v Jones & Laughlin
(N.D. Ohio) and U.S. v Georgia Pacific Corporation (M.D. La.).
In each case, a state or local governmental entity requested a
significant portion of the involved penalty. Consequently, OECM
and DOJ jointly concluded that this policy was needed.
EPA generally encourages state and local participation in
federal environmental enforcement actions. State and local
entities may share in civil penalties that result from their
participation, to the extent that penalty division is permitted
by federal, state and local law, and is appropriate under the
circumstances of the individual case. Penalty division advances
federal enforcement goals by:
1) encouraging states to develop and maintain active
enforcement programs, and
2) enhancing federal/state cooperation in environmental
enforcement.
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-2-
However, penalty division should be approached cautiously because
of certain inherent concerns, including:
1) increased complexity in negotiations among the
various parties, and the accompanying potential
for federal/state disagreement over penalty
division; and
2) compliance with the Miscellaneous Receipts Act, 31
U.S.C. §3302, which requires that funds properly
payable to the United States must be paid to the U.S.
Treasury. Thus any agreement on the division of
penalties must be completed prior to issuance of and
incorporated into a consent decree.
As in any other court-ordered assessment of penalties under
the statutes administered by EPA, advance coordination and
approval of penalty divisions with the Department of Justice is
required. Similarly, the Department of Justice will not agree
to any penalty divisions without my advance concurrence or that
of my designee. In accordance with current Agency policy,
advance copies of all consent decrees, including those involv-
ing penalty divisions, should be forwarded to the appropriate
Associate Enforcement Counsel for review prior to commencement
of negotiations.
The following factors should be considered in deciding if
penalty division is appropriate:
1) The state or local government must have an indepen-
dent claim under federal or state law that supports
its entitlement to civil penalties. If the entire
basis of the litigation is the federal enforcement
action, then the entire penalty would be due to the
federal government.
2) The state or local government must have the authority
to seek civil penalties. If a state or local govern-
ment is authorized to seek only limited civil
penalties, it is ineligible to share in penalties
beyond its statutory limit.
3) The state or local government must have partici-
pated actively in prosecuting the case. For example,
the state or local government must have filed com-
plaints and pleadings, asserted claims for penalties
and been actively involved in both litigating the
case and any negotiations that took place pursuant
to .the enforcement action.
\\n\/
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4) For contempt actions, the state or local government
must have participated in the underlying action
giving rise to the contempt action, been a signatory
to the underlying consent decree, participated
in the contempt action by filing pleadings asserting
claims for penalties, and been actively involved
in both litigating the case and any negotiations
connected with that proceeding.^/
The penalties should be divided in a proposed consent
decree based on the level of participation and the penalty
assessment authority of the state or locality. Penalty division
may be accomplished more readily if specific tasks are assigned
to particular entities during the course of the litigation.
But in all events, the division should reflect a fair apportion-
ment based on the technical and legal contributions of the
participants, within the limits of each participant's statutory
entitlement to penalties. Penalty division should not take
place until the end of settlement negotiation. The subject
of penalty division is a matter for discussion among the
governmental plaintiffs. It is inappropriate for the defendant
to participate in such discussions.
cc: F. Henry Habicht II, Assistant Attorney General
Land and Natural Resources Division
I/ If the consent decree contains stipulated penalties and
specifies how they are to be divided, the government will
abide by those terms.
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IV.C.10.
"CLEAN WATER ACT CIVIL PENALTY POLICY", dated February 11, 1986. Also see
Addendum at III.B.9.
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\\\0
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IV.C.5,
"GUIDANCE FOR CALCULATING ECONOMIC BENEFIT OF NON-COMPLIANCE FOR A CIVIL
PENALTY ASSESSMENT", dated November 5, 1984. See GM-33.
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*% - —- 1 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, O.C. 20460
NGV 5884
OFFICE OF ENFORCEMENT
AND COMPLIANCE
MONITORING
MEMORANDUM
SUBJECT: Guidance for Calculating the Economic Benefit of
Noncompliance for a. Civil Penalty Assessment
FROM: Courtney M. Price \^J^uJU^ ^
Assistant Administrator"for Enforcement
and Compliance Monitoring
TO: Regional Administrators
Associate Enforcement Counsels
OECM Office Directors
I. PURPOSE
This guidance amplifies the material in the Appendix of
GM-22, "Framework for Statute-Specific Approaches to Penalty
Assessment." The Appendix presents a description of how to
calculate the economic benefit of noncompliance as part of
developing a civil penalty. A new computer model, BEN, is a
refinement of the methodology for calculating the economic
benefit of noncompliance. •
By refining the methods by which we calculate the economic
benefit of noncompliance, we will:
1. Respond to the problems that enforcement end program
offices identified concerning methods for calculating the
economic benefit component of a civil penalty;
2. Ensure among the media programs appropriate consistency
in calculating the economic benefit component of a civil penalty;
3. Ensure that the economic benefit of noncompliance con-
tinues to be a fairly valued, reasonable component of a civil
penalty; and
4. Ensure that the assumptions and data used in BEN to
calculate the economic benefit component can be defended at
either an administrative hearing or a judicial proceeding.
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II. SCOPE
This guidance describes BEN, the new computer model, in
terms of how this model resolves the identified problems related
to the use of CIVPEN. EPA personnel can use BEN to calculate .he
economic benefit a violator gains from delaying capital expendi-
tures for pollution control equipment or from avoiding the costs
of operating and maintaining pollution control equipment.
Exhibit I summarizes BEN.
EPA personnel cannot use Bcfi to calculate the economic
benefit component of a civil penalty if a violator's action
does not involve a delayed or avoided expenditure. Under
these circumstances, program offices may elect to develop
statute-specific formulas as provided in GM-22 for calculating
the economic benefit component of a civil penalty. These
formulas would be used to develop civil penalties in response
to actions such as certain TSCA marking/disposal violations or
RCRA reporting violations. The rule of thumb in the general
penalty policy would not be appropriate fcr these types of
violations.
OPPE is considering the feasibility of developing a second
computer model or rule of thumb formula that could be applied
uniformly to violations that do not involve delayed or avoided
expenditures.
III. NEW CIVIL PENALTY POLICY APPROACH
Regional personnel may use the rule of thumb described in
GM-22 to develop a preliminary estimate of the economic benefit
component of a civil penalty. The rule of thumb is for the
convenience of EPA and is not intended to give a violator a lower
economic benefit component in a civil penalty. Regional personnel
should consider whether an estimate of economic benefit derived
with the rule of thumb would be lower than an estimate calculated
with BEN. For example, the longer the period of noncompliance,
the more the rule of thumb underestimates the economic benefit
of noncompliance.
If EPA proposes and a violator accepts the rule of thumb
calculation. Regional personnel can develop the civil penalty
without further analysis of economic benefits. If a violator
disputes the economic benefit figure calculated under the rule
of thumbr a more sophisticated method to develop the economic
benefit component of the penalty is required.
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In general, if the estimate under the rule of thumb is
less than $10,000, the economic benefit component is not needed
to develop a civil penalty;1 the other factors in GM-22 still
apply. If the rule of thumb estimate is more than $10,000,
Regional personnel should use BEN to develop an estimate of
the economic benefit component.
IV. DSING BEN TO CALCULATE ECONOMIC BENEFIT OF NONCOMPLIANCE
EPA personnel should use the revised computer model BEN
whenever:
1. the rule of thumb indicates that the
economic benefit of noncompliance is
greater than $10,000} or
2. the violator rejects the rule of thumb
calculation.
BEN uses 13 data variables. At the option of the user,
BEN substitutes standard values for 8 of the 13 entries, and
the user only provides data for 5 variables. (See Exhibit I.)
BEN also has the capability for EPA personnel to enter
for those 8 variables the actual financial data of a violator.
In appropriate cases, EPA should notify a violator of the
opportunity to submit actual financial data to use in BEN
instead of the 8 standard values. If a violator agrees to
supply financial data, the violator must supply data for all
the standard values.
V. ADVANTAGES OF BEN OVER OTHER CALCULATION METHODS
The computer model BEN has advantages over previously
used methods for calculating the economic benefit component
of a civil penalty. BEN does not require financial research
by EPA personnel. The five required variables are information
about capital costs, annual operation and maintenance costs,
and the dates for the period of noncompliance. Further, BEN
has the flexibility to allow a violator who cooperates with
EPA to provide actual financial data that may affect the penalty
calculation.
I/ Although the general penalty policy cut off point is $10,000,
.each program office may establish a cut off point for the
program's medium-specific policy.
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-4-
An economic benefit component calculated with BEN can be
defended in an administrative or judicial proceeding on the
grounds that the standard values used in BEN are derived from
standard financial procedures and the violator had an opportu-
nity to provide financial data to help develop the civil penalty.
The use of BEN or statute-specific formulas when appro-
priate gives the Regional Offices flexibility in determining
the economic benefit of noncompliance. Regional personnel
have a consistent method for developing a civil penalty under
several statutes for multiple violations that involve delayed
capital costs and avoided operation and maintenance costs.
BEN is easy for a layman to use. The documentation is
built into the program so that a Regional user always has
updated documentation and can use the program with minimal
training. States are more likely to follow EPA's lead in
pursuing the economic benefit of noncompliance through civil
penalty assessments because the method available from EPA to
serve as a model does not require extensive financial research.
cc: Regional Enforcement Contacts
Program Compliance Office Directors
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Exhibit I .
BEN
A. Accessed via terminal to EPA's IBM computer in Durham, N.C.
B. Can be run in either of two modes:
1. Standard mode:
a) Requires 5 inputs:
i. Initial Capital Investment
ii. Annual Operating and Maintenance Expense
iii. First Month of Noncompliance
iv. Compliance Date
v. Penalty Payment Date
b) Relies on realistic standard values for
remaining variables:
i. A set of standard values for private
companies
ii. A set of standard values for munici-
pally-owned or not-for-profit companies
c) Would be used for final calculation of economic
benefit unless the violating firm objected and
supplied all its own financial data
2. Specific mode:
a) Requires 13 inputs
b) Would be used if violating firm supplied data or
if EPA staff researched data
C. Is easy to use
1. Optional on-line documentation will guide inexperienced
users through each step of the model
2. Written documentation will be available by December
1984
D. Is based on modern financial principles
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IV.C.6
"Penalty Calculations Compliance Schedule for Pretreatment Enforcement
Initiative", dated February 19, 1985. (See Also IV.C.10)
; ••'..£
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
FEE I 9 iS85
MEMORANDUM
SUBJECT: Penalty Calculation and Compliance Schedules for
Pretreatnent Enforcement Initiative
FROM: J. William Jordan, Acting Director
Enforcement Division (EN-338)
Glenn L. Unterberger
Associate Enforcement Counsel
for Water (LE-134W)
TO: Water Management Division Directors
Regions I, III, V, and VI
Regional Counsels, Regions I, III, V and VI
During the week of February 4, staff from the Office
of Water Enforcement and Permits, the Office of Enforcement and
Compliance Monitoring, and the Department of Justice met
with you to discuss the potential referral candidates and the
scope of the referral packages for the Pretreatment Enforcement
Initiative. We are pleased with the results of those meetings
and expect to receive your referral packages shortly, and in all
cases by February 28. V7e have committed to expedite our normal
review process.
Two aspects of the referral package may need to be clarified.
During the visits we distributed a draft penalty policy. The
final version is attached for your use in calculating the penalty.
As we noted in our visits and conference calls, we would advocate
a penalty of at least 520,000.00 in these cases. Since this is
an interim penalty policy, please feel free to call us if you
have any questions as to its use for your cases. We also dis-
cussed the.compliance schedule that should be sought in settlement
We would expect the POTW to submit a complete and approvable
pretreatment program in six months or less. In addition, we
recommend that you plan to negotiate milestones and stipulated
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- 2 -
penalties for failure by the POTWs to prepare an.annual
report and for failure to implement the program (examples are
attached).
If you have questions, please contact Ed Bender, OWEP
(475-8331) or Kim Pearson, OECM (475-8185). '
Attachment
cc: Ross Connealy, DOJ
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Attachment A
Penalty for Failure to Submit a Complete and Approvable
Pretreatment Program
The basis for assessing a penalty in the Pretreatment Enforcement Initiative
is to be determined by two factors. The first factor is the economic saving that
a POTW received by failing to develop all or part of an adeouate pretreatment
program and the avoided costs of not implementing the program. The second factor
is the penalty for the gravity of the failure to develop and implement a oretreatrent
program. This preliminary penalty figure can then be increased or decreased bv
considering appropriate adjustment factors. The basis for calculatina the oenaltv
for pretreatnent violations is summarized by the eouation below, if specific POT.-?
costs are available for the economic or gravity component they should be used.
Settlement amount=(Economic component)+(Gravity component)* (Adjustments)
I II III
NOTE: A minimum upfront penalty of $20,000 is advocated for' all
referrals.
I. Economic benefit component=(savings from delaying costs for program develoanent)+
(avoided costs of program implementation)
A. Savings from delaying program developments(Program Development cost)(interest
rate)(percent of program not yet developed)
1. Total cost to develop a .complete program (including grants)
a. Small POTW ( 1-5 MGD, IU flow 10% or less) $5,000 to $25,000
Depends on the sampling needed for the I Us- and
whether developed in house or by consultant.
b. Medium POTW (5-15 MGD, IU flow 10-20%, 50 IDs) $-25,000 to 75,000
same considerations as a. Needs local limits.
c. Large POTW (over 15 MGD, 50 or more lUs, needs $50,000 to $300,000
local limits, multijurisdictional)
2. Cost to develop each program element
Typical Percent of Total Cost*
Program Element Small Medium Larce
1. Industrial -Waste Survey 30 25 20
2. Legal Authority 857
3. Technical/Local limits 11 6 6
4. Compliance Monitoring Plan 857
5. Administrative Procedures 7 8 10
6. Resources 36 51 51
3. Interest rate assumed to be .12 annually for one year on borrowed
capital.
4. Example calculation: POTW-10 .MGD, 15% IU Flow, 30 lUs
Incomplete program elements 2, 3, and 5 (19% of total)
Program cost=S50,000; interest rate=.12;
Economic benefit component3($50,000) (.12) (.19).=S-114n.OO
*JRB Associates. 1982. "Funding Manual for Local Pretreatment Programs" EPA Contract
No. 68-01-5052. Tables 2.7 (manpower and GC/MS costs dropped) and Table 3.7.
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-2-
B. Avoided implementation costs=(annual salaries .and operatina costs)
(number of years delayed)(percent of program not implemented)
1. Total Annual Implementation cost-range 5-10,000 to 5250,000
- Salaries based on work years shown under resources by the POTW
- Can be drawn directly from the PCTW program submission estimates.
- Monitoring costs depends on number of lUs, inspections, and analyses.
2. Number years delayed-assume imolementation by reouired Julv, 19R3 unless
other deadline is justified based on the permit.
3. Cost to implement each orogram activity
- In some cases, a POTW may have Liralenented some pretreatr.ent practices
even though their program is not approved by the approval authority.
Activity TVoical Percent of Implementation Cost*
Small" Medium
1. Sampling and Industrial Review 22 19
2. Laboratory Analysis 34 34
3. Technical Assistance 17 26
4. Legal Assistance 13 09
5. Program Administration 14 11
4. Example calculation
Annual cost to implement=S60,000; activities not iirolemented
3 and 4; assume same POTW as A-4. Delayed 18 months.
Avoided costs=(360,000)(.35)(1.5)=S31,500.00
II. Gravity Component
S —""*"**""^~™"™™i——-"^—••
This component considers damage done to the POTW and its collection system, or
potential harm to the environment that may have been allowed to continue as a result
of the POTW not having an approved and implemented pretreatment program. Therefore,
this aspect of the penalty should include any known costs which the POTW is incurrina
for O&M, sludge disposal, and collection system renovation which will be eliminated
by implementing the pretreatment program. In addition, the penalty oolicy for the
multi-case initiative includes the factor of "importance to the regulatory system."
Penalties in these cases should reflect the importance that the Aaencv attaches to the
prompt submission of approvable pretreatment programs. This factor would justify a
minimum gravity component of 55,000 or 10% of. the economic benefit, if it is higher,
where actual environmental harm, significant risk of harm, or damage to the POTW is
not shown. The factors that should be considered in this calculation are included in
the eguation below:
Gravity Component=(55000) + ((lenath)(TO impact))+(Loss of plant useful 1 ife)+(Increased
costs for O&M and sludge disposal)+((Lenath of violation)(Nature of
IU wastewaters))
A. Length of Violation-this value is used to weight toxic and water duality
impacts, which are expressed as cost factors. The length of violation in
months should be divided by 3.
B. Loss of useful life of the treatment olant that could be avoided by impl
pretreatment. Any cost savina should be entered directly. "
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-3-
C. Excess costs for O&M and Sludge Disposal which could be avoided by implementin
pretreatment. Include these costs directly.
D. Nature of the IU wastewaters that will be controlled.
1. Toxics
2. Corrosives-low/hiah oH
3. Explosives-oraanic solvents, history of in-olant Droolers, seotic haulers,
Multiply the percent IU flow tijnes SlOOn if no data are available. T^ese
data may include the costs of TU treatment, workmans compensation, or
other damages from toxics.
E. v&ter Quality impacts, e.g.,
1. fish kills -economic value + replacement and maintenance costs
2. loss of habitat-cost/acre or cost/strea-n mile
3. drinking water contamination - cost of treatment
F. Example calculations
Length of violation=18 months/3 = 6 units
Loss of useful life- 1 year lost of design life, 20 years =.05
cost=.05(cost of damaged comDOnent=S10000)=S500
IU waste controlled=.2(1000);
Gravity component* S5000+$500+(6($-200)=$6700
III. Adjustments
, If the POTW has demonstrated good faith, the POTW may be penalized to recover
a minimum of economic benefit plus 10% or $5,000, whichever is higher. The penaltv
should also consider other factors which are favorable to the POTW. "niese may
include delays by EPA, ambiguous information given to the POTW by EPA, and other
factors as may be appropriate, such as including inability to pay.
Example Calculations
No equities for the POTW. Region creviced written guidance and issued an AO
which POTW violated.
Adjustments
Recalcitrance (e.g., failure to comely with ' S-10000
a previous administrative order)
Total Penalty for Example POTW
Component Amount
Economic • ' $-32640
Gravity $• 6700
Adiustrents : $10000
Total S49340
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Attachment B
Pretreatment
Compliance Schedule Elements
Milestones
1. Submi t compl ete program
2. Submit program implementation
status report
3. Advise approval authority of
program change
4. Respond to noncompliance of
industrial users through
enforcement activities
5. Inspect all major industrial users
Deadline
Six months (maximum) after settlerrent
Six months after approval
30 days, after change occurs
Based on time frame for an appropriate
enforcement response
Within six months after settlement
Examples of Stipulated Penalties for Comoliance Milestones for a Small POTW
1. Failure to submit complete program
2. Failure to submit annual report
3. Failure to notify approval authority
of program changes
4.- Failure to address lUs noncompliance
through enforcement activities*
5. Failure to inspect major industrial
users
S200 day
S400 day
$200 day
$200 day
day 1-15
after day 15
S150/informal action
$200-$750/formal action
$-100/Insoection
* The control authority should, as part of its approved program, have procedures and
time frames to respond to instances c:. in noncompl iance. The control authoritv must
contact the IU for all instances of noncomoliance (e.g., failure to report, failure
to monitor, or violations of effluent limits and compliance schedules). The POTW
should start with telephone calls for the initial minor violations and proceed to
initiate formal written enforcement activities (i.e., NOVs, administrative orders,
penalties, and lawsuits) for continued noncompliance. The POTW must maintain a log
of IU violations and.enforcement responses. When the IU noncompliance occurs and
the control authority fails to initiate appropriate and timely enforcement action,
the control authority has failed to enforce its pretreatment program and is subject
to penalties. Additional guidance on appropriate and timely enforcement responses
will be provided later in the guidance to Control Authorities.
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IV.C.7,
"Enforcement Settlement Negotiations", dated May 22, 1985. See GM-39.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
'«. OBO'1
FEB I I 1986
OFFICE OF ENFORCEMENT
*SOCOMP::»\CE
MOMTORISC
MEMORANDUM
SUBJECT;
FROM:
TO;
New Clean Water Act Civil Penalty Policy
Lawrence J. Jensen
Assistant Administrator for Water,
Courtney M. Price \Jj£jL^ f^*
Assistant Administrator for Enforcement
and Compliance Monitoring
General Counsel
Regional Administrators
Regional Counsels
Regional Water Management Division Directors
Attached is the Agency's new Clean Water Act civil penalty
policy to be used by EPA in calculating the penalty that the
Federal government will seek in settlement of judicial actions
brought under Section 309 of the CWA. This policy supersedes
the CWA Civil Penalty Policy issued on July 8, 1980 and repre-
sents the Office of Water's guidance in response to EPA's
Policy on Civil Penalties (GM-21) and A Framework for Statute-
Specific Approaches to Penalty Assessments (GM-22) issued on
February 16, 1984. This policy is effective as of the date of
this memorandum and shall be applied to future enforcement
actions and to pending enforcement actions in which -the
government has not transmitted to the defendant a proposed
settlement penalty.
The attached document consists of the following three
parts: (1) the CWA Penalty Policy; (2) the policy "methodology",
which is a one-page description of each of the steps to be
taken in a penalty calculation, along with one page of footnotes;
and (3) the "worksheet", a proposed model sheet to be used to
record the different numerical components of the final penalty.
This penalty policy is designed to promote a more consistent,
Agency-wide approach to the assessment of civil penalties while
allowing substantial flexibility for individual cases within
certain guidelines. We believe that this penalty policy, when
effectively applied, will promote the goals of increasing
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- 2 -
recovery of economic benefit of non-compliance, providing
substantial deterrence to noncompliance, providing a more fair
and equitable treatment of the regulated community, and achieving
a more swift resolution of environmental problems and of
enforcement actions. In order to support the goals of this
policy and EPA's enforcement efforts generally, application of
this policy may result in CPA seeking higher civil penalties
than it has in the past.
This CWA penalty policy tracks the basic concepts and
procedures embodied in the general penalty policy and Framework.
For example, the CWA policy directs the Regions to calculate
the economic benefit of noncompli re, calculate the "gravity"
(or seriousness) component, and tr^n calculate adjustments to
consider ability to pay, litigation factors, and other factors.
This policy includes the following minor deviations from
the general penalty policy and the Framework which we believe,
based upon our past experience with Clean Water Act enforcement,
are reasonable:
(1) The first adjustment factor is "History of Recalci-
trance." We believe that this factor should only result in an
increase in the proposed penalty amount;
(2) The remaining two adjustment factors ("Ability to
Pay" and "Litigation Considerations") should only be used to
reduce the proposed penalty;
(3) A proposed section on "mitigation projects" has
been included, although the Department of Justice and the
Agency may make some additional refinements on this issue in
the near future; and
(4) The economic benefit component will not be deleted
merely because the component involves an "insignificant amount."
Substantial thanks are due to the Clean Water Act Penalty
Policy Work Group for an excellent job in developing an initial
draft, collecting comments, carefully considering all comments,
and reconciling and balancing often disparate viewpoints
regarding penalty assessment. Thanks also to staff in the
Regional Offices and in a number of Headquarters offices and
the Department of Justice for considerable assistance in
providing review and comment on drafts.
During the upcoming months, we will carefully analyze
and evaluate the application and effectiveness of this penalty
policy. After, that, we will issue appropriate refinements to
the policy.
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- 3 -
In the near future, we will publish the policy in the
Federal Register. In addition, we will soon distribute some
example calculations and hold training workshops to
provide further guidance on the application of this policy.
If you have any questions or comments on this policy,
please contact Anne Lassiter, at 475-8307, or Jack Winder, at
382-2879.
Attachment
cc: Clean Water Act Penalty Policy Work Group
Associate Enforcement Counsel for Water
OECM Office Directors
OW Office Directors
Department of Justice, Environmental Enforcement
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1 I.
CLEAN WATER ACT
PENALTY POLICY FOR CIVIL SETTLEMENT NEGOTIATIONS
UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
EFFECTIVE DATE:
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I I
Clean Water Act
Penalty Policy for Civil Settlement Negotiations
I. Introduction
Under Section 309 of the Clean Water Act (CWA), the
Administrator is authorized to bring civil actions to enforce
certain requirements of the Act and related regulations. In
such actions, the Administrator may seek a civil penalty not to
exceed $10,000 "per day of such violation." The Agency will
vigorously pursue penalty assessments in judicial actions to
ensure deterrence and to recover appropriate penalties.
In order to guide settlement negotiations on the penalty
issue in actions under Section 309 of the CWA and Section 113
of the Clean Air Act for failure to meet statutory deadlines,
the Agency issued a Civil Penalty Policy on July 8, 1980.
During the next few years, the Agency identified the following
four goals for improving its civil penalty assessment practices:
(1) penalties should, at a minimum, recover the economic benefit
of noncompliance; (2) penalties should.be large .enough to deter
noncompliance; (3) penalties should be more consistent throughout
the country in an effort to provide fair and equitable treatment
to the regulated community; and (4) there should be a logical
basis for the calculation of civil penalties for all types of
violations, industrial and municipal, to promote a more swift
resolution of environmental problems and of enforcement actions.
In an effort to address these and related penalty issues,
on February 16, 1984, the EPA Office of Enforcement and Com-
pliance Monitoring (OECM) issued the'following two civil penalty
guidance documents: The Policy on Civil Penalties (# GM-21),
and the companion document entitled A Framework for Statute-
Specific Approaches to Penalty Assessments, (# GM-22), as
general guidance for settlements for violations of all statutes
which EPA enforces. Although the 1984 penalty policy documents
do provide basic conceptual guidance for penalty calculations,
they were designed to be implemented further through medium-
specific penalty guidance. The "Policy" document states in
part, as follows:
Each EPA program office, in a joint effort with
[OECM], will revise existing policies, or write new
policies as needed. These policies will guide the
assessment of penalties under each statute in a manner
consistent with this document and, to the extent
reasonable, the accompanying Framework. [Policy,
at 1, 2]
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- 2 -
II. Purpose
This penalty policy and attached methodology is the water-
specific-penalty guidance for certain CWA violations. This
policy follows the major principles set out in the general
penalty policy documents and also reflects considerations
unique to CWA enforcement.
As the Framework directs, this CWA Penalty Policy provides
"a system for quantifying the gravity of violations of the laws
and regulations . . . ." Moreover, this policy provides a logical
structure and a number of different ways (number of violations,
duration, etc.) to quantify the severity of a defendant's
noncompliance with the CWA. The policy also provides a number
of ranges of weighting factors in order to allow the Regions
flexibility in exercising their experienced judgment.
The calculated penalty figure should represent a reasonable
and defensible penalty which the Agency believes it can and
should obtain in a settlement in compromise of its claim for the
statutory maximum penalty. This figure, and a discussion of
the basis of calculation, must be included in all litigation
reports. After referral, as more information becomes available,
the penalty calculation should be modified to reflect relevant,
new information. In those cases which proceed to trial, the
government should seek a penalty higher than that for which '
the government was willing to settle, reflecting considerations
such as continuing noncompliance and the extra burden placed
on the government by protracted litigation.
III. Applicability
This penalty policy applies to Federal CWA civil judicial
enforcement actions commenced after the effective date of this
policy and to pending judicial enforcement cases in which the
government has not transmitted to the defendant an approved oral
or written proposed penalty. The policy applies to civil
penalties sought under CWA Section 309 for violations including
the following: violations of NPDES permits by industrial and
municipal facilities; discharges without an NPDES permit;
violations of general and categorical pretreatment requirements
and local limits; monitoring and reporting violations; viola-
tions of Section 405 sludge use or disposal requirements; etc.
The policy also applies to violations of Section 308 information
requests and to violations of Section 309 administrative orders.
This policy, shall not be applied to CWA civil enforcement
actions brought exclusively under $311 ("hazardous substance
spills") or for violations related to requirements in $404
(disposal of "dredged or fill"" material). The CWA and imple-
menting regulations provide unique enforcement procedures and
penalty provisions for $311 and $404 violations which are
currently being followed in pursuing these types of cases.
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1 1
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IV. Penalty Calculation Methodology
Th«"initial calculation shall be an estimate of the
statutory maximum penalty in order, for comparison purposes,
to determine the potential maximum penalty liability of the
defendant. The penalty which the government seeks in settle-
ment may not exceed this statutory maximum amount.
The Regional office shall then calculate a civil penalty
figure for settlement purposes based upon the following
formula: "Civil Penalty * (Economic Benefit Component) •*• (Gravity
Component) +/- (Adjustments)."
The civil penalty settlement calculation involves the
following four consecutive steps: (1) calculate the "Economic
Benefit" of noncompliance; (2) calculate the monthly and total
"Gravity Components"; (3) calculate the "Adjustment Factors";
and (4) calculate the total penalty.
(1) Economic Benefit. Consistent with the Agency-wide
"Policy and Framework", every reasonable effort shall be made
to calculate and recover the economic benefit of noncompliance.
Mote that the economic benefit should be calculated from the
start of noncompliance up to the point when the facility was or
will be in compliance. In a limited number of cases, based
upon a defendant's inability to pay or "litigation practicalities",
application of the "adjustment factors" may justify recovery of
less than the calculated economic benefit. The economic benefit
component shall be calculated by using the EPA computer program
— "BEN." This program produces an estimate of the economic
benefit of delayed compliance, which is calculated to be the
sum of the net present value of: delayed capital investment,
one-time, non-depreciable expenditures, and avoided operating
and maintenance expenses. (See "BEN Users Manual," OPPE/OECM,
January 1985.)
(2) Gravity Component. The gravity calculation methodology
is based upon a logical scheme and criteria which relate the
gravity of the violations to the Clean Water Act and its regula-
tory scheme. Every reasonable effort should be made to calculate
and recover a "gravity component" in addition to the economic
benefit component. As the penalty Policy states:
The removal of the economic benefit of .
noncompliance only places the violator in
the 'same position as he would have been
if compliance had been achieved on time.
Both deterrence and fundamental fairness
require that the penalty include an
additional amount to ensure that the
violator is economically worse off than
if [he] had obeyed the law. [Policy, at 3]
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The following four gravity weighting factors should be
considered for each month during which there was one or more
violations and assigned values according to the attached "CWA
Penalty Policy Calculation Methodology":
"A" — "Significance of Violation." This factor is to
reflect the degree of the exceedance of the most significant
effluent limitation violation each month, and is weighted more
heavily for exceedances of toxic effluent limitations. The
attached outline contains a table indicating the range of
"significance of violation" factor values for exceedances of
effluent limitations (% over permit effluent limitation).
Note that all exceedances, and all other violations of permit
conditions in a given month, should be accounted for under
gravity weighting factor "C" - "Number of Violations."
"B" — "Health and Environmental Harm." A value between
1 and a value that results in the statutory maximum penalty may
be applied to each month in which one or more violations present
actual or potential harm to human health or to the environment.
"C" — "Number of Violations." This factor allows
consideration of the total number of violations each month,
including all violations of permit effluent limitations,
monitoring and reporting requirements, and standard and special
conditions. It is important to account for each violation in
assessing the significance of a defendant's violations, and
this factor allows for flexibility in assessing penalties for
multiple violations. Violation of a monthly average effluent
limitation should be counted as 30 violations, a weekly average
effluent limitation violation should be counted as 7 violations,
violations of different parameters at the same outfall are to
be counted separately, and violations at different outfalls are
to be counted separately. The attached outline contains a
range of weighting factor values between 0 and 5 to account for
the total number of violations. In addition, this "number of
violations" factor may be weighted more heavily to account for
serious or significant violations other than the most signifi-
cant effluent limit violation which was accounted for under
factor "A."
"D" — "Duration of Noncompliance." This factor allows
consideration of continuing, long-terra violations of an effluent
limitation or other permit condition, and for extended periods
of discharge without a permit. The attached outline contains
a range of values between 0 and 5 for the "Duration of Noncom-
pliance" factor which should be applied to each month of
continuing violation of the same requirement. Generally, "long-
term" violations are those which continue for three or more
consecutive months.
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Th« gravity component should be calculated from the date
on which the violations at issue began up to the date when the
violations ceased or the date of anticipated filing of the
enforcement action. The monthly gravity component is the sum
of the gravity weighting factors, plus one, multiplied by
$1,000. The total gravity component is the sum of all monthly
gravity components.
(3) Adjustment Factors. After the economic benefit
component is added to the sum of all the * monthly gravity
components," this total may be modified by the application of
"adjustment factors." The consideration of "history of recalci-
trance" may only result in an increased penalty. In addition,
in some cases and when justified in writing, the following two
factors may be applied for a penalty reduction: ability to pay
and litigation considerations.
(A) History of recalcitrance (to increase penalty).
The "recalcitrance" factor will allow for higher penalties for
bad faith, unjustified delay in preventing, correcting or
mitigating violations, violations of prior administrative orders
or consent decrees, failure to provide timely and full informa-
tion, etc. This factor should also be used to account for the
relationship of the violations to the regulatory scheme, i.e.
the significance of the recalcitrance. For example, higher
values for this factor may be used to account for municipal
violations which continue beyond July 1, 1988. This factor is
to be applied one time, by multiplying a percentage CO to 150%)
times the sum of the "total gravity component" plus the economic
benefit calculation and then adding this figure to the benefit
and gravity total. The resulting figure is the "preliminary
total," which shall not exceed the statutory maximum. The
application of the recalcitrance factor to the total figure
allows for a more logical relationship between recalcitrance
and the actual significance of the violations. The recalci-
trance factor may also be increased during negotiations if
defendant continues to be recalcitrant with the remedy or with
settlement efforts.
(B) Ability to pay (to decrease penalty). The
Regional-office should evaluate the ability of the defendant to
pay the proposed civil penalty and to pay for the proposed
injunctive relief. The government should carefully analyze
this factor where it appears that the defendant can convincingly
demonstrate an inability to pay a given penalty. The defendant
has the principal burden of establishing a claim of inability
to pay. The government typically should seek to settle for as
high an amount which the government believes defendant can
afford without seriously jeopardizing defendant's ability to
continue operations and still achieve compliance, unless the
defendant's behavior has been exceptionally culpable, recalci-
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trant, or threatening to human health or the environment. The
government should carefully assess the accuracy of the actual
or anticipated claim; Evaluation by an outside expert consultant
may be necessary to rebut the inability to pay claim. If
securing an outside expert is impractical or impossible, the
Region shall make its best estimate of ability to pay.
Many factors often have a significant impact on ability to
pay and may justify a reduction of a penalty. For example, the
Region may consider high user fees, high percentage of local
funds spent on a POTW, low bond rating, low per capita income,
low total of population served by the POTW, bankruptcy, etc.,
in evaluating an "inability to pay" claim.
(C) Litigation considerations (to decrease penalty).
The government should evaluate every penalty with a view toward
the potential for protracted litigation and attempt to ascertain
the maximum civil penalty the court is likely to award if the
case proceeds to trial. The Region should take into account
the inherent strength of the case, considering for example, the
probability of proving questionable violations, the probability
of acceptance of an untested legal construction, the potential
effectiveness of the government's witnesses, and the potential
strength of the defendant's equitable defenses. (Also see
GM-22, pp. 12 - 13; discussion of "compelling public concerns".
Examples of equitable considerations which may lead to
adjustment of the penalty amount include the following: whether
the defendant reasonably, conclusively, and detrimentally
relied on EPA's or state or local agency's representations or
actions; whether the defendant has requested modification of
its final effluent limits (related to, for example, pending
§301(h) decisions, pending industrial variance decisions, or
new wasteload allocations); whether the defendant's violations
are clearly attributable to accepting new discharges from nearby,
noncomplying jurisdictions; and whether the defendant's compliance
has been delayed in an unusual or unreasonable manner by other
Federal requirements through no fault of the defendant.
These equitable considerations will justify mitigation only
to the extent that they directly caused or contributed to the
defendant's violations. The government may reduce the amount
of the civil penalty it will accept at settlement to reflect
these considerations where the facts demonstrate a substantial
likelihood that the government will not achieve a higher penalty
at trial.
V. Mitigation Projects
In the past, in a few cases the Agency has accepted
decree provisions which allow the reduction of a civil penalty
assessment in recognition of the defendant's undertaking an
environmentally beneficial "mitigation project.
N
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The following criteria are provided to guide the use of
mitigation projects in settlements.
(1) The activity must be initiated in addition to all
regulatory compliance obligations.
The project may not be an activity which is. otherwise
required by law. The project may not be a substitute for full
compliance — it must be designed to provide an environmental
benefit beyond the benefits of full compliance.
(2) The activity is most likely to be an acceptable
basis for mitigating penalties if it closely addresses the
environmental effects of the defendant's violation.
Preferably, the project will address the risk or harm
caused by the violations at issue. In general, qualifying
activities must provide a discernible response to the percep-
tible risk or harm caused by defendant's violations which are
the focus of the government's enforcement action.
(3) The defendant's cost of undertaking the activity,
taking into account the tax benefits that accrue, must be
commensurate with the degree of mitigation.
In order to attain the deterrent objectives of the civil
penalty policy, the amount of the penalty mitigation must
reflect the actual cost to the defendant. With consideration
of tax benefits, the actual cost of the project may exceed
the value of the mitigation.
(4) The activity must demonstrate a good-faith commitment
to statutory compliance.
«
One test of good faith is the degree to which the defendant
takes the initiative to identify and commence specific, potential
mitigation projects. In addition, the project must be primarily
designed to benefit the environment rather than to benefit the
defendant.
(5) Mitigation based on the defendant's activity must not
detract significantly from the general deterrent effect of the
settlement as a whole.
The government should continue to consider mitigation
projects as the exception rather than the rule. Efforts should
be made to eliminate any potential perception by the regulated
community that the government lacks the resolve to impose
significant penalties for substantial violations. The government
should seek penalties in conjunction with mitigation activities
which deter both the specific defendant and also the entire
regulated community. Accordingly, every settlement should
include a substantial monetary penalty component.
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(6) Judicially-enforceable consent decrees must meet the
statutory and public interest criteria for consent decrees and
cannot Contain provisions which would be beyond the power of
the court to order.
A proposed consent decree should not include provisions
which would be beyond the power of the court to order under
the particular statute which had been violated. Additional
guidance on the appropriate scope of relief might be found in
the statute, the legislative history or the implementing
regulations.
The Agency should exercise case-by-case judgment in deciding
whether to accept a mitigation project based upon the above
criteria and, in addition, based upon consideration of the
difficulty of monitoring the implementation of the proposed
project in light of the anticipated benefits of the project.
VI. Intent of Policy; and Information Requests for
Penalty Calculations
The policies and procedures set out in this document are
intended solely for the guidance of government personnel. They
are not intended, and cannot be relied upon, to create any right.«
substantive or procedural, enforceable by any party in litigatiofl
with the United States. The Agency reserves the right to act
at variance with these policies and procedures and to change
them at any time without public notice. When the Regions
deviate from this policy they shall include in the litigation
report a brief description of the nature of and justification
for the deviation. In addition, any penalty calculations under
this policy made in anticipation of litigation are likely-to be
exempt from disclosure under the Freedom of Information Act.
As a matter of public interest, the Agency may release this
information in some cases.
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1 I
Clean Water Act Penalty Policy; Calculation Methodology
t
SETTLEMENT PENALTY1'2 » (ECONOMIC BENEFIT) * (GRAVITY COMPONENT)
+ (ADJUSTMENTS)
Step 1: Calculate the Statutory Maximum Penalty
Step 2: Calculate the Economic Benefit Using "BEN*3*4
Step 3: Calculate the Total Gravity Component^
- Monthly Gravity Component * ($1,000) x (1+A+B+C+D)
- Total * Sum of Monthly Gravity Components
GRAVITY CRITERIA
ADDITIVE FACTORS
A. Significance of Violation^
% Exceedence
Monthly Avg«
0-20
21 - 40
41 - 100
101 - 300
301 - >
% Exceedence
7-Day Avg.
0-30
31 - 60
61 - 150
151 - 450
451 - >
% Exceedence
Daily Max.
0-50
51 - 100
101 - 200
201. - 600
601 - >
Toxic
0-3
1-4
3-7
5-15
10 - 20
Conventional/
Non-Toxic
0-2
1-3
2-5
3-6
5-15
10 - Stat. Ma:
1 - 10
0-5
0-5
B. Health and Environmental Harm7
(i) Impact on Human Health; or
(ii) Impact on Aquatic Environment
«
C. Number of Violations8
D. Duration of Noncompliance^
Step 4: Include Adjustment Factors
A. History of Recalcitrance10 (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.
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\---7'.
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I I.
^G'lV'Il ^PENALTY POLICY CALCULATION METHODOLOGY: FOOTNOTES
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-
terra 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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1 L
CWA Penalty Summary Worksheet
(1) No. of Violations
x 910,000 - stat. max. - $
(2) Economic Benefit ("BEN")
(period covered/
months) »
(3) Total of Monthly Gravity
Components $
(4) Benefit + Gravity TOTAL
(5) Recalcitrance Factor %
(0-150%)-x Total (Line 4) * $
(6) Preliminary TOTAL (Line 4 + Line 5) $
ADJUSTMENTS
(7) Litigation Considerations
(Amount of reduction)
(8) Ability to Pay
(Amount of reduction)
(9) SETTLEMENT PENALTY TOTAL
Name and Location
of Facility
Date of Calculation
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U30
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IV.C.ll.
"Letter of the Administrator to James Borberg, President of the Association
of Metropolitan Sewerage Agencies", (concerning penalties against
municipalities), dated October 21, 1986.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
. WASHINGTON/DC 10440
OCT21886
TNI ADMINItTftATOA
Mr. James R. Borberg, President
Association of Metropolitan Sewerage Agencies
Suite 1002
1015 18th Street, N. W.
Washington, O.C. 20036
Dear Mr. Borbergi
Thank you for your letter of September 22, 1986, which
reiterates some of the issues that you and other members of
the Board of the Association of Metropolitan Sewerage Agencies
(AMSA) raised during our meeting on September 10, 1986. We
at the Environmental Protection Agency (EPA) thought the
session was a productive exchange of ideas, and we certainly
appreciate your endorsement of our proposal on stormwater and
your willingness to communicate that support to Congress. Z
also welcome this opportunity to continue our dialogue.
The first issue you raise involves EPA's practice of
assessing penalties for a municipality's past and future
violations in conjunction with Federal judicial actions under
the National Municipal Policy (NMP). You are correct that the
NMP does not explicitly require us to seek penalties. However,
the NMP—although it is*a clear statement of Agency policy-
is not intended to stand alone. All Agency policy documents,
including the NMP, serve as a "master plan," and are buttressed
by other policy and guidance; collectively, they direct our
day-to-day activities to reach our goals. The NMP states our
position with respect to the relationship between the Clean
Water Act (CWA) provisions for Federal funding and for munici-
pal compliance, and provides a general framework for accom-
plishing the Agency's goal of achieving as ouch compliance as
possible by July 1, 1988.
Since your concern relates to what AMSA perceives as an
•inconsistency* between penalties and the NMP, 1 will mention
the three main foundation documents that we use in conjunction
with the Policy statement to guide the NMP enforcement effort.
First, we rely on the NMP Guidance (March 1984), which sets
out our detailed action plan, includingi 1) the use of judicial
enforcement actions to establish schedules that extend beyond
the July 1, 1988, deadline in the BMP; and 2) the use of
appropriate civil penalties.
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The second document that undergirds our municipal compliano
program 4s the Agency's Uniform Civil Penalty Policy (February
1984), which superseded an earlier version (July 1980). This
Policy is a statement of the Agency's position on tha use of
penalties. It sets out guidelines covering, among other
things, the application of our statutory authority to afssss
penalties under f309 of the CNA. Zt also affirms our obligation
to exercise that authority to ensure a consistent, common
effort to detsr violations of the laws of the United Statas
and to promote equity and voluntary compliance among all
parts of the regulated public.
Most recently, we have issued a third policy documenti the
Clean Water Act Penalty Policy (February 1966), which provides
a detailed methodology on how to determine the appropriate
amount of each penalty. Zt is important to note, however,
that the CWA Penalty Policy in no way alters the Agency's
policy on whether to seek penalties from municipalities, as
originally enunciated back in 1980; both f309 of the CWA and
EPA's CWA Penalty Policy simply do not distinguish between
industrial and municipal violators. Rather, the 1986 CWA
Penalty Policy provides techn -«1 guidance on how to best carry
out the Agency's policy in an /en-ha '.«d manner.
Zf you look at the law and at these expressions of Agency
policy and guidance, Z am confident y-3 will see that our
enforcement policies are faithful to t ,th the CWA and ne
spirit of the NMP. For nearly three years, we have made an
honest effort to wc.k with States and with affected municipali-
ties to establish reasonable schedules for compliance in admin-
istrative orders or NPDES permit:—without penalties. Where
the municipality is not willing to wcrtc with us to negotiate a
reasonably expeditious schedule or where the schedule extends
beyond July 1, 1988, we.are seeking Court-sanctioned schedules
and penalties consistent with the law and Agency policy. Thus
far, the Courts have consistently upheld our interpretations
of the law in this area, which indicates that %> are complying
with the intent of Congress as it appears in the CWA.
Perhaps some numbers would be helpful to out things into
perspective* By the end of FY 1986, we had returned about
260 major facilities to compliance (generally as a result of
schedules established in administrative orders (AOs)). We
had also placed about 1000 other major facilities on enforce-
able schedules established in administrative or-Jers (700) and
in HPDES permits (300). Nationwide, since the ssuance of
the NMP, EPA has est - lished about 40 schedules in Court
Orders, and has filed another 30 cases; some schedules are
established in State Court Orders as well.
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- 3 -
After nearly three years of work and negotiation, however,
we still hav« about 100 major munieipalitiaa that hava not
agraed to an enforceable achadula for achieving compliance,
including some pending final f301(h) deciaiona. Every day that
passes reducea the likelihood that these municipalities can
neat the statutory deadline* Which increaaea the prospedts that
we will have to establiah their schedules in Court Orders
including penalties for violationa of the Act. Overall, how-
ever, Court Ordera that aaaesa penalties have constituted only
a small part of our total effort, and penalty aaounta are a very
email percent of total construction coats (rarely in excees of
one percent and often below that figure).
The second issue you raise.on behalf of AMSA la the
relationahip between the Conatruction Grants program and the
HMP. As we have said consistently, we see no conflict between
the Construction Grants program and the municipal compliance '
effort under the BMP. Both are intended to achieve the same
goals municipal compliance with the requirementa of the CMA.
Moreover, we have provided clear guidance to the Regiona and •
States that, where a municipality is ready and willing to
initiate construction before its name comes up on the priority
list for a grant award, this does not necessarily preclude that
municipality'a grant eligibility for the remainder of the pro-
ject. This is intended to provide an incentive for communities
to start construction aa aoon as possible so they can retain
their grant eligibility and avoid Court Orders and associated
penaltiee.
In summary, we have worked cooperatively with affected
municipalities for the nearly three yeara aince issuance of
the NMP, and we will continue to do so. However, EPA has an
obligation to Congress and to the public to carry out and
enforce the law that protects the nation's watera, and we fully
intend to do eo through all the mechanisms the Act provides.
Moving to your final issue of EPA's response to the Third
Circuit Court's decision on removal credits, X want to let you
know that an appeal to the Supreme Court ia still under con-
sideration. Juat recently, at EPA*a request, the Department
of Justice eeked the Supreme Court for an extension of time
to allow us to further consider the merits of an appeal. Z
know this is an important issue to AMSA members and to other
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- 4 -
aunicipalitiaa that adminiatar local pretraatraant programa.
and x aaaora you that tha Agency will continue to Cork with
your ramoval cradita •ubcommitt«« .o that AK£A'. vi«w« will
b« incorporated into our daciaion-making.
v 4A9*f?' X valuad our racant diacuaaiona and appraciata
haaring tha viawa of your organisation. -FP«r»«ata
/-^Sincaral
Laa M. Thonaa
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IV.C.12,
"Guidance on Calculating after Tax Net Present Value of Alternative
Payments", dated October 28, 1986. See also GM-51.
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1 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
f WASHINGTON, D.C. 20460
OCT 2 8 (986
ENFORCEMENT AND
COMPUANCt MONITOHINC
MEMORANDUM
SUBJECT: Guidance on Calculating After Tax Net Present Value
of Alternative Payments
\Ci
FROM: Thomas L. Adams, Jr.
Assistant Administrator for
Enforcement and Compliance Monitoring
TO: Assistant Administrators
Regional Administrators
PURPOSE
This guidance provides a methodology for calculating the
after tax net present value of an environmentally beneficial
project proposed by a violator to mitigate a portion of a civil
penalty. We developed this guidance in reponse to requests from
both the Regions and Headquarters on how to evaluate a project's
real cost to a violator. The Associate Enforcement Counsels,
Regional Enforcement Contacts, Regional Counsels, and the Chief
of the Environmental Enforcement Section at Department of Justice
have reviewed this guidance. In addition, the Tax Litigation
Division of the Internal Revenue Service and the Corporate
Finance Division of the Securities and Exchange Commission
reviewed pertinent language in this document. We hope it will
be useful. The policy on alternative payments is set forth in
the February 16, 1984, uniform civil penalty policy.
BACKGROUND
The 1984 civil penalty policy provides flexibility for EPA
to accept, under specified conditions, a violator's investment in
environmentally beneficial projects to mitigate part of a civil
penalty. The policy allows the use of these alternative payments
as an incentive for settlement. The policy does not contemplate
a dollar-for-dollar reduction in the civil penalty equal to the
cost of an acceptable alternative payment project. Furthermore,
EPA will not accept more than the after tax net present value
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-2-
of an alternative payment project. The Agency also can choose
to accept less than that amount. £/
EPA must carefully balance the benefits of fostering settle-
ments by approving alternative payment projects against the benefits
of achieving the broadest deterrent impact from enforcement actions.
Allowing these projects to mitigate part of a penalty may reduce
the deterrent effect of an action on the regulated community.
A civil penalty is not tax deductible under 26 U.S.C.
§162(f); therefore, the full amount of the penalty is a
liability to a violator.£/ Conversely, if a violator invests
in an alternative payment project, that investment may be tax
deductible. EPA must use the after tax value of a proposed
investment when determining whether and by how much to mitigate
a civil penalty.3
•
In addition to considering the tax effects of an alterna-
tive payment project, EPA must evaluate the cost of the project
in terms of its present value. An alternative payment project
usually requires expenditures over time.^/ Th afore, the Agency
also must reduce the after-tax value of the casn flows invested
in an alternative payment project to its net present value at
I/ Proposed alternative payment projects may not be used to
mitigate the entire amount of a civil penalty. The Agency
plans to issue further policy clarifying the use of alter-
native payments in settlement negotiations.
_2/ A written agreement specifiying the tax implications of the
civil penalty is essential. The agreement should be a legally
binding contract. The agreement should state that the civil
penalty is punitive and deterrent in purpose and is a non-
deductible expense.
3/ In addition to -ax benefits, a firm also can generate
positive, image-enhancing publicity from the project developed
for the alternative payment; however, the penalty policy requires
that any publicity a violator generates a at the project must
include a statement that the project is undertaken in settlement
of an enforcement action by EPA or an authorized state.
4/ A dollar today is worth more than a dollar a year from now
for two reasons: 1) if a dollar today is held in a no-interest
checking account, inflation erodes the value of that dollar over
the year; and 2) if a dollar today is invested at a rate higher
than the rate of inflation, that dollar increases in value by
the amount of earnings in excess of the inflation rate.
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-3-
The BEN computer model can calculate the atter tax net
present value of a violator's proposed alternative payment.
Appendix A of tne BEN User's Manual provides the procedure tor
calculating after tax net present value of capital investment,
operation and maintenance costs, and one-time costs.
USING BEN TO CALCULATE THE AFTER TAX NET PRESENT VALUE OF
ALTERNATIVE PAYMENTS
To use BEN to calculate after tax net present value of an
alternate payment project, respond to the BEN questions as
follows:
1. Enter the case name (variable 1);
2. For variables 2 through 4, enter the incremental
. costs for the alternative payment project of:
a. Pollution control equipment;
b. Operation and maintenance;
c. One-time expenditure;
3. Substitute the date of settlement of the enforcement
action tor the first month of non-compliance
(variable 5);
4. Enter the compliance date or completion date of the
alternative investment for variables 6 and 7;
5. Select standard values for variables 8 through 13;£/
6. Select output option 2.
5/ Decreasing the tax'rate used in BEN increases the amount of a
civil penalty and also increases the atter-tax cost ot an
alternative investment. Therefore, a violator has an incentive
to provide a lower marginal tax rate tor an alternative payment
project than the one used to calculate the civil penalty.
Both the civil penalty calculation and the alternative payment
calculation must use the same tax rate. The annual inflation
rate and the discount rate should be the same as the rates used
in the civil penalty calculation.
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-4-
Calculation C in output option 2 expresses the after tax
net present value or the alternative payment on the date of
settlement, which is the date substituted for the first month
ot noncompiiance {variable 5). This tigure is the maximum
amount by which EPA may mitigate a civil penalty. Attachment
A is an example ot a proposed alternative payment project with
the BEN output sho rig the after tax net present value of the
investment.
If you have any questions about calculating the after tax
net present value ot a proposed alternative payment, call Susan
Gary Watkins of my staff (FTS 475-8786).
Attachment
•
cc: Regional Counsels
Associate Enforcement Counsels
Compliance Office Directors
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ATTACHMENT A
ALTERNATIVE PAYMENT EXAMPLE
Suppose a violator offers to invest over the next 20 months
$500,000 in pollution control equipment. The equipment will
provide environmental benefits beyond those that result from
meeting legal requirements for compliance. The after tax net
present value in 1986 dollars of a $500,000 investment over a
period of 20 months is $299,562. Therefore, the value of the
alternative payment in this example is $299,562, although the
violator must commit to investing $500,000. Exhibit 1 shows
how the BEN model displays the data.
If EPA approves the alternative payment project in the
example, the Agency may propose an adjusted penalty target figure
that is as much as $299,562 less than the initial penalty target
figure.V Other adjustment factors also may reduce the initial
penalty target figure.
The effects of inflation and return on a dollar are smaller
over shorter periods of time. Consequently, the difference
between the after tax net present value of an alternative payment
and the total amount of the alternative payment decreases as the
time between the date of settlement and the date of the final
alternative payment decreases. If the violator in the example
could invest $500,000 in pollution control equipment in less
than 2 months after settlement, the net present value of the
investment would be $76,742 greater (See Exhibit 2).
For using the BEN model to calculate the after tax net
present value of the proposed alternative payment for this
example the data required are:
1. Case Name: Alternative Payment Example
2. Capital investment: 500000 1986 dollars
3. One-time nondepreciable expenditure: 0
4. Annual O&M expense: 7000 1985 dollars
5. Month of settlement: 4, 1986
6. Compliance date:
7. Penalty payment date:
12, 1987
12, 1987
I/ The Agency is never obligated to mitigate a civil penalty by
the full amount of the after tax net present value of an alter-
native payment project. For example/ EPA might mitigate a civil
penalty by only half of the after-tax net present value of the
project.
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EXHIBIT 1
OUTPUT QPTIGR 2
ALTERNATIVE PAYMENT EXAMPLE '. APRIL 16, 81986
A. PRESENT VALUE COST OF PURCHASING THE INITIAL
pni i IITTOM rnMTRnt FOIITPMFMT QM TIME
OPERATING IT THROUGHOUT ITS USEFUL LIFE
••«•
B. PRESENT VALUE COST OF ON-TIME PURCHASE AND
np TMTTTAI pnt LLITIQN CONTRQI
EQUIPMENT PLUS ALL FUTURE REPLACEMENTS
PRESENT VALUE COST OF DELAYED PURCHASE AND
OPERATION OF POLLUTION CONTROL EQUIPMENT
PLUS ALL FUTURE REPLACEMENTS ...-•-, * 299562
D. ECONOMIC DENEFIT OF A 2O MUNIH L"-.'_M»
A3 OF INITIAL DATE OF NONCOMPLIANCE
(EQUALS B MINUS C) * 5B62C
VI lg H'C'LiiiL^.M ' L. rrl-FIT QF A 2O MONTH DELAY
w£ Of 1'jr •••t.MALTY PAYMENT DATE, 2O MONTHS
AFTER THE INITIAL PATE QF NQNCOMPLI ANCE * 77252
THE ECONOMIC SAVINGS CALCULATION ABOVE
LJSFP TMF PHI I rmTMG VARIABLES*
USER 'SPECIFIED VALUES*
1.
2.
3.
4.
5.
6.
7.
CASE NAME* ALTERNATIVE PAYMENT EXAMPLE
INITIAL CAPITAL INVESTMENT » «
ONE-TIME NONDEPRECIABLE EXPENDITURE «
ANNUAL OltM EXPENSE* *
FIRST MONTH OF NONCOMPLIANCE*
COMPLIANCE DATE*
PENALTY PAYMENT DATE*
5OOOOO
*
7OOO
4,
12.
. 12,
1986
1986
1986
1987
1987
DOLLARS
O
DOLLARS
STANDARD VALUES..
8.
9.
11.
12.
13.
USEFUL t I FE OF POLLUTION CONTROL EQUIPMENT • •*
INVESTMENT TAX CREDIT. RATE * . - -•:
MARBfNAL. INCOME TAX RATE-*
ANNUAL INFLATION RATE-^.. "„•-. : . .
DISCOUNT RATE • \« .-«.-•.- w .••
AMOUNT OF LOW INTEREST FINANCING * t
15 YEARS
1O.CC 7.
50. • '/.
6.«. V.
18.00 •/
O
-------
EXHIBIT 2
OUTPUT OPTIGH 2
ALTERNATIVE
EXAMPLE
'Y.EtrT'Iii
•24, 1986
PRESENT VALUE COST OF PURCHASIN8rtHE INITIAL
POLLUTION CONTROL CQUIFI'lgKT OK Til 1C ftKP
OPERATING IT THROUGHOUT ITS USEFUL LIFE
303688
PRESENT VALUE COST OF ON-TIME PURCHASE AND
OPERATION OF INITIAL POLLUTION CONTROL
EQUIPMENT PLUS ALL FUTURE REPLACEMENTS
379682
PRESENT VALUE COST OF DELAYED PURCHASE AND
OPERATION OP POLLUTION CONTROL EQUIPMENT
PLUS ALL FUTURE REPLACEMENTS
——*-^«—i
ECONOMIC BENEFIT OF A 1 MONTH DELAY
AS OF INITIAL DATE OF HONCOMPLIANCE
(EQUALS B MINUS C>
3763O4
3373
1
AS OF THE PENALTY PAYMENT DATE, 1 MONTHS
t
i
i
*
->-
>->->-> THE ECONOMIC SAVINGS CALCULATION
ABOVE <-<-<-<-<-<-
! USER SPECIFIED VALUES
*
t
•t
*
n
a
•
»
m
m
M
*
1.
4* •
3.
3.
7.
••
9.
11.
13.
CASE NAME- ALTERNATIVE PAYMENT EXAMPLE
ONE-TIME NONDEPRECIABLE EXPENDITURE -
FIRST MONTH OF NONCOHPL I ANCE-
PENALTY PAYMENT- DATE^
STANDARD VALUES ' - - »
- . • . j . .•--..;
H^JACC^J^_^^.A£CM.^BC*i.^&AL^M^A&^^^^^«AOMiXBOk*^MCfiAACCtttfiHM
^%y5«ErTJcr^fcr»F^i^wi^^"^^ycc*Ti^Tw^^^soT^^^^**^ ^••w&« <^MI^
INVESTMENT TAX CREDIT RATE •
ANNUAL INFLATION RATE" '..:''' '
AMOUNT OF LOW INTEREST . FINANCING *^_t:: ";'
t 0
11, 1987
12, 1987
;// '.
•r- -
• '•" -'!': : •;• -
10.00 '/.
6. CO */.
* 0
a * " f i • 9 •? E ? • . s "•' " ' '
-------
-------
IV.C.13.
"Guidance on determining Violator's Ability to Pay a Civil Penalty", dated
December 16, 1986. See GM-56.
\\-
-------
-------
IV.C.14
"Addendum to the Clean Water Act Civil Penalty Policy for Administrative
Penalties", distributed August, 1987. (This document is reproduced at
III.B.9., this compendium).
-------
-------
IV.C.15,
"November 4, 1987 Congressional Testimony on Proposed Amendments to the
Clean Water Act", dated November 24, 1987. Includes DOJ and EPA Testimony
on "Environmental Improvement Projects".
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-------
} UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
/ WASHINGTON. D.C. 20460
NOV 24
MEMORANDUM
SU3JZCT: November 4, 1337, Congressional Testimony c:
Proposed Amendments to the Clean Water Act
FROM: Thomas L. Adams, Jr. • .\cr
Assistant Administrator for Enforcement
and Compliance Monitoring
TO: Regional Enforcement Contacts
Regional Counsels
Associate Enforcement Counsels ^
Director, Office of Compliance Analysis
and Program Operations
Director, Office of Criminal Enforcement
Attached are copies of Agency and Department of Justice
testimony on environmental improvement projects as used ir.
water enforcement case settlements. The testimony was giver.
at a November 4 hearing before the House Subcommittee on
Fisheries, wildlife Conservation, and the Environment.
Jonathan Z. Cannon, Deputy Assistant Administrator fcr
Enforcement and Compliance Monitoring - Civil, testified for
the Agency. Raymond 3. Ludwiszewski, Associate Deputy
Attorney General, testified for DOJ. Other parties who
testified were the Mayor of New Bedford, MA; a representative
from the California Environmental Trust; Patrick Parenteau,
Commissioner of the Vermont Department of Natural Resources
and former Regional Counsel for Region I; and Donald Stever,
law professor and former DOJ environmental enforcement
official.
-------
Also attached is a copy of proposed bill H.R. 3411 which
addresses environmental improvement projects. I hope you
find this material helpful.
Attachments
cc: Susan Lepow, OGC
Jim Elder, OWEP
Dave Davis, OWP
Tudor Davies, OMEP
Tai-Ming Chang, OCAPO
CECM-Water Attorneys
-------
STATEMENT OF
JONATHAN Z. CANNON
DEPUTY ASSISTANT ADMINISTRATOR FOR CIVIL ENFORCEMENT
OFFICE OF ENFORCEMENT AND COMPLIANCE MONITORING
U.S. ENVIRONMENTAL PROTECTION AGENCY
BEFORE THE
SUBCOMMITTEE ON FISHERIES, WILDLIFE CONSERVATION AND THE ENVIRONMEN'
OF THE
COMMITTEE ON MERCHANT MARINE AND FISHERIES
'J.S. HOUSE OF REPRESENTATIVES
WASHINGTON, D.C.
November 4, 1937
Good afternoon, Mr. Chairman and Members of che Subcooaictee.
It is a pleasure Co appear before you co discuss aspeccs of che
Agency's wacer enforcemenc program and H.R. 3411, now before
che Subcommittee. I am Jonathan Z. Cannon, Deputy Assistant
Adainiscracor for Civil Enforcemenc in Che Office of Enforceaent
and Compliance Monicoring (OECM) ac che Environmencal Protection
Agency. Seated beside me is Glenn L. Uncerberger, Associace
Enforcemenc Counsel for Wacer. Among other things, my office
is responsible for approving secclemencs on behalf of EPA for
civil enforcemenc casss Co ensure Chey supporc nacional enforce-
ment goals and policy before cransmiccing chem co che Department
of Juscice (DOJ) for final approval and lodging in courc. My
office vork« closely with che Department of Juscice and EPA's
Regiona,!' of flees Co encourage prompc case filings by DOJ and co
ensure proper resolucion of cases.
"More specifically, my responsibilicles under che Clean
Wacer Ace include nacional management of rIPA's Legal enforcement .
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-2-
prograa implementing Section 309(d) and Section 309(g). Those
sections authorize the Agency to bring judicial or administrative
enforcement actions seeking civil penalties against owners and
operators of facilities, both municipal and industrial, that
violate the Clean Water Act. My office also provides legal
•2 r.forceaent counsel to EPA program officials charged with
administering the Marine Protection, Research and Sanctuaries
Act (MPRSA), including Section 105(a) of that Act, which autho-
rizes the Agency to assess civil penalties adainiscratively
for violations of that statute. I will focus on the Clean
Water Act today, but the same general principles also apply to
the MPRSA.
•PA's Present Policies on "Environmental Improvement Projects"
As background for considering H.R. 3411, I wane to review
:he Agency's current policies for approving environoental
mitigation projects as part of settlement . agreements in judicial
or adainistrative enforce'ment actions. Many of the Agency's
enforceaer.t actions are settled without litigation or full
administrative penalty proceedings. The Agency developed tvo
civil penalty settlement policies to assist in treating the
regulated community fairly and consistently during settlement
* v x
negotiations and to ensure that settlements achieve a proper
deterrent iapact on potential violators. The Unifora Civil
Per. a 117 Policy (issued February 16, 1984) applies to all of
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-3-
the eaviroa«eaca 1 statutes che Agency enforces. This policy
provides * framework cor developing policy and guidance for
settleaent negociacioo3. The Clean' Water Ace Penalty Policy
(issued February 11, 1936) applies specifically Co settlements
of Clean Water Ace enforceaent actions. The cwo policies were
developed in consultation with the Department of Justice, which
strongly supports them.
Both policies contain provisions for considering "environ-
nental improvement projects" as part of a settlement agreement.
The Uniform Civil Penalty Policy calls these projects "alternative
payment projects," whi'le the Water Penalty Policy calls these
projects "mitigation projects." Both policies contain specific
criteria that the Agency applies to a defendant or respondent's
proposed environmental project to determine whether to accept
the project as part of the settlement agreement. I will focus
on the criteria in the Clean Water Act Penalty Policy that we
use to evaluate proposed mitigation projects during settlement
negotiations. There are six criteria. Comparable criteria
apply to settlements of EPA's administrative penalty actions
under the MPRSA pursuant to our Uniform Civil Penalty Policy.
First, mitigation projects -aust not significantly reduce
the deterrent effect of a settlement. Therefore, the Agency
policy establishes an expectation of a substantial up front
cash penalty to che U.S. Treasury as part of any settlement,
which sight also include a mitigation project. I cannot
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-4-
emphaslze coo itrongly chac any mitigation project Is only or.e
element of • settlement chac should include a requirement for a
cash penalty payment by a violator.
Second, Che project oust provide an environmencal benefit
in addlcion to the benefits of full compliance vich Che law.
For example, a proposal to upgrade a vastevaCer treatment plane
would not be acceptable as a mitigation pro'jecc If the upgrade
were required to meet permit limitations.
Third, the project should correct or reverse the environ-
mental hara caused by the violation. For example, a proposed
project to install equipment chat would result in a discharge
of pollutants significantly below the permit requirements and
thus reduce the pollutant load in the receiving waters might
be allowed if che effect of the'project also included a net
improvement in the quality of the receiving waters which were
affected by che violations.
Fourth, the Agency's evaluation of the effect the cost
of a mitigation project will have on an acceptable penalty
settlement aiaounc oust cake into account the tax consequences
D f the project Ch-at can reduce che decerrenc effect of the
enforcement action.' For .example, an investment in pollution
con t rol^'equipment provides tax deductions for de or ecia t ion .and
operation and ma int enance (O&M) costs. On occasion,' violators
seek : a x deductions for payments co environmental crust funds.
Part of the deterrent effect o.f a civil penalty is, chat it is
not rax deductible.
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- 5 -
other public relations benefits. Polluters have also displayed 2
natural eagerness to avail themselves of the potentially
significant tax deductions possibly associated with credit
projects, when violators take deductions for these "projects",
they essentially force the United States' taxpayer to subsidize
their unlawful pollution. Finally, an unrestrained statutory
endorsement of environmental projects as substitutes for
penalties may encourage the courts sua sponte to order
undesirable credit projects, even where the expert technical
agency, the Environmental Protection Agency, has rejected such
projects as an appropriate component of a settlement agreement.
For these reasons, the extensive use of-credit projects
may have the damaging effect of undercutting the civil
enforcement program, rather than supporting it. In light of
these adverse effects, any mitigation of statutory penalties
through credit projects must be carefully structured to preserve
and enhance the operation of an effective judicial enforcement
program and support the four basic goals discussed above.
The February 11, 1986, Clean Water Act civil penalty
policy, issued by the Environmental Protection Agency (EPA) after
extensive review and coordination with the Department of Justice,
carefully delineates criteria to be used in considering
'environmental improvement projects* as part of a settlement
agreement. This policy is working. To date, according to
information provided by the EPA, approximately 15% of our
judicially-approved CWA settlements with publicly-owned treatment
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- 6 -
works contain some kind of environmental improvement project.
Any settlement which includes a mitigation project must have a
substantial upfront monetary payment to the United States
Treasury. The following discussion highlights the other criteria
used by the EPA and the Department in determining whether to
accept a credit project as part of a settlement agreement:
1. Mitigation of the penalty amount based on the
defendant's activity must not detract significantly from the
deterrent effect of the settlement as a whole. The Department of
Justice is especially concerned that the expanded use of credit
projects will undermine the deterrent impact of our environmental
enforcement efforts. To avoid this, these projects should be the
exception, rather than the rule. Moreover, any settlement
including a credit project must also contain a substantial cash
penalty component payable to the United States Treasury.
2. The credit project should closely address the
environmental effects of the defendant's violations. The goal of
all enforcement efforts is to prevent, remedy, and punish
environmental pollution. Credit projects, to serve the ultimate
enforcement objectives, should address the environmental risk or
harm resulting from the defendant's violations.
3. The polluter's cost of undertaking the activity,
taking into account any tax benefits that may accrue, must be
commensurate, with the degree of mitigation. Defendants often
exploit tax benefits, corporate filing benefits and other
advantages from credit projects. To maintain the proper
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- 7 -
incentives, the violator's real costs, rather than the value of
the project, must be considered.
4. The activity must demonstrate a good-faith
commitment to statutory compliance. A defendant's commitment to
future compliance is extremely relevant to a civil penalty
calculation. It is appropriate to consider the type of
mitigation project, the initiative of the defendant in
identifying and commencing the project, and the environmental
benefit provided by the project as demonstrating the defendant's
commitment.
5. The activity must be initiated in addition to all
regulatory compliance obligations. That is, the credit project
must provide a benefit to the environment beyond those provided
by full compliance with the law, and cannot be substituted for
full compliance.
6. Under the CWA, the Department cannot accept, and
the court cannot approve, provisions in a consent decree that are
beyond the power of the court to order.
These criteria provide for a fair and equitable
assessment of an environment improvement project in the context
of the settlement decision.
II. COMMENTS ON H.R. 3411
First and foremost, the amendment is not necessary.
While civil and criminal penalties and injunctive relief are the
only presently authorized remedies under the CWA, the United .
States Attorney General, in settling claims for penalties, has
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- 8 -
the inherent authority to consider a polluter's willingness and
commitment to undertake activities that mitigate the harm caused
by his violations. This authority is derived from the broad
discretion vested in the Attorney General to settle and
compromise litigation involving the United states. -I/ Since this
authority is already being used in appropriate situations, the
amendment may have the undesirable effect of fostering a much
greater number of credit project proposals, many of which would
prove to be unacceptable. Consideration of these proposals nay
delay settlement or prosecution of the government's case. In our
cases, delay only helps the polluter at the expense of the
environment. Moreover, the regulated community understands and
abides by the existing civil penalty policy — the "ground
rules." This amendment will upset the existing status quo and
provide incentives for violators to avoid civil penalties and
engage in protracted negotiation and litigation until the new
ground rules are again established.
At this point, let me clarify my earlier statement on
the Attorney General's legal authority to use mitigation under
the Clean Water Act. As indicated earlier, the CWA and MPRSA do
not clearly authorize the use of credit projects as substitution
for civil penalties. However, the government has broad
discretion to mitigate civil penalties and permits this
^ The Attorney General's settlement authority is both inherent
in the creation of his office, eg.. Confiscation Cases. 74 U.S.
at 457-459, and derived from the client agencies' authority to
settle cases. United States v. Newport News Shipbuilding. 571
F.2d 1283, 1287 (4th Cir.), cert, denied. 439 U.S. 875 (1978).
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- 9 -
mitigation on the basis of a defendant's environmentally
beneficial activities. Such authority must be exercised
consistent with the terms of the Miscellaneous Fees Act, 31
U.S.C. § 3302, which provides that money received for the
government must be deposited in the United States Treasury. We
have interpreted this section to mean that the government is
constrained in its ability to accept direct substitutes for civil
penalties, but the Miscellaneous Fees Act does not entirely
eliminate the authority of the government to mitigate the civil
penalty based on an environmentally beneficial credit project.
Thus, the United States currently has the legal authority to
accept "credit projects" in certain circumstances as mitigation
of civil penalties.
Direct substitution of a-project for civil penalties,
as well as unlimited credit projects, raise difficult enforcement
issues. First, the amendment is unclear with respect to the
Department's role in the approval of these credit projects under
the amended section 309(d). As currently drafted, it has no role
for the Attorney General. Yet, the Administrator or the
Secretary alone cannot accept credit projects in settlement of
federal «nforcement actions without the involvement of the
Attorney General, since ultimately the Attorney General must
approve all consent decrees under the CWA to which the United
States is a party. Therefore, the amendment should reflect the
Attorney General's involvement.
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- 10 -
Second, section 4(b) is most troubling as it raises the
specter of judicially-imposed environmental improvement projects
in situations where the EPA and the Department believe such
projects are inappropriate. The courts and the defendants
shouldn't'be in business of selecting environmental improvement
projects. That should be left to the Congress and the EPA.
If Congress does not want these monetary recoveries to go into
the United States Treasury, then it is incumbent upon Congress to
establish a procedure that gives the Administrator some guidance
in determining how and where the monies should be spent. A
system that puts the polluter in the driver's seat unwisely
rewards the outlaw for his illegal activity.
In conclusion, achieving compliance with environr.er.tal
requirements in the first instance is the goal of our enforcener.t
program. Any amendment that provides incentives to the regulated
community to avoid compliance should be rejected. We all share
the same goals — quick, effective, and complete compliance with
the nation's environmental laws — the "only question is the best
means to reach them.
The Department of Justice looks forward to working
closely with Members of this Subcommittee and the Environmental
Protection Agency in this important area. I would be pleased to
answer any questions you might have.
-------
STATEMENT OF
RAYMOND B. LUDWISZEWSKI
ASSOCIATE DEPUTY ATTORNEY GENERAL
U.S. DEPARTMENT OF JUSTICE
BEFORE THE
SUBCOMMITTEE ON FISHERIES, WILDLIFE CONSERVATION,
AND THE ENVIRONMENT
OF THE
COMMITTEE ON MERCHANT MARINE AND FISHERIES
U.S. HOUSE OF REPRESENTATIVES
NOVEMBER 4, 1987
Mr. Chairman and Members of the Subcommittee:
On behalf of the Department of Justice, I am pleased to
have this opportunity to present our views on issues related to
H.R. 3411 and "environmental improvement projects" under the
Clean Water Act (CWA) and the Marine Protection, Research and
Sanctuaries Act (MPRSA). I am Raymond B. Ludwiszewski, Associate
Deputy Attorney General, from the Department of Justice. For a
period of two years, I was Special Counsel to the Assistant
Attorney General, in the Land and Natural Resources Division. As
Special Counsel, I was involved in all aspects of our civil
. environmental enforcement procram, including enforcement under
the CWA and the MPRSA. I am committed to helping the Congress
work through these important issues and achieving our mutually
desired goals of a forceful environmental protection program. I
wish to stress at the very outset that the Justice Department,
and the Lands Division in particular, is strongly committed to
achieving the most effective environmental enforcement program
possible. My testimony today will focus on the current federal
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- 2 -
enforcement program under the CWA and the MPRSA, and the effects
this amendment would have on those efforts.
In the last six years we have successfully prosecuted
more people and corporations for criminal violations of the
environmental laws than ever before, obtaining over 262 guilty
pleas and convictions since 1981. The prosecutions have resulted
in over $6 million in fines and over 175 years in jail sentences.
Since 1981, we have also filed more than 1400 civil environmental
enforcement suits — more than ever before.
Specifically, with respect to the Clean Water Act, we
have initiated over 225 cases and concluded more that 197 since
FY 1985. Also, since FY 1985, we have recovered approximately
$15 million in civil penalties paid to the United States Treasu^
under the Clean Water Act.
These civil penalties play a critical role in the
Government's strong enforcement program. They are the foundation
and the cement of the private compliance structure. It is often
the fear of these penalties (which can be as high as $25,000 per
day per violation) that discourages potential violators from
polluting the environment. The imposition of civil penalties
against the polluters of our nation's waterways, combined with
the perseverance and aggressiveness that the EPA, the States, and
the Department of Justice bring to bear on these problems, wakes
for a most effective and efficient enforcement program.
I. CIVIL PENALTYPOLICY
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- 3 -
Enforcement actions initiated under the Clean water Act
use the Clean Water Act Civil Penalty Policy as the basic
framework to calculate penalties which the United States would
seek to recover in settlement in these actions. This policy,
most recently amended in February 1986, reflects the four basic
goals of an effective civil penalty enforcement program: (l)_
penalties should disgorge the economic benefits that the violator
obtained through non-compliance; (2) penalties should act to
deter non-compliance, not just for the individual violator
subject to the penalty, but for the regulated community as a
whole; (3) penalties should be applied throughout the nation
consistently to provide fair and equitable treatment to all in
the regulated community; and (4) penalties should promote swift
resolution of environmental problems and enforcement actions by
being rationally based and easily discernable to the regulated
community.
At this point, I think it would be helpful to clear up
any confusion over the scope of the United States' existing
authority to accept 'credit projects" in settlement of
enforcement cases. The CWA and the MPRSA do not clearly
authoriz^ the use of credit projects as substitution for civil
penalties. Nor do I believe that any such endorsement is
necessary. The Acts do, however, allow the government to
exercise its historically-recognized discretion to mitigate civil
penalties .where appropriate and permit this mitigation to be
based on a defendant's environmentally beneficial activities.
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- 4 -
Thus, the United States already has the legal authority to accept
"environmental improvement projects* in certain circumstances as
mitigation of civil penalties.
Where exercising our discretion to mitigate penalties
because of environmentally beneficial activities by the
defendant, the Department and EPA proceed with caution and
attempt to keep the overarching interests of our enforcement
programs in mind. In our view, the unfettered use of these
projects would present serious potential dangers to the overall
efficacy of the Department's civil enforcement program. First,
such a practice circumvents the Congressional appropriations
process. Second, with "credit projects", the polluter is ofte^
in the position of ultimately determining the need for, the
appropriateness of, and the proper funding level for the specific
project. This approach yields the anomalous result of having the
violator determine the type of punishment it will suffer for
breaking the law. Third, the use of credit projects, especially
without clear standards, makes it more difficult to treat
similarly-situated defendants in a consistent fashion. They lack
the easy comparability of penalty assessments. Accordingly,
settlement and resolution of the litigation may be prolonged and
become more difficult. Fourth, the linchpin of the enforcement
program — voluntary compliance resulting fron the deterrent
effects of federal enforcement— may be seriously undermined by
allowing the violator falsely to cast the image of a "responsibly
environmental actor" or "model citizen", .and by affording him
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-5-
Pifch, « proposed project must show che defendanc'3 good
faith coanftaent to statutory compliance and must be designed
primarily Co benefit the environment rather than the defendant.
"or example, adding additional treataent capacity to a waste-
water treataent plant beyond what La required to achieve permit
compliance may provide more production capacity for the defer.dan:
without generating additional water quality benefits for the
local community as a whole.
Sixth, our policy is that the Agency cannot accept
provisions in judicial Consent Decrees or administrative Consent
Agreements that are beyond the equitable power of a court to »
order.
EPA uses the criteria in the 1986 Water Penalty Policy
for evaluating proposed mitigation projects when negotiating
settlements in enforcement actions brought under the authority
of the Clean Water Act relating to the National Pollutant
Discharge Elimination System (NPDES) program. Where the United
States has, on occasion, accepted mitigation projects in recent
years, mast have been associated with settlements of enforcement
actions against municipalities for Clean Water Act violations
at publicly owned wastewater treataent works (POTWs). We have
accepted" fever mitigation projects in settlements with industrial
dischargers.
EPA issued 'the National Municipal Policy in January 198-i
calling for expeditious compliance by POTWs with CJ.ean Water
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Acc polludon control r equi r eaent 9 . From chat tiae through
June of thia year, the United States has filed 73 actions
against POTVs. We have concluded 46 of those actions during
that time period. Seven of those concluded cases (about 15
percent) included mitigation projects. Examples of these
projects Include a 5100,000 stream restoration and a 3625,000
investment in pollution control equipment to reduce degradation
of Lake Erie.
There are a number of enforcement policy reasons why EPA
applies the criteria in our penalty policies in determining the
acceptability of a mitigation project in settlement of an
enforcement case. The most important reason is to maximize the
Inpact of the enforcement case in deterring future violations
by the defendant or other members of the regulated community.
Consistent with the goals of the statutes the Agency administers,
EPA's enforcement program not only seeks to abate existing
violations but also takes steps to prevent future violations.
To the extent that undertaking an environmental improvement
project has some bearing on a defendant's good faith, and thus
serves as son* justification for accepting a lover cash penalty,
settlement •till sfiould leave the defendant worse off economi-
cally .fhan If it had complied in the first instance. Thus, we
are not receptive to proposals In which a defendant seeks to perfor:
projects which the defendant would be required to do by law or
would otherwise choose to do on its own, or to perform projects
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-7-
whose benefits accrue co che defendant racher chan the puoiic
at large. Further, we are noc receptive co proposals, however
beneficial che projecc, chac allow a defendanc co avoid civil
penalties entirely, nor do we believe chac ic is appropriate
for a defendanc co receive mitigated penalcies and co benefic
froa che favorable publicity or organizacional goodwill chac
the defendanc might gain from performing che mitigation projects
it-proposes, particularly wnen ic was defendant's probable iac.<
of r es po ns ib il t cy on environmental tnaccers which engendered the
enforcement action in che first place.
There are ocher policy reasons for being careful abouc che'j
kinds of mitigation projects which che government should accept
in an enforcement case, specifically:
1. Some proposed mitigation projects raise serious
questions about whether the projecc actually will
produce any direcc or indirect environmenatally
beneficial result;
2. Accepting a proposed credit project creates a
resource burden on EPA co monitor and enforce
performance of che projecc; and
3. Certain proposed projeccs aay raise fairness or
propriecy questions (e.g., agreeing co payments co
one designated cruse fund or organizacion as
opposed co another).
Even wich th-ese reservations, I believe chac che Agency
has developed a policy co ensure chat any. environmental
improvement projects proposed during settleaenc negociacions
are given fair consideration and evaluated in ceras of how che
projeccs will further the intent of the Clean Water Ace.
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ObservacioB* on H.R. 34 I 1
la Ch« context of our present policies on environmental
improvement projects, I have reviewed H.R. 3411. It appears
that we are already fulfilling the objectives of H.R. 3411
under the existing Agency penalty policies that I earlier
described by giving consideration to proposed mitigation projects
in appropriate situations. I understand the intent of H.R. 3411
is to provide legal support for the use of environmental improve-
aent projects as part of civil enforcement settlements. We are
already using our policies in the judicial context. Mitigation
projects also are included as part of settlements of judicial
actions for illegal dredge and fill activities, and are available
in settlement of EPA's penalty claims under MPRSA Sl05(a),
which authorizes the Administrator to mitigate penalties "for
good cause shown." The relationship of H.R. 3411 to administra-
tive penalty litigation under §309(g) of the Clean Water Act
would require further study if the bill were enacted, particu-
larly in light of Congress' intent that administrative penalty
proceedings serve as an expeditious vehicle for civil penalty
as ses smenc .
1C appears to'us that H.R. 3411 would not require any signi-
ficant change to our existing reasoned approach to evaluating
environmental -Improvement projects. Therefore, we believe
H.R. 3411 is not necessary. Should the Subcommittee proceed
with this legislation,, we have a 5 .aw further observations
you may wish to consider. ' ' • '
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1« You may wish to clarify whether H.R. 3411 gives
a court the authority unilaterally to order a
defendant .to perform an environmental improvement
project, or simply to ratify the agreement between
the parties to the action. Our experience suggests
that these projects are moat likely to succeed if
defendants, rather than EPA or a court, are
clearly made responsible both fo-r devising and
Implementing an acceptable project.
2. You nay wish to provide explicit authority for
the government to enforce compliance with the
terms of an environmental improvement project
to ensure that the intended results of the
initial enforcement action actually are achieved.
3. You may wish to ensure that SPA retains the
authority to determine in its discretion what
environmental Improvement projects are acceptable
so as to avoid litigation over that issue In
Individual cases. Our concern is the effect on >
the efficiency of our national enforcement program •
if defendants could propose mitigation projects
directly to a court without approval by the
plaintiffs.
We would be happy to provide more specific language on these
points if it would help the Subcommittee in its deliberations.
In closing, I want to assure the Subcommittee that the
Agency supports the use of appropriate environmental Improvement
projects which are consistent with our overall enforcement goals
as part of selected case settlements. At the same time, we
believe ic appropriate to continue to rely on the up front cash
penalty Co Che U.S. Treasury as the principal deterrent La
envlronaencal cases, including those settled and those tried.
Again, thank you for this opportunity to testify. I
would be happy to respond to any questions the Subcommittee
may have.
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LNITED STATES ENV'RONMENT\L PROTECTION AC.EM \
* ASHINGTOV D.C. :0460
MEMORANDUM
SUBJECT: Use of Stipulated Penalties in EPA Settlement
Agreements
FROM: • James M. StrocW
Assistant Administrator
TO: Addressees
Attached is final guidance on the use of stipulated
penalties in EPA settlement agreements. This guidance was
developed with the help of a workgroup, which consisted of
representatives from other Headquarters offices, Regional Counsel
offices, and the Department of Justice. It also reflects
comments made on a draft of the guidance which was circulated for
review on August 16, 1989.
Several commenters made procedural suggestions such as
recommending an expedited referral process for referring cases
for collection of stipulated penalties to OOJ, requesting more
specifics on the role of OECM, ORC, and DOJ in decisions to
compromise stipulated penalties, and requesting specific regional
procedures for demanding and compromising stipulated penalties.
All these issues will be addressed in the Manual on Monitoring
and Enforcing Administrative and Judicial Orders, to be issued in
final form soon.
Several commenters objected to the language in section I of
the guidance cautioning against attaching stipulated penalties to
violations of the consent agreement which are also violations of
a statute or regulation. This language has been modified in the
final verq£0B. The guidance now states that agency attorneys
should coMi
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-2-
Several commenters also disagreed with the language in
section IV discouraging caps. This language has been revised to
reflect these comments. Only caps on the amount of penalties are
now discouraged. Caps on the number of days for which stipulated
penalties can accrue combined with a reservation of all>
enforcement responses available to the government for violation
of the consent agreement eliminate the problems associated with
caps on penalty amounts and are now mentioned as an option to
consider.
One commenter asked that the guidance address the practice
of forgiving stipulated penalties for violation of interim
milestones where the final deadline for compliance is met. It is
now addressed in section VI of the guidance and allowed in
situations where minimal environmental degradation results from
missing the interim milestones and the accrued penalties are kept
in escrow until compliance is achieved.
Two commenters objected to the language in the first
paragraph regarding the applicabilty of the guidance to
administrative cases. This language has not been changed because
in fact the agency does not have legal authority to assess
stipulated penalties in all administrative cases. The legal
determination of whether the government has authority to assess
stipulated penalties in a given administrative case is a
threshold issue to be determined by ORC, OECM, and DOJ based on ,
their legal expertise concerning the particular statute involved.
Finally, one commenter suggested that the language in
section VI restricting compromise of stipulated penalties to
"rare, unforeseen circumstances'* was too strong. The intent of
this section and the guidance in general is that stipulated
penalties should be set at levels and attached to provisions that
the government is ready to vigorously enforce dollar for dollar
except in "rare, unforeseen circumstances.1* Stipulated penalties
should never be set at levels higher than we intend to enforce or
attached to provisions we are not prepared to enforce. This
practice ••nda the regulated community the wrong message, namely
that accrued stipulated penalties are only a starting point or
opening offer and are subject to negotiation.
If you have any questions concerning this guidance, please
contact Elise Hoerath of the Air Enforcement Division of OECM,
FTS 382-4577.
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Attachment
Addressees:
Regional Administrators
Regions I-X
Deputy Regional Administrators
Regions I-X
Regional Counsels
Regions I-X
Associate Enforcement Counsels
Headquarters Enforcement Office Directors
Mary T. Smith, Acting Director
Field Operations and Support Division
Office of Mobile Sources
E. Donald Elliott
General Counsel
David Buente, Chief
Environmental Enforcement Section
U.S. Department of Justice
Workgroup Members
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IV.C.16,
"GUIDANCE ON PENALTY CALCULATIONS FOR POTW FAILURE TO IMPLEMENT APPROVED
LOCAL PRETREATMENT PROGRAMS", dated December 22, 1988. Displayed at
VLB.30.
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IV.C.17
"Guidance on the Distinction Among Pleading, Negotiating and litigating
Civil Penalties for Enforcement Cases under the Clean Water Act", dated
January 19,1989.
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3 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
/ WASHINGTON. O.C. 20460
JAN | 9
MEMORANDUM
Guidance on the Distinctions Among Pleading,
Negotiating, and Litigating Civil Penalties
for Enforcement Cases Under the Clean Water Act
Edward E.
Deputy Assistant^TWtfiinistrator' for
Civil Enforcement, OECM
SUBJECT:
FROM:
-'ly1 'James R. Elder, Director / /^''
Office of Water Enforcement
and Permits, OW
David G. Davis, Dir
Office of Wetlands Protection, OW
TO: Deputy Regional Administrators
Regional Counsels
Water Management Division Directors
Environmental Services Division Directors,
Regions III and VI
Assistant Regional Administrator for Policy
and Management, Region VII
Attached you will find a major guidance on the subject of
how to develop CWA civil penalty demands under many different
circumstances. We have found a certain amount of confusion in
this area, with the creation of new administrative remedies and
subsequent use of the CWA penalty settlement policy in
inappropriate situations.
Upon circulation of a draft of this guidance to NPDES
contacts, a few commenters noted that they believed the CWA
penalty policy should be applied in setting penalty amounts in
administrative complaints, and that the CWA penalty policy should
also be explained to and considered by administrative judges in
their assessment of penalties. We understand this approach,
which the Agency does follow in other enforcement programs, but
have decided to follow the majority sentiment that we place
ourselves in a stronger negotiating position by pleading for
penalties without direct reference to our bottom-line settlement
calculations and retaining the option of litigating for civil .
penalties well in excess of settlement policy amounts. (We have
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found that administrative judges more often lower a penalty
policy amount requested in an administrative complaint than
maintain it, even though in these other programs judges are to
take such policies into account when assessing civil penalties
under 40 C.F.R. §22.27[b].)
We also received a number of comments noting some ambiguity
in the draft's discussion of how high a penalty to plead for in
an administrative complaint. The final guidance clarifies that
we cannot plead for a penalty greater than we could justify to an
administrative judge under the relevant statutory assessment
factors, but that in many, if not most cases, this amount will be
the same as the statutory maximum "cap."
Because the points discussed in this guidance apply in
principle equally to the §404 program, we have widened the scope
of the guidance to encompass wetlands judicial and administrative
enforcement cases.
Attachments
cc: Regional Counsel Water Branch Chiefs
Regional Water Management Division
Compliance Branch Chiefs
Regional Wetlands Coordinators
OECM-Water Attorneys
Susan Lepow, OGC
David Buente, DOJ
Margaret Strand, DOJ
Administrative Law Judges
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CLEAN WATER ACT
DISTINCTIONS AMONG PLEADING. NEGOTIATING AND
LITIGATING CIVIL PENALTIES FOR ENFORCEMENT CASES
UNITED STATES
ENVIRONMENTAL PROTECTION AGENCY
Effective Date:
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G
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Clean Water Act
Distinctions Among Pleading. Negotiating
Litigating Civil Penalties for Enforcement
This policy provides guidance on some of the distinctions
for determining appropriate penalty amounts to pursue at three
different stages of a Clean Water Act enforcement action —
pleading for penalties in a judicial or administrative complaint,
settling penalty claims in a judicial or administrative action,
and litigating for penalties in a legal proceeding before a judge
or hearing officer where a case does not settle.
»
Specifically, this guidance emphasizes the following points:
1. EPA's Clean Water Act civil penalty policy governs only
the bottom-line dollar amount which EPA will accept in settlement
of civil penalty claims in a judicial or administrative NPDES
enforcement case.
2. The CWA civil penalty policy is not intended to be used
to calculate either the amount which EPA requests a judge or a
hearing officer to assess in a judicial or administrative
complaint, or the amount which EPA argues a judge or hearing
officer should assess in a litigated proceeding where a case does
not settle. Those amounts will be significantly higher than the
CWA penalty policy indicates for settlement purposes.
3. In litigating a claim for CWA civil penalties either
judicially or administratively, counsel representing EPA
typically should argue for assessment of a penalty amount which
is well above the internal bottom- line settlement amount derived
through application of the CWA penalty policy.
4. Counsel should support its arguments for the "litigation
amount" based upon reasoned application of the statutory penalty
assessment criteria and citation of precedent, not through
arithmetic calculations derived according to the CWA penalty
settlement policy.
5. In judicial complaints, as has been the practice to
date, th* United States typically will continue to request civil
penalties of "up to $10,000 per day of such violation for
violations occurring before Februarys, 1987, and up to $25,000
per day per violation for violations occurring thereafter."
6. In an administrative penalty complaint initiating a
Class I or Class II proceeding, SPA enforcement officials should
request assessment of a penalty amount which is:
a) Within statutory ceilings;
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b) Justifiable based on the statutory penalty
assessment criteria of CWA §309(g)(3); and,
c) Set at a level which will facilitate negotiation of
an appropriate settlement amount and recovery of an
appropriate amount through litigation if the case does
not settle (since we cannot litigate for a higher
figure than we request in the administrative•
complaint).
Application of these principles should, among other things,
help EPA obtain adequate CWA civil penalty judgments if judicial
or administrative cases do not settle. At the same time, they
will help preserve EPA's leverage to obtain satisfactory civil
penalties through settlement of these enforcement actions.
Effect of Guidance
To the extent there may be any conflict with existing Agency
CWA policy, this guidance supersedes any such policy regarding
the pleading, negotiating, or litigating of Clean Water Act civil
penalties in NPDES and 8404 judicial and administrative
enforcement cases. This guidance does not apply to cases brought
under §311 of the Clean Water Act. This guidance does not apply
to CWA administrative or judicial enforcement cases in which a
complaint or equivalent document has been served, but shall apply
to every case initiated after the date of this guidance.
Pleading Civil Penalties
An administrative compla:
describes the Agency*s case, just as a complaint in federal
An administrative complaint typically only opens and
These are sometimes titled per the August 28, 1987,
guidance as "Administrative Complaint, Findings of Violation,
Notice of Proposed Assessment of a Civil Penalty, and Notice of
Opportunity to Receive a Hearing Thereon." In order to avoid
confusion over the role of the complaint in an administrative
penalty action, Regional enforcement officers have the discretion
to modify the caption of the §309(g) pleading to read
"Administrative Complaint."
Although the longer caption accurately recites the statutory
functions the Agency implements in an enforcement action, that
title may contribute to the existing confusion over the
particular role we play as Agency prosecutors initiating a case.
A change in caption will more accurately describe to the general
public our action, which is often described in press releases as _
the actual imposition of a fine.
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District Court opens a judicial enforcement case. To the extent
possible, we intend to treat administrative and judicial
enforcement complaints the same, both procedurally
and substantively.
It is Agency and Department of Justice practice in civil
judicial cases to paraphrase the Clean Water Act in pleading for
penalties. At the present time, our Prayers for Relief typically
include the request for "$10,000 per day of such violation before
February 4, 1987, and $25,000 per day per violation thereafter."
This formulation has worked well and will continue as our usual
judicial policy. At the outset of a case, the government often
does not have complete information on the number or extent of
violations, but as a litigant, it preserves its rights by
pleading for the statutory maximum penalty by using this
phrasing.
Similarly, EPA's interests as a plaintiff in an
administrative penalty complaint are best served by pleading for
an administrative penalty which is high enough to facilitate
negotiation of a settlement which is based on the CWA penalty
policy for settlements or an approved 9404 settlement amount.
Moreover, the penalty amount pled in the administrative complaint
also must be high enough to permit the Agency to obtain an
appropriate penalty under statutory assessment criteria if the
case must be litigated.
In many cases, it will be necessary to name the statutory
maximum amount (i.e., $25,000 for Class I cases and $125,000 for
Class II cases) in the administrative complaint to preserve EPA's
ability to negotiate and litigate for as high a penalty as is
possible under the facts of the case. Nevertheless, EPA Regions
have discretion to plead for a lesser amount by weighing other
case-by-case considerations such as what amount is likely to
produce an adequate settlement, as well as a duty to consider
what amount, taking into account the statutory penalty factors,
is supported by the facts.
To ensure that CWA administrative complaints comply with the
statute and present Class II rules of practice by explaining the
basis for the penalty sought, Agency water enforcement staff are
to follow the August 27, 1987, guidance by pleading:
For reasons peculiar to the present administrative
penalty process, EPA staff should not use this formula in
administrative complaints, but. instead request a specific dollar
amount (as more precisely described below). In case of a
default, using a specific.dollar amount in the complaint will
result in a more enforceable penalty assessment.
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The> proposed penalty amount was determined
by EPA after taking into account the nature,
circumstances, extent and gravity of the violation
or violations, and Respondent's prior compliance
history, degree of culpability for the cited
violations, any economic benefit accruing to
Respondent by virtue of the violations, and
Respondent's ability to pay the proposed penalty,
all factors identified at Section 309(g)(3) of
the Act, 33 U.S.C. §1319(g)(3).
This statement should satisfy the requirement of 40 C.F.R.
§22.14(a)(5) that "Each complaint for the assessment of a civil
penalty shall include . . . [a] statement explaining the
reasoning behind the proposed penalty." The Agency staff which
drafts the administrative complaint in fact should consider the
statutory penalty factors. This consideration satisfies the
requirements of 1309(g)(3) of the Act, in case the respondent
defaults and the requested Class II penalty becomes an
assessment. In this context, EPA will best preserve its
negotiation and litigation position by pleading for a civil
penalty based on the statutory penalty factors and resolving all
discretion in favor of the highest defensible penalty amounts.
The facts supporting the reasoning — but not itemized arithmetic
calculations — underlying the requested penalty (e.g., facts
showing extent and history of violations, environmental impact,
economic benefit, or good faith) should be incorporated in the
case file which becomes part of the administrative record. These
materials will fora the basis for EPA penalty arguments before an
Agency judge if the matter is litigated4 and will form part of
the necessary administrative record to support the assessment of
the proposed civil penalty if the respondent defaults and the
proposed penalty becomes final through operation of law.
In the event that an administrative judge in a Class II
proceeding requires under 40 C.F.R. §22.14(a)(5) more information
from EPA than the recitation of the statutory penalty factors,
Agency enforcement personnel should provide those elements of the
Under the present default procedures for Class II
penalties (see 40 C.F.R. §22.17), the administrative complaint
can become an. assessable order without the intercession of an
administrative law judge.
4 The materials are not directly applicable, however, to
.settlement negotiations, which are governed by the methodology of
.the CWA penalty policy. See discussion below.
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case file which support the penalty pleading based upon the
statutory factors in |309(g)(3).
This analysis to support EPA's administrative penalty
pleading based on the statutory penalty assessment factors should
not be derived by applying the Clean Water Act penalty policy,
which EPA uses specifically for determining appropriate penalty
settlement amounts for NPDES cases. Unlike other Agency
enforcement programs, such as FIFRA or TSCA, which operate under
penalty policies that control Agency administrative'pleading
practices, the NPDES program's penalty policy does not encompass
how to plead administrative penalty complaints. The Agency's
settlement position, although based on concepts similar to the
Agency's or a district court's assessment criteria, almost always
will differ from (and presumably will be less than) the figure or
formulation requested in a complaint. These two calculations we
make in an administrative case serve entirely different purposes,
and should not be confused.
Negotiating Civil Penalty Settlements
The February 11, 1986, Clean Water Act penalty policy, aa
amended for administrative penalty cases in the August 18, 1987
guidance, governs Agency negotiators in settling both
administrative and judicial NPDES enforcement cases. The
principles of the policy and its use are well known, and we will
not repeat them here. We believe this policy has succeeded both
in raising Agency penalty settlements consistent with the policy
and goals of deterrence and providing incentives for quick
correction of violations, and in achieving a greater national
consistency. Agency negotiators should continue using this
policy in all NPDES settlements. Similarly, Agency negotiators
should continue to use approved bottom-line settlement amounts in
wetlands cases.
If the request comes at the outset of the administrative
enforcement action, before the parties have exchanged information
or even before the respondent has answered the complaint, Agency
prosecutors often will not possess complete information on some
relevant issues. Such an incomplete information base is usual
and normally sufficient for pleading and charging purposes, but
may be of limited use to an administrative judge making decisions
during contested litigation. Under these circumstances,
enforcement staff should consider whether it is advantageous .to
EPA to urge the judge to delay the inquiry until a later stage in
the litigation when all available information can be considered.
See discussion below on Litigating Penalties.
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Litigating Civil Penalties
When EPA or DOJ attorneys provide written or oral arguments
to a federal District Court judge or an administrative judge on
the issue of an appropriate civil penalty, they are not governed
by the calculation methodology of the 1986 Clean Water Act
penalty policy or the 1987 addendum. The 1986 policy itself
notes:
In those cases which proceed to trial, the
government should seek a penalty higher than
that for which the government was willing to
settle, reflecting considerations such as
continuing noncompliance and the extra burden
placed upon the government by protracted
litigation.
CWA Penalty Policy at p.2. It is inherent to the concept of
settlement negotiations that respondents will risk a higher civil
penalty in the event settlement talks fall through. Without this
leverage, defendants or respondents will not have strong
incentive to settle on terms acceptable to the government under
the penalty policy. Agency negotiators then would either have to
agree to civil penalties lower than those presently being
attained, or spend a lot more time litigating cases that are
currently being settled. In order to promote settlements, it is
necessary to restrict the scope of the penalty policy and its
specific calculation methodology to settlements alone.
Government litigators are to argue for the highest civil
penalty appropriate under the law, considering the applicable
statutory factors, our ability to prove the allegations in the
These are, for judicial actions,
"the seriousness of the violation or violations, the
economic benefit (if any) resulting from the violation,
any history of such violations, any good faith efforts
to comply with the applicable requirements, the
economic impact of the penalty on the violator, and
such other matters as justice may require."
CWA § 309(d). The virtually identical statutory factors in
administrative enforcement proceedings are
"the nature, circumstances, extent and gravity of the
violation, or violations, and, with respect to the
violator, ability to pay, any prior history of such
violations, the degree of culpability, economic benefit
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complaint/ and whatever financial burdens may be placed upon the
government by continuing litigation.
Government litigators must provide legal arguments and may
introduce testimony or other evidence supporting facts related to
the application of statutory penalty criteria to a violator's
conduct to advance EPA's claims for civil penalties. We should
draw on favorable civil penalty precedents, such as Chesapeake
Bay Foundation v. Gwaltnev of Smithfield. 611 F. Supp. 1542
(E.D.Va. 1985), aff., 791 F.2d 304 (4th Cir. 1986), rev. on other
grounds and remanded, 108 S.Ct. 376 (1987) (for the total amount
assessed), sierra Club v. simkins Industries. Inc. 617 F.Supp.
1120 (D.Md. 1985), aff., 847 F.2d 1109 (4th Cir. 1988) or United
States v. Cumberland Farms of Connecticut. Inc.. 647 F. Supp.
1166 (D.Mass. 1986), aff., 826 F.2d 1151 (1st Cir. 1987)(§404
case in which defendant was assessed a civil penalty of $150,000
and required to pay an additional $390,000 if restoration of
wetlands not carried out). See also Attachments A and B. We
strongly advise you to adopt the approach used in the attached
Regional materials -- recommend a total penalty amount, after
discussion of the appropriate statutory factors, but do not
provide specific amounts (other than for economic .benefit, where
applicable) for each factor. Attachments A and B. The penalty
we recommend should be one supportable by the evidence and
available legal arguments, but also one that resolves any penalty
discretion or factual ambiguity in terms most favorable to the
United States or the Environmental Protection Agency. The amount
that we recommend to a judge should in all instances be more than
we were proposing in settlement negotiations. In administrative
penalty cases in which there is a significant record of
violations, it is likely that the facts of a case will often
justify EPA seeking the maximum penalty authorized by the Act —
either $25,000 or $125,000 — assuming also that EPA requested
that maximum assessment in its administrative complaint. An
important distinction to note here is that in pursuing a clean
Water Act civil penalty in litigation, the government should
support its claim through application of the statutory penalty
factors rather than the Agency's civil penalty policy
or savings (if any) resulting from the violation, and
such other matters as justice may require."
CWA §309(g)(3).
7 At this point in an enforcement case, such financial
costs will typically be minimal.
8 The judges in our enforcement cases need this information
to support their decisions imposing civil penalties under the
Water Quality Act amendments.
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methodology. Indeed, government litigators shall not aroue
before « "Vudae or neutral deciaionmaker for a civil penalty baaed
upon the apeeifie methodology set out in the CWA penalty policy,
nor should .they offer evidence, including expert testimony, as to
how specific CWA penalty policy gravity component calculations
apply to a given case.
The analysis of the economic benefit accruing to the
violator remains the same (after accounting for a potentially
longer period of noncompliance if settlement is not reached), and
is to be considered according to the terms of §309(d) *and (g) of
the Act, so the BEN program may and should be used in litigating
penalties. The existence and extent of economic benefit is a
factual matter which may be objectively measured in dollar terns.
Therefore, to support the United States' figure on economic
benefit government litigators may introduce a witness expert in
the application of financial analysis as used in the BEN program.
The penalty policy's settlement gravity analysis, however,
must be abandoned in favor of a more stringent, statutorily-
grounded approach if penalties in a case are litigated.
Specifically, the government should then offer into evidence
facts that are related to the gravity-oriented statutory
criteria, such as the magnitude and duration of the violations,
the actions available to the defendant to have avoided or ,
mitigated the violations, or any environmental damage. The
government should argue as an advocate that the presence of these
facts warrant assessment of a civil penalty of a given amount.
9 Although the application of BEN to the facts of violation
will remain the same in settlement or litigation, government
prosecutors may well take a more stringent position in litigation
than settlement regarding, for example, days in violation. This
tactical shift may influence the economic benefit analysis by
changing material inputs into the computer program. We do not
address here special issues that may arise over how to apply the
BEN program to a given set of facts.
The BEN program generally does not apply to wetlands cases
under §404 of the Act.
10 This amount should correspond to the penalty requested
in the administrative or judicial complaint, adjusted to reflect
any new information received since the filing of the case
(keeping in mind that the government cannot argue for penalties
higher than initially requested), and should always be
.significantly greater than the bottom-line penalty derived from
application of the CWA penalty policy.
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The results of our gravity analysis of the Clean Water Act
penalty policy, although applicable in NPDES settlement
discussions, are irrelevant to our litigation approach and should
never be introduced into evidence by the United States or
advanced as representing Agency litigation penalty policy. This
is the case because the penalty policy quantifies gravity
calculations in a way which takes into account government
resources and priorities relevant to deciding whether to litigate
or settle a case.
If the defendant in a judicial case attempts to depose EPA
personnel on the gravity calculations for settlement purposes
under the CWA penalty policy, either in the case at hand or other
cases, this should be vigorously opposed by government counsel
under Rule 26(b) as not "being reasonably calculated to lead to
the discovery of admissible evidence." If the defendant in a
judicial case attempts to introduce the CWA Penalty Policy into
evidence, this snould be opposed as irrelevant. In
administrative litigation in which formal rules of evidence may
not apply, EPA prosecutors should resist the respondent's
introduction of the policy as irrelevant and potentially
misleading.
.40 C.F.R. §22.27(b)'s mandate that administrative law judges
"consider any penalty guidelines issued under the Act" when
assessing a penalty does not apply in Clean-Water Act cases,
because there are no applicable guidelines. The February 1986
NPDES settlement policy, as amended, does not and cannot govern
or even apply to the decision which an adjudicator must make to
resolve an administrative or judicial claim for civil penalties.
If it did, the policy most likely would be designed to quantify
penalties differently so as to produce acceptable amounts to
achieve through litigation, rather than settlement. Furthermore,
if the settlement policy governed adjudications respondents could
have too little incentive to settle with Agency negotiators and
administrative judges would face much lengthier dockets. EPA
litigators should make this point to any administrative judge who
misconstrues the scope of the NPDES penalty policy.
Attachment*
1 Tactically, exceptions may apply here. Sut in no case
should government prosecutors represent to the Court that the CWA
penalty policy binds the Court, the hearing officer, or the
United States in litigating civil penalties.
12 The Agency has not issued §404 program penalty
guidelines applicable to administrative judges.
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IV.C.18.
# "Use of Stipulated Penalties in EPA Settlement Agreements", dated January
11, 1990.
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I NITED STATES ENVIRONMENTAL PROTECTION A(,ENO
V> \SHINr.TON. D.C. :
2 4 1990
MEMORANDUM
SUBJECT: Use of Stipulated Penalties in EPA Settlement
Agreements
FROM: . James M. Strock-J
Assistant Administrator
TO : Addressees
This memorandum provides guidance on the use of
stipulated penalties in settlement of enforcement actions.
For each issue discussed, a preferred approach is stated
along with its rationale. These preferred approaches should
be followed absent unusual circumstances dictating an alter-
native approach. The guidance applies to judicial settle-
ments except that it does not supersede the September 21,
1987 Guidance on the Use of Stipulated Penalties in Hazardous
Waste Consent Decrees. It also applies to administrative
cases where EPA has legal authority to assess stipulated
penalties.
Stipulated penalties are penalties agreed to by the
parties to a settlement agreement for violation of the agree-
ment's provisions. These penalties are then made a part of
the agreement, and are enforceable if it is violated. In EPA
settlement agreements, the primary goal of a stipulated
penalty is to act as an effective deterrent to violating the
settlement agreement.
I. Types ot Requirements to Which Stipulated Penalties
Any clearly definable event in a settlement agreement
may be appropriate for stipulated penalties in a given case.
Such events include testing and reporting requirements,
interim and final milestones in compliance schedules, and
final demonstration of compliance. The government litigation
team assigned to a case should carefully consider which
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-2-
consent agreement provisions are appropriate for stipulated
penalties and be prepared to vigorously enforce them. stipu-
lated penalties can even be attached to consent agreement
provisions requiring payment of up-front penalties so long as
the stipulated penalties are higher than the interest,
computed at the statutory interest rate, on the underlying
amount. Every consent agreement requirement to which stipu-
lated penalties are attached should be drafted to ensure that
the standards for determining compliance are clear and objec-
tive, and that any information required to be submitted to
EPA is clear and unequivocal.
in general, stipulated penalties are particularly impor-
tant for requirements of the consent agreement which do not
represent regulatory or statutory violations for which the
agency could potentially get statutory maximum penalties.
Such provisions may include a requirement to install specific
control equipment where the regulations and statute involved
require only compliance with a discharge or emissions stan-
dard, or environmental auditing or management requirements
designed to ensure future compliance. Without stipulated
penalty provisions, penalties for violation of such provi-
sions in judicial cases are only available at the judge's
discretion in a contempt action under the court's inherent
authority to enforce its own order.
Attaching stipulated penalties to violations of consent
agreement provisions which are also violations of a statute
or regulation with a specified statutory maximum penalty has
advantages and disadvantages which Agency attorneys should
consider carefully in the context of a particular case. The
advantage is ease of enforcement. The Agency can pursue
violations without having to bring a new enforcement action
or, in the judicial context, a contempt action. The disad-
vantage is where stipulated penalties for such violations are
set at less than the statutory maximum, parties may argue
that the government has bargained away some of its
enforcement discretion.
If a particularly egregious statutory or regulatory
violation occurs for which the government feels the applic-
able stipulated penalties are not adequate, sources may claim
the government is equitably estopped from pursuing other
enforcement responses. Sources may argue in the context of a
contempt action or new enforcement action that the govern-
ment has already conceded in the consent agreement that a
fair penalty for. this type of violation is the stipulated
penalty, and therefore, the court should not require any
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-3-
additional penalty. Sources may make this argument even if
the government has reserved all rights to pursue various
enforcement responses" for consent agreement violations.-
II. Level-of Stipulated Penalties
Because the statutes EPA is charged with enforcing vary
so widely, penalty schedules for all media or types of viola-
tions are not practical. There are, however, several impor-
tant criteria which should always be considered in.setting
stipulated penalty amounts. Each program office, in concert
with the appropriate OECM Associate Enforcement Counsel, may
want to consider providing further, more specific guidance on
appropriate levels or ranges for stipulated penalties based
on the criteria below.
One key element which applies to setting the levels of
all stipulated penalties for violation of a consent agreement
provision is that the defendant is by definition a repeat
offender when the provision is violated. For this reason,
such stipulated penalties should be higher on a per day basis
than the initial civil penalties imposed. See Guidelines for
Enforcing Federal District Court Orders in Environmental
Cases (GM-27).
The economic benefit accruing to a source due to a
violation should be recovered in order for the stipulated
penalty to be an effective deterrent. For some types of
violations, such as notice provisions, the economic benefit
of noncompliance may be minimal, though significant stipu-
lated penalties may be appropriate based on other criteria as
discussed below. For these types of violations, no formal
BEN analysis is necessary. For violation of provisions which
involve quantifiable delayed or avoided costs, such as
installation of control equipment as part of a compliance
schedule, the minimum stipulated penalty should be the
economic benefit of noncompliance. However, the recidivism
factor will nearly always justify a penalty well above this
minimum, which often serves as the point of departure for a
minimum in&tial penalty.
The source's ability to pay can be another important
criterion to consider. How much of a deterrent a stipulated
penalty is will depend on how financially significant it is
to the source. The same stipulated penalty may be
1 In considering whether to attach penalties to violations
uncovered by an environmental audit, the November 14, 1986 Final
EPA Policy on the Inclusion of Environmental Auditing Provisions
in Enforcement Settlements (GM-52) should be consulted.
7 0-
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-4-
financially crippling to one source, while merely a routine
business expense for another. However, the burden is always
on the defendant to raise such issues during negotiations and
to justify lower stipulated penalties than the government has
proposed. Financial ability to pay a penalty can be
determined using the ABEL computer program for corporate
violators and the MABEL computer program for municipal
violators.
It should be emphasized that this factor should not be
considered a reason for lowering the level of stipulated
penalties below the level equal to the economic benefit. It
would mainly affect the degree to which this base minimum
amount is increased to account for the recidivist nature of
the violation. The key concern is that stipulated penalties
should be set at levels which are significant enough to deter
violations rather than resulting in a "pay-to-pollute"
scheme.
Another criterion which should be considered in setting
stipulated penalty amounts is the gravity of the violation,
i.e.. how critical is the requirement to the overall
regulatory scheme and how environmentally significant is the
violation. The environmental significance factor should
include consideration of potential and actual harm to human
health and the environment. In general, consent agreement
provisions which are central to a particular regulatory
scheme should have higher stipulated penalties than
provisions that are considered less significant. It is up to
each enforcement program to make judgments about the relative
importance of respective requirements. As previously noted,
some consent agreement requirements such as notice provisions
may have little or no associated economic benefit, but may
nevertheless be critical to the regulatory program in
question and would warrant high stipulated penalties.
Another consideration related to the gravity component
is the source's history of compliance. If the source has a
record of previous violations, a higher stipulated penalty
may be necoMary because earlier enforcement responses were
ineffective in deterring subsequent violations.
Another option to consider whenever setting stipulated
penalty levels is an escalating schedule, in which the
stipulated penalty increases with the length of the
violation. For example, violations of up to two weeks might
have stipulated penalties of $1000 per day while violations
of two to four weeks might have stipulated penalties of $2000
per day, and so on.
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-5-
III. Method of Collection
Settlement agreements should state the method by which
stipulated penalties will be collected. Two options are for
the settlement agreement to provide that the penalty is
automatically due upon the occurrence or non-occurrence of a
specified event, or it may make the penalty payable only on
demand by the government.
Automatic payment is the preferred approach. It saves
resources which would otherwise be devoted to making demands
for payment and may put the government in a more advantageous
position should the source declare bankruptcy. If payment is
made on demand, the consent agreement should make it clear
that the legal liability of the source for the stipulated
penalty attaches immediately upon violation, and it is only
payment of the penalty to the Agency which is not due until
demand is made.
Settlement agreements should always state where and how
the penalty should be paid and how the check should be draft-
ed. See EPA Manual on Monitoring and Enforcing Administra-
tive and Judicial Orders for additional guidance. In
addition, settlement agreements should not agree to pre-
enforcement review of accrued stipulated penalties.
IV. Timing of Enforcement Responses
Prompt action to collect stipulated penalties due under
any consent agreement is crucial. If stipulated penalties
are due on demand, it is very important such demands be
timely. The government encounters significant difficulty
collecting stipulated penalties if it sits on its rights.
Delay allows penalties to increase to levels parties may
argue are inequitable. Sources may also raise equitable
defenses such as laches or estoppel, arguing that the govern-
ment cannot fail to exercise its rights for extended periods
of time allowing stipulated penalties to continue to accrue
and then BOV« to collect unreasonably high penalties. The
government, of course, can and should always rebut such
claims by arguing it is simply enforcing the decree or agree-
ment as agr««d to by defendant, and is not subject to such
equitable defenses. However, this unnecessary complication
should be avoided.
A cap on the amount of stipulated penalties which can
accrue is generally not a preferred solution to this problem.
The stipulated penalty would lose its deterrent value once
the cap is reached. Also, the main goal of any enforcement
action must be compliance with the law so that public health
.and welfare is protected. If consent agreement provisions
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-6-
are allowed to be violated long enough for a cap. to be reach-
ed, serious environmental consequences may have occurred.
Providing that stipulated penalties only apply for a
specific, reasonably short period of time in conjunction with
reserving to the government all available enforcement respon-
ses for violation of the consent agreement, however, solves
many of the problems mentioned above. By its own terms,
stipulated penalties will not accrue to levels defendants can
argue are inequitable. The government will be in a- strong
position when it pursues other enforcement options, such as
contempt actions or a new enforcement action to get
additional penalties, because it can argue that the penalties
in the original consent agreement were not enough to deter
the defendant from further violations and the possibility of
additional penalties was clearly contemplated.
V. Reservation of Rights
All consent agreements must contain a provision which
reserves to the government the right to pursue any legally
available enforcement response for violation of any consent
agreement provision. These enforcement responses would
include civil contempt proceedings and injunctive relief, and
criminal contempt proceedings for particularly egregious
violations. However, for provisions mandated by statute or
regulation and which have stipulated penalties attached, a
reservation to pursue statutory penalties is suggested but
not required. For model language, see the October 19, 1983
Guidance for Drafting Judicial Consent Decrees (GM-17).
VI. Collection of Stipulated Penalties
The government should be prepared to collect the full
amount of stipulated penalties due under a consent agreement.
No agreement should ever anticipate compromise by specifying
instances where it will be allowed, aside from a standard
force majeure clause. In rare, unforeseeable circumstances,
however, t)M equities of a case may indicate that the govern-
ment may compromise the amount it agrees to collect. For
penalties payable on demand, the government may also exercise
prosecutorial discretion by declining to proffer a demand for
stipulated penalties for minor violations of a consent agree-
ment.
It may also be appropriate to provide that stipulated
penalties for violation of interim milestones in a compliance
schedule will be forgiven if the final deadline for achieving
compliance is met. This is clearly inappropriate where there
is significant environmental harm caused by the defendant
missing the interim deadlines. If such a provision is used,
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-7-
the defendant should generally be required to place accrued
penalties in an escrow account until compliance by the final
deadline is achieved.-
In judicial cases, the Attorney General and his
delegatees in the Department of Justice (DOJ) have plenary
prosecutorial discretion to compromise stipulated penalties.
This authority stems from 25 U.S.C. § 516, which reserves to
DOJ authority to conduct the litigation of the United States,
including cases in which an agency of the United States is a
party, and the cases and regulations broadly interpreting
this authority.
In administrative cases handled solely by EPA,
stipulated penalties should be collected pursuant to the
enforcement authority granted to EPA under the statute gover-
ning the case. This authority to collect and compromise
stipulated penalties varies from statute to statute.
Separate from the process for collecting stipulated
penalties, EPA must keep track of money owed the federal
government (accounts receivable) resulting out of the acti-
vities of the Agency, including administrative penalty
assessments. A stipulated penalty becomes an account receiv-
able when the appropriate Agency official determines that a
violation of a consent agreement provision with an attached
penalty has occurred. Under Agency financial regulations and
policies for monitoring accounts receivable, stipulated
penalties due and owing must be reported within three days to
the Regional Financial Management Office (FMO). The FMO is
responsible for entering the stipulated penalty as an
accounts receivable into the Agency's Integrated Financial
Management System (IFMS). The "appropriate agency official"
who determines the existence of a stipulated penalty account
receivable is responsible for keeping the FMO updated on the
status of enforcement penalty collection efforts. A more
detailed account of these procedures is included in the
Manual on Monitoring and Enforcing Administrative and Judi-
cial Orders.
Addressees:
Regional Administrators
Regions I-X
Deputy Regional Administrators
Regions I-X
Regional Counsels
Regions I-X
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-8-
E. Donald Elliott
General Counsel
Headquarters Compliance Program Divisions Directors
Mary T. Smith, Acting Director
Field Operations and Support Division
Office of Mobile Sources
David Buente, Chief
Environmental Enforcement Section
U.S. Department of Justice
Associate Enforcement Counsels
Workgroup Members
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IV.C.19
# "Multi-Media Settlements of Enforcement Claims", dated February 6, 1990.
-------
-------
USB
5 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
f WASHINGTON. D.C. 20460
MEMORANDUM
SUBJECT:
FROM:
TO:
FEB 6-1990
Multi-Media Settlement
OFFICE OF
ENFORCEMENT AND
COMF1 '.Aur.t MONITORING
James M. Strock^ /
Assistant Administrator
Enforcement Claims
Regional Administrators, Regions I - X
Regional Counsel, Regions I - X
Associate Enforcement Counsel
Program Compliance Office Directors
A. PURPOSE
The purpose of this memorandum is to provide guidance which
explains 1) EPA policy strongly disfavoring judicial and
administrative settlements of enforcement cases which include
releases of potential enforcement claims under statutes which are
not named in the complaint and do not serve as the basis for the
Agency bringing the enforcement action, and 2) how approval for
any multi-media settlements of enforcement claims should be
obtained in civil judicial enforcement cases in the Region and at
Headquarters.
B. DISCUSSION
As a general rule, a settlement of a hazardous waste
enforcement action, for example, may include a covenant not to
sue providing the settling party with protection from subsequent
civil enforcement action under some or all provisions of CERCLA
and/or RCRA. i Similarly, a Clean Water Act enforcement
settlement may expressly settle EPA claims under some or all
provisions of the Clean Water Act. A settlement which extends to
potential EPA enforcement claims under any statute(s) outside of
the program medium under which the case was brought, e.g.. a CWA
release in a CERCLA case, or a release in a CERCLA case under all
1 The United States generally gives covenants not to sue,
not releases, in the CERCLA context. This guidance, however,
uses the terms "covenant not to sue" and "release"
interchangeably. Use of the word "release" is not intended to
signify any differing effect of the settlement but is merely used
for ease of exposition.
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statutes administered by EPA, should not be given except under
exceptional circumstances, because it is standard EPA policy that
releases, when granted, should be no broader than the causes of
action asserted in the complaint. 2
Although defendants often seek releases broader than the
specific medium at issue in the case, multi-media releases for
single-medium enforcement cases are strongly discouraged and will
be granted only in exceptional cases. A proposal to enter into
such a settlement will undergo close scrutiny at both the
Regional and Headquarters level. When deciding whether to
entertain a request for a multi-media release, the Region should
consider the following factors:
1) The extent to which EPA is in a position to know whether
it has a cause of action warranting further relief against the
settling party under each of the statutes included in the
release. If, after investigation, it is determined that no cause
of action exists, then it is somewhat more likely that the
release might be considered;
2) Whether the settlement provides adequate consideration
for the broader release. If the relief to be obtained under the
settlement includes appropriate injunctive relief and/or
penalties for any actual or potential violation/cause of action
under the other media statutes, then it is somewhat more likely
that the release might be considered; and
3) Whether the settling party is in bankruptcy. If the
relief obtained through the settlement is all the Agency can
obtain from the settling party, and the settling party will be
ceasing operations, then it is somewhat more likely that the
multi-media release might be considered if the settlement is
otherwise favorable to the Government. This rationale is far
more persuasive in the Chapter 7 or Chapter 11 liquidation
context than in the Chapter 11 reorganization context.
In addition, the only possible statutory releases or
covenants not to sue that EPA will grant are for statutes
administered by EPA. Multi-media settlements should not grant
releases phrased in broad terms such as "all statutes
2 If multi-media causes of action have been asserted
in the United States' complaint, then settlement of and
releases under all statutes involved in the action wo.uld not be
unusual, provided that appropriate relief is obtained under each
statute. Such settlements would, however, require the
concurrence of all Regional and Headquarters media offices
involved, as described in Part C below.
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administered by EPA." Rather, all such releases should
specifically name the EPA statutes included in the release.
Further, releases should not include broad statements reaching
beyond EPA-administered statutes such as "all claims or causes
of action of the United States." A settlement should also not
release any common law claims EPA may have, because it is not
clear what, if any, Federal common law exists in the
environmental area, and thus a release of this kind is of
undefined scope. Similarly, State law claims should not be
released by the Federal government, since it is unclear what, if
any, Federal causes of action derive from State law. Moreover,
as a matter of practice and policy, we should not purport to bind
States when they are not directly involved in our enforcement
cases. 3 As always, releases may be granted only for civil
liability, not for criminal liability. 4
C.' PROCEDURES
All settlements involving multi-media resolution of
enforcement claims require the approval of the appropriate EPA
official(s) consistent with Agency delegations of authority. For
civil judicial enforcement cases specifically, all multi-media
settlements, including all CERCLA settlements resolving claims
under other EPA-administered statutes, require the approval or
concurrence of the AA-OECM. 5 In any case in which the Region
wishes to propose to the AA-OECM that EPA enter into such a
settlement, certain procedures must be followed.
3 Ordinarily, State claims are independent of Federal
enforcement authorities and are not compromised by settlement
under the Federal authorities.
4 Releases should also be drafted in accordance with the
policy and practice of each medium involved. In most enforcement
actions, this means that the release is based upon information
known to EPA at the time of the settlement and does not extend to
undefined future violations or site conditions.
5 For administrative enforcement cases which include multi-
media releases, the Regions similarly should obtain the
concurrence of all EPA officials (at Headquarters or in the
Region, as the case may be) consistent with the relevant EPA
delegations covering administrative settlements under each
statute included within the release. (If all authorities
included within the release are delegated to the Regions, then no
Headquarters concurrence is needed.) Of course, some
administrative settlements with multi-media releases will also
require approval by the Department of Justice when a DOJ role is
established by statute.
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First, cross-media consultation among all affected Regional
program offices and Office of Regional Counsel branches must be
undertaken. This consultation should involve joint investigation
as to whether there are any actual or potential causes of action
under any statute under which a release is contemplated. An
appropriate investigation, for example, is likely to include a
check of all relevant files, a determination of whether a field
inspection is warranted, and, if so, an inspection, and an
inquiry to State program and legal counterparts to ensure that
EPA is not unknowingly settling or waiving any potential claims
it may have based upon relevant and available information. In
the event that an appropriate cross-media investigation cannot be
undertaken, a release for any uninvestigated medium cannot be
given.
Second, when the settlement is referred to Headquarters for
approval or concurrence, the Regional Administrator's cover
memorandum to the AA-OECM should highlight the existence of the
multi-media settlement or release. It should also include a
statement by the Regional Administrator (or any other Regional
official delegated responsibility to approve the settlement on
behalf of the Region) that the Region has evaluated all possible
claims under all EPA-administered statutes included within the
release and, after diligent inquiry, has determined that, to the
best of its knowledge, no claims exist, or, if any claims do
exist, that it is in the best interest of the Agency to settle
the claims in the manner included in the proposed settlement. If
claims do exist, the RA's memorandum should explain why the
settlement is in the best interests of the Agency.
Lastly, the OECM Division for the program area that has the
lead in the settlement must take certain steps to ensure that
the other affected OECM Divisions and their program counterparts
at Headquarters do not object to the multi-media release. The
lead Associate Enforcement Counsel should provide a copy of the
settlement, the RA's cover memorandum, and any other relevant
supporting material from the Region (e.g. , in the case of a
CERCLA settlement, the Ten Point Settlement Analysis) to all
other OECM Associates who are responsible for any statutes
included in the release with a request for written concurrence
within 21 days. Each Associate should in turn consult with, and,
if part of standard procedure, obtain the concurrence of, his/her
Headquarters program counterpart on the settlement. The lead
Associate and his/her staff should coordinate all OECM comments
or requests for additional information from the Region to help
avoid presenting the Region with conflicting comments or
requests.
After all necessary concurrences have been received, the
lead Associate Enforcement Counsel will transmit the settlement
to the AA-OECM for final action, with a copy of all Headquarters
concurrences attached to the package. Although OECM will strive
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to meet its standard 35-day turnaround time for civil judicial
settlement referrals, because multiple Headquarters offices are
involved, the Regions should expect that multi-media release
settlements may take greater time to be reviewed and approved by
Headquarters than single-medium settlements. To assist OECM in
obtaining concurrences as expeditiously as possible, the Region
should actively consult with the lead OECM Division during
negotiations so that OECM will have advance notice of the cross-
media release issue and will be able to consult with other OECM
Divisions before the settlement is referred to the AA-OECM.
D. DISCLAIMER
This memorandum and any internal office procedures adopted
for its implementation is intended solely as guidance for
employees of the U.S. Environmental Protection Agency. It does
not constitute a rulemaking and may not be relied upon to create
a right or a benefit, substantive or procedural, enforceable at
law or in equity, by any person. The Agency may take action at
variance with this memorandum or its internal implementing
procedures.
If your staff has any questions on this matter, please ask
them to contact Sandra Connors of OECM-Waste at 382-3110.
cc: Richard B. Stewart, Assistant Attorney General, Land and
Natural Resources Division, U.S. Department of Justice
David T. Buente, Chief, Environmental Enforcement Section,
Land and Natural Resources Division, U.S. Department of
Justice
-------
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IV.C.20,
# "Documenting Penalty Calculations and Justifications in EPA Enforcement
Actions", dated August 9, 1990.
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UNITED STATES ENVIRONMENTAL PROTECTION AGE»i'*v
WASHINGTON, D.C. 20460
q .:%
3 r c
MEMORANDUM
SUBJECT: Documenting Penalty Calculations and Justifications in
EPA Enforcement
^
FROM: James M. Sgrqck/
Assistant Administrator
TO: Addressees
This memorandum institutes a uniform system for documenting
penalty calculations and explaining how they are consistent with
the applicable penalty policy in all EPA enforcement actions. It
expands on the September 14, 1987 Guidance on Processing of
Consent Decrees (GM-64) and requirements in several media
specific penalty policies. The system will allow regional and OE
management to assure that EPA settlement agreements comply with
applicable penalty policies, and will provide documentation for
our actions for purposes of oversight review. The memorandum
sets out the information regarding the penalty which must be
discussed at each stage of litigation. The exact format of the
discussion is left to the discretion of each program. All
discussions of the agency's settlement position regarding
penalties are, of course, strictly enforcement confidential
workproduct, should be clearly labeled as such and should not be
released.
Effective immediately, every settlement package transmitted
from the Regional Administrator or Regional Counsel to
Headquarters for concurrence must include a written "Penalty
Justification." This should include an explanation of how the
penalty, including the economic benefit and gravity component,
was calculated. The Region should then discuss in detail the
justification for any mitigation of either component. In
particular, reference should be made to the factor or language in
the penalty policy that is relied upon to justify the mitigation,
and a discussion must be included detailing why mitigation is
warranted in the particular case. For administrative cases, a
Penalty Justification should be prepared for circulation within
the Office of Regional Counsel with a final consent agreement or
order. It may not be circulated to the agency official who signs
the final order as the presiding agency official, usually the
Regional Administrator, because it could constitute ex carte
communication which would have to be shared with defendants under
40 C.F.R; Part 22.
Print*} on Recycled Paper
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- 2 -
When the factor relied upon to justify mitigation is
litigation risk, the Region should state the probable outcome of
litigation along with legal and factual analysis which supports
its conclusion. For judicial cases, this should be done in
consultation with the Department of Justice. Specific discussion
of the evidentiary problems, adverse legal precedent, or other
litigation problems in the case should be included. If the
required discussion of the penalty is contained in the litigation
report or subsequent correspondence between the ORC and OE, the
settlement package from the Region may reference this discussion
along with an attachment of the previous documentation.
A similar discussion of Penalty Justification should also be
included in every settlement package transmitted from the
Associate Enforcement Counsels for the signature of the Assistant
Administrator. The Headquarters staff may, however, reference
the discussion in the regional memorandum when it is sufficient.
Seriously deficient Penalty Justifications will be returned to
the Region to allow a proper analysis to be prepared before the
Assistant Administrator for Enforcement reviews a consent decree
for signature.
In addition, each Office of Regional Counsel case file and
all OE files in cases in which OE is involved should contain at
all times during the course of an enforcement action
documentation of the current bottom line agreed upon by the
litigation team. For civil administrative cases, this will begin
with the filing of the administrative complaint. For civil
judicial cases, this will begin with the litigation report, which
should include the penalty proposed by the Region initially. The
litigation report should clearly indicate how the gravity and
economic benefit components were calculated under the applicable
penalty policy and discuss in detail any mitigation that is
proposed. Significant uncertainties which could result in
further mitigation should also be identified.
The OE attorney assigned to the case will then determine if
OE concurs with the.penalty proposed by the Region in reviewing
the referral. OE concurrence will be documented in writing,
placed in the OE case file and provided to the Region. If OE
does not concur with the penalty proposed by the Region in the
referral, the assigned OE attorney will prepare a memorandum to
the Region stating with specificity the basis(es) of the
nonconcurrence.
Once the enforcement action is initiated or pre-filing
negotiations begin, the litigation team should document any
agreed upon changes to the bottom line penalty based upon new
information or circumstances which arise during the course of the
enforcement action. This documentation must, at a minimum,
I 21S'
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include a memorandum to the file recording how both the gravity
and economic benefit components were calculated, the basis in the
applicable penalty policy and in the specific facts of the case
for any mitigation, and the changed circumstances or new
information vhich justify modification of the bottom line. This
will be especially beneficial in cases where there are changes in
the litigation team over time. It will enable new attorneys
assigned to the case to know what the current bottom line penalty
is and how that has been determined over the course of the case.
These requirements will serve several functions. It will
ensure that management has adequate information to judge
consistency with the applicable penalty policies in specific
cases and in the various enforcement programs overall. It also
will ensure that every regional case file and all OE files in
cases in which OE is involved have written documentation of how
the penalty obtained was calculated and justified in terms of the
penalty policy. This is essential for reviews or audits of our
settlements.
Addressees:
Regional Administrators
Regions I-X
Deputy Regional Administrators
Regions I-X
Regional Counsels
Regions I-X
E. Donald Elliott
General Counsel
Headquarters Compliance Program Division Directors
Associate Enforcement Counsels
Richard B. Stewart
Assistant Attorney General
Environment and Natural Resources Division
U.S. Department of Justice
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L NTTED STATES ENVIRONMENTAL PROTECTION AGENC V
WASHINGTON. D.C. 20460
MEMORANDUM
SUBJECT: Documenting Penalty Calculations and Justifications in
EPA Settlement Agreements
FROM: James M.
Assistant
Office of Enforcement
TO: Addressees
Attached is final guidance on documenting penalty
calculations and justifications in all EPA enforcement actions.
We have made several revisions to the draft memorandum in
response to Regional comments.
Two Regions pointed out that the requirement to include the
discussion of the penalty in settlement packages which go to the
Regional Administrator in administrative cases violates the
prohibition against ex parte communication in 40 C.F.R. Part 22
where the Regional Administrator is acting as the presiding
agency official. The memorandum has been changed to reflect
this. The penalty documentation requested is still required in
administrative cases. However, it should be circulated only
within the Office of Regional Counsel and the program office
where the Program Office Director is not the presiding agency
official. This discussion should not be circulated to the
Regional official who acts as the presiding official.
Some commenters expressed concern as to the level of detail
and.length of explanation required. What is contemplated by the
memorandum is a document which calculates the unmitigated penalty
and discusses the factors relied upon for any mitigation. This
should generally take only a page or two. It is not acceptable
to simply say, for example, that the gravity component was
mitigated by 30% due to defendant's inability to pay without some
explanation of what the Region did to ascertain the defendant's
financial status, consistent with the ABEL program and agency
guidance.
One Region expressed concern that, with regard to mitigating
penalties with reference to municipalities, there is no agency
guidance on this issue and, therefore, no policy they can
reference to justify mitigation. We are not addressing this
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- 2 -
issue in this memorandum, but OE will consider future guidance on
this topic. Several commenters expressed concern that the
required penalty documentation be marked and treated as
enforcement confidential work product. A caution to this effect
has been added.
Several commenters were also concerned that the memorandum
will cause a significant paperwork burden with its requirement
that every time a bottom line penalty changes, a new
justification needs to be drafted. What is required by the
memorandum is only that changes since the last penalty
justification be discussed. Points which are already adequately
discussed in previous documentation need not be repeated.
Previous documentation which fully discusses an aspect of the
penalty can simply be referenced. One commenter suggested that
penalty documentation only be required at the end of the
litigation in the settlement package. This is not acceptable
because it invites post hoc rationalizations.
Finally, one commenter suggested that a similar requirement
be applied to injunctive relief. This is not a subject which
will be addressed in this memorandum, but OE will consider it for
future guidance.
If you have any questions concerning this memorandum, please
contact Elise Hoerath of the Air Enforcement Division of OE at
FTS 382-2843.
Addressees:
Regional Administrators
Regions I-X
Deputy Regional Administrators
Regions I-X
Regional Counsels
Regions I-X
Associate Enforcement Counsels
E. Donald Elliott
General Counsel
Headquarters Compliance Program Division Directors
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- 3 -
Richard B. Stewart
Assistant Attorney General
Environment and Natural Resources Division
U.S. Department of Justice
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IV. CIVIL LITIGATION
D. ENFORCING JUDGEMENTS AND DECREES
Z2T
-------
IV.D.I
"Guidelines for Enforcing Federal District Court Orders", dated April 18,
1984. See GM-27.
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•ft
-------
IV.D.2.
"Procedures for Assessing Stipulated Penalties", dated January 11, 1988.
See GM-67.
-------
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IV.D.3
"Guidance on Certification of Compliance with Enforcement Agreements",
dated July 25, 1988, see GM-74.
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IV.D.4
# "Manual on Monitoring and Enforcing Administrative and Judicial Orders",
dated February 6, 1990. Transmittal Memorandum, Summary Introduction, and
Table of Contents only.
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-7 24.
— O-' \
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V. <•'
'. *>!.'*-
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, O.C. 20460
6 1990
MEMORANDUM
SfTBJECT: Manual on Mori i ror inq and Enforcing
Admin istrat i ve and Judjjftial Orders
FROM: James M. St-rock
Assistant Administrator
TO: Assistant Administrators
Regional Administrators, I-X
This memorandum Transmits the EPA Manual on Monitoring and
Knfore ing Administrative and Judicial Orders. The Manual
provides general guidance to EPA enforcement staff on their roles
and responsibilities in moniroring and <=nforcing final order
requirements. The Manual applies to all regulatory enforcement
programs with t-he exception of the CERCF.A (Superfund) Program.
The term "order" includes judicial consent decrees and
administrative consent orders. The Manual also outlines a
process for working with the EPA Financial Management Offices
(FMOs) and the Department of Justice for monitoring and
collecting penalties.
The Manual was prepared in response to recommendations in
several Office of Inspector General (OIG) audit reports that OE,
the Program Offices and the OARM Financial Management Division
(FMD) develop clearer guidance and management systems for
ensuring that administrative and judicial order requirements are
aggressively monitored until compliance is achieved. A major
concern Of the OIG was the failure of enforcement staff to notify
the Regional Financial Management Offices (FMOs) when
administrative or judicial penalties have been assessed so that
these "accounts r^r-pj-.-.ini e's" can be entered into and tracked in
the Agency's Integra
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The Manual has received two Agency-wide reviews, in May 1987
and October 1988. Both reviews surfaced gaps and deficiencies in
the Manual's attempt to designate areas of responsibility and
information sharing. The final Manual contains procedures
designed to address the deficiencies.
The OARM FMD has drafted revisions to Chapter Wine of its
Resource Management Directives to conform with the guidance
agreed to in this Manual. These Directives will soon undergo
green border review and may require some adjustments to the FMD-
related sections of the Manual. Accordingly, the Manual will be
updated as necessary. A summary of the major provisions of the
Manual, including the latest revisions, is contained in
Attachment A.
OE is available to assist you in implementing the revised
procedures. Questions should be directed to Renelle Rae, Chief
of the Program Development Branch, at 475-8777.
Attachments
cc: Deputy Regional Administrators
Regions I-X
Regional Counsels
Regions I-X
Regional Financial Management Offices
Associate Enforcement Counsels
Associate General Counsels
Headquarters Enforcement Office Directors
Financial Management Division Director
Deputy Assistant Administrator for Criminal Enforcement
Acting Director, National Enforcement Investigations Center
Chief, Environmental Enforcement Section, DOJ-
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At tachjner. t * 1
MANUAL ON MONITORING AND
ADMINISTRATIVE AND JUDICIAL ORDERS
SUMMARY OF PROVISION AND RESPONSE TO COMMENTS
Chapter I - Monitoring and Reporting the Status of Orders.
Roles and Responsibilities
The Regional Program Office (RPO) is responsible for
monitoring (i.e. routinely checking) compliance with the
technical requirements in administrative and judicial orders.
The Regional Financial Management Office (FMO) is responsible for
monitoring and collecting administrative penalties as "accounts
receivables". The Department of Justice (DOJ) is responsible for
monitoring and collecting judicial penalties and for reporting
the status of penalty collection to the EPA Headquarters
Financial Management Division (HQ-FMD).
Reporting on Penalty Payments
While the RPO is not responsible for monitoring collection
of administrative or judicial penalties, RPO is responsible for
verifying that penalties have been paid before terminating an
order or reporting a violator in full compliance. Therefore, RPO
data systems should include the amount of penalties assessed in a
final order and be able to report on a "yes/no" basis whether the
total amount of the administrative or judicial penalty has been
collected. The OE Docket also will report the amount of the
judicial penalty assessed and contain a yes/no statement on
whether the total amount assessed has been collected. The
Integrated Financial Management System (IFMS) maintained by the
Headquarters and Regional FMOs will be the official EPA system
for reporting the numerical (dollar) amounts of enforcement
penalties collected.
EBJ^ Enforcement Payment Accounts Re.c,e,iva.fale, Control Number
In order to cross-walk between program office systems and
the IFMS, the Manual recommends that all programs enter into
their program data system the assigned IFMS accounts receivable
control number for the penalty assessed in each final order.
When the Regional FMO receives a copy of a final order and
establishes the accounts receivable in IFMS, the FMO will provide
the RPO, the ORC and the Regional Hearing Clerk with the accounts
receivable control number. The goal is to have the IMFS accounts
receivable control number be the common identifier number in all
data systems that report penalty information.
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Several of the comments received on the Manual expressed
concern that some program office data systems do not have tne
ability to report penalty payments on a "yes/no" basis or to
include the IFMS accounts receivable control number. These
additions vould require modifications to their systems. Program
Offices should follow the Manual's guidance, wherever possible
including these penalty tracking modifications as they make other
improvements to their system. OE will work with the Program
Offices to ensure that these changes are made. As of the date of
the issuance of the Manual, the IMFS will be recognized as the
official EPA record of the total amount of dollars collected on
every penalty assessed in a final order.
Chapter 2 - Collecting Administrative Penalties.
Roles and Responsibilities
The RPO (or the ORC in some Regions) is responsible for
sending a copy of the final order assessing a penalty to the FMO.
The FMO is responsible for monitoring and collecting the penalty
as an accounts receivable for the first 120 days. The ORC is
responsible for collecting the penalty after 120 days in defaul
The Regional Hearing Clerk is responsible for keeping the '
official administrative record for the case and including any
penalty payment information received from the RPO, ORC or FMO in
the record.
Notifying the FMO of Assessed Administrative Penalties
The 1989 OIG audits of the Regional Financial Management
Offices found that the FMOs still are not receiving from
enforcement offices all copies of final orders that assess
penalties. The Manual adds a documentation procedure for
ensuring that the responsible enforcement office sends to the FMO
a copy of the order and the transmittal letter to the violator.
A now form entitled: "EPA Enforcement Payment Accounts
Receivable Control Number Form", hereafter referred to as the
Form (S*o last page of Attachment #1), will provide a record that
the responsible EPA office has sent a copy of the final order to
the FMO. The Form also will document that the FMO provided the
offices designated on the Form with the IFMS accounts receivable
control number for each assessed penalty. Under most enforcement
programs, the 'RPO has been delegated the responsibility for
administrative enforcement, so the Manual presumes the RPO is the
responsible party ("originating office") for filling out the
Form, and sending the Form with a copy of the final order and
transmittal letter to violator to.the FMO. In some Regions, the
ORC may have assumed the "originating office" responsibility. A
copy of the completed Form that includes the IFMS accounts
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receivable control number should be included in the case file and
available for review in the context of an audit.
collecting. Enforcing and Terminating Administrative Penalty
Payments
The procedures for coordinating among the FMO, RPO and ORC
in collecting, enforcing and terminating administrative penalty
payments also have been refined. At the request of FMD, the time
frames have been added for ORC review of enforcement options
regarding penalties that have not been paid within 120 days.
The process for collecting, enforcing or terminating orders is as
follows:
Once the FMO receives a copy of the final order and
establishes the accounts receivable, the FMO win monitor and
collect the receivable using standard debt collection practices.
The FMO will send the RPO, ORC and Regional Hearing Clerk a copy
of payments received. These payments win be identified by the
IFMS Accounts Receivable Control Number.
Uncollected penalties, at the end of 120 days and after
three demand letters have been issued, will be referred by the
FMO to the ORC for review and option selection. The ORC, after
consulting with the RPO, must notify the FMO, in writing within
30 days from receipt of debt from the FMO, of the collection
option the ORC will pursue. Options include referring the
penalty debt to DOJ for judicial collection, pursuing additional
FMO collection activities such as outside collection agencies, or
requesting termination of the debt. However, to uphold EPA's
enforcement authority, administrative penalty debts should be
terminated only under exceptional circumstances. The ORC's
written response to the FMO should be included in the official
case file.
Several reviewers of the draft Manual suggested that EPA and
DOJ institute a direct referral process from the ORC to the U.S.
Attorneys' Office (USAO) for administrative penalty debt
collecti^k The current delegation of authority by the Attorney
General Mr the Land and Natural Resources Division precludes a
direct r«f«rral to the USAO of EPA enforcement cases including
administrative penalty collection cases.
Chapter 3 - collecting Judicial Penalties.
Roles and Responsibilities
The Manual recognizes that the DOJ Land and Natural
Resources Division, Environmental.Enforcement Section,
hereinafter referred to as LNRD-EES, is responsible for
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monitoring judicial penalty payments and the U.S. Attorneys'
Office is responsible for collecting payments through the DOJ
locJcbox system and pursuing uncollected debts. While EPA is not
responsible for collecting judicial penalty payments, it is the
policy of EPA Financial Management Division that all judicial
penalty payments that are the result of an EPA enforcement action
be recorded in the IFMS as "accounts receivables". As EPA
receivables, these debts must be monitored by the Regional FMO
until collected or terminated. This requires all DOJ offices and
all EPA offices involved vith the penalty to have a common
identifier number—the IFMS accounts receivable control number.
Superfund cost recovery payments (debts) obtained through
judicial actions (court orders or consent decrees) are collected
differently than judicial penalties. All cost recovery payments
(administrative or judicial) are collected by the EPA Regional
FMOs through the EPA Regional Superfund locJcbox depositories.
Even though a judicial cost recovery case has been handled by the
USAO, Agency resource management directives (RMDS 2550) governing
financial management of the Superfund Program require that EPA
FMOs monitor and collect Superfund debts.
Obtaining Copies of Final Orders and Notifying the FMO of
Penalties Assessments and Superfund Cost Recovery Payments
A major concern raised in the review on the draft Manual is
that the ORC and. the Regional FMOs do not consistently get
copies of the final (entered) judicial orders (enforcement
penalty or Superfund cost recovery) from the USAO. Under the
guidance specified in Chapter Three, the LNRD-EES win be
responsible for ensuring that the USAO sends a copy of the
entered final order including all consent decrees to the
appropriate ORC. The ORC is responsible for following up with
the LNRD-EES or USAO if an order is not received. Unless another
office is designated in a Region, the ORC is responsible for
sending to the FMO a copy of the final order with the attached
EPA Enforcement Payment Accounts Receivable Control Number Form.
Th« FM> will fill in the IFMS accounts receivable control
number on tlM Form and send a copy of the Form to the parties
designated on the Form, including the DOJ LNRD-EES. The Form
containing the IFMS accounts receivable control number will be
retained in the case file as documentation.
Reporting the Status of Penalty Payments
DOJ LNRD-EES will enter the IFMS accounts receivable control^
number in its Lands Docket Tracking System (LOTS) and will
provide quarterly reports to the Headquarters FMD on the status
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of EPA penalty payments using the IFMS number. The Headquarters
FMD will distribute copies of these reports to the Regional FMOs.
The FMOs will update the IFMS with the data received from LMRD-
EES. The IFMS will be the official EPA system for reporting the
dollar amounts of judicial enforcement penalties collected.
Other EPA data systems win, as with administrative penalty
payments, provide information on judicial penalty collection in a
"yes/no penalty paid" format only. To interface with the IFMS,
other EPA program offices can include the IFMS accounts
receivable control number in their data systems.
Chapter 4 - Enforcing Orders.
This chapter remains unchanged and contains existing
guidance on available enforcement tools such as motions for
specific enforcement, contempt actions, contractor listing, etc.
The Appendix contains procedures for worlcing witn DOJ Land and
Natural Resources Division on modifying judicial orders or
collecting stipulated penalties under judicial consent decrees.
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MANUAL
ON
MONITORING
AND
ENFORCING
ADMINISTRATIVE
AND
JUDICIAL ORDERS
January 1990
(m)
\ ~*F
Office of Enforcement
U.S. Environmental Protection Agency i
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INTRODUCTION
This Manual provides guidance to EPA enforcement staff on monitoring
and enforcing administrative and judicial orders. The procedures
described in this Manual apply to all EPA statutes that provide
authority to issue administrative and judicial orders requiring
compliance with Agency requirements with the exception of the CERCLA
(Superfund) program. The procedures set forth herein will supersede
general guidance in program case development manuals that address the
topics in this Manual. Each program, however, may have more specific
guidance on monitoring and tracking orders that supplements this
manual.
The Manual focuses on the activities of Regional Offices in monitoring
and enforcing penalties since the majority of the cases are initiated
by the Regional programs. Some Headquarters offices, such as the
Office of Toxic Substances, have national programs where enforcement
cases are initiated, concluded and settlements monitored by
Headquarters staff. These Headquarters offices have program, legal,
administrative hearing clerk and financial management functions
comparable to the Regional structure described in this Manual.
Headquarters offices involved in monitoring and enforcing orders
should substitute their office functions for the comparable Regional
functions described and follow the guidance set forth in this Manual.
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Table of Contents
Chapter One - Monitoring and Reporting the Status of Final Orders
Final Administrative and Judicial Orders
Drafting Enforceable Orders
Monitoring Systems
Reporting Requirements
Additional Oversight Requirements for Administrative Orders
Additional Oversight Requirements for Judicial Orders
Appendices
Chapter Two - Col.
of Administr<
Authority for Administrative Penalty Collection
Roles and Responsibilities
Financial Management Collection Procedures
Appendices
Chapter Three - Collection of Judicial Penalties
Payment Depositories
Responsibilities
Distributing Copies of Final Orders
Monitoring Penalty Payments
EPA Enforcement Reporting of the Status of Penalty Payments
Coordination of DOJ and EPA Accounts Receivable Reporting Systems
Pursuing Outstanding Penalty Debts
Compromising, Suspending or Terminating Judicial Penalty Debts
Appendices
Enforcing MMnistrative Orders
Enforcing Jpncial Orders
-- Modifications
-- stipulated Penalties
-- Motions to Enforce
-- Contractor Listing
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IV.D.5,
"Agency Judicial Consent Decree Tracking and Follow-up Directive", dated
January 11, 1990.
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.-<•: VMS \.~-i. -^ OTECTIQN AGENCY
.'39C
MEMORANDUM
SUBJECT: Agency Judicial Consent Decree Tracking and Follow-up Directive
FROM: James M. StroclTf /*L^
Assistant Administrator
TO: Assistant Administrators
Regional Administrators, I-X
This memorandum transmits the Agency Judicial Consent Decree Tracking
and Follow-up Directive. The Directive specifies Agency requirements for how EPA
Regional Offices track compliance with judicial consent decree requirements and for
how Regions select and document decisions on appropriate Agency follow-up
responses to consent decree violations (for the purposes of this Directive, the use of
the term "consent decree" also includes judicially imposed court orders). Each
Region should develop and execute a plan to implement this Directive so that all
elements will be in place by April 30,1990. By no later than May 30, each Region
should submit to me a memorandum detailing the steps they have taken to
implement the Directive. In addition, we intend to review its implementation
during this year's audits of the Offices of Regional Counsel.
Tba Directive was developed after an extensive review of current Agency
requirapattf «nd practices conducted, over the last nine months, in consultation
with thtfeforcement Management Council and the Enforcement Office Directors.
We appivdfttt the efforts of the Regional and Headquarters offices, which made
significant contributions to the study and to the development of the requirements
outlined in this Directive. The resultant Directive outlines the basic requirements
that are necessary to effectively manage our consent decree tracking and follow-up
responsibilities'and should be used as a supplement to the Agency "Manual on
Monitoring and Enforcing Administrative and Judicial Orders", which OECM will
soon be publishing.
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There are a few requirements from the Directive that I would like to highlight.
The Directive emphasizes the need for adequate documentation of each violation
and the selection of the Agency s enforcement response in response to a violation.
The documentation requirement is handled through the use of a form which has
been kept basic so as to not cause a resource drain on Regional resources. The
Directive also lays out a requirement for database management but provides each
Region with maximum flexibility on selecting the appropriate method of
maintaining its database based on its caseload and computer capabilities. Finally, the
Directive requires that the Regional Program Division and the Office of Regional
Counsel jointly select the Agency response to a consent decree violation, with the
decision made at the Branch Chief or higher level in keeping with the seriousness
associated with consent decree violations.
Fulfilling the requirements of the Directive should allow us to successfully
address the increasing workload associated with the growing number of judicial
consent decrees. We will soon be discussing with the Headquarters Enforcement
Office Directors the appropriateness of applying elements of these judicial Directive
requirements to at least some classes of administrative enforcement orders.
Each Region currently reports quarterly on the status of each active consent
decree as part of the Agency's STARS system. OECM would like to move to
oversight of Regional consent decree tracking and follow-up implementation
through our existing Regional audits, rather than through the STARS system. We
will assess the Regions' success in implementing this Directive with the goal of
dropping this activity as a STARS reporting measure in FY1992. We will also be
working with the Headquarters Enforcement Office Directors to include consent
decree tracking and follow-up activity in their Regional audit programs. As we
move to drop the STARS reporting requirements, Regions must assure that their
consent decree tracking systems have the capacity to provide timely information or
reports on the compliance status of their consent decrees to respond to information
requests that might occasionally be made by Agency management or in response to
outside inquiries
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-3-
OECM is available to provide assistance to you in implementing this Directive
Rick Duffy, Chief of the Compliance Evaluation Branch, or Bill Wart of his staff are
available to assist the Regions on the technical and management requirements and
can be reached at 382-3130. Regions interested in exploring the option of using the
consent decree tracking database management system developed by the National
Enforcement Investigation Center (the .VEIC-CDETS) should contact Rob Laidlaw at
776-3210.
Attachment
cc Headquarters Enforcement Office Directors
Deputy Regional Administrators, I-X
Regional Counsels, I-X
Associate Enforcement Counsels
Acting Director, NEIC
Regional Program Division Directors, I-X
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Judicial Consent Decree Tracking
and Follow-up Directive
January 1990
}
Office of Enforcement and Compliance Monitoring
U.S. Environmental Protection Agency
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Questions concerning this Directive or requata
for additional copies can be directed to:
Chief, Compliance Evaluation Branch
Office of Compliance Analysis and Program Operations
Of rice of Enforcement and Compliance Monitoring.
U.S. Environmental Protection Agency
401 M Street S.W.
Washington, DC 20460
(202 - 382-3130)
U.S. EPA Mail Code LE-133
OECM-EPA . Unuir%
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. JUDICIAL CONSENT DECREE TRACKING AND FOLLOW-UP DIRECTS £
PURPOSE
This directive is provided to cla: :fy and supplement existing Agency
requirements and guidance for judicial consent decree tracking and follow-up.
Agency managers responsible for consent decree tracking and follow-up activities
must implement the requirements of this directive. Managers are also responsible
for fulfilling any additional requirements for consent decree tracking and follow-up
that are issued by National Program Managers. This Directive is effective April 30,
1990. For purposes of this Directive, the term "consent decree" includes judicially
imposed court orders.
This directive prescribes judicial consent decree tracking and follow-up
re., airements for the following areas:
1. Implementing the Agency Guidance on Certification of Compliance with
Enforcement Agreements
2. Regional consent decree tracking and follow-up database management
3. File documentation of consent decree violations
4. Decisions on Agency follow-up to violations
A. Responsibility for decision
B. General criteria for making follow-up decisions
C. File documentation of follow-up decisions
5. Maintaining data on the current status of EPA consent decrees
6. Termination of consent decrees and dosing cases
BACKGROUND
Consent Decree Tracking Responsibilities:
Consent decree tracking and follow-up is conducted by each Regional Office
under the direction of die Regional Administrator. Within each Region, most
responsibilities are shared between the Office of Regional Counsel (ORC) and the
Regional Divisions responsible for program compliance activity. Generally, the
responsibilities are divided within each Region as follows:
Regional ffcognm Divisions
Regional Program Divisions are responsible for the overall management and
direction of the Regional compliance program in accordance with the policies and
procedures of the Agency and each National Program Office. In that role, they are
responsible for the following regional consent decree tracking and follow-up
activities:
1. Assuring, along with ORC, that proposed consent decree agreements contain
provisions/milestones that maximize the Region's ability to determine
compliance status.
:OECM-EPA Janujrv
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2. Determining compliance with the consent decree requirements through :-.*,
use of announced and unannounced inspections and the receipt and review el
deliverables.
3. Determining whether there are violations of the consent decree and
notifying the ORC of each violation.
4. Maintaining a database of consent decree status which tracks completion or
consent milestones and denotes violations. (Can te a component of a
Region-wide consent decree database system.)
5. Determining (jointly with the ORC) the appropriate Agency response to each
violation.
6. In concert with the ORC, maintaining complete file documentation of
consent decree violations and the subsequent follow-up activity, including
documentation of all consent decree violations and follow-up decisions. (File
documentation must be maintained in whatever file or files the Region uses as
the official case file, whether in a separate Program file, ORC file or a common
Program-ORC file.)
7. Notifying the ORC when all the requirements of the consent decree have
been met so that the ORC can track and assist in the termination of the
decree according to the terms of the decree.
Offices of Regional Counsel:
The Office of the Regional Counsel in each Region is responsible for the
following Regional Office consent decree tracking and follow-up activities:
1. Assuring that each settlement agreement complies with the "Guidance on
Certification of Compliance with Enforcement Agreements" (July 25,1988
memorandum from Thomas L. Adams to AAs, RAs, and RCs).
2. Obtaining a copy of the entered decree and providing it to the appropriate
regional program compliance office and to the NHC Central Depository in a
'manner. A copy must also be provided to the Financial Management
>
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3. Determining (jointly with the Regional Program Divisions) the appropr.a:e
follow-up action the Region will take in response to a violation of the decree
4. Providing legal support and services to the programs, as necessary, to enforce
the consent decree.
5. In concert with the Program Division, maintaining complete file
documentation of consent decree violations and the subsequent follow-up
activity, including documentation of all consent decree violations and
follow-up decisions. (File documentation must be maintained in whatever file
or files the Region uses as the official case file, whether in a separate ORC file,
Program file, or a common Program-ORC file.)
6. Maintaining and reporting data on the status of active consent decrees as
might be required by the Agency management and accountability systems.
7. Assisting in obtaining the termination of consent decrees which have
been successfully fulfilled, including updating the Agency DOCKET
database to reflect current status.
CONSENT DECREE TRACKING REQUIREMENTS
1. IMPLEMENTING THE AGENCY GUIDANCE ON CERTIFICATION OF
COMPLIANCE WITH ENFORCEMENT AGREEMENTS
Background:
Certification requirements were prescribed in the July 25,1988 memorandum
from Thomas L. Adams Jr. to Assistant Administrators, Regional Administrators
and Regional Counsels, "Guidance on Certification of Compliance with Enforcement
Agreements." This Guidance addresses the inclusion of compliance certification
language (in which a responsible official personally attests to the accuracy of
information contained in compliance documents made available to EPA pursuant to
the terms of a settlement agreement) and the need for including precise
documtnttlion requirements for self-certifying provisions of the decree.
Each Region must take steps to insure that all staff involved in drafting and
negotiating consent decrees are fully aware of the requirements of the July 25,1988
guidance memorandum and this Policy. (While that guidance applies more broadly
than to consent decrees, the discussion in this Policy will refer only to consent
decrees, consistent with the scope of the rest of the document)
Staff involved in drafting consent decrees must incorporate the guidance for
documentation of compliance and for certification by a responsible official unless
OECM-EPA 3 Ij.-.-j.-
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:hey affirmatively determine and document that the policy is not applicable :o i
specific case. Therefore, each consent decree should specify that all future reports
the settling party to the Agency, which purport to document compliance
with the terms of the decree, shall be signed by a responsible official. The need tor
certification and documentation requirements should be raised early in the
negotiation and drafting process.
Regional managers who review and approve drafted consent decrees must
assure that the Guidance has been adequately incorporated or determine that the
Guidance is not applicable for the specific case.
Staff and managers within the OECM Associate Enforcement Counsel Offices
must also review drafted consent decrees for inclusion and/or applicability of the
Guidance. Implementation of the certification and documentation requirements
will be a component of the ongoing oversight and periodic reviews conducted by
OECM.
2. REGIONAL CONSENT DECREE TRACKING DATABASE MANAGEMENT
Background:
Regional Program Divisions are responsible for tracking compliance with active
consent decrees once the decree has been entered by the Court The ORC is
r . - nsible for obtaining a copy of the entered decree and providing it to the
Program Division and the Financial Management Office (for penalty tracking). If the-
decree has been entered but a copy has not yet been made available, the program can
use the lodged decree during the interim, if it is known that the final decree was not
changed.
Compliance tracking is accomplished through the receipt of reports and other
deliverables from the consent decree parties and through the use of announced and
unannounced inspections. In order to determine whether a party is currently in
compliance with the consent agreement, the program compliance staff must
compare the requirements of each decree with the information gathered through
inspections and deliverables. In the case of deliverable items, the compliance staff
should domnine if the submission adequately meets the decree requirements.
Qmd dKihi u management is an important element for effective and timely
tracking ad reporting of case status. This policy outlines requirements for the
consent decree databases that are used to track consent decrees for each Regional
program. Additional elements may be required by each of the National Program
Offices.
Requirements:
Each program responsible for tracking consent decree compliance status must
maintain a consent decree database (file/record). Each program database must
OECM-EPA (anuarv :•;-:
-------
include the following information for each active decree: case name and
enforcement civil judicial docket number, statute/program, all required milestones
and their due dates, and a block for inserting the date each milestone was completed
The consent decree database can be manual, on a personal computer or
included as a part of a national compliance database such as the CDS of the Air
Program. The database could also be maintained centrally, as in Region II, where the
ORC maintains a database of all regional consent decrees using the NEIC - CDETS
capability. Each Region can choose what database type system(s) to use. For
programs with only a few consent decrees to track, a manual system may be
sufficient Regional programs may opt to use the national compliance database
depending on its specific capabilities.
The consent decree database must be maintained in three ways for it to be used
effectively. Milestones for all decrees must be entered (and revisions, if applicable,
in the case of amended decrees). On a regular schedule (not less than quarterly), all
currently due (and overdue) milestones must be extracted from the system and made
available to staff and supervisors. This use as a tickler system will alert staff as to
what actions are required to be checked on. Finally, the dates for completed
milestones must be put into the database on a regular basis (suggested monthly
updates).
Maintaining this database in a central location will allow a program easy access
to the status of all its decrees, the ability to retrieve all due milestones and a complete
historical record of each decree as staff turnover and assignment changes occur. It
will also provide documentation of case history for audits or other oversight activity.
3. FTLE DOCUMENTATION OF VIOLATIONS
Background:
Program Divisions are responsible for determining if a consent decree violation
has occurred. Any milestone not complied with by the due date of the consent
decree constitutes a violation, regardless of the substantive impact of the deviation
from the consent decree requirement In certain cases, Program Divisions may need
to consukntth the ORC in determining whether a violation has occurred (e.g.,
when A ^|to of force majeure has been made).
Requirements:
Regional Program Divisions must notify the ORC of each violation of an active
consent decree. A violation occurs when any milestone is missed (i.e. a report that is
one day late is a violation), although there may be instances where, as a matter of
priority, no formal enforcement action is taken. In addition, a record of the violation
must be placed in the official Regional case file (see copy of form attached).
;OECM-EPA
-------
4. DECISION'S OX ACEN'CY FOLLOVV-LT TO VIOLATION'S '
Background:
When a violation occurs, the Region must determine the appropriate Agency
response. In some cases, the violation may not pose a threat to public health or the
environment or jeopardize the party's ability to meet subsequent milestones or rhe
final compliance date. In such instances, after a review including the criteria
discussed in subsection C below, the program office and ORC may jointly decide that
no follow-up action is required or that a non-formal response may be appropriate.
Other violations will be more serious and the program and ORC may decide to take a
formal enforcement action such as seeking stipulated penalties or initiating a
contempt action. For all violations it is important for the Agency to document the
decision process within the case record. For all violations, the responsibility for
determining the appropriate response action is shared by the Regional Program
Division and the Office of Regional Counsel.
Requirements:
A. Responsibility for decision:
Once a violation occurs, the Program and the ORC must jointly determine
the Agency response. Given the seriousness of consent decree violations,
concurrence must occur at no lower than the Branch Chief level in both Offices.
Disagreements should be elevated to senior management On the rare occasion
when the two offices cannot agree, the issue will be resolved at the RA or DRA ievei.
B. File documentation of follow-up decisions:
The decision concerning how the Agency will respond to a violation must be
documented in the official Regional case file. The documentation (copy of form
attached) must include the decision made and the reason for the decision. The
documentation must also include the signatures of the responsible Program Office
and ORC Branch Chiefs (or higher level).
C General Criteria for follow-up decisions:
the Agency enters into a consent decree we expect the defendant to
comply, fit take compliance with the decree very seriously and expect all parties to
take all step* necessary for timely compliance. As a result if they are in violation, we
will normally respond for the purpose of remedying the violation, obtaining a
penalty, or both. However, given the need to set priorities, we may not choose to
take a formal action in every instance. The Region is delegated authority to decide
what follow-up action, if any, to take. The decision not to take a formal action is a
serious judgment required to be made jointly by the Regional Program Division and
the Office of Regional Counsel at the Branch Chief or higher level.
OECM-EPA Januarv:--
-------
In selecting the appropriate response, the following factors /criteria rnisr.: r=
considered.
Environmental Harm Caused by Violation: What is the level of risk to
human health and to the ambient surroundings for continuing
noncompliance?
Duration of the Violation: How long has the violation continued? Has the
violation been continuous or interrupted? Has the violation been corrected? >
Good Faith/Bad Faith (Compliance history): Was the violation deliberate?
Has the party been notified that it was in violation and continued to violate?
Has the party demonstrated good or bad faith in its past efforts to comply or
respond to Agency efforts? Is there a pattern of violations which suggests
inattention to its compliance obligations, even though the individual
violations are not, in themselves, of major concern?
Deterrence Value: Will an action deter future violations?
Ability to Respond: Will the enforcement action result in compliance?
Will the facility meet its final compliance date, even though it missed an
interim date?
Economic Gain: Has the violator gained an economic advantage over its
competitors as a result of the violation?
Violations for which a decision not to take a formal action based on competing
priorities might be appropriate would generally find the party on the positive side of
the factors above (i.e. no or limited environmental harm from the violation, good
compliance record, etc.). Situations where the Agency might exercise its discretion
not to take an action might include:
• Late reporting with no environmental consequence and without a
past pattern of delay or noncompliance.
• Missed milestone, not a major requirement, with expectation they will be in
compliance with/by the next milestone
• Violation of an interim limit, magnitude of the exceedence is minor, with
compliance now achieved or anticipated shortly.
5.
Background:
Currently, each ORC is responsible for providing consent decree status reports
each quarter to OECM as part of the Agency SPMS system. In most Regions, the
information for this report is collected from each program and combined into a
Regional report.
OECM-EPA . Januarv .^
-------
--...j ..•--*-: _ec-=e
Requirements:
The ORCs will continue to be responsible for maintaining information on
regionwide status of consent decrees and providing Regional reports to OECM, as
required. The specific nature of these reports may change from the current STAR
measure. Regional Program Divisions are responsible for supplying
program-specific information or reports to ORC that might be needed to fulfill
national reporting requirements in addition to meeting the requirements of their
N'ational Program Office.
6. TERMINATION OF CONSENT DECREES AND CLOSING OF CASES
Background:
A judicial enforcement case with a consent decree is successfully completed
when all the requirements of the consent decree, including penalty payments, have
been met and the termination clause satisfied. At that point, the consent decree
should be terminated in accordance with the terms of the decree. Agency databases
and status reports need to accurately reflect the current status of cases (including cases
where the requirements of the decree have been fully met, cases for which
termination of the decree is due, and cases which have been dosed after consent
decree termination). Accurate data are needed to report the status of active decrees
and for planning, budgeting and other management purposes.
Requirements:
Program Divisions, as part of their responsibility for tracking consent decree
compliance status, must notify the ORC when all the requirements of the consent
decree have been satisfied.
The ORC is responsible for working with DOJ to effect the termination of the
consent decrees, in accordance with the termination clause of the decree (timeframe,
automatic, plaintiff or defendant motion). The ORC is responsible for tracking the
termination status of inactive decrees and assisting the completion of plaintiff
responsibilities, as appropriate. The ORC is responsible for maintaining the current
status of these decrees in the Agency DOCKET system and dosing cases after
termiMtioB
OECM-EPA |anui-v
-------
CONSENT DECREE VIOLATION AND FOLLOW-UP FORM
PART A: REPORT OF VIOLATION
Case Name:
Program/Statute:
EPA Docket *
:n violation:
Requirement due data:
Requirement was completed late:
Comments:
Requirement not completed:
(wnen; (crteck)
Violation documented by: Signature/date:
Print na/ntf;
Title/organization:
PART B: DECISION ON RESPONSE TO VIOLATION (cMctipf
Q Type of enforcement action planned:
Q Enforcement acton determined not to be appropriate for the following reason (s):
Office of Regional Counsel
Concurrences by:
Name /signature:
Organization tiflr
Date:
EPA-OECM Form
-------
V. CRIMINAL LITIGATION/ENFORCEMENT
-------
V.I.
"Agency Guidelines for Participation in Grand Jury Investigations", dated
April 30, 1982. See GM-9.
-------
-------
V.2.
"Criminal Enforcement Priorities for the EPA", dated October 12, 1982. See
GM-14.
-------
-------
V.3.
"Analysis of Existing Law Enforcement Emergency authorities", dated March
6, 1984.
7-
-------
2.-H-
-------
Memorandum
Subject
Analysis of Existing Law Enforcement
Emergency Authorities
SST;EHF:JIF;lsp
Dale
March 6, 1984
To Distribution *™V Stephen S. Trott
Assistant Attorney General
Criminal Division
As you are aware, the Law Enforcement and Public Safety
Working Group (LEPSWG), which I chair, was directed by the
President to compile existing emergency law enforcement author-
ities, analyze them, and propose measures which could improve
law enforcement agency preparedness to respond to severe
regional or national emergencies. The purpose of this exercise
is to provide the nation with the legal means to confront the
disruptions that would result from a wide range of severe
national security and domestic emergencies.
The Federal Emergency Management Agency (FEMA) recently
completed a compilation (attached) of emergency authorities.
As we enter upon the second and third phases — analysis and
recommendation, respectively — of our assignment, I request
your assistance. Your participation will also present an
opportunity to assure that your agency will be in a position
to act efficiently and with lawful authority in responding to
regional or national emergencies. _
I would appreciate your determination whether the compi-
lation accurately reflects your agency's existing emergency
authority. (The LEPSWG determined that only authorities which
take effect in emergency situations should be included in the
compilation.) Even if your agency has already had an opportunity
to review and comment upon an earlier draft of this compilation,
it would be appreciated if you would bring any current errors
or omissions to our attention.
I would also appreciate your suggestions regarding statutes,
Executive Orders, or other authorities that need to be enacted
to provide your agency with jurisdiction that would be necessary
or useful in meeting foreseeable emergencies. In this regard,
it is the Working Group's belief that a review should be con-
ducted by both your legal staff and by officials with operational
-------
- 2 -
responsibilities. It would be most helpful if your staff con-
sidered both hypothetical situations that might develop and
actual incidents which have already occurred. If your agency
has created after-incident reports following previous law
enforcement emergencies, such reports could be very useful in
this endeavor. We are only looking for outlined suggestions,
not meticulous legislative drafts. The attached sample would
be an ample response.
Finally, as it may be necessary for us to discuss specific
issues in greater detail with members of your legal or operational
staffs, please identify for me, by name, title, and phone number,
the persons whom we can contact for further information. At
this time it has not been determined whether such interviews
will be necessary, or how they can be most productively con-
ducted, if necessary.
Consistent with the Presidentially "mandated milestone
deadlines for completion of this project, it is requested that
you provide us with the requested information within one month
of receipt of this memorandum. The responses should be addressed
to the Emergency Mobilization Preparedness Board Support Group
(Room 2252-, Main Justice Building, 10th and Pennsylvania Avenue,
NW., Washington, D.C. 20530). Mr: Ezra Friedman, Chairman of
the Emergency Law Enforcement Authorities Sub-Working Group,
may be contacted directly at 724-6971 if your staff has any
questions regarding this project.
Attachments
-------
DISTRIBUTION
General Counsel
Department of Agriculture
Washington, D.C. 20250
Inspector General
Department of Agriculture
Washington, D.C. 20250
General Counsel
U.S. Forest Service
Department of Agriculture
Washington, D.C. 20250
General Counsel
Commodity Futures Trading
Commission
Washington, D.C. 20581
General Counsel
Consumer Product Safety
Commission
Washington, D.C. 20207
General Counsel
Department of Commerce
Washington, D.C. 20230
General Counsel
Civil Aeronautics Board
Department of Commerce
Washington, D.C. 20428
General Counsel
Environmental Protection
Agency
Washington, D.C. 20460
General Counsel
Department of Energy
Washington, D.C. 20585
General Counsel
Farm Credit Administration
Washington, D.C. 20578
General Counsel
Federal Communications
Commission
Washington, D.C. 20554
General Counsel
Federal Home Loan Bank Board
Washington, D.C. 20552
General counsel
Federal Maritime Commission
Washington, D.C. 20573
General Counsel
Federal Reserve Board
Washington, D.C. 20551
General Counsel
Federal Trade Commission
Washington, D.C. 20580
General Counsel
General Services Administration
Washington, D.C. 20405
General Counsel
Department of Health and Human
Services
Washington, D.C. 20201
General Counsel
Food and Drug Administration
Department of Health and Human
Services
5600 Fishers Lane
Rockville, Maryland 20857
General Counsel
Social Security Administration
Department of Health and Human
Services
Baltimore, Maryland 21235
Inspector General
Department of Health and Human
Services
Washington, D.C. 20201
General Counsel
Department of Housing and Urban
Development
Washington, D.C. 20410
Solicitor
Department of the Interior
Washington, D.C. 20240
General Counsel
National Park Service
Department of the Interior
Washington, D.C. 20240
-------
- 2 -
Deputy Assistant Secretary
for Indian Affairs
Bureau of Indian Affairs
Department of the Interior
Washington, D.C. 20245
Director
U.S. Fish & Wildlife Service
Department of the Interior
Washington, D.C. 20240
Director
Bureau of Land Management
Department of the Interior
Washington, D.C. 20240
General Counsel
International Trade Commission
Washington, D.C. 20436
General Counsel
Interstate Commerce Commission
Washington, D.C. 20423
General Counsel
International Boundary and
Water Commission, U.S.
and Mexico
4110 Rio Bravo
El Paso, Texas 79902
General Counsel
International Boundary
Commission, U.S. and Canada
Room 150 - 425 I. St., NW.
Washington, D.C. 20001
Director
Community Relations Service
Department of Justice
Washington, D.C. 20530
Assistant Attorney General
Antitrust Division
Department of Justice
Washington, D.C. 20530
Assistant Attorney General
Civil Division •
Department of Justice
Washington, D.C. 20530
. Assistant Attorney General
Civil Rights Division
Department of Justice
Washington, D.C. 20530
Assistant Attorney General
Land & Natural Resources Divisi,
Department of Justice
Washington, D.C. 20530
Assistant Attorney General
Tax Division
Department of Justice
Washington, D.C. 20530
General Counsel
Bureau of Prisons
Department of Justice
Washington, D.C. 20530
General Counsel
U.S. Marshals Service
One Tysons Corner Center
McLean^, Virginia 22102
%
General Counsel
Immigration & Naturalization Service
Department of Justice
Washington, D.C. 20536
General Counsel
Federal Bureau of Investigation
Washington, D.C. 20535
General Counsel
Drug Enforcement Administration
Washington, D.C. 20537
Solicitor
Department of Labor
Washington, D.C. 20210
General Counsel
National Credit Union Admin.
Washington, D.C. 20456
General Counsel
Nuclear Regulatory Commission
Washington, D.C. 20555
Chief Postal Inspector
Postal Inspection Service
Washington, D.C. 20260
General Counsel
Small Business Administration
Washington, D.C. 20416
General Counsel
Securities & Exchange Commissi3|
Washington, D.C. 20549
-------
- 3 -
Legal Adviser
Department of State
Washington, B.C. 20520
General Counsel
Tennessee Valley Authority
400 West Summit Hill
Knoxville, Tennessee 37902
General Counsel
Department of Transportation
Washington, D.C. 20590
General Counsel
U.S. Coast Guard
Washington, D.C. 20593
General Counsel
Federal Aviation Administration
Washington, D.C. 20591
General Counsel
Maritime Administration
Washington, D.C. 20590
General Counsel
Department of the Treasury
Washington, D.C. 20220
General Counsel
U.S. Customs Service
Washington, D.C. 20229
Chief Counsel
Bureau of Alcohol, Tobacco,
and Firearms
Washington, D.C. 20226
Chief Counsel
Internal Revenue Service
Washington, D.C. 20224
Chief Counsel
U.S. Secret Service
Washington, D.C. 20223
Chief Counsel
Veterans Administration
Washington, D.C.' 20420
-------
-------
EMERGENCY AUTHORITIES RECORDS FOR SECTION: LAW ENFORCEMENT
-------
M*S1t* *t*: 9 USC llfttCp) -001
ft££0ftb TITLE :
' SUSPENSION OF IWM6RAT10N
Li&AL CITATION:
e V&C 1182
AiSTKAlT:
*HEME*Efc TML PRkSlDlKT FINDS THAT THE ENTRY OF ANT ALIENS OR OF AftiV CLASS OF
AkUNS INTO THE UMTiii STATtS kOULD Bt DETRIMENTAL TO THE INTERESTS OP THE
EC ST*TLS, Ht P.AT bT PROCLAhA TJ ON, AND FOR SUCH PERIOD AS HE SHALL DEE«
SiAPT, SUSPtl.O THi Et.TRY uF ALL ALUNS OR ANT CLASS OF ALIENS AS IfMICRANTS
liCKIK^ICtaAUTS, OR IMPOSE ON THE ENTRY OF ALIENS ANY RESTRICTIONS HE MAY ASP-
aE
-------
UST.R K£TS iu tic 33« -OC1
'E19KD TITLE:
USE OF RIL1T1A AN* ARMED FOKCES TO ENFORCE FEDERAL LAW
EGAL CITATluN:
1L- USC 332
r
ACT;
^^
,':: rj«?.ix%s?wf.j"?s%tj
JUDICIAL PROCEEDINGS. SEfc PO»SE COMTATUS ACT C16 USC lSi$|.
KET: 10 use 333 -001
RECOKD TITLE : .
USE OF MILITIA ANb ARMED FOKCES TO SUPPRESS INTERFERENCE »/ FED t ST
LEGAL "CITATION:
HI USC 333
ABSTRACT:
AUTwOKlZlS THL PRESIDENT TO USE THE MjLlTl* OR ARMEii FORCES OR BOTH TO
SUPPKLSS. IN A STAU. ANT INSURECTI ON, DOMESTIC VIOLENCE, UNtAWFUL ASSEMBLAGE
OK LONSP1KACV IF IT CD SO HINDERS THE EXECUTION OF STATE OR FEDERAL LAW THAT
PART OK CLASS OF PEOPLE IS DEPRIVED OF A RIGHT, PRIVILEGE, XMMUNITT OR
NAKED IN TnE CONSTITUTION AND CONSTITUTED AUTHORITIES OF THAT STATE
FAIL, C* KEFUSE TO PROTfeCT THAT RIGHT, PRIVILED6E, OR IP.MUNITT,
o GIVE THAT PROTECTION; OK (2> OPPOSES OR OBSTRUCTS THE EXECUTION OF THE
CF THE UMTLD STATES OK IP.f-EDES TMfc COURSE OF JUSTICE UNDER THOSE LAWS.
1C use 57'
COLLECTED DURING «ILITART OPERATIONS fOR CIV L*«
LEGAL CITATION:
It USC 371
MA . lHlN THE JURISDICTION OF SUCH OFFICIALS.
(U&UR KET: 1w USC 372: -001
fcECO«D TITLE:
DSL OF MILITANT EQUIPMENT/FACILITIES FOR CIVILIAN LAW ENFORCEMENT
L?CAL CITATION:
1C VSC 372
4UTHO«I2ES THE SECRETARY QF DEFENSE TO MAKE AVAILABLE. IN ACCORDANCE WITH OTHER
APPLlCAbLE LA., TO CIVILIAN LAW ENFORCEMENT OFFICIALS ANT MMT, NAVT, AIR
/DACE Oft KARINE COfcPS EQUIPMENT, oASE FACIL1TT OR RESEARCH FAClLlTt FOR LAW
ENFORCEMENT PURPOSES. -7^-
-------
fcASUR KfcY: 1ii USC 373; BOO D1RECTIVE-C01
REC04D TITLE:
USE OF KlLlTAKT PtfiSONSiL TO TRAIN AND ADVISE CIVILIAN LAW ENFORCE*!
.EGA* CITATION:
10 USC 373; ftOD DIRECTIVE 5525.5
ABSTRACT:
AUTHORIZES SECRETARY OF DEFfcN&E TO ASSIGN MILITARY PERSONNEL TO TRAIN FEDERAL,
STATE AND LOCAL LAfc ENFORCEMENT OFFICIALS IN THE DERATION AND MAINTENANCE OF
EfcUIPr.EnT *AD£ A.'AlLAeLfc UNDER SECTION 372 OF TITLE 1C AND TO PROVIDE
ADViSc rtELE*E'«T TO THE PUkPOStS OF THIS CHAPTER*
BASUR KEt: Id USC 374 -001
&ECOKD TITLE:
USE OF MILITARY PtKSONNEL FOR CIVILIAN LA* ENFORCEMENT OUTSIDE THE U.S.
LEGAw CITATION:
1C USC 374(0
•
ABSTRACT:
UPO* A JOINT DETERMINATION fcT THE SECRETARY OF DEFENSE AND THE ATTORNEY GENERAL
THAT EMERGENCY CIRCUMSTANCES EXIST, EQUIPMENT OPERATED BY OR KITH THE ASSIST-
ANT OF MILITARY PERSONNEL MAT bE USEb OUTSIDE THE UNITED STATES, ITS TER-
RITORIES AND POSSESSIONS AS A BASE OF OPERATIONS BY FEDERAL LAW ENFORCEMENT
OFFICIALS TO FACILITATE ENFORCEMENT OF TMt LA.S LISTED IN 10 USC 374(A> AND
TO TRANSPORT L*. EKFOKCfENT OFFICIALS IN CONNECTION kITH SUCH OPERATIONS
PROVIDED SUCH EQUIPMENT IS NOT USED TO INTERDICT OR INTERRUPT THE
VESSELS CM AIRCRAFT.
3lSTtR KEY: 10 USC 374 -001
TITLE:
USE OF MILITARY PERSONNEL TO OPERATE AND MAINTAIN EQUIPMENT
CITATION:
10 USC 374
ST^»CTs
AUTHORIZES THE SECRETARY OF DEFENSE TO ASSIiN MILITARY PERSONNEL TO OPERATE
4»d MAINTAIN ECUIPKENT MADE AVAILABLE UNDER SECTION 372 OF TITLE 10 TO THE
?UEM THAT THE EMUIPMNT is USED FOR POMTORING AND COKKUNICATINC THE MOVEMENT
)f AIR AND SEA TRAFFIC UPON REQUEST OF THE HEAD OF AN AitENCY WITH JURISDICTION
'0 ENFORCE FEbERAL DRutt IMMIbRATION OR CUSTOMS LAifS. CAVEAT: SEE
10 JSC 37WCCX1) (PROVISION OF AN ISDINE OUTSIDE THE .UNITED STATES LIMITED TO
I* EMERGENCY SITUATIONS). ;>'^P-
«AST£R KEY: Ifi USC 376 -001
11CORD TITLE:
0>* USL °r r<1LIT**T *«OURCE FOR CIVILIAN LAW ENFORCEMENT
16 USC 376
CJV1».1*I» UA. ENFORCEMENT OFFICIAL UND|R
c lr THE PROVISION OF SUCH ASSISTANCE WILL
AFFECT THE MILITARY PREPAREDNESS OF THE UNITED STATES.
-------
M*UR Ktv: 10 use 906 (ART. 106, ucw
RElOHD TITLE:
SPYING
LE&AU CITATION:
10 USC 906 (ART. 106, UC*J>
ABSTkACT:
A*Y PERSON MHO IN TIME OF WAR IS FOUND LURKING AS A SPY OR ACTING AS A SPT IN
05. ABOUT ANT PLACE, VcSSEL, Oft AIRCRAFT, WITHIN THE CONTROL OR JURISDICTION OF
AST Of THE ARMED FOrtCcS, OR IS OR ABOUT ANY SHIPYARD OR AKY MANUFACTURING OR
IfcDJSTRIAL PLANT ENGAbED IN AID OF THE PROSECUTION^ OF THE UAR BY THE UNITED
STATE* SHALL bE TftUD £T A GENERAL COURT-WAfcTIAL OR BY A MILITARY COMMISSION
AND ON CONVICTION SHALL Be PUNlSHcD BY DEATH.
-------
BASTtR KEY; 12 US C 34U(B> -001
RECOKD TITLE:
EMERGENCY GOVERNMENTAL ACCESS TO FINANCIAL RECORDS
LEGAL CITATION:
12 USC 3414(B>
A9STKAIT;
C&EHPTS GOVERNMENT FRfc* PKOHlblUUN IN 12 USC 3401 ET SEO AGAINST OBTAINING
FINANCIAL RECORDS FfcO* A FINANCIAL IN&TJTuTION WITHOUT A SEARCH WARRANT OR
JUDICIAL SUPOESA IF THE GuVERNriKT AUTHORITY DETtR^INES THAT DELAY IN OBTAINING
ACCtSi bCULD CREATE fKriNENT DANGER OR PHYSICAL INJURY TO ANY PERSON, SERIOUS
PROPERTY DAKAwE OK FLltHT TO AV01* PROSECUTION. fcOVERNAENT AUTHORITY MUST ALSO
CD SU&riT 10 THE FINANCIAL INSTITUTION THE CERTIFICATE REQUIRED IN 12 USC
5«.UJtfc>, bllHlK FIVE DAYS OF UBTAlNJKu ACCESS TO RECOkDSt (2> FILE vITH THE
APPriOPfclATE CUUkT A SIGNED Sbt*N STATL^EKT OF DESIGNATED SUPERVISORY OFFICIALS
31T)ING FORTH THI GROUNDS FOR E*E«GENCY ACCESS; (3> COMPILE AN ANNUAL
Gft UF OCCASIONS WHEN AUTHORITY EXERCISED.
-------
1* u$c be -001
RECOXD TITLE;
SAVING OF LIFE ANv PROPERTY BY COAST GUARD
LE»AL CITATION:
14 USC 68
ABSTRACT:
THE COAST GUARD IS AUTHORIZED TO RENDER AID TO DISTRESSED PERSONS, VESSELS AND
AIRCRAFT ON AND UNDER THE HIGH SEAS AND ON AND UNDER bATE*S OVER WHICH THE UNI«
TED STATES "AS JURISDICTION, AND TO PERSONS AND PROPERTY IMPERILED B* FLOOD BY-
(1) PEKFGF'ING ANY AND ALL ACTS NECESSARY TO RESCUE AND AID PERSONS AND PRO-
TECT AND SAV£ PRl/PERTY;
(2) TAHITI, CH&KGL OF AND PROTECTING ALL PROPERTY SAVED FROM SUCH DISASTERS
UNTIL SUCH Pfc&PEfcTY IS CLAir.ED PY PERSONS LEGALLY AUTHORIZED OR UNTIL
DISPOSED OF IN ACCORDANCE *ITH LAto, AND CARING FOR BODIES OF THOSE WHO
KAY HAvL PLRISHE1. IN SwCft CATASTROPHES;
£3) FUUMSHUG CLOTHING, FOOD, LODGING, MEDICINES, AND OTHER NECESSARY SUP-
PLIES AND SERVICES;
AND
C4> DESTROYING Oh T0.1N6 INTO POKT SUNKEN OR FLOATING DANGERS TO NAVIGATION.
14
RECOkD TITLE:
•EROVAL OF COAST GUARD RESTRICTIONS
LEGAL CITATION:
14 USC
ABSTRACT:
AKY LAh REMOVING ANY RESTRICTION CONTAINED IN ANY THEN-EXISTING LAto A$ APPLIED
. 1HE NAVY, FOP THE DURATION OF THE nAi. OR NATIONAL EMERGENCY PROCLAIMED
THE pStSlDENT, INCLUDING BUT NOT LIFTED TO RESTRICTIONS RELATING TO THE
K IN WHICH PURCHASES KAY Bt KAbE AND CONTRACTS AWARDED, FISCAL OPERATIONS,
,!*SC''KfcLt SHALL 1N TME $*H£ "ANNER AND TO THE SAME EXTENT, HEflOVE SUCH
SIRICTICNS AS APPLIED TO THt COAST tUARfr.
-------
KEY: 16 USC 2153CA) -001
,0«D TITLE:
DESTRUCTION OF WAR, MATERIAL
E6AL CITATIONS
la USC i1S3CA>
CR -HEN THE UNITED STATkS IS AT WAR, OR IN TIMES OF NATIONAL EMERGENCY
AS DECLARED BY THE PRESIDENT VR CONGRESS, KITH INTENT TO INJURE 0« OBSTRUCT
T«€ UK1TED STATES OR ITS ALLt IK PREPAfclNG FOR OR CARRYING ON THE WAR OR
DEFENSE ACTIVITIES, WILLFULLY INJURES, OESTROTS, OR CONTAMINATES ANY WAR
MATERIALS, OR ATTEST* TO DO SO, SHALL bE FINED NOT PORE THAN §10,000 OR
XSPaiSCNED NOT WOKE ThAN JC YtAfcS 0* bOTH.
WiSTER KEY: 16 USC 21*3(B> -C01
«ICG«D TITLE:
CO?.SP1RAC» TO DkSTROY «AR MATERIALS
LEbAL CITATION:
16 USC 2153(6)
AtSTMACT:
IF TWO 0» PORE PEftSOKi CONSPIRE TO DESTROY teAR «ATE«JAL5, AS OUTLINED IN
id USC 215JCA), AND ONE OR *OkE OF SUCH PERSONS 00 ANY ACT TO EFFECT THE
S^JECT OF THE CONSPIRACY, EACH PAKTl SHALL eE PUMShEC AS PROVIDED FOR IN
**ST£R KEY: IS, USC 21S«(A> -001
TITLE:
PkCOUCJKG DEFECTIVE WAR MATERIALS
CITATIONS
19 USC 215*(A>
iiiaACT:
>rxO£V£K, -M£N THE UNITED STATES IS AT WAR, OR IN TlnES OF NATIONAL EPER6ENCY AS
"•fCLiKED BY THE PKtSIDENT OR CONGKESS, tolTH INTENT TO INJURE OR OBSTRUCT THE
;if£i: STATES Ori ITS ALLY IN PfttPARING FOR OR CARRYING ON THE WAR OR DEFENSE
TIVITJES, WILLFULLY HAKES, CONSTRUCTS, OR CAUSES TO BE HADE OR CONSTRUCTED,
iNY bA* rATERIAL, fcAR UTILITY OR TOOL IN A DEFECTIVE MANNER, SHALL BE FINED NOT
10S£ THAS SIC.CuO ON IMPRISONED NOT KfefcE THAN 30 YEARS OR BOTH.
KEY: 18 use 21>^(B> -OS1
TITLE:
CONSPIRACY TO MObUCE DEFECTIVE MAR
LEaAL CITATION:
1fa USC 2154(8)
3STAACT:
; i'kO OK MOR£ PERSONS CONSPIRE TO PRODUCE DEFECTIVE MR MATERIALS, AS
OUTLINED IN u u.s.c. 21**CA>, ANA ONE OR MORE OF SUCH PERSONS DO ANY ACT
f£ EFFECT THE ObJECT OF THE CONSPIRACY. EACH PAR1Y SHALL BE PUNISHED AS
**
-------
KEY: 18 USC 21i5<*> -C01
TITLE:
DESTRUCTION OF NATIONAL DtFEN:»E PAURIALSt PREMISES OR UTILITIES
LE&AL CITATION:
U USC 215SCA)
ABSTRACT:
rfHOtVL*. »ITH INTENT TO INJURE OR OBSTRUCT THE NATIONAL DEFENSE OF THE UNITED
STATED, WILLFULLY DESTROYS OR CONTAI*1HATES ANY NATIONAL DEFENSE MATERlALt
PKEM-ES OK UTILITIES SHALL B£ FI hE 0 NOT MO*E THAN S1C.OOO OR IMPRISONED WOT
BORE THAN 1u YEARS, OK BOTH.
KEY: IE tSC 215S(B> -001
«ECO*D TITLE:
COKSFIRACY TO DtSTRl/Y NATIONAL DEFENSE MATERIALS. PREMISES OR UTILITIES
LELAL CITATION: *
It USC 21i*(B>
A3ST*ACT:
IF TWO OK PORE PERSONS COfcSFUE TO DESTROY NATIONAL DEFENSE MATERIALS. PREMISES
9» UTILITIES AS OUTLINED IN 1b U.S.C. 2155(A>, AND ON£ OR MORE OF SUCH PERSONS
3U ANY ACT TC EFFECT THL OBJECT OF THE CONS PIRACY, EACH OF THE PARTIES TO SUCH
' «,i,PlRACT SHALL bl PuKISHEl AS PROVIDED FOii IK 18 U.S.C* 2155CA).
MASTER KEY: 16 use 21&e -001
«:CO»D TITLE:
PRODUCTION OF DEFcCTlVE NATIONAL DEFENSE MATERIALS OR PREMISES
wE6AL CITATION:
1t USC 2156CA)
.ITH INTENT TO INJURE OR ObSTRUCT THE NATIONAL DEFENSE OF THE UNITED
5-.\f£S, hILLFJLLY CONSTRUCTS, OR r.AKES ANY NATIONAL DEFENSE MATERIAL OR
PREMISES IN A DEFECTIVE MANNER. 0* ATTEMPTS TO DO SO. SHALL BE FINEfi NOT MORE
»l£(OCu OR IMPRISONED NOT KCUE THAN 10 YEARS OR BOTH.
KEY: 18 USC 21S6(b> -001 . :
«10*D TITLE: . . ...
CONSPIRACY TO PRODUCE DEFECTIVE NATIONAL DEFENSE MATEKIALS OR PREMISES
CITATION: -
fc USC 2156(i)
«
Ik'O OR MORE PERSONS CONSPIRE ^0 PRODUCE DEFECTIVE NATIONAL DEFENSE
IPIALS OR PREMISES AS OUTLINED IN 18 USC 21S6(A)V AND ONE OR MORE OF SUCH
PIRSC'HS DO AKV ACT TO EFFfcCT THL UEJECT OF TJfE CONSPIRACY, EACH OF TH£ PARTIES
1;> SUCH CONSPIRACY SHALL BE PUNISHED AS PROVIDED FOR IN U USC 2156(A).
-------
KEY: 18 USC 2381 -001
TITLE:
TfcEASON
LE'»A* CITATION:
16 USC i361
ABSf4ACT:
«HOCVE«. OHING ALLEGIANCE TO THfc UNITED STATES, LEVIES WAR AGAINST TMEM OR
AD*£fc£S TO THEIR ENcKIES, GIVING THE" AID AND COMFORT WITHIN THE UNITED STATES
09 SLSEb-ttRt, IS UUILTY OF TRtASO* AND SHALL SUFFER DEATH, OR IMPRISONMENT MOT
LESS THAN 5 YEARS AKD FINED NOT LESS THAN 810,000; ANd SHALL BE INCAPABLE OF
HOLDING A«T OFFICE UNiER TMt UNITED STATES.
R KEY: 18 USC 238k -001
D TITLE:
WISPfilSIOf. OF TREASON
CITATION:
1fc USC 1362
ACT:
VER, OklNb ALLEGIANCE TO TM£ L-MTED STATES AMD HAVING KNOWLEDGE OF THE
iSSIG,, CF ANY TREASON AGAlNiT THE«, CONCEALS AND DOCS HOT DISCLOSE THE SAME
TWi P8LS1DEN1 OR SO^E FEDEfcAL JUDGE OR STATE JUDtoE OR GOVERNOR, IS 6UXLTY OF
.\ v»f TklASON AND SHALL BL FINED NOT MORE THAN S1.COO OR IMPRISONED MOT
7 Yt*RS, OR fcOTH. t»JL«i
KEY: 18 use
;:*<:Q*D TITLE:
REBELLION OR INSUKKECTICN AGAINST THE UNITED STATES
LEGAL CITATION:
1o USC 2383
' !!VER:INCITES, ASSISTS OR ENGAGCS IN ANY REBELLION OR INSURRECTION
,.--• AUTHORITY OF THE UNITED STATES. OR GIVES AID OR COMFORT J^^TO, SHALL BE
MNED NOT roPt THAN SIC.DO:, OR IrtPKlSONEt NOT MORE THAN 1C YEARS, OR BOTM;
SHALL BL INCAPABLE OF HOLDING ANY OFFICE UNDEfc THE UNITED STATES.
IE USC 238* -001
C TITLE:
SEDITIOUS CONSPIRACY
CITATION:
1b USC 23&*
"IF ihc oi. PURE PERSONS m ANY STATE OR TERRITQRT, o- IN ANY PLACE SUBJECT
U.S. JUklSblCTlON, CONSPIRE T6 UVERTHROh, PUT »OMN, OR PfiTROY BY FORCE
U.S. bOVERkhEhT, Ok Tt LEVY MAR AfcAlNST THEM, OR TO OPPOSE BY FORCE THE
?S$tUTlO* OF AN» LA* OF THE U.S.. OR TO TAKE ANY U.S. PROPERTY BY "RCE, SMALL
'I /II.ED NOT r.ORL THAN S2U.OCO OR IMPRISONED fcOT MORE THAN TtoENTT TEARS, OR
O
-------
MASTED KEY: 1* USC 23t5 -001
RECORD TITLE:
ADVOCATING THE OVEKTHRO. OF THE GOVERNMENT
CITATION:
14 USL
WMOtVER KNOWINGLY OR »!LLlNtLY ADVOCATES, AfcETS, ADVISES OR TEACHES THE
PkOPRUTY Ofc NECESSITY Of OVEkTHROtflNb OR DESTROYING THE U.S. GOVERNMENT
OK THE GOVERNMENT OF ANY STATE OK TERRITORY, OR 60VERNMENT OF ANY POLITICAL
SUBDIVISION THEREOF, L>Y FORCE OK VIOLENCE, OR BY THE ASSASSINATION OF ANT
OFFICER OF ANY SUCH GOVERNMENT SHALL faE FINED NOT MORE THAN $20.000 OR
IMPRISONED KOT HOME TbAN 20 TtARS, OR ftOTH.
RASUR *EY: 18 USC 23e7 -001
fcECORD TITLE:
INTERFERENCE WITH ARM*D FORCES
LEGAL CITATION:
14 USC 2387
ABSTRACT:
WHOEVER, »ITH INTENT TO INTERFERE WITH, IMPAIR OR~XNFLUENCE THE LOYALTY,
MOhfcLE OK blSCIPLINl OF THE MILITARY OF THE UNITED STATES ADVISES, COUNSELS
Oft IN AMY FANNER CAUSES 0« ATTEMPTS TO CAUSE INSUoORDINATI ON, DISLOYALTY*
MUTINY 0» REFUSAL OF iiUTY BY AKY KEnCER OF THE MILITARY SHALL BE FINED NOT
<.
*.* KLT: IB use 2 3 to -001
D TITLE;
XI.TERFEMEUCE IIITH AR^ED FOKCES DURING TIME or WAR
LEGAL CITATION:
IS USC *3*B
A9STMACT:
WHOEVER tURING A TIME OF bAR bILLFULLY RAKES Ofc CONVEYS FALSE REPORTS OR
STATEf.tfcTS tilTH, INTENT TO INTERF E kE r WITH THE U.S. PlLlTAfY OR Tf PROMOTE THE
ACCESS OF ITS ENEP1E* »HALL t>E FINED NOT P.ORE 110,000 OR IMPRISONED NOT
*ORfc TnAN TWENTY YEARS OR BuTH.
VHOEVEK DURISu TIP.E OF -A* WILLFULLY CAUSES Oft ATTEMPTS TO CAUSE XNSUBORDINA-
YJO J» DISLOYALTY, KUT1NY 0& REFUSAL OF DUTY IN THE U.S. MILITARY OR WILLFULLY
OBSTRUCTS RECftUlTKENT CR ATTEMPTS TO DO SO TO THE INJURY OF THE U.S. SHALL BE
FINED NOT MORE THAN 110,000 Ok IMPRISONED NOT MORE THAN TWENTY YEARS OR BOTH.
CCF.U USC 23.i?>.
WHOEVER HAfieOMS Oh CONCEALS A PtRSON .HO HE KNOwS OR HAS REASON TO SUSPECT MAS
COM4ITTEt> Ok IS AbOUT TO COMMIT AN OFFENSE UNDER THIS SECTION SHALL BE FINED
HOT PORE THAN S10,000 OR 1PPR1SOSED NOT MORE THAN TWENTY YEARS OR BOTH. THIS
SECTION ALSO APPLIES »ITHIN THE ADMIRALTY AND MARITIME JURISDICTION OF THE
UNITED S TAT IS AND ON THE HIGH SEAS.
HASTLH kEY: 18 USC 23*'
RieOMD TITLE:
•ECRUITINb FOR SEKV1CE AGAINST THE UNITED STATES
fc.iAL CITATION:
m 1b USC 2389
AIST8ACT:
WHOEVER RECRUITS SOLDIERS OR SAILORS WITHIN THE u.s. OR ANY PLACE SUBJECT
TO U.S. JURISDICTION. TO ENWAbE IN ARMED HOSTILITY AGAINST THE SAME SHALL
»t F1NEK NOT NORb THAN ftlfCOO Ok IMPRISONED NOT KORC THAN 5 YEARS, OR BOTH.
\
-------
KE»5 18 USC 2390 -001
2EC03D .'TITLE :
ENLISTKkNT TO SERVE AGAINST THE UNITED STATES
LEGAL CITATION:
USC 2390
ABSTRACT:
•HOtVt* ENLISTS WITHIS THE U.S. OK IN ANY PLACE SUBJECT TO U.S. JURISDICTION,
WITH INTENT TO SfcRVt IN AR*ED HOSTILITY AGAINST THE U.S. SHALL BE FINED
siOJ OR ir.pKisouEw NOT MOKE THAN i TEARS, OR BOTH.
".AIUR KET: is use 2S11 -001
KECditD TITLE:
INTERCEPTION I OISCLOSUkE OF WIRE OR ORAL COMMUNICATIONS
LEGAL CITATION: -
tb USC 2511
••
A3if4ACT:
AM PERSON «Hd,
-------
MASTER KEY: id
RECOXD TITLE:
GATHERING,
. CITATION:
1fc USC 793
USC 793
-001
TRANSMITTING Oii LOSING DEFENSE INFORMATION
A3ST*
WHOc
(A)
(8>
(C)
(6)
CE)
(F)
ACT:
VER
eY
BY
BT
faY
AND
EY
DEF
BY
INJJ
BE F
IF T
JA3STK
AND
CONS
PUNJ
ObTAINS INFORMATION RELATING TO THE NATIONAL DEFENSE,
SECkETLY iNSPtCTlNG A DEFENSE RELATED INSTALLATION, OK
COPYING, TAKING OR OBTAINING DOCUMENTS RELATED TO NATIONAL DEFENSE* OR
RECEIVING DOCUMENTS RLLATING TO NATIONAL DEFENSE* OR
HAVING LAWFUL POSSESSION OF A DOCUMENT RELATED TO NATIONAL DEFENSE,
THEN TftAltSMITS OR CAUSES IT TO Bt COM'UNlCATED, OR
HAVINt, UNAUTHORIZED POSSESSION OF A DOCUMENT RELATED TO NATIONAL
>c, AN3 THEN TRANSMITS OR CAUSES IT TO BE COMMUNICATED, OR
HAVlNb LAbFUL POSSESSION OF A DOCUMENT RELATED TO NATIONAL DEFENSE, AND
THEN THROUGH GROSS NEGLIbENCE, PERMITS IT TO BE REMOVED FROM ITS PROPER
PLACE OF CUSTCfcY,
INTENT OK KEASON TO BELUvt THAT THE INFORMATION- is TO BE USED TO THE
RY OF THfc UNITED STATES, Oft TO THE ADVANTAGE OF ANY FOREIGN NATION, SHALL
INEO NOT MORE THAN ilO.GOG OR IMPRISONED HOKJ THAN 10 TEARS OR BOTH.
WO OR MORt PERSONS CONSHI*E TO VIOLATE ANY SUBPART OF 18 U.S.C. 793,
ACT (CONTINUED):
ONE C* KOSE OF SUCH PERSONS Ou ANY ACT TO EFFECT THE OBJECT OF THE
PIRACY, EACH OF THE PARTIES TO SUCH CONSPIRACY SHALL BE SUBJECT TO THE
SHKENT PROVIDED IN 18 U.S.C. 793.
R KEY: 18 use 79j<&) -001
D TITLE;
CONSPIRE TO GATHEfc, TRANSMT OR LOST DEFENSE INFORMATION
CITATION:
1£ USC 793(6)
ABSTRACT:
IF TWO OR PORE PERSONS CONSPIRE TO VIOLATE ANY SUbPART OF 18 U.S.C. 793,
AND O.\E ok MORE OF SUCH PERSONS DO ANY ACT TO EFFECT THE OBJECT OF THE
CONSPIRACY, EACH OF ThC PARTIES TO SUCH CONSPIRACY SHALL BE SUBJECT TO THE
PUNISHMENT PROViDtD IN 18 U.S.C. 733.
MASTtR KfcY:
R£CORD TITLE;
tATHEKlNG I
LEi»AL CITATION:
1« USC 794
1g USC 794
-001
DELIVtRJNi DEFENSE INFORMATION TO A FOREIGN GOVERNMENT
ABSTRACT:
(A) WHOEVER COMMUNICATES, OR ATTEMPTS TO COMMUNICATE TO A FOREIGN GOVERNMENT, A
DOCU-ENT RELATING TO NATIONAL DEFENSE, fclTH THE INTENT OR REASON TO BELIEVE
THAT IT IS TO tE USED TO THE INJURY Of THE UNITED STATES OR TO TH£ ADVAN-
TAGE OF A FORElvN NATION SMALL BE PUNISHED BY DEATH OR BY IMPRISONMENT FOR
ANY TERR OF TEARS OR FOR LIFE.
WHOEVER, IN TIME OF MAR, .ITh INTENT TO COMMUNICATE TO THE ENEMY COLLECTS*
PCoLlSHtS OK COMMUNICATES ANY INFORMATION HTH RESPECT TO MILITARY OR NAVAL
MOVEMENTS. NUKbER* AND PLANS OR PUPLIC DEFENSE, WHICH MIGHT BE USEFUL TO
THE ENEMY, SHALL eE PUNISHED bT DEATH OR *T IMPRISONMENT FOR ANT TERM OF
YEAKS ON FOR LIFE. - C
(CJ COUSFIRACY PENALTY FOR ABuVE CRIMES.
-------
iSTtR KIT: 18 use 7»t -D01
:CQhD TITLE:
USING AIRCRAFT TO PHOTOGRAPH DEFENSE INSTALLATIONS/EQUIPMENT
•'-AL CITATION:
Ik USC 796
JSTfcACT:
*HctvER USES OR PERMITS THE USE OF AN AIRCRAFT o« ANY CONTRIVANCE USED, OR
JtSlCNEC FOR NAVIGATION OR FLIGHT If, THE AIR, FOR THE PURPOSE OF RAKlNfi A
•HOTOliRAFH, SKETCH, PICTURE, DRAWING, MAP, OR GRAPHICAL Rl PRESENTATION OF
tUH. MILITARY 0* KAVAL I f.ST AtLAT IONS OR EQUIPMENT, IN VIOLATION OF
;ib usc TVS), SHALL BI FINED NOT MORE THAN 11,000 ON IMPRISONED NOT PORE THAN
>NE YEAK, CK fc-OTH.
HASUR KLT: 16 USC 79i, 797 -C01
RECOUP TITLE:
PHOTOGRAPHING AND FETCHING DEFENSE 1NSTALLAT IONS/EOU1 PHENT
LI5AL CITATION:
1C USC 795, 797
v
ABSTrtACT:
THE PRESIDENT IS AfTHtKIZCD TO DEFINE CERTAIN VITAL MILITARY AND NAVAL INSTALL"
afJONS, AS VITAL TC THE INTERESTS OF NATIONAL DEF£NSEt AS REQUIRING PROTECTION
A6A*k;»T TH£ GcKCPAL DISSEMINATION OF INFORMATION RELATIVE THERETO. XT IS
IT IS UULAhtUL TO MAKfc ANY PHCTOGKAPH, SKETCH, PICTURE, DRAblNG, HAP, OR
REPRESENTATION OF SUCH INSTALLATIONS OR EQUIPMENT DEFINED AS VITAL
FIRST ObTAlHlKt THE PcRnlSSION UF THE COMMANDING OFFICER OF THE MILI-
INSTALLATION. VIOLATORS OF THIS SECTION SHALL BE FINED NOT "ORE THAN .
1,3Dw OR IMPRISONED NOT HQk E THAN ONE UAR, OR BOTH.
IT IS ALSO UNLAWFUL TO rtEPRODuCE, PUeLlSH, SELL OR GIVE AMAY ANT PHOTOGRAPH,
H, P1CTUHE, DKAUlt.6, ^*Pf OR GRAPHICAL REPRESENTATION OF THE VITAL MILI-
OR NAV*L INSTALLATION &R EQUIPMENT so DEFINED* WITHOUT OBTAINING THE
*»KOPLR PEriMSSIGN, UNLESS StCH REPRESENTATION CLEARLY INDICATES THAT IT HAS
§Et« CENSORED BY THE PKOPEK AUTHORITY. VIOLATORS SHALL BE FINED NOT MORE THAN
OP IKPKIS&NLU NOT HCfcE ThAU ONc YEAR, OR BOTH.
• Jisfl* KEY: 18 USC 79c
RICO&D tITLE:
"UCLCSbRE OF CLASSIFIED INFORMATION
L v/4l CITATION:
U USC 79b
A-.STKAtT:
^^OtVCk KNCklNGLY AND tILLFlLLY COMMUNICATES, FURNISHES, TRANSMITS, OR
eiHtfc»ISF PACES AVAILABLE TC AK UNAUTHORIZED PERSON, OR PUBLISHES, 0* USES
IN AI.V KAW.ER PREJUDICIAL TO Thl SAFETY OR INTEREST OF THE UNITED STATES
. 0' >Cfc THE fcENEFIT OF ANY FORfclCN GOVERNMENT TO THE DETRIMENT OF THE UNITED
SUltS ANY CLASSIFIED INFORMATION CONCERNING THE CRYPTOGRAPHIC SYSTEMS OR
THE COMMUNICATION INTELLIGENCE ACTIVITIES OF THE UNITED STATES OR INFORMATION
KNO»IN(iLV ObTAINED FRO' THE COr.KUNl CAT IONS OF ANY FOREIGN GOVERNMENT BY
COMMUNICATIONS INTELLIGENCE PfcOCESSESt SHALL BE SUBJECT TO A FINE OF NOT MORE
i1G,UC)U OR IMPRISONMENT l*F NOT MORE THAN 10 YEARS, OR feOTH.
-------
k KiY: 16 USC (63 -301
ftEC OR 0 TITLE:
DETENTION OF ARKED VfSSELS
LEfeAL CITATION:
It USC V63
A3STKACT:
DURING A tAfc IN WHICH THE UMTEC STAUS IS A NEUTRAL NATION, THfc PRESIDENT,
OK ANY PEtSGN AUTHORIZED bY Hjr, MY DETAIN ANT Aft*£D VESSEL OWNED WHOLLT Oft
IN PART SY ClTI2tHS Of THE UNlUD STAUS, IK ANT VESSEL, DOMESTIC Oft FOREX6N,
WHICH IS bUJLT OR HAS EEEN ADAPTED FOR WARLIKE PURPOSES UNTIL THE OWNER OR
' ft Si 01, IN CHARGE SATISFACTORILY PROVES THAT THE VESSEL WILL NOT BE USED TO
COMMIT HOSTILITIES UPwN THE CITIZENS OR PROPERTY OF A FOREIGN STATE WITH WHICH
TME UMUy STATES IS AT PEACE OR SOLD TO A 6ELL I6ER E*T NATION. VIOLATION OR
OR ATTfPTtU VIOLATION SHALL CARRY A FINE OF NOT MORE THAN SlOtOOO, Oft TEN
Y£A*S 1«P«; SON*-tKT, OR bOTh.
18 USC 967 -001
RECOtfD TITLE:
FOIi&It>DIN(> DEPARTURE OF VESSELS IU AID OF NEUTRALITY
L£6AL CITATION:
la USC V67
A3STnACT:
DURlKb A WAK IN WHICH ThE UNITED STATES IS A fcEUTRAL NATION, THE PRESIDENT,
0 ANY PtkSOS AtTKOkl/ED bY H1H, HAY FOhBID DEPARTURE OF A VESSEL WHENEVER
ThCxt IS tEASONALLC CAUSE TC bELltVE THAT SUCH VESSEL IS ABOUT TO CARRY FUEL,
Ah?*, AK«UN1TJON, KfcN, SUPPLIES OR INFORMATION TO A WARSHJP Oft SUPPLY SHIP OF A
fORtlOI. LELLlbEKthT NATION IN VIOLATION OF THE LAWS, TREATIES OR OBLIGATIONS OF
THE tMTED »TATfcS. WHOEVER TAKES OK ATTEMPTS TO TAKE A VESSEL OUT OF A PORT IN
VIOLATION. OF THIS SECTION SHALL BE FINED NOT MORE THAN 110,000 OR IMPRISONED
NOT *cRE THAN TIN TEARS, OR BOTH.
-------
KEY: POSSE COWITATUS ACTI 18 u-001
ECO*O TITLE :
USING MILITARY EQUIPHEST/PERSONWEL FOR CIVILIAN LAM ENFORCEMENT
ECU CITATION:
POSSE COKITATUS ACT, 1c UiC 1365
PRCHlblTIOS AbAlNST THE UiE OF MILITARY SERVICES IN CXVXL LAW
E S/OfcCtWlNT Ui.LLSS SPECIFICALLY AtThOfclZED BY CONGRESS. SEE STATUTORY
OPTIONS TO 18 USC 13e5 AT 10 USC 371-378 AND SPECIFIC fcRANT OF AUTHORITY
ig THE P^tSlDLVT FOR UTILIZATION CF MILITIA AND/OR ARMED FORCES DOMESTICALLY
AT 10 USC 3J1-333.
-------
KIT: 19 USc 26G3 -001
RECOrtft TITLE :
. IMEKGENCY IMPLEMENTATION OF IMPORT RESTRICTIONS
LEGAL CITATION:
19 USC 2603
ABSTRACT:
AUTHORIZES T«E PRESIDENT TO I*POS£ IKPORT RESTRICTIONS OF 19 USC 2606 UPON A
DlURriNATl&N THAT AN EMERGENCY CONDITION EXISTS WITH RESPECT TO ARCHEOLOGICAL
OR ETHNOLOGICAL MAUP.iAL OF AKT STATE PARTY. AN EMERGENCY CONDITION IS DEFINED
AS INVOLVING MATERIAL kHlCH IS —
CD Nt-LY DISCOVcKEi/ IMPORTANT TO Ul.Ofc RSTANH NG THE HISTORY OF MANKIND, AND IN
JECPAKCY OF PILLAbEt DESThUCTION ETC;
il) ICEHTIFIArLC AS CODING FROM ANT SITE RECOGNIZED TO BE OF HIGH CULTURAL
SIGNIFICANCE IF SuCH SITE IS IN DANGER FROM PILLAGEt DESTRUCTION ETC; OR
A PAR1 OF THE REMAINS OF A PARTICULAR CULTURE, THE RECORD OF WHICH IS IN
bY FRu« PILLAGE, DESTRUCTION ETC.
-------
«uSTER *EY: 21 USC 95* 19 CFR 162.0 -CO!
RECORD TITLE:
WAIVE* OF CONTROLLED SUbSTANCE IMPORTATION IESTkXCTXONS
LEGAL CITATION:
21 USC 952 19 CM 162.0
AiSTAACT:
IMPORTATION
OR NAkCOTIC
OR II (21 U
ARE FOUND B
SCIENTIFIC
1A7 BE SO I
SCRIBE.
IRTATION
OTHLR LE31T
THE ATTORNE
THEftElt. IS
INTO THE UNITED STATES OF CONTROLLED. SUbSTANCES (SCHEDULE X OR XX)
DRUGS (SCHEDULE III, IV OR V) IS PROHIBITED EXCEPT DURING AN
N WHICH DOMESTIC SUPPLIES OF ANY CONTROLLED SUBSTANCE IN SCHEDULE X
SC 612) OR ANY NARCOTIC DRUG IN SCHEDULE XIX. XV* OR V (21 USC 812)
V THE ATTDkNfcY GENtRAL TO BE NECESSARY TO PROVIDE FOR MEDICAL*
OR otHfcR L£L>ITIHATE PURPOSES* AND ARE INADEQUATE* SUCH SUBSTANCES
HPORTED UNDER kUCH REGULATIONS AS THE ATTORNEY GENERAL SHALL PRE-
OF NONNARCOTIC CONTROLLED SUBSTANCES XN SCHEDULE XXX* XV OR
UL UNLESS TMfc SUBSTAsCt IS IMPORTED FOR MEDICAL* SCIENTIFIC*
ifATt uses PURSUANT TO REGULATION OF THE ATTORNEY GENERAL*
Y &CNLKAL HAT PERMIT IMPORTATION OF COCA LEAVES IF THE COCAINE
DESTROYED UNDER HIS. SUPERVISION.
-------
MASTtR KfcY: 26 USC 55d, 27 CFR 19.70-001
fcECOKD TITLE:
EXEMPTIONS FROP TAX LAWS TO MEET NATIONAL DEFENSE REQUIREVENTS
LEfcAu CITATION:
26 USC 5561, 27 CFR 19.70
ABSTKACT;
THE DIRECTOR OF THE BUREAU OF ALCOHOL, TOBACCO* I FIREARMS FIAT TEMPORARILY
DISTILLS SPIRITS PLANT PRWP*IETuRS FROM ANT PROVISION OF THE INTERNAL
LA*S KEATING Tu DISTILLED SPIRITS, ExCLPT THOSE REQUIRING PATENT OF
?ME TAX THEHEON, UHLMLVIP Hk DEEKS IT EXPEDIENT TO DO so TO HEET NATIONAL
dEFLKSE RiCtlKEKLKTS. THE CIiiECTOR PAY PRESCRIBE ANY NECESSARY REGULATIONS*
4ASTfcR RET: 26 tSC 5562; 27 CFR 19.64-001
REC9KD TITLE:
DISASTER EXEPPTIONS FRO* TAX LAW REQUIREMENTS
LE5»L CITATION:
2& bSC 5562; 27 CFR 1V.6*
A3STKACT:
THE DI'tCTOM OF THE RLRcAU OF ALCOHOL* TOBACCO, AND FIREARPS MAY, WHENEVER HE
FINDS THAT IT IS NECESSAhY OR DESIRABLE, BY REASON OF DISASTER* TEMPORARILY
EAfctPT ANY DISTILLED SPIRITS PLANT PROPRIETORS FROM ANY PROVISION OF THE INTER*
NAL RLVENUE LAWS fctLATlNC TO DISTILLED SPIRITS, EXCEPT THOSE REQUIRING PAYMENT
OF THE TAX THEREON, TO THE EITENT HE MAY DEEM NECESSARY OR DESIRABLE.
-------
42 USC 5157U> -001
AEC04D TITLE :
F*tNALTI£S FOR MISREPRESENTATION UNDER DISASTER RELIEF ACT(DAA)
LE6AL CITATION:
42 USC 5157U)
ABSTRACT:
ANT IKDIV1DUAL taHO FRAUDULENTLY OR talLLFULLT MISSTATES ANT FACT IN CONNECTION
VITH A RE-UtST FOfc ASSISTANCE UNDtR THE DRA SHALL BE FINED NOT MORE THAN
JIU.Cuu OR l^PaiSOKEii FOK NCT HORt THAN ONE TEAR .-OR BOTH FOR EACH VIOLATION.
RET: 42 use 51S7<8> -001
iECCHD TITLE :
VIOLATION OF DISASTER RiLIEF ACT ORDERS I REGULATIONS
CITATION:
42 USC 5157(d)
*:,T H.DIVIDOAL »HO UNOklNGLT VIOLATES ANT ORDER OR REGULATION UNDER THIS
ACT SHALL ft SUbJECT TO A CIVIL PtNALTT OF KOT MORE THAN 15.00C FOR EACH
y 1 fli. A T 1 ON .
42 USC 5157
-------
ASUN KCT: 4: use U11C4), 1*U(A>, -001
EC Ok I TITLE;
PkNALTllS FOfc VIOLATIONS OF OIL SPILL NOTICE
E»iAL CITATION: ^
42 uSC U1K4), 1eU(A)( U2?(b>; 33 CFR 135.305, 307
9STRACT:
ANT PERSON IN CHAKGi. OF A VESSEL Ok OFFSHORE FACILITY MHO IS SUBJECT TO U.S.
TlON AND WhO FAILS TO 6IVE 1HKEDIATE NOTICE TO THE SECRETARY OF TRANS-
S OF AN OIL POLLUTION iNCUtM AS SOON AS N£ HAS KNOWLEDGE THEREOF
SHALL, UPON CONVICTION, Bt FINED NOT MORE THAN 110.0CD OR IMPRISONED FOR MOT
• :-^ THA*. ONE TL/.R, OK BOTH.
-------
4V USC 1472(i>C1>(3> -001
Etoao TITLE:
AIR PI8ACT
EGAL CITATION:
49 USC 1472U>C1M2>
:: s
EV£K)
THE I
THE t
STATI
FOR I
NASTcft KET: 49 UiC 1*72(P> -Q01
RECOKD TjTLr:
INTERFERENCE HTM AIRCRAFT ACCIDENT INVESTIGATION
LEbAL CJTATIuN:
49 USC U72CP)
ABSTRACT:
ANT PERSON -MO KKOfcJN&LY AND .ITHOUT AUTHORITT REMOVES, CONCEALS.
^NT P«RT OF A CIVIL CRAfT II,VOLVE»> IN AN ACCIDENT, OR ANT PROPERTY
;*?•?!' ??*"£ iUCM ;jRCKArJ AT TH^ T^*i OF SUCH ACCIDENT, SMALL BE SUBJECT
A F,M Of NO LESi ThA,V $rOo NOR «0«C THAN $5000 OR IMPRISONED FOR NOT
ONE TEAK, OX BOTH.
KASTeR &ET: 4? USC 1514 .Q01
KECOftD TITLE:
SUSPENSION OF FORilbN Al* SERVICE BT PRESIDENT
CITATION:
49 USC 1514
ABSTRACT:
AUTHORIZES THE PRESIDENT TO SUSPEND
ANT Pi?SO% uft AIM CARRIER TO EM6AO£
tEUT DfcURftlhES THAT A FORII6N
TH£ CC:»V£NTION FCR THE SUPPRESS
ZF HE DET£»Mr,ES THAT A FOREIGN NATI
JURISDICTION AS A feASt OF OPE«ATIOMS
AIDS ANT TERRORIST ORGANIZATION «HIC
AN INSTRUMENT OF POLICY.
WITHOUT NOTICE OR HEARING "HE RIGHT 0
IN FOREIGN TRANSPORTATION WHENEVER TH
NATION IS ACTING IN A r.ANKER INCONSIS'
ION OF UNLAWFUL SEIZURE OF AIRCRAFT 01
ON PERMITS THE USE OF TERRITORY UNDER
, TRAINING OR SANCTUARY OR IN ANT WAT
H KNO»INGLT USES SEIZURE OF AIRCRAFT t
-------
V.4.
"Guidelines on Sampling, Preservation, and Disposal of Technical Evidence
in Criminal Enforcement Matters", dated April 18, 1984.
-------
-------
\.
ECTION AGE
WASHINGTON, D.C. 20460
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
APR 1 8 I95M
OFFICE OF
ENFORCEMENT AND
COMPLIANCE MONITORING
MEMORANDUM
SUBJECT: Guidelines on Sampling, Preservation, and
Disposal of Technical Evidence in Criminal
Enforcement Matter
FROM: Courtney M. Price
Assistant Administrator for Enforcement
and Compliance Monitoring
TO: Assistant Administrators
Regional Administrators, Regions I-X
Regional Counsels, Regions I-X
Associate Enforcement Counsels
Director, NEIC
Introduction
This guidance describes procedures to be used for tech-
nical evidence related to cases which have been assigned to,
and are being managed by, the Office of Criminal Investigations
of the National Enforcement Investigations Center (NEIC) of
the Office of Enforcement and Compliance Monitoring. This
guidance, and the internal office procedures adopted in
accordance with the guidance, are not intended to, do not,
and may not be relied upon to create a right or benefit--
substantive or procedural--enforceable at law by a party in
litigation with the United States. Attempts to litigate
any portion of this guidance should be brought to the
attention of the Criminal Enforcement Division, Office of
Enforcement and Complaince Monitoring, EPA Headquarters.
I. SAMPLING GUIDELINES
Background
In any criminal prosecution, the government must prove
each element of each offense beyond a reasonable doubt. The
evidence that the government chooses to use to meet this
burden is left to the prosecutor's discretion subject to the
standard limitations of probativity and relevancy. Prosecution
under environmental statutes poses particularly interesting
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-2-
questions because of the need to prove the identity (and
often quantity) of pollutants, and because of the need for
experts (i.e., technicians, environmental engineers, etc.)
to establish aspects of the government's case. The facts
upon which the expert relies must impress a jury, meet defense
challenges, and establish the criteria necessary for the
expert opinion.
Only by considering issues of proof before evidence is
collected can the government be assured that violations dis-
covered can be proved when the case goes to trial. A determina-
tion of what evidence should be taken, how it is to be taken
and how much should be taken must be done on a case-by-case
basis. As will be discussed.below, the general principle
will be to take representative samples and to refer clean
up problems for civil and/or administrative remedies.
Issue
What level of pollutant sampling will suffice to support
a criminal case?
Guidelines
Technical support operations conducted as part of investi-
gations assigned to the Office of Criminal Investigations
will, with few exceptions, be evidence-gathering rather than
remedial or response operations, and will be limited accordingly.
Samples taken in support of a criminal investigation normally
will be limited to those considered necessary to confirm the
occurence of illegal activity, and to prove the government's
case at trial. Any overall remedial response required by the
situation will then become the responsibility of existing
administrative or civil response authorities within the
Agency.
It will be the policy of the Agency to use representative
samples as evidence for criminal cases. Occasionally, the only
evidence available for a significant environmental offense will
be a small amount of material. In that event, the entire amount
of material which can be collected will be retained for testing
and for defense requests.. Most cases assigned to the Office
of Criminal Investigations will involve large amounts of pollu-
tion or hazardous substances and, in those cases, representative
samples will be gathered.
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-3-
Before any decisions are made or any samples obtained,
agents, technical personnel, and, where possible, prosecuting
attorneys should collaborate to decide what evidence will be
necessary and desirable to prove each charge. When samples
are obtained without a search warrant and prior to a referral
to the Justice Department or to the U.S. Attorney's office, a
prosecutor may rot be working on the case. When this is the
case, the legal, investigative and technical personnel at the
Agency will make the evidence decisions.
If the evidence is to be obtained pursuant to a search
warrant, this discussion (concerning evidence collection) must
be prior to the submission of the affidavit for the warrant.
The magistrate or judge issuing the warrant will inquire as to
the duration of the "on-site" time, the area to be searched,
and the subject(s) of the search. These questions can only be
answered if the government has formulated an investigative
plan for obtaining the evidence in advance of the request for
the warrant.
In some cases, the Office of Criminal Investigations will
be notified of environment offenses which must be documented
immediately if the evidence is to be preserved. In such situ-
ations, the necessarily quick response time precludes lengthy
collaborate discussions. However, the guidelines concerning
quality control, chain-of-custody and representative sampling
apply even in these situations.
Discussion
Evidence decisions must start with the technicians, envi-
ronmental engineers and other experts who are familiar with
the evidence necessary to form a basis a for their scientific
opinions. Attorneys and agents should then add information
concerning the tangible evidence that is most likely to
clarify the government's case for the jury and what evidence
is likely to best reflect the seriousness of the charges.
Thought should be given to defense arguments concerning whether
the samples are truly representative and whether they were
obtained, preserved and tested in an accurate, scientific
manner. Consideration must also be given to reducing the
"on-site" time and the practical difficulties of proper storage
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-4-
and safekeeping. Finally, under certain statutory provisions
[for example, the CERCLA reporting requirement for "reportable
quantities" found at Section 103(b)(3)], the government will
be obliged to demonstrate that a specified amount of a hazardous
substance was released. This will also affect the amount of
sampling that is conducted on-site.
The question of what is a representative sample can only
be answered in the context of the case. All the parameters of
the potential evidence should be sampled, photographed or
documented in some fashion. See, NEIC Policies and Procedures
Manual. For instance, if drums are located at a plant which
does not have a permit to store hazardous wastes, the necessary
proof will include establishing the nature of the drum contents.
The total number of drums should also be determined and docu-
mented. Unless the number is extremely large, samples can be
obtained from each drum. If this is impractical, samples
should be obtained from all apparent categories (size, content,
appearance, state of deterioration or exposure to the environ-
ment, etc.). If the soil under and around the drums appears
contaminated, then soil samples should be taken at different
points and at different depths. Keeping in mind that the
concentration of the substances as well as the gross amount of
the substance may be relevant, the technicians should be prepared
to take samples which can answer these questions. See, United
States v. Gonzalez, 697 F. 2d 155 (6th Cir. 1983).
If it is anticipated that a screening procedure will be
used, either at the site or in the laboratory, it is recommended
that the prosecuter be made aware of this. A screening procedure
is a preliminary analysis used to determine whether further
analysis would be useful.
Because criminal prosecutions must be proved "beyond a
reasonable doubt", care must be taken to ensure thorough and
complete testing and sampling procedures. Recognizing the
storage limitations of the Agency, it cannot be denied that
the seriousness of the offense is emphasized when the Govern- „
ment can visually prove its case with a multitude of samples
and physical evidence. It is expected that the technical
personnel who testify in criminal cases will be able to state
that a thorough and scientific procedure was used to obtain
the evidence, that no further samples or tests would be necessary
to confirm the results, and that strict chain of custody and
quality control procedures were employed.
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-5-
II. DISPOSAL OF EXTRA SAMPLE EVIDENCE
Background
There will be occasions when EPA technicians and agents
take more evidence samples than are necessary to prove a case.
The storage and preservation expense as well as potential
dangerousness of the items might make it advisable to dispose
of the evidence in advance of trial. At the same time, courts
lopk with disfavor upon the disposal of material that may be
characterized as potential evidence in a criminal trial.
Thus, destruction of samples and remains of samples must occur
in a manner that does not jeopardize the subsequent prosecution
Finally, once a prosecution has been concluded, decisions
must be made concerning all remaining evidence stored on behalf
of the Office of Criminal Investigations.
Issue
When and how may the Agency dispose of surplus sampling
evidence collected on behalf of the Office of Criminal Investi-
gations?
Guidelines
Court permission must be obtained before surplus samples
obtained in the course of a criminal investigation are disposed
of by the government. Disposal procedures will vary depending
on the stage of the criminal case. Where a defendant has been
formally charged, the government can file a pre-trial motion
for disposal of evidence that will be considered in an adver-
sarial proceeding. If charges have not been filed, the same
type of motion filed ex parte may be used. This ex parte
motion would be made pursuant to the All Writs Act, 28 U.S.C.
$636(b)(1)(A). (A copy of a sample destruction motion is
attached to this guidance.)
Following termination of the criminal case (by trial,
plea, dismissal or other means), the prosecutor should be
contacted to discuse appropriate procedures for evidence
disposal.
Discussion
It should be noted at the outset that an evidence destruc-
tion motion will not always succeed. For example, it is not
certain that a court will give permission for such destruction
in the context of a criminal case involving non-contraband
materials. The majority of cases which discuss destruction of
evidence before trial involve destruction of contraband (i.e.,
drugs, counterfeit money, illegal weapons). It would be under-
-andable for a court to refuse permission to dispose of
chemicals, soil, capacitors, or drums when it has not been
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-6-
conclusively established -- by plea or trial -- that these
items were illegally held or stored by the defendant(s). If
the jury acquits the defendant(s), they would have the right
to repossess the evidence seized, for whatever value it might
have •
In United States v. Ramsey, 490 F. Supp. 96 (E.D. Tenn.
1980) the court issued an opinion on the government's motion
to destroy certain chemicals. The court would not authorize
the disposal of chemicals which the government had seized
even though the government documented a reasonable concern
over the hazardous nature of the substances. The government
alleged that the chemicals were flammable and explosive and
•constitute a present danger to property and a threat of
personal injury or death to people in or near the storage
area.* Id. at 97. But, the court reasoned, how could it
authorize destruction of non-contraband, unforfeited property
when there has been "no showing that the chemicals have been
used or intended to be used by anyone in any significant way
in a criminal enterprise?" Id. at 96. Presumably, that is
what the government intended to prove at trial, but until then,
the prosecutor was admonished by the court to use extreme care
and- caution with the chemicals, but to keep them*
When a court is petitioned, either pursuant to the All
Writs Act, or by way of a pre-trial motion, for permission to
destroy evidence, the court should be informed whether the
targets of the investigation have been notified of the motion,
whether the targets have been offered split samples (see Section
III, infra) and whether the targets have been offered the
opportunity to view the evidence before destruction. Of course,
before such a motion is made, the effect of disclosing the
existence of a previously secret criminal investigation must
be analyzed. However, if the defendants have been formally
charged or otherwise made aware of the criminal investigation,
EPA will encourage the prosecutor assigned to the case to
obtain court authorization to destroy sample evidence which
goes beyond that necessary to prove the case or evidence
which the defense has declined.
In any event, 'any evidence obtained on behalf of the
Office of Criminal Investigations shall not be disposed of
until the investigation has foreclosed the possibility of
criminal charges; or until the criminal case has been concluded
by trial, plea, dismissal or otherwise and the prosecutor and,
if necessary, the court have approved disposal.
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-7-
III. SPLIT SAMPLES/DOUBLE SAMPLES
Background
Many environmental statutes require the Agency to split
samples taken in the exercise of statutory inspection rights.
When a site search is conducted pursuant to a criminal search
warrant, no such requirement exists. However, offering samples
at the time of the execution of the warrant is an expeditious
method of assuring the defense access to the samples while not
burdening the Agency with storeage problems.
It. rue
Should samples be split in the context of a criminal
investigation?
Guidelines
All samples taken by EPA technical personnel on behalf
of the Office of Criminal Investigations should be taken in
large enough quantities so that if the defense requests part
of the sample at any time prior to trial, a portion of the
sample may be turned over to the defense or to a defense-
designated laboratory.
If sample ollection is authorized by a court as part of a
search warrant, it is appropriate to inform the court (at the
time the warrant is obtained) of the Agency's plan to offer
split samples to authorized persons at the site of the warrant.
Prior court approval, of the transfer of hazardous substances
is helpful, even if not necessary. Once the court has authorized
the collection of samples and the splitting of such samples, an
offer to turn over split samples should' be made to an authorized
person at the site, even without such a request having been made
by the defense.
An alternative which may be used is to ask the defendant
to designate a laboratory to analyze the sample. Thus, instead
of giving the sample to an authorized person at the site, the
sample would be sent to a laboratory named by the defendant(s).
If the split sample is refused or no one is available to
accept it, extra amounts of the sample must be retained by the
Agency. Whether or not the extra amounts are kept in separate
containers should be a laboratory decision. There may be
subsequent requests for samples so that independent testing
can be administered on behalf of the defense in preparing for
trial. Courts will normally honor such requests.
Finally, the return on the search warrant should document
whether a sample split is accepted, refused or not offered
because no one vis available to accept it.
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-8-
Di scussion
Although convictions have been affirmed where the govern-
ment has lost or destroyed an evidentiary sample, the courts
have begun to sympathize with a defendant's request to indepen-
dently inspect and test. For instance, in Banks v. F.A.A..
687 F.2d 92 (5th Cir. 1982) the courts reversed the dismissal
of two air traffic controllers who were fired after drugs
were found in their urine. The defendants claimed that their
due process rights were violated because F.A.A. allowed the
private lab which had tested the urine to destroy it after it
was analyzed. The court agreed that it was "crucial" that the
samples were not available for independent testing and dis-
counted the government's claim that cross examination of the
independent testing chemist and challenging the testing methods
were sufficient. Citing the principles of United States v.
Gordon, 580 F.2d 827 (5th Cir.), cert, denied,439 U.S. 1051
(1978), the court stated:
The laboratory tests here were the only
meaningful evidence resulting in the
discharges. The. accuracy of those tests,
including the possibility that the samples
were mixed up, damaged, or even inaccurately
tested, was the likely determinant of the
entire case. Id. at 94. (emphasis in original)
In Gordon, even though the government made available
samples of the three seized chemicals to the defense, the
court found that it was error not to also have turned over
the chemical which the government chemist made from the three
seized chemicals. The reasoning of this and other similar
cases is that if the government intends to introduce secondary
evidence (i.e., photographs, testimony, test results), then
it should retain the primary evidence for defense inspection
and testing.
One more case widely cited is U.S. v. Loud Hawk, 628 F2d
1139 (9th Cir. 1979), cert, denied, 445 U.S. 917 (1980). In
this case, state law enforcement officers destroyed seized dyna-
mite after thoroughly examining it and photographing it. The
defense argued that the material was not dynamite and that they
were not notified of the state's intention to destroy it and
therefore, did not get a chance to test it. The court held
that even though the dynamite was destroyed for "public safety
considerations," it was evidence and it should have been
preserved for the defense.
The Fifth (U.S. v. Gordon, supra.). Ninth (U.S. v. Loud
Hawk, supra.), Third (Government of the Virgin Islands v.
Testamark, 570 F.2d 1162, 1978), Eleventh (U.S. v. Nabors, 707
F..2d 1294, 1983) and First (U.S. v. Picariello, 568 F.2d 222,
1978), Circuits are not sympathetic to the argument that
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-9-
evidence which has been destroyed is not "suppressed." Under
Brady v. Maryland, 373 U.S. 83 (1963) and following the
reasoning of U.S. v, Bryant, 439 P2d 642 (D.C. Cir. 1971),
courts have found that a right to discover implies a duty to
preserve. Therefore, sufficient quantities of the evidence
should be obtained and preserved so that both the government
and the 'defense can perform tests.
IV. TECHNICAL SAMPLES WHICH DEGENERATE
Background
Samples taken by the government may, no matter how scienti-
fically preserved, degenerate with the passage of time. Thus,
even if there is an adequate amount of the material for defense
testing, it may no longer be suitable for testing by the time
the defense is notified or by the time a defendant is identi-
fied. This will only be an issue when the defense has not
obtained a split sample at the time the sample was taken by the
Government.
Issue
What, steps should the government take when it has poss-
ession of evidence which -degenerates?
Guidelines
Under no circumstances will samples, residues, or sample
containers used in cases assigned to the Office of Criminal
Investigations be destroyed, regardless of their condition,
without following disposal procedures established in Section II
above. If the chemical and/or biological properties of the
evidence seized remains stable for only a short period of time,
the Office of Criminal Investigations should be notified by
the laboratory personnel. Agency personnel and/or a prosecutor
will then notify the defense. The notification should state
that the government has a sample and that the defense has
until a certain date to inspect or obtain the sample for indepen-
dent testing. The target must be notified as soon as possible
after formal charges have been brought* Whenever the target
is notified, court approval to destroy after the stated date,
whether or not the defense responds to the notice, must be
obtained. This can be accomplished by way of the All Writs
Act or by a motion to the court which has jurisdiction over
the case.
iscussion
This is a difficult and sensitive area because of the
time considerations when evidence is likely to self-destruct.
To avoid an allegation of bad faith, it will be important
that the government give notice as soon as possible, so that
the defense has adequate time to retain their own experts
and to start their own testing.
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-10-
Notice should include a technical person's preliminary
assessment of what the sample contains, when it was obtained
and the rate of anticipated degeneration. The Agency has good
technical information upon which to make sound assessments of
how long a sample may be held and still retain its integrity
for its intended purpose. The name and phone number of the
prosecutor and agent to contact should also be included. If
the defense responds to the notice, the U.S. Attorney's office
should be contacted and the arrangements for the transfer of a
portion of the sample should be coordinated with that office.
V. Laboratory Procedures
Issue
What procedures should be used in the laboratory in handling
evidence for criminal enforcement cases?
Guidelines
All evidence obtained on behalf of the Office of Criminal
Investigations will be obtained, tested and preserved by Agency
laboratories. Unless unavoidable, no contract laboratories
will be employed. Until further guidance is issued, each Agency
laboratory will institute its own procedures to ensure the
security of the paperwork and the samples. These procedures
will supplement those already in force in this this area.
Discussion
Because of superior quality control and simplified chain
of custody, technical samples collected in criminal cases should
be analyzed whenever possible in EPA laboratories, rather than
contract laboratories. In addition, samples and paperwork
(on these samples) should not be tampered with or discussed
with persons who are not assigned to work- on the case. A
premature disclosure, even inadvertent, to a company, the
media, or other individuals can jeopardize the success of the
investigation and the safety of the investigators.
Furthermore, the "tighter" the chain of custody, the easier
it will be to prove the case in court. Since it may be necessary
to bring into court each individual who handled, tested or packaged
the samples, the fewer individuals involved, the better. Because
of the complexity of the sampling and testing procedures, the
laboratories are authorized to determine their own methods for
making sure that no "unnecessary" personnel handle the evidence.
It is assumed that the quality control guidelines and methods
already in use by the laboratories will be applied with particular
care in the development of criminal cases.
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V.5
"Guidance Concerning Compliance with the Jencks Act", dated November 21,
1983. See GM-23. Superseded and replaced by V.8. below.
-------
-------
V.6
"Policy and Procedure on Parallel Proceedings at the EPA", dated January
23, 1984. See GM-30. Superseded.
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-------
V.7,
"The Use of Administrative Discovery Devices in the Development of Cases
Assigned to the Office of Criminal Investigations", dated February 16,
1984. See GM-36. Superseded.
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V.8.
"Guidance Concerning Compliance with the Jencks Act" dated March 8, 1984
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\J
} UNITED STATES ENVIRONMENTAL PROTECTION AGENCY V
WASHINGTON. D.C. 20460
MAR £ 1964
Off ICt Of
ENFORCEMENT AND
COMPLIANCE MONITORING
MEMORANDUM
SUBJECT: Guidance Concerning Compliance with the Jencks Act
FROM: Courtney M. Pr i
Assistant Administrator tor Enforcement
and Compliance Monitoring
TO: Assistant Administrators
Regional Administrators
Regional Counsels
Associate Enforcement Counsels
Director, MEIC
Background
The Jencks Act (18 U.S.C. $3500) provides that in a
federal criminal prosecution, after a witness called by the
United States has testified on direct examination, the court,
on motion of the defendant, shall order the United States to
produce any "statement*, as defined in the Act, in the
possession of the United States that relates to the subject
matter as to which the witness has testified. Any witness
called by the United States is subject to the Jencks Act.
Therefore, the "statements" of environmental engineers,
technicians, laboratory personnel, criminal investigators,
inspectors, and EPA lawyers may be ordered turned over to
the defense if any of these individuals testifies for the
Government. The need for a complete understanding of the
requirements of the Jencks Act, by all EPA personnel, can-
not be underestimated. The identity of government witnesses
cannot be accurately predicted in advance, and the sanctions
for losing, destroying or misplacing "Jencks Act material*
can be severe.
The Act (the text of which is set forth in Appendix A) ...
has generated a considerable amount of case law. Litigations?
has mainly concerned questions as to what is a "statement" SE
and what sanctions should be imposed should the Government yy o
fail to produce Jencks Act material. This memorandum will — •—
discuss these points and the procedures which must be used u) rn
to preserve the material. r=
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-2-
Issue
What written materials will be considered "statements"
subject to production to the defense during the course of
criminal litigation?
Discussion
A "statement" is defined in part in 18 D.S.C. S3500(e)
as (1) a written statement made by the witness and signed or
otherwise adopted or approved by him; or (2) a stenographic,
mechanicalr electrical, or other recording, or a transcription
thereof, which is a substantially verbatim recital of an oral
statement made by the witness and recorded contemporaneously
with the making of such oral statement.
"(e)(l) Statements"; Under subsection (e)(l), a written
statement can be a report written by an agent and adopted by
the witness. That is, if an agent writes up a report and
either reads it back to the witness or lets the witness read
it and then has the witness, in writing or orally, approve
what has been written, then the witness has "adopted" the
statement and it becomes the witness's statement. This
statement or report does not have to be written at the time
of the interview- of the witness. If an agent talks to a wit-.
ness, types up a report a few days later and shows the report
to the witness who approves it, it is an "(e)(l) statement"
of the witness. A document written by a witness, whether
signed or unsigned, is also a statement and, if turned over
to an agent, must be retained as Jencks Act material.
Criminal investigators or agents intentionally obtaining
statements from potential witnesses are not the only EPA
personnel who may create "(e)(l) statements." If an EPA
technician or inspector writes a report which a facility
manager reads and certifies as being accurate, then this
report may be considered the "statement" of the facility
manager. The manager has "adopted" the report. Also, the
notes or laboratory reports of a technician or inspector
are "(e)(l) statements" as to that technician or inspector.
If the technician or inspector testifies, then these notes
or reports must be turned over to the defense if they relate
to the subject matter of the direct testimony. It does not
matter who records the statement or for what purpose; it
remains Jencks Act material. EPA technical personnel must
keep any notes that they have made of interviews with facil-
ity personnel (or other potential witnesses) as well as notes
recording actions which may later be the subject of a criminal
prosecution.
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-3-
"(e)(2) Statements"; Statements which ace "(e)(2) statements"
include not only tape recordings, but any notes which can be
considered a "substantially verbatim recital" of a witness's
oral statement. If an agent takes notes quoting, or writing
down in a substantially verbatim form, the words of a witness
and these notes are taken either at or near the time of the
witness's oral statement, these notes become the witness's
"(e)(2) statement". The agent taking the notes is viewed in
the Banner of a stenographer who accurately memorializes the
witness's words. The witness does not have to approve or
adopt the agent's notes.He does not have to even know that
notes were being taken. If the agent has captured the witness's
words on paper, then these words are the witness's statement
even if he is unaware that he is making a statement.
Agents who testify in court oecome witnesses whose
statements also must be turned over to the defense. Investi-
gative reports, written interpretations or impressions of a
case, and written analyses of case problems and issues may
all be "statements" of an agent. For instance, a report of
a witness interview may not be a witness's "(e)(l)* or "(e)(2)*
statement because it does not directly quote the witness or
capture the witness's words in a substantially verbatim fornu
However, it may be the "(e)(l) statement" of the agent who
wrote the report. "The written report of the agent, however,
is just as much a verbatim statement of the agent who prepares
it as a written statement of an informer, incorporated in
the report, is the statement of the informer." Holmes v.
United States, 271 F.2d 655, 658 (4th Cir. 1959).
•Running resumes" of F.B.I, agents, detectives or EPA
agents are "(e)(l) statements" of the agent and may be
producible. If a Special Agent testifies, it can be antici-
pated that his/her notes, reports to SAICs, case referral
reports, and investigative reports will be producible if the
direct testimony covers areas which are discussed in these
previously written documents. United States v. Sink, 586
F.2d 1041 (5th Cir. 1978), cert, denied, 443 U.S. 912 (1979);
Holmes v. United States, supra. Although it is incumbent
upon the trial j.udge to separate out personal evaluations
and "discussions of legal and practical problems of a prose-
cution" from the "running resumes" (or from any document
which contains Jencks Act material), the writer who includes
extraneous material always runs the risk of a judge deciding
against excision. United States v. Pfingst, 377 F.2d 177,
195 (2d Cir.), cert, denied, 412 U.S. 941 (1973). Material
in an agent's report which is sensitive or which might affect
the security of EPA's investigative techniques is not exempt
from Jencks Act requirements. West v. United States, 274
F.2d 885 (6th Cir. 1960), cert, denied, 365 U.S. 819 (1961).
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-4-
Notes, reports, etc., in the hands of any EPA employee—
including criminal investigators, lawyers and technical
persons—are considered "in the possession of the government."
Therefore, if an EPA employee fails to disclose Jencks Act
material to the prosecutor, that failure will be held against
the Government even though it is the agent rather than the
prosecutor who has failed to preserve something. United
States v. Bryant, 439 P.2d 642 (D.C. Cir. 1971); Emmett v.
Ricketts, 397 F. Supp. 1025 (N.D. Ga. 1975); United States v.
Niederberger, 580 F.2d 63 (3d Cir. 1978); United States v.
Williaas7604 F.2d 1102 (8th Cir. 1979). As soon as a case
is opened by the Office of Criminal Investigations, the agent
assigned to the case should inventory all existing notes and
reports concerning potential government witnesses in the
possession of, or known to, all Agency personnel involved in
the case, and inform them of their obligation to retain such
material. Copies of this Agency's guidance on the Jencks Act
should also be distributed to such personnel.
Courts will require the Government to turn over any material
which fits the "statement" definition if it relates to the
subject matter of the witness's direct testimony. Any material
which either is not a statement of the witness or does not
relate to the subject matter of the witness's direct testimony
will be excised- from the document. A judge may not exercise
his or her own judgment as to what material is important,
helpful or necessary for the defense. If it is a statement
that relates to the direct testimony, it must be turned
over.
Courts have broadly interpreted the phrase "relates to
the subject matter as to which the witness has testified," in
Section (b) of the Act. However, courts have more restric-
tively defined "statements" under Section (e). Acknowledging
that it is unfair to cross-examine a witness using material
which does not represent what the witness in fact said,
courts have excluded material that is really the agent's
words or impressions rather than those of the witness. In
Palermo v. United States, 360 U.S. 343 (1959), the Court
affirmed the denial of the production of a 600-word memoran-
dum in which the Government agent summarized a three and a
half hour interrogation of a witness who testified at trial.
In one of the first Supreme Court decisions discussing the
•statement" definition of the Jencks Act, the Court attempted
to clarify what courts may exclude:
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-5-
[S]ummaries of an oral statement which evidence substan-
tial selection of material/ or which were prepared after
the interview without the aid of complete notes, and hence
rest on the memory of the agent, are not to be produced.
Neither, of course, are statements which contain the
agent's interpretations or impressions.
360 U.S. at 353. If a court describes an agent's notes as
"rough", "random" or "brief", it will be signaling its finding
that the notes are not "statements" as to the witness referred
to in the notes.
To determine whether notes accurately reflect a witness's
words, courts will consider the extent to which the writing
conforms to the witness's language (e.g., "I dumped it because
I thought the load was hot."); I/ the number of pages of notes
in relation to the length of the interview (e.g., one page of
notes after three hours of interviewing); 2/ the lapse of time
between the interview and its transcription; 3/ the appearance
of the substance of the witness's remarks (i.e., are they in
quotation marks? in sentence form?); 4/ and the presence of
comments or ideas of the interviewer. £/
The Jencks Act clearly gives the court the authority to
determine, after an in camera inspection, what is Jencks Act
material and what is not. It is not the Government's function
to excise material; rather, any notes or memoranda which
conceivably could be viewed as Jencks Act material should be
provided to the prosecutor for review by the courts.
I/ Palermo v. United States, supra.
2/ United States v. Judon, 581 F.2d 553 (5th Cir. 1978);
United States v. Durham, 587 F.2d 799 (5th Cir. 1979);
Goldberg v. United States, 425 U.S. 94 (1976); Palermo v.
United States, supra.
3/ Campbell v. United States, 365 U.S. 85 (1961).
4/ United States v. Muckenstrum, 515 F.2d 568 (5th Cir.),
cert, denied, 423. O.S. 1032 (1975); United States v.
Pennett, 496 F.2d 293 (10th Cir. 1974J1United States v.
Hines, 455 F.2d 1317 (D.C. Cir. 1971).
5/ United States v. Pfingst, supra.
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-6-
Issue
When must Jencks Act material be made available to the
defense and what ace the sanctions if it is not made
available?
Discussion
If a prosecutor decides to follow strictly the letter
of the law, he or she need not turn over Jencks Act material
until after the witness has testified at trial for the Govern-
ment. However, because of the delay which this creates,(while
the defense reviews the material), most courts expect that a
prosecutor will agree to turn over Jencks Act material either
at the start of each day of trial or before the witness testi-
fies on direct examination. Some prosecutors even allow the
defense to examine the material before trial.
As in any area of the law, different courts interpret
the Jencks Act differently. Prosecutors who are aware of
previous rulings by a court on Jencks Act issues will conform
their practice accordingly. Therefore, what one prosecutor
considers Jencks Act material, another may not. EPA personnel
must accommodate themselves to the practice of the prosecutor
within their jurisdiction.
The Congressional purpose of the Act is to allow the
defendant to have, for impeachment purposes, "relevant and
competent statements of a governmental witness in possession
of the Government touching the events or activities as to
which the witness has testified at trial." Campbell v. United
States, supra, 365 U.S. at 92. If the defense's ability to
cross-examine is impeded by the deliberate or inadvertent
loss, by the Government, of Jencks Act material, the Court
may decide not to allow the witness to testify at all or to
strike the witness's entire testimony. Of course, the effect
of completely excluding the testimony of a Government witness
may be significant.
Although the Act does not require the automatic imposi-
tion of sanctions for failure to preserve potential Jencks
Act material, courts have warned law enforcement agencies of
their duty to promulgate procedures to ensure preservation.
[S]anctions for non-disclosure based on loss of evidence
will be invoked in the future unless the Government can
show that it has promulgated, enforced, and attempted in
good faith to. follow rigorous and systematic procedures
designated to preserve all discoverable evidence gathered
in the course of a criminal investigation. The burden,
of course, is on the Government to make this showing.
Negligent failure to comply with the required procedures
will provide no excuse.
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-7-
United States v. Bryant, 439 F.2d 642 (D.C. Cir. 1971)
(footnote omitted)(emphasis in original).
In light of the sanctions that can flow from a failure
to preserve Jencks Act material, as well as Government's
inherent responsibility to preserve discoverable evidence, it
is incumbent upon EPA to develop procedures that will ensure
this end.
Issue
What procedures should be implemented throughout the
Agency to preserve Jencks Act material?
Discussion
As a general rule, after a matter is referred to CPA's
Office of Criminal Investigations, the case agent, will be
responsible for reports written to document factual develop-
ments in ongoing cases. This would include, for example,
interview write-ups, surveillance reports, documentation
of the receipt of physical evidence, etc. One clear exception
to this general rule will be Agency technical personnel who
will continue to draft reports documenting sampling data
and analysis, chain of custody information, etc.
If more than one investigator is involved in an investi-
gation, only one report should be written documenting a
specific event unless circumstances mandate otherwise.
All work notes should be retained by Agency personnel
working on the criminal investigation until the final disposi-
tion of the case. This potential Jencks Act material must
be kept in secured files when not in immediate use. Any
notes taken at the time of the event, or at the time of the
interview, as well as reports composed from the notes must be
retained. Intermediate drafts need not be retained.
Investigative reports and technical reports should not
include the writer's subjective thoughts, impressions or
general opinions concerning a case. If it is thought necessary
to reduce to writing information that is not strictly factual,
this should be kept separately in secured files. It is more
likely that material which is arguably not producible under
the Act will be withheld from the defense if it is kept apart
from material which is clearly Jencks Act material. .Rather
than disputing in court which portions of reports should be
excised, everything within a report should be relevant and
objective material. Extraneous material which does not
directly relate to a case should not be included in investi-
gative reports on that case.
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•? ~3
x
'
t /
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- 4 -
— DAA Civil, who, in conjunction with the DAA-
Criminal, will coordinate final discussions
with and input fron the Department of Justice
(and, as necessary, State enforcement
personnel.)
— Assistant Administrator, Office of Enforcement
and Compliance Monitoring.
Time limits will be met. Extensions of time limits will be
allowed only for good cause and required approval by the OAA
Civi,! and should not exceed five (5) working days. Routine
preparation of analyses or implementing memoranda shall not be
appropriate reasons for delay or extensions of time in the review
process.
•
9. When the referral package and implementing memorandum
have been signed by the Assistant Administrator, the package will
be returned to the preparing office. The office assigned
responsibility for preparation of the referral must assure
distribution of copies of the referral memorandum to the persons
named in paragraph 4.
Emergency Clearances
10. When the public health or the environment is
significantly endangered, and in the judgment of the Region'
immediate civil or administrative action is required to
stabilize or to control an emergency fact situation when there
would otherwise be need for approval of parallel proceedings, the
Region may seek emergency clearance. Prior to seeking emergency
clearance, the Region shall consult with the Special (Resident)
Agent in Charge of that Region. Emergency clearance may be
requested by telephonic contact between the Regional
Administrator or Deputy Regional Administrator and Regional
Counsel with the Assistant Administrator - Office of Enforcement
and Compliance Monitoring for limited civil or administrative
action. This Emergency Request will then be memorialized by the
Region in accordance with the procedures outlined above.
Emergency approval will be limited to an immediate need to
stabilise • fact situation or protect against Significant
environmental harm or public endangerment, and* *- not a
substitute for final, formal approval of parallel proceedings.
cc: Gerald H. Yamada
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- 3 -
6. Upon receipt by the Assistant Administrator, the
request for parallel proceedings will first be sent to the Deputy
Assistant Adainistrator for Civil Enforcement (DAA Civil). The
OAA Civil will assign and delegate the preparation of the
referral package.
7. Upon receipt of their information copies, each Deputy
Assistant Administrator will assign a staff attorney to work on
the request. The staff attorney should begin preliminary issue
exploration immediately after receiving the assignment.
Preliminary issue exploration includes having discussions and
conferences with other attorneys and EPA or Regional staff. This
is necessary to prepare the matter for speedy review when the
request is actually received from the DAA Civil. Note: It is
anticipated that before there ia discussion of a parallel
proceeding request with the Department of Justice by
headquarters, all affected program* will exchange information and
views, and discuss the merits of the request to establish an .
Agency consensus before seeking information or comment from
outside sources, departments, agencies or individuals.
8. The office assigned responsibility for the request
shall process the request into a referral package within eight
(8) working days. Within the eight day limit for and during
preparation of the referral package, the office assigned
responsibility for the package preparation is expected to confer
with all affected media representatives during its preparation of
the package. The referral package shall include a memorandum
drafted to the Regional Counsel from the Assistant Administrator,
reflecting approval or disapproval of the request. The final
referral package should reflect the concurrence of each Associate
Enforcement Counsel for each medium identified as affected by the
request for parallel proceedings. The final package will then be
forwarded to each of the following offices in turn, which will
each complete its review within five (5) working days of
receiving the package:
— Deputy Assistant Administrator for Civil
Enforcement (DAA Civil)
— Office of Criminal Ei ^rcement counsel (OCEC),
who will discuss the referral with the Regional
criminal enforcement contact.
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V.9,
"Functions and General Operating Procedures for the Criminal Enforcement
Program", dated January 7, 1985. See GM-15.
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APPENDIX A
$3500 Demands for production of statements and reports of
witnesses.
(a) Ir any criminal prosecution brought by the United
States, no statement or report in the possession of the United
States .which was made by a Government witness or prospective
Government witness (other than the defendant) shal. be the
subject of subpoena, discovery, or inspection unti. said wit-
ness has testified on direct examination in the trial of the
case.
(b) After a witness called by the United States has tes-
tified on direct examination, the court shall, on motion of
the defendant, order the United States to produce any state-
ment (as hereinafter defined) of the witness in the possession
of the United States which relates to the subject matter as to
which the witness has testified. If the entire contents of
any such statement relate to the subject matter of the testi-
mony .of the witness, the court shall order it to be delivered
directly to the defendant for his examination and use.
(c) If the United States claims that any statement
ordered to be produced under this section contains matter
which does not relate to the subject matter of the testimony
of the witness, the court shall order the United States to
deliver such statement for the inspection of the court in
camera. Upon such delivery the court shall excise the portions
of such statement which do not relate to the subject matter of
the testimony of the witness. With such material excised, the
court shall then direct delivery of such statement to the
defendant for his use. If, pursuant to such procedure, any
portion of such statement is withheld from the defendant and
the defendant objects to such withholding, and the trial is
continued to an adjudication of the guilt of the defendant,
the entire text of such statement shall be preserved by the
United States and, in the event the defendant appeals, shall
be made available to the appellate court for the purpose of
determining the correctness of the ruling of the trial judge.
Whenever any statement is delivered to a defendant pursuant to
this section, the court in its discretion, upon application of
said defendant, may recess proceedings in the trial for such
time as it may determine to be reasonably required for the
examination of such statement by said defendant and his
preparation for its use in the trial.
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-2-
(d) If the United States elects not to comply with an
order of the court under subsection (b) or (c) hereof to
deliver to the defendant any such statement, or such portion
hereof as the court may direct, the court shall strike from
the record the testimony of the witness, and the trial shall
proceed unless the court in its discretion shall determine
that the interest interests of justice require that a mistrial
be declared.
(e) The term "statement", as used in subsections (b),
(c), and (d) of this section in relation to any witness
called by the United States, means—
(1) a written statement made by said witness and
signed or otherwise adopted or approved by him;
(2) a stenographic, mechanical, electrical, or other
recording, or a transcription thereof, which is
a substantially verbatim recital of an oral
statement made by said witness and recorded
contemporaneously with the making of such oral
statement; or
(3) a statement, however taken or recorded, or a
transcription thereof, if any, made by said
witness to a grand jury.
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V.12.
"Procedures for Requesting and Obtaining Approval of Parallel Proceedings",
dated June 15, 1989. Excludes attachment entitled "Guidelines on
Investigative Procedures for Parallel Proceedings".
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3 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O.C. 20460
JUN 151989
COM»lUkMC|i MOMITO«I*O
MEMORANDUM
SUBJECT: Procedures for Requesting and Obtaining Approval of
Parallel Proceedings
FROM: Edward E. Reich
Acting Assistant'
TO: Regional Counsels, Regions I-X
Associate Enforcement Counsels
This memorandum supersedes and replaces a prior OECM policy
document, dated April 2, 1987, entitled "Handling Requests for
Parallel Proceedings."
Although not favored as a general matter, the parallel
proceeding occasionally is necessary or desirable as the best way
to achieve EPA goals and objectives. Parallel administrative or
civil proceedings which conform to Agency policy may be approved
by the Assistant Administrator, Office of Enforcement and
Compliance Monitoring, before or after the initiation of a
criminal proceeding. Use of the following procedural steps will
ensure the most expeditious treatment of a Regional request for
parallel proceedings:
Initiation of ^tlff Parallel Proceedings Request:
1. A Region initiates a request for parallel proceedings
by memorandum directed to the Assistant Administrator, Office of
Enforcement and Compliance Monitoring. The memorandum request
for parallel proceedings should include the following:
— background information including a statement
concerning the status of administrative or civil
evidence or information gathering with respect to
the matt - for which approval is' being sought, and
a statement that the Region has made inquiry and is
not pursuing any administrative or civil proceeding
for any purpose other than the one for which the
approval is being sought.
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- 2 -
—- a brief factual outline of each proposed civil 'or
administrative action;
— a brief description of the existing criminal
investigation or action; and,
— a specific statement explaining why simultaneous
actions are necessary and the specific aspects of
the Agency parallel proceedings policy vhich justify
this request.
2. The memorandum request for parallel proceedings should
be prepared by the Regional Counsel. The memo should be signed
by the Office of Regional Counsel ano by affected Regional
Program.Manager(a).
3. All factors affecting potential enforcement actions —
criminal, civil and administrative — should be coordinated
within the Region before the decision to request approval for
parallel proceedings. However, once the decision is made, in
advance of sending the memorandum request, the Office of -
Regional Counsel should call the Special (Resident) Agent in
Charge in that Region and the Office of Criminal Enforcement
Counsel (OCEC) in Headquarters that the request is coming.
4. Simultaneous information copies of the request for
approval together with any supporting attachments should be sent
to the following persons:
A. Deputy Assistant Administrator for Criminal
Enforcement;
B. Deputy Assistant Administrator for Civil
Enforcement;
C. Regional Criminal Enforcement Counsel for the
requesting Region;
0. Special (or Resident) Agent in Charge in the
requesting Region;
E. Chief of the Environmental Enforcement Section
(EES), Departa -»t of Justice; end,
P. Chief of the Environmental Crimes Section (ECS),
Department of Justice.
5. While awaiting approval of requests for parallel
proceedings, Regional personnel may continue good faith
inspection and monitoring activities, but Agency policy with i
respect to separation of civil and criminal staff shall be
followed in anticipation of approval of the request.
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U.S. fc, ylRONMENTAL PROTECTION AGENCY
PROCEDURES FOR APPROVAL OP PARALLEL PROCEEDINGS
c
IDENTIFICATION OF FACT SITUATION
J
SPECIAL AGENT IN CHARGE
(U.S. ATTORNEY)
(OTHER FEDERAL AGENCY)
REGIONAL PROGRAM
PERSONNEL
MEMORANDUM REQUEST
by
OFFICE OF REGIONAL COUNSEL
REGIONAL PROGRAM MANAGER(S)
ASSISTANT ADMINISTRATOR, OECM
I
DEPUTY ASSISTANT ADMINISTRATOR, CIVIL
REFERRAL PACKAGE
by
PRINCIPAL MEDIA, AEC
ALL AFFECTED
MEDIA, AECs
DEPUTY ASSISTANT ADMINISTRATOR, CIVIL
I
DEPUTY ASSISTANT ADMINISTRATOR, CRIMINAL
DEPUTY ASSISTANT ADMINISTRATOR,' CIVIL
ASSISTANT ADMINISTRATOR, OECM
APPROVAL
C DISAPPROVAL
DEPARTMENT OF JUSTICE
REGIONAL COUNSEL
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V.13,
# "Revised EPA Guidance for Parallel Proceedings", dated June 21, 1989.
This document together with V.12. above, supersedes and replaces the
documents at V.6.,V.7., and V.10. This document is supplemented by the
document at V.14.
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-------
\ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
/ WASHINGTON. D.C. 20460
*/
Of HCl Of
EMFOftCCMEMT AMD
COM1IAM7C MOMTOA'MG
MEMORANDUM
SUBJECT: Revised EPA Guidance for Parallel Proceedings
FROM: Edward E. Reich _
Acting Assistant Administrator *
TO: Assistant Administrators
Associate Administrators
Headquarters Enforcement Program Office Directors
Regional Administrators, I-X
Deputy Regional Administrators, I-X
Regional Counsel, I-X
Attached for your use and distribution is the revised
guidance on parallel proceedings. Copies of the "Guidelines on
Investigative Procedures for Parallel Proceedings'* should be made
available at once to all affected enforcement personnel, program
managers, and senior staff. Also included in the Guidelines is a
short form, two-page "Easy Access to Parallel Proceedings
Guidance by Five Rules of Thumb" which you may wish to post
prominently in all civil enforcement offices.
Effective immediately, thes.- Guidelines constitute Agency
policy with respect to parallel proceedings. These Guidelines,
taken together with the June 15, 1989 memorandum, "Procedures for
Requesting and Obtaining Approval of Parallel Proceedings",
(attached) supersede and replace the following five memoranda
dealing with parallel proceedings:
— "Policies and Procedures on Parallel Proceedings at the
Environmental Protection Agency," dated January 23, 1984;
—"The Use of Administrative Discovery Devices in the
Development of Cases Assigned to the Office of Criminal
Investigations," February 16, 1984;
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— "The Role of EPA Supervisors During Parallel Proceedings "
March 12, 1985; - '
—"Implementation of Guidance on Parallel Proceedings "
February 3, 1986; and, '
—"Handling Requests for Parallel Proceedings," April 2,
1987.
This final guidance reflects all of the comments received
upon the several prior drafts circulated over the past several
months. These Agency Guidelines also reflect the comments of the
Department of Justice and correlate with their October 13, 1987,
"Guidelines for Civil and Criminal Parallel Proceedings." Your
comments were very helpful, and we appreciated your assistance in
making the guidance useful as a field reference tool.
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V.14
# "Supplement to Parallel Proceedings Guidance and Procedures for
Requesting and Obtaining Approval of Parallel Proceedings", dated July 18,
1990.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, O.C. 204M
JUL ! 8 1990
(MONCtMIMT
MEMORANDUM
SUBJECT: Supplement to Parallel Proceedings Guidance and
Procedures for Requesting and Obtaining Approval of
Parallel Proceedinc
FROM: James M. Strocfc.^
Assistant Administr^a-fctSr
TO: Regional Counsels, Regions I-X
Associate Enforcement Counsels
Director, Office of Criminal Enforcement
Director, Office of Civil Enforcement
As a result of the recent reorganization of and realignments
within the Office of Enforcement, changes must be made to the
parallel proceedings policy and to procedures for requesting and
obtaining approval of parallel proceedings requests. This
memorandum supplements prior memoranda dated June 15, 1989,
"Procedures for Requesting and Obtaining Approval of Parallel
Proceedings," and June 21, 1=89, "Revised EPA Guidance for
Parallel Proceedings," which transmitted "Guidelines on
Investigative Procedures for Parallel Proceedings," to the degree
necessary to change certain references and terms used in those
memoranda. The procedures, policy and guidance provided by the
memoranda dated June 15 and 21, 1989, remain fully effective,
except as revised as follows:
1. Two revised flow charts, which replace the one
previously supplied with the memorandum dated June 15, 1989, are
attached. These charts should be used instead of the earlier one
as an aid in routing the parallel proceeding request.
2. Requests for parallel proceedings will continue to be
submitted by memoranda from the Office of Regional Counsel,
directed to the Assistant Administrator, OE. Information copies
should also be sent simultaneously to the Office of .Criminal
Enforcement and to the attention of the Associate Enforcement
Counsel for the principal media affected by the parallel
proceeding request (Chart I).
-------
3. Upon receipt in the Office of the Assistant
Administrator, the Deputy Assistant Administrator will assign the
request to an Associate Enforcement Counsel for preparation of
the package, which will then be routed for concurrence and action
within Headquarters as provided by the existing policy and
procedures (Chart II). (A request for parallel proceedings which
involves a request for suspension or debarment or discretionary
listing and for which there is an ongoing environmental criminal
investigation will be routed to the Office or Criminal
Enforcement for preparation of the package for internal OE
concurrence and AA approval.)
4. The following titles and terms, used in prior
memoranda, have been changed as indicated:
"Office of Enforcement and Compliance Monitoring (OECM)" to
"Office of Enforcement (OE)"
"Deputy Assistant Administrator, Civil" to "Director,
Office of Civil Enforcement"
"Deputy Assistant Administrator, Criminal" to "Director,
. Office of Criminal Enforcement"
Attachments
cc: Gerald H. Yamada, Deputy General Counsel
-------
U. S. Environmental Protection Agency
Procedures for Approval of Parallel Proceedings
Flow Chart for Regional Request to Headquarters
Special Agent in Charge
(U. S. Attorney)
(Other Federal Agency)
Regional Program Personnel
\
Memorandum Request
Office of Regional Counsel
(information copy)
Director
Office of Criminal Enforcement
(original request)
Assistant Administrator
Office of Enforcement
(information copy)
Associate Enforcement Counsel
Civil Division (Affected Media)
-------
-------
U. S. Environmental Protection Agency
Procedures for Approval of Parallel Proceedings
Flow Chart for Headquarters
i
Office of Enforcement
Deputy Assistant
Administrator
(assignment to AEC)
All Affected Media
Director of Civil Enforcement
Director of Criminal Enforcement
Deputy Assistant Administrator
1
Suspension or
Office of Criminal
Enforcement
Assistant Administrator
(approval or disapproval)
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VI. SPECIALIZED ENFORCEMENT TOPICS
A. NATIONAL MUNICIPAL POLICY
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VI.A.I
"Municipal Enforcement Case Requirements", dated December 14, 1982.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. DC 20460
DEC I 4 1932
ornce OF
LEGAL. AND ENFORCEMENT CC
MEMORANDUM
SUBJECT: Municipal Enforcement Case Requirements
FROM : Louise D. Jacobs ^^•^^^L^LT~^~
Associate Enforcement Counsel for Water
,•
TO ' : All Attorneys
Water Enforcement Division, OLEC
Please ensure that the following.information is contained
in all referrals sent to the Department of Justice for
prosecution of municipal violations:
0 Confirmation of the municipality's permit requirements;
0 Listing of precise nature of violation of the requirements;
0 Information about alternatives for solving the problem
which are likely, in the opinion of an informed indivi-
dual, to be successful. The informant should be some-
one who knows the plant and violation, is familiar
with the kind of violations occurring, is knowledgeable
about sewage treatment systems in general, and is of •
the opinion that these particular violations are
possible to solve by one of several alternatives posited.
The informant should be identified in the referral.
A JRB report may ordinarily suffice to meet this
requirement;
'° "First-cut" information indicating that the cost of a
probably feasible solution is one which this municipality
will not find it totally impossible to pay. We will
discuss at a later date some sources for this "first-
cut" conclusion. One source of such information
might be the OW test (Longest office) for whether a-
given munipality can support a grant. Another source.
might be the economists on staff.in Region III.
You will note that tne tests listed are broad'.and general.
.This is purposeful, particularly in the case of .the f inanc'ial'.".-
information requests. .The purpose of collecting this information
~> • ' (
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-2-
is to provide the Department of Justice with a rough, predis-
covery screening of the case, containing enough information
to indicate to a sensible lawyer that filing is warranted, but
certainly not enough to make a conscientious lawyer comfortable
at the time he/she enters the courtroom for the first day of trial.
• •.--- It is my opinion that too often we have tried to meet
the first-day-of-trial test in our prefiling efforts, and
that this has slowed the rate of filing beyond what might be
desirable.
If after providing the information listed above you find
that further information is being requested by the Department
of Justice-,, please call this to my attention. It may be that
in a giyen case further information might be desirable.
However, I would like to keep abreast of these requests and
to discuss them with .Steve Ramsey if necessary.
The elements listed above as materials sufficient for -an
average filing have been discussed by me with Steve, and generally
agreed uporu
In addition to meeting these internal requirements for a
municipal referral, each attorney should impress upon his/her
regional counterpart, to the extent possible, that we prefer
to use scarce agency resources to develop cases against larger
municipalities, or those presenting otherwise significant
problems. ,
Examples of "otherwise significant" might include damage
to water quality or threat to public health caused by
violations by any-sized municipality, violations having
unusual precedential significance, or responses to an unusual
show of recalcitrance.
I am sending a copy of this memo to Steve so that he may
make any corrections he desires in this statement of my
understanding of our agreement.
* '• "• . • i -
cc: Mike Brown
Steve Ramsey
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VI.A.2,
"CWA Municipal Enforcement Cases", dated January 3, 1983,
-------
Subject
CVA Municipal Enforcement Cases
To
All EES Attorneys
Date
January 3, 19S^
A
ll^f
r j
Ramsey
As you know, EPA is in the process of developing -a
municipal water enforcement policy. Although the policy is not
yet final, we have said we will consider filing cases against a
municipality where the agency can identify what the municipality
must do to achieve compliance and that the municipality has the
financial.wherewithal to implement the remedy.
Mike Brown and Louise Jacobs have agreed that EPA will
provide the following information to assist us in reviewing
these cases:
1. Violation
Information about the precise nature and duration of
the violation, including confirmation of the municipality's permii
requirements.
2. Remedy
An explanation of what the municipality must do to
achieve compliance, basically a particularized plan of action
identifying practical alternatives we can propose to the court.
3. Financial Capacity
Information which reflects that the proposed remedy
will not be impossible for the municipality to fund. EPA1 s
economists are putting together a test which identifies the kinds
of information relevant to this inquiry (e.g. , bond rating.
assessment of staff economists, user charges).
We also expect that the referral will identify an
individual who has been to the plant, is familiar with the
violations, and can explain how the violations can be remedied.
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- 2 -
The referral should indicate the civil penalty the agency seeks
including the penalty "calculation and what amount EPA will ac
as a bottom line.
If any of the municipal enforcement cases which you are
reviewing lack this information, please advise Carol, Lloyd, or
Chip immediately and prepare a letter to the EPA staff attorney
requesting this information. These cases are important to EPA
and I would appreciate .your expediting your assessment of them. '
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VI.A.3.
NATIONAL MUNICIPAL POLICY, 49 FR 3832 (January 30, 1984)
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Monday
January 30, 1984
Part V
Environmental
Protection Agency
Publicly-Owned Treatment Works;
National Municipal Policy; Notice
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3832
Federal Register / Vol. 49. No. 20 / Monday, January 30.1981 / Notices
ENVIRONMENTAL PROTECTION
AGENCY
IWH-fRL 2515-6]
Notice of National Municipal Policy on
Publicly-Owned Treatment Works.
AGENCY: Environmental Protection
Agancy.
ACTION: Notice of National Municipal
Policy.
SUMMARY: This notice sets forth the
Environmental Protection Agency's
policy on ensuring that all publicly-
owned treatment works (POTW) comply
with the statutory requirements and
compliance dead-lines in the Clean
Water Act (CWA). The policy describes
the Agency's intention to focus its
efforts on POTWs that previously
received Federal funding assistance and
are not in compliance, on all other major
POTWs. and on minor POTWs that are
contributing significantly to an
impairment of water quality. It also
describes how the Agency expects EPA
Regions and States to carry out the
intent of the policy. The purposes of the
policy are to achieve maximum
improvement in water quality in
accordance with the goals of the CWA.
and to protect the public's investment in
wastewater treatment facilities.
The Agency has recently proposed a
regulation that redefines secondary
treatment pursuant to the 1981
amendments to section 304{d) of the
CWA. 48 FR 52258. November 16.1933.
This related action will help provide
reasonable certainty regarding POTWs
applicable effluent limits and will
facilitate implementation of this policy.
EFFECTIVE DATE: This policy will be
effective January 30.1984.
FOR FURTHER INFORMATION CONTACT:
Robert W. Zcller. Ph. D.. U.S.
Environmental Protection Agency. EN-
338. 401 M Street SVV.. Washington.
D.C. 20460 (202) 475-8304.
Dated: January 23.I9ft».
WUlUm D. Ruckel*baus.
Administrator.
Statement of Policy
When the Clean Water Act (CWA)
was passed in 1972. Congress gave
municipalities until 1977 to comply with
its requirements. Congress authorized
the Environmental Protection Agency
(EPA) to extend the deadline to 1983 and
then again to July 1.1988. for some
municipalities. In addition. Congress
amended the Act in 1981 to modify the
basic treatment requirements. Therfore.
Congress has authorized EPA to give
some municipalities several.additional
years to achieve compliance and baa
also provided more reasonable
treatment requirements for certain types
of facilities.
The CWA requires all publicly-owned
treatment works (POTWs) to meet the
statutory compliance deadlines and to
achieve the water quality objectives of
the Act whether or not they receive
Federal funds. The EPA will focus on
POTWs that previously received Federal
funding assistance and are not currently
in compliance with their applicable
effluent limits; on all other major
POTWs. and on minor POTWs that are
contributing significantly to an
impairment of water quality. EPA's goal
will be to obtain compliance by POTWs
as soon as possible, and no later than
July 1.1988. Where there are
extraordinary circumstances that
preclude compliance of such facilities by
July 1.1988. EPA will work with States
and the affected municipal authorities to
ensure that these POTWs are on
enforceable schedules for achieving
compliance as soon as possible
thereafter, and are doing all they can in
the meantime to abate pollution to the
Nation's waters.
Implementation Strategy
The Agency is committed to pursuing
a clear course of action that fulfills the
intent of Congress and results in the
maximum improvement in water quality.
The Agency is also committed to
protecting the public's financial
investment in wastewater treatment
facilities. To meet these objectives, the
Agency expects EPA Regions and States
to adhere to the National policy stated
above and to use the following
mechanisms to carry out the intent of
this policy.
EPA Regions will cooperate with their
respective States to develop strategies
that describe how they plan to bring
noncomplying facilities into compliance.
These strategies should include a
complete inventory of all noncomplying
facilities, should identify the affected
municipalities consistent with the
National policy, and should describe a
plan to bring these POTWs into
compliance as soon as possible. Regions
and States will then use the annual
State program grant negotiation process
to reach agreement on the specific
activities they will undertake to carry
out the plan.
Based on the information in the final
strategies, the permitting authority I
(Region or approved NPDES State) 1
require affected municipal authorities to
develop one of the following as
necessary:
Composite Correct/on Plan: An
affected municipality that has a
constructed POTW that is not in
compliance with its NPDES permit
effluent limits will be required to
develop a Composite Correction Plan
(CCP). The CCP should describe the
cause(s) of noncompliance. should
outline the corrective actions necessary
to achieve compliance, and should
provide a schedule for completing the
required work and for achieving
compliance.
Municipal Compliance Plan: An
affected municipality that needs to
construct a wastewater treatment
facility in order to achieve compliance
will be required to develop a Municipal
Compliance Plan (MCP). The MCP
should describe the necessary treatment
technology and estimated cost should
outline the proposed sources and
methods of financing the proposed
facility (both construction and O&.M).
and should provide a schedule for
achieving compliance as soon as
possible.
The permitting authority will use ^^
information in these plans and will \ifP
with the affected municipality to
develop a reasonable schedule for
achieving compliance. In any case
where the affected municipal authority
is unable to achieve compliance
promptly, the permitting authority will.
in addition to setting a schedule for
achieving full compliance, ensure that
the POTW undertakes appropriate
interim steps that lead to full
compliance as soon as possible. Where
there are extraordinary circumstances
that make it impossible for an affected
municipal authority to meet a July 1.
19C8 compliance date, the permitting
authority will work with the affected
municipality to establish a fixed date
schedule to achieve compliance in the
shortest reasonable period of time
thereafter, including interim abatement
measures as appropriate. The general
goal is to establish enforceable
compliance schedules for all affected
municipalities by the end of FY 1985.
Once schedules for affected
municipalities are in place, the
permitting authority will monitor
progress towards compliance and will
take follow-up action as appropriate.
Nothing in this policy is intended to
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Federal Register / Vol. 49. No. 20 / Monday. January 30. 19tH / Notices 3833
impede or delay any ongoing or future
enforcement actions.
Overview
EPA Headquarters will overview the
implementation of this policy to ensure
that actions taken by Regions and States
are consistent with National policy and
that the Agency as a whole is making
progress towards meeting the statutory
deadlines and achieving the water
quality objectives of the Act.
Dated: January 23.1964.
William D. Ruckelshau*.
Administrator.
(FR Due M-M33 Hied l-IT-H. MS im|
•ILLJMO CODE «M» I»'M
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VI.A.4.
"Municipal Enforcement: The Financial Ability Question", dated February 17,
1984.
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-------
I SB
5 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
FEE ITB64
C,ll',> /•
tNf.'U' . I.M •.- .-.-. .
r.OM»l'A.V r M(JN''O"'N •
MEMORANDUM
SUBJECT: Municipal Enforcement: the Financial Ability Question
x-^V- ' /' /
FROM: Louise D. Jacobs (i >"u"i^/^/-—•
Associate Enforcement Counsel
for Water
TO: Addressees: Headquarters Water Program, Department of
Justice, and OECM (Water)
I was delighted with progress made in our meeting Thursday
morning on this subject. Efforts made to discuss this subject
among departments and among disciplines were worth the effort in
my opinion, and we should do it more often.
Following are some of the more important conclusions
reached, as I understood them.
0 The Office of Water will make clear to the Regions that
priorities in "municipal cases lie first in correcting the
substantial noncompliance among funded facilities.
0 OECM will participate with the Office of Water in
developing and sending to the Regions a.statement of
other qualifications which should be viewed as having
high priority for litigation. (Regions should be cautioned
not to view the development of this formula as a reason
for delay in developing other cases which they presently
consider important.)
0 For cases referred against POTWs built with Federal
funds, no financial impossibility defense should be
anticipated, and no special financial information will
be requested from the Regions.
0 For cases dealing with POTW noncompliance where compliance
can be achieved through proper O & M, no special financial
information will be requested from the Regions.
-------
0 When a Regie refers a case against a POTW which was no
federally funded, and in regard to which construction
is needed, the amount of financial information requested
front the Region will depend on the stage the case has
reached and other relevant circumstances. While we
have not had sufficient experience with municipal enforce-
ment to define this with precision, we can make the
following agreement, based to some extent on past partial
agreements:
1. To justify filing a complaint, information listed in
the attached exchange of memos (Ramsey and Jacobs)
will be requested from the Region, to make a prima
facie showing that construction expenditure proposed
is not an impossibility for the municipal defendant.
2. If the case proceeds into early stages of discovery
and shows signs of being contested, information con-
tained in the attached "Longest" questionnaire will
be requested from the Regions. (It should be noted
that this is information to be supplied in other
contexts for other purposes and may in some cases
already be on file in the Regions.) This information
is intended to result in a balance sheet which shows
municipal assets and liabilities and therefore
the relative financial health of the municipality|
3. If discovery is extended, and there is indication
of a seriously contested case which may well lead
to full trial, an expert will be hired by the
Agency to provide direction on any further financial
information needed from the Region or from else-
where. Funds are available in the FY84 OW budget
for this purpose. OW and OECM can assist in
locating and hiring experts.
0 OW will provide OECM with information on ways in which
financial data gathered for grants purposes has been
applied in making grants decisions, to assist the Agency
in maintaining,.a consistent position.
0 OECM will gather examples of some successful municipal
cases for OW to use in encouraging the Regions to
prioritize cases properly and refer them promptly.
These agreements, in my opinion, give us a good starting
point for moving agressively into the implementation of enforce-
ment aspects of the Administrator's municipal policy. As we
encounter new problems, or as the Regions make us aware of
new questions, I will hope to reconvene the participants for
similarly constructive solutions.
-------
Again, thanks for your cooperation,
Attendees:
Rebecca Hanmer, OW
Betsy LaRoe, OW
Robert Zeller, OW
Don Olson, OW
Stephen Ramsey, DOJ
Lloyd Guerci, DOJ
John Lyon, OECM
Jack Winder, OECM
Elyse DiBiagio-Wood, OECM
Attachment
cc: Courtney Price
Richard Mays
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VI.A.5,
"Financial Capability Guidebook", dated March 1984. (Table of Contents
only)
-------
1390
-------
Environmental Protection Programs Operations (WH-&47!
Agency Washington DC 20460
/EPA Financial Capability
Guidebook
TABLE OF CONTENTS
Chapter Page
L Introduction
o Purpose of the Guidebook 1
o Guidebook Audience 2
o Approach Used in this Guidebook 4
o Application and Evaluation Procedures 4
o Guidebook Organization 7
n. Overview of Approach and Notes on the Preparation
of a Financial Capability Analysis
o An Overview of the Approach 9
o - Worksheet fit Roles and Responsibilities
of Local Governments 9
- Worksheet #2: Facilities Cost Estimate 9
- Worksheet #3: Financing the Facilities 11
- Worksheet #4: Determining the Annual Costs
per Household 11
- Worksheet 05: Assessing the Community's
Debt History 11
- Worksheet #6: Evaluating the Community's
Financial Condition 12
o Notes on the Preparation of a Financial
Capability Analysis 12
- Obtaining the Data 13
• Estimating Needed Data 13
- Knowing Which Number to Use When
There's a Choice 13
- Recognizing the Effect of Different
Accounting Methods 13
- Incorporating Trend Analysis into the
Financial Capability Assessment 14
- Taking Account of Inflation and Economic
Change 1*
- Considering Overlapping Debt 14
- Funding Financial Capability Analysis 13
nL Financial Capability Analysis Worksheets, and
Instructions
o Evaluating Results of the Analysis 17
- Worksheet #1: Roles and Responsibilities
of Local Governments 23
- Worksheet f 2: Facilities Cost Estimate 27
\ ~~:
-------
• Worksheet #3: Financing the Facilities 35
• Worksheet £4: Determining the Annual Costs -47
• Worksheet 05: Assessing the Community's
Debt History 53
• Worksheet 06: Evaluating the Community's
Financial Condition 59
Appendices
A. Selected References A-3
B. Glossary of Financial Terms B-3
C. The Calculation of Capital Recovery Factors C-3
D. Sensitivity Analysis D-3
LIST OF EXHIBITS
Page
Exhibit I Integration of Financial Capability Analysis
into the Construction Grants Process 3
Exhibit n Relationship of Guidebook to Financial
Capability Policy Facilities 5
Exhibit ni Flow of Information from Source
Documents to Worksheets 10
Exhibit IV Overlapping Debt in Community "A" 16
Exhibit V Wastewater Facilities Financial
Information Sheet 19
Exhibit VI Basis for Identification of Regional
Costs 24
Exhibit VII Supplemental Information Sheet 52
vi
13=72-
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VI.A. 6.
"Eligibility for Variances under Section 301(i)(l) of the CWA", dated April
11, 1984.
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;• UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
*' WASHINGTON. D.C. 20460
APR I I
CCMCAAU COOP-ISC
MEMORANDUM
SUBJECT: Eligibility for Variances under Section
.301(1)(1) of the Clean Water Act
FkOM: Colburn T. Cherney; f ^
Associate General Colajri's'e'l
Water Division (LEU32W)
TO: Rebecca Hanmer
Director *
Office of water Enforcement .and
Permits (EN-335)
Bruce Barrett requested my legal opinion on a set of
five issues relating to the eligibility of publicly owned
treatment works (POTWs) for compliance extensions under
Section 301(i)(l) of the Clean Water Act (CWA). This
memorandum responds to that request.
QUESTION 1 . .
(1) Can EPA (or an approved NPDES State) issue a Section
301(i)(l) compliance extension to a municipal permittee thuc
will not be receiving Federal funds to construct its treatment
facility?
ANSWER
Yes, if the permittee is otherwise eligible. In order
Co be eligible a POTW would have to establish that it applied
by June 26, 1978 and meets a variety of substantive criteria
discussed below.
Discussion
Under Section 301(b)(l)(B) and (C) of the CWA, enacted
in 1972, all POTWs were required to comply with s.econdary
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-2-
creatnent, as well as a variety oc other requirements, I/ by
July 1, 1977. To assist POTUs co meet che 1977 compliance
deadline, Congress also enacted in 1972 Title II of the CWA,
which provided Federal grant assistance for POTW construction.
Congress did not, however, condition the applicability of
the compliance deadline upon the timely receipt of Federal
funds. See State Water Control Board v. Train, 559 F.2d
921 (4th Cir. 1977) .
Many POTWs failed to meet the 1977 deadline, in' part
because of delays in Federal funding. Therefore, in the
1977 Amendments to Che CWA, Congress enacted a new Section
301(i)(l) granting EPA the authority to extend the compliance
deadline for particular POTWs in appropriate circumstances. 2/
Section 3.01(i)(l) as originally enacted read as follows:
Where construction is required in
order for a planned or existing publicly
owned treatment works to achieve limitations
under subsection (b)(l)(3) or (b)(l)(C) of
this section, but (A) construction cannot be
•completed withfri the time required in such
subsection, or (B) the United States has
failed to make financial assistance under this
Act available in tine to achieve such limitations
by the cine specified in such subsection, the
owner or operator of such treatment works may
request the Administrator (or if appropriate the
State) to issue a. permit pursuant to section 402
of this Act or to oodify a permit issued pursuant
to that section to extend such time for compliance.
Any such request shall be filed with the Administrate:
(or if appropriate the State) within ISO days
after Che date of enactment of this subsection.
The Administrator (or if appropriate the State)
\_l These consist of "any more stringent limitation, including
those necessary to meec water quality standards, treatment
standards, or schedule of compliance, established pursuant
to any Scace law or regulacions (under authority preserved
by section 510) , or any other Federal law or regulation, or
required co implement any applicable wacer quality standard
established pursuant Co chis Act." Section 301(b) (1) (C) .
2/ Congress also granted EPA authority to extend compliance
deadlines for direct dischargers that had planned to
discharge into POTWs that were not yet fully constructed and
were granted Section 301(i)(l) extensions. See Suction 301(i)(2)
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-3- .
raay granc' such re^uesc and issue or modify such a
permit:, which shall concain a schedule of compliance
for Che publicly owned creacrsenc works .based on
Che earliesc dace by which such financial assiscance
will be available from che United Scaces ana
conscruccion can be completed, but in no event
lacer Chan July 1, 1983, and shall contain such
other terns and conditions, including chose necessary
Co carry ouc subsection (b) chrough (3) of section
201 of chis Act, section 307 of this Ace, and such
interim effluent limitations applicable co chat -
creacmenc works as che Adniniscracor decermines
are necessary Co carry ouc che provisions of chij
Ace.
On December 29, 1981, Congress again amended Che Clean
Wacer Ace by enaccing che "Municipal Wascewacer Treacnenc
Construction Granc Amendmencs of 1931," P.L. 97-117 ("1931
Anendmencs"). The 1981 amendments reduced Federal funding
of POTWs, boch in aggregace Germs and in che maximum
percentage of construction,- coses chac may be borne by E?A.-
The 19S1 Amendaencs also extended che compliance deadline
for recipients of Seccion 301(i) excensions co July 1,
1938. The remainder of che seccion was unchanged. Thus,
che criceria chaC previously applied to obcaining and granting
excensions have remained in effecc. Congress did, however,
rescricc che-availabilicy of excensions beyond July 1, 1933:
The amendment shall not be interpreted or
applied to excend the date for compliance
with section 301(b)(l)(B) or (C) of the
Federal Water Pollution Control Ace
beyond schedules for compliance in effecc
as of che dace, of enaccmenc of chis Ace,
except in cases where reduccions in che
araounc of financial assiscance under
Chis Ace or changed conditions affeocing
Che race of conscruccion beyond che
concrol of Che owner or operacor will make
ic impossible co complece conscruccion
by July 1, 19S3.
1981 Amendmencs, Seccion 21(a).
The criceria sec forch in Seccion 301(i)(l) and in
Seccion 21(a) of che 1931 Amendmencs arc designed co assess
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-4-
whether a POTW has justifiably failed to achieve compliance
with the relevant compliance deadline. 3/ These include the
POTW1 s ability to physically construct b~y the deadline-; the
impact of Federal failure to provide funding in a timely
manner upon the POT-v" s schedule; and changed conditions that
have affected the rate of constructon beyond the POT'.v" s
control. None of these statutory criteria makes a POTW's
eligibility for an extension contingent upon the likelihood
that the POTW will receive Federal funds in the future.
Likewise, nothing in the legislative history prevents
EPA from granting a Section 301(i) extension to an otherwise
eligible POTW that will not receive Federal funds. The
relevant legislative history consists of the following brief
discussion in the Senate Report:
The 1972 Act originally required municipal plants
to comply with effluent limitations based on secondary
treatment by 1977. This deadline proved to be difficult,
and in many cases impossible to meet, largely because of
insufficient Federal,-funding. The 1977 amenaments ,
therefore, permitted extension of the deadline to
municipalities acting in good faith which were unable
to neet this requirement. Such extensions were to be
in no case later than July 1, 1983.
With the projected shortfall in Federal expenditures,
and the reduced Federal share for the construction grsnt
program, it is once more apparent that r.any communities
will be unable to meet the* 1933 deadline. The legislation
thus extends the deadline to 1988 for communities wnicn
cannot meet earlier oe.adlines because Feoeral funds
are not available.The Committee emphasises that the
same good raitn requirements now in existing law are
also extended to facilities seeking the new extension.
*****
The Committee is aware that a number of communities
are under court orders to comply with certain pollution
control deadlines. These communities will not be
helped by the further"program limitations and reduced
funding .imposed by this legislation. This provision
3/ The relevant compliance deadline at present is either no
later than July 1, 1977, or, for POTWs that were granted
Section 301(i)(l) 'extensions, no la:er than July 1, 19S3.
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0-
exprasses the sense of the Congress that courts in
supervision of court orders for such non-complying
municipalities take cognizance of the amendments
contained in this legislation in their consideration
of modifications to such deadlines.
Senate Report No. 97-204, 97th Cong., 1st Sess. (1981), at 17
(emphasis added).
Under no circumstances, however, may a POTr.v delay
compliance beyond July 1, 19S8. Section 301(i) provides that
any extension "shall contain a schedule of compliance for the
publicly owned treatment works based on the earliest date by
which such financial assistance will be avail-able from the
United States and construction can be completed, but in no
event later than July 1, 1988" (emphasis added) ana must
contain interim limitations or other necessary requirements.
Thus, even if the POT'v does not anticipate receiving any Federal
funcs, it is required to construct and achieve compliance. &/
The quoted language does indicate, however, that the scheduled
availability of Federal funding is a relevant factor in
establishing a schedule"-of-'compliance for POTWs that are
granted extensions under Section. 301(i).
Can a Section 30l(i)(l) compliance extension beyond
July 1, 1933 be issued to a permittee that applied for an
extension by June 25, 1973, if EPA (or an approved IIPDES
State) never acted on the request? ' -
ANSWER
Yes.
DISCUSSION
The 1977 Amendments to the CWA provide that EPA may
grant an extension to any eligible POTW that applied in'a
timely manner. There is no deadline by which EPA is
required Co grant: or deny the extension. The 1981 Amendments
and legislative history did not alter this conclusion.
£/ Moreover, we note that the 1931 amendments cut back on the
Federal grants program without providing a waiver for
unfunded POTWs. Therefore, POTV/s do not have a reasonable
basis to expoct that Congress will provide further relief from
compliance deadlines in the future.
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-b-
QUESTION 3
Is a permittee thac requested a Section 301(i)(l)
compliance extension upon which EPA (or the approved State)
did'not act in violation of the Act or tfPDES regulations?
ANSWER
Yes, if the permittee has not achieved compliance with
the requirements of Section 301(b)(l)(3) and (C) by the deadline
set forth in its permit.
DISCUSSION
Initially, all POTWs should have been issued permits
requiring compliance with Section 301(b)(l)(3) and CO not
later than July 1, 1977. This permit deadline remains in
effect unless the permit is modified by EPA (or the approved
State) under Section 301(i)(l). If EPA (or the approved
State) has not modified the permit to extend the deadline
and the permittee.has not achieved compliance by the deadline,
then the permittee:is in violation of its permit. j>/
QUESTION 4
Can EPA bring an enforceaent action against a POTV
where EPA has not yet acted upon the FOTWs timelv Section
301(i)(l) request?'
..-. .. ANSWER
Yes.
*
.DISCUSSION
EPA may bring an enforcement action under Section 309 of
• the Act against any permittee that is violating its permit.
If a POTW has not complied with the compliance deadline in
its permit, it is subject to an enforcement action.
The statute does not provide any defense against
enforcement based upon the penaency of a request for an
extension, variance, or other permit modification. While the
5/ The Senate Report described the reported bill as .extending
the 1983 deadline. However, like the enacted amendment,
the bill itself .did not extend the deadline. Rather, it
authorized EPA to do so on a case-by-case basis, thereby
assuring, as noted in the Senate Report, that only good-faith
actors receive such extensions.
-------
,Hx's,si£ »»?:•". «••- • _ ,„«„,
>.KS-> "tr-,; s-u^ «s^r
-,,^'=-S'S^Sfe-SsS k^r,"
««i»»et *c" W« ^ lawsuiO «8C|roc.^ ^c I
:c»«w«e?;iiS --t^Vr.^..""""^"
u
ac
Fu
of
parties
k»
action
aA. -
also be ass
ides °
:i*e' ro compel asency -^, whicn ^- ratot «--
CD.C. C- • ^^ ^^ _ «„ 70. vjs t
——^T^" &rSu» i'l^U^» ^^"t7
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^^^B^"^^1""^"""""
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-8-
If che POTW as seres a claim, a courc may well scay che
enforcemenc proceeding pending an agency decision on che
Seccion 301(i) requesc. In an excrcme case where agency
delay has prejudiced che POTW's abilicy Co defend icself
(e.g. , if POTW employees wich percinenc knowledge have left:
ics°employ and are unnvailaole) , che courc mignc even dismiss
Che lawsuic. See, e.g.. EEOC v. Libercv Loan Coro. , 584
F.2d 853 (Sch Cir. 197-J) ana cases cicea cherein ac 355.
Finally, even if che courc allows che case Co proceed co
judgnenc in' EPA 's favor, eicher before or afcer a final agency
accion on che 301(1) requesc, che courc maincains a grcac
deal of equicable discrecion co fashion appropriace remedies
for violacions of Clean Wacer Ace roquiremencs . Weinberger
v. Romero.- Barcelo. 456 U.S. 305 (19S2). .Moreover, a courc
would lixeiy be mindful of Che adnonicion in che Senace Reporc,
supra ac 17, chax coures cake cognizance of che 1981 amendments
co Seccion 301(i). in addressing inscances of municipal non-
conpliance and fashioning new courc-orcereu deadlines. If a
POTW subn-.icced a Seccion 301(i) requesc in good faich,_ and
EPA has finally denied che rc-cuesc only afcer years of .delay,
a Courc may well exercise --ics discrecion by declining co
impose subscancial' penalcies or a burdensome compliance
schedule upon cne POT/.,
.QUESTION 5
Can EPA use che Acmir.iscracive Order process (Seccion
309(a)(5)) co issue complianc-j schedulc-s in lieu of Qodifying
or reissuing pernics .for municipalicic-s chac are eligible
'for Seccion 301(i)(l) compliance excensions?
Adip.iniscracive orders can be used, buc noc "in lieu" of
'Seccion 301(i)(l) compliance excensions.
DISCUSS 10:.'
Adminiscracive orders under Seccion 309(a)(3) and (5) (A) l_l
cannoc be used "in lieu" of Seccion 301(1) (1) excensions
2/ .Seccion ,309(a) (3) provides:.
Whenever on Che basis of any infonnacion available Co ^
Che Adniniscracor finds Chac any person is in violacion of
(FOOTNOTE CONTINUED ON N't^CT PAGE)
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because che two proc2ss.es are functionally tiistinet. A
Section 301(i)(l) extension is set forth in a permit, which
thereby establishes a new compliance deadline for the POTW.
An administrative order is an enforcement action. Compliance
with the order does not relieve che POTW from its legal
obligation to comply with the perr.it deadline. See N'or.::gem cry
Environmental Coalition v. EPA. 19 E.R.C. 1169, 1171 (D.C. ,^
Cir.1963). The oru^r ojerely assures the POTW that EPA will .
exercise its discretion not to enforce against the permit
violation if the POTW complies with a specified set of
requirements.
The distinction between Section 301(i) extensions and
administrative orders may be important from the POT'.V s point
of view. If the POTW is issued a permit containing a Section
301(i) extension and complies with that permit, the POTW has
a good defense to citizens' suits. If the POT'.v does not
receive such an extension, it will be subject, to citizens'
suits alleging a permit: violation; compliance with an
administrative order is no defense to such a lawsuit. See
Montgomery Environmental Coalition v. EPA'supra, at n. 6.
Tliererore, if £PA' would attempt to use administrative orders
on a broad scale "in lieu'of" 301(i) extensions, it would be
(FOOTNOTE 7 CONTINUED)
sections 301, 302, 306, 307, 308, 313, or i05 of this Act, or
is in violation of any permit condition or limitation
•implementing any of such sections in a permit issued uncer
section 402 of this Act . . ., he shall issue an order
requiring such person to comply with such section or requirement
or he shall bring a civil action in accordance with subsection
(b) of this section.
Section 309(a) (5) (A) provides:
Any order issued under this s.ubsection shall be by personal
service, shall state with reasonable specificity the nature
of the violation, and shall specify a time for compliance not
to exceed thirty days in the case of a violation or an interim
compliance schedule or operation and maintenance requirement
and not to exceed a time the Administrator determines to be
reasonable in the case or a violation of a final deadline,
taking into account the seriousness or the violation and any
good faith efforts to comply with applicable requirements.
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placing chose POTWs at-risk despice Congress1 clear incenc
Co afford chera relian. 8/
Nonecheless, che use of adrr.iniscracive orders under
Seccion 309(a)(5) is a permissible means of issuing enforceable
compliance schedules co POTVs chac are noc complying wich cheir
permits. While an adrainiscracive order does noc shield a PC-TV
from cicizens suics, ic dues provide governmental assurances
of non-enforcemenc if che order is complied wich. Furthermore,
if a cicizen suic is brought, che Ad::iir.iscracive order is
likely co be assigned significanc weighc by a reviewing court. 9_/
8/ As noced above, Che failure co act upon requescs for
Seccion 301(i) excensions gives rise co pocer.cial actions
by POTWs or ochers Co compel Agency.action. Moreover, in a
recent case decided under che Resource Conservation and
Recovery Ace (RCRA), che Court held chac a general agency
policy not Co issue RCRA permics co cercain cypes of facilities
jeopardized che'righcs and inccrescs of parcics and was
Cherefore a rule reviewable in che U.S. Circuic Courc of
Appeals. Environnencal Defense Fund v. Gorsuch. 713 F.2d 802
(D.C. Cir. 1983). Excending chis ii~n*= of reasoning, a pecicioner
mighc argue Chac an EPA "decision" noc Co ace upon Section
301(i)(l) applications is a rule and challenge chis "rule"
in che U.S. Circuic Courc of Appeals, alleging chac che rule
is arbicrary and capricious or is ochervise wichouc legal
basis.
j?/ The issuance of.A.O.s wich reasonable compliance schedules
also might help EPA defend againsc a Seccion 505 action
seeking to compel Agency accion on the Seccion 301(i) application.
cc: Louise Jacobs
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VI.A.7
"REGIONAL AND STATE GUIDANCE ON THE NATIONAL MUNICIPAL POLICY", dated
March, 1984.
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' £% \ UNITED STATES ENVIRONMENTAL PROTECTION AGENCV
WASHINGTON. D.C. 20460
APR 1 '< 15£4 °"AT; °""
MEMORANDUM
SUBJECT: Regional and State Guidance on the National Municipal
Policy
FROM: Jack E.
Assistant Administratorfor Water
TO: Regional Administrators
State Program Directors
On January 23, 1984, the Administrator signed the National
Mun'cipal Policy. The release of the signed Policy was preceded b<
a series of public briefings and other announcements to alert ou.
various constituencies that we intend to carry out the Policy
immediately. The issuance of this Policy signaled a new era in
municipal compliance and enforcement, and we must now move forwarc
to carry out its objectives.
Since the release of the Policy, we have tracked the development
of State municipal strategies through the Regional Offices. The
target date for completion of those strategies was April 1, 1984.
Thus far, only Rccj.vrn VI has submitted strategies for its States,
and we appreciate- :.;ieir timeliness. I expect the remaining State
strategies, including the categorized list of noncomplying facilities,
to be completed immediately, as they are an essential element of
your §106 program planning for FY85. We must adhere to this schedule
to ensure our ability to establish enforceable schedules by the end
of FY85 for all noncomplying POTWs that need construction to meet^
the requirements of the Clean Water Act.
In order to facilitate the coordination between Regions and
States in this critical early period, we are providing the attached
guidance for carrying out the Policy. This product was jointly
developed over a long period by Regions, States, and representatives
of ASIWPCA. We consider this our operational guidance, but it has
been forwarded to OMB for clearance under the Paperwork Reduction
Act, and it will become final upon OMB clearance (30-60 days). Yo«
will note that we -have withheld the sample financial capability
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REGIONAL AND STATE GUIDANCE
on the
NATIONAL MUNICIPAL POLICY
U.S. Environmental Protection Agency.
Office of Water
March 1984
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CONTENTS
REGIONAL AND STATE GUIDANCE
on the.
NATIONAL MUNICIPAL POLICY
Page
Background 1
Introduction 2
Guiding Principles 3
State Strategies: The Framework for Carrying 6
out the Policy
Executing State Strategies 7
0 Approach to Completed POTWs 8
0 Approach to POTWs in the Grants Process 9
0 Approach to Unfunded Municipalities 10
0 Compliance Monitoring and Enforcement 11
Program Management Activities and Overview 12
Attachments:
0 Permit Issuance and Compliance Schedule
Development Table ('and associated activities)
1411
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REGIONAL AND STATE GUIDANCE
.ON THE
NATIONAL MUNICIPAL POLICY
BACKGROUND
The Clean Water Act (CWA) originally established July 1, 1977,
as the statutory deadline for publicly-owned treatment works (POTWs)
to comply with both water quality-based and technology-based per-
mit requirements. Congress later authorized the Agency to extend
the compliance deadline for certain municipalities. In order to
receive an extension under. §301(i) of the CWA, a'municipality had
to apply by June 1978 and to demonstrate in. its application that
construction could not be completed by the July 1, 1977 deadline,.
or that the Federal Government had failed to provide grants in
time to allow the POTW to meet the deadline. EPA or the State was
authorized to extend the compliance date for such POTWs to the
earliest -date by which grants would be made available and construc-
tion could be completed, but no later than July 1, 1983.
In 1981, Congress recognized the need to provide additional
time for some POTWs to achieve compliance and amended §301(i) to
allow eligible facilities additional time to comply with their
applicable effluent limits. EPA or the State is authorized to
extend the compliance date for eligible POTWs to the earliest date
by which grants are available and construction can be completed,
but no later than July 1, 1988. A POTW is eligible for an exten-
sion beyond 1983 only where reductions in the amount of financial
assistance under the CWA or changed conditions affecting the rate
of construction, beyond the control of the owner or operator, made
it impossible to complete construction by July 1, 1983. Any muni-
cipality that is not currently in compliance with its permit re-
quirements and has not received a §301(i) extension, is in viola-
tion of the July 1, 1977, statutory compliance deadline. There
are, however, many §301(i) applications that have never been acted
upon.
In 1981, Congress also amended other sections of the CWA to
provide significant reform and redirection to the Federal Construc-
tion Grants Program. Congress, for example, amended .§201 of the
CWA to reduce both the number of categories of POTW construction
costs that are eligible for Federal funding after September 1984,
and the Federal share of .the total eligible costs. These changes
indicate a Congressional intent to reduce local dependence on
Federal funding assistance and to increase local accountability
for achieving compliance with the requirements of the CWA.
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Also in 1981, §304(d) of the CWA was amended to specify cer-
tain less costly treatment technologies that are the equivalent of
providing secondary treatment. The Agency has published a proposed
regulation that establishes a class of equivalent secondary treat-
ment works. The issuance of the National Municipal Policy has been
timed to follow the proposal of the new definition of secondary
treatment.
Because of historic and current problems with municipal compli-
ance, the Agency developed the National Municipal Policy, which
places renewed emphasis on .improving municipal compliance rates in
order to protect the Nation's water quality. The policy basically
reaffirms that municipalities must comply with the statutory dead-
lines in the CWA, whether or not they receive Federal funds. While
the deadlines in the CWA apply to all POTWs, the policy states that
the Agency will focus its compliance efforts .on 1) fully constructed
POTWs that previously received Federal funding assistance and are
not currently meeting their permit limits, 2) on all other major
POTWs, and 3) on minor POTWs that are contributing significantly
to an impairment of water quality. The policy also recognizes that
rhere may be extraordinary circumstances that make it impossible
for some municipalities to comply even by 1988. In such cases,
provided that the municipality has acted in good faith, the Agency
will work with the States and the affected municipalities to estab-
lish enforceable schedules for achieving compliance as soon as pos-
sible thereafter. These schedules will also require such munici-
palities to undertake appropriate, interim abatement measures.
Nothing in the Policy is intended to impede or delay any ongoing or
future enforcement actions.
This guidance sets forth a logical approach for implementing
the National Municipal Policy. The document is divided into four
main sections: an introduction, which presents a tiered approach
for addressing the problem of municipal noncompliance, as well as
guiding principles for implementation; a section that describes
Regional/State strategies, which are the basic planning documents
that permitting authorities should use to carry out the policy; a
section that discusses specific problems that permitting authori-
ties may encounter in implementing the policy, as well as suggested
mechanisms for addressing particular kinds of noncompliance; and
a final section that describes how Regions and States should use
the annual §106 program planning process to reach agreement on the
specific activities that states and EPA will undertake to carry
out the policy.
INTRODUCTION '
The National Municipal Policy identifies certain planning and
program management activities that'are considered essential in car-
rying out the Policy. State-specific strategies are the primary
planning mechanisms for coordinating Regional and State efforts
and resources to accelerate effective regulatory action across the
broad front of municipal noncompliance. To develop comprehensive
strategies, Regions and States need to coordinate carefully their
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permit, grant, and compliance/enforcement programs to provide the
mutual assistance necessary to meet the goals of the Policy. The
content of State strategies is discussed on.page six of this guidance.
The Policy also sets forth clear National priorities for
action. In support of these priorities, this guidance presents a
three-tiered approach for Regions and States to .use in addressing
the POTW noncompliance problem. It places primary importance on
completed facilities that are not in compliance, especially those
that used EPA funds for construction. The goal here is to achieve
maximum pollution abatement through effective operation, and to
realize the full water quality benefits of construction grant
funding.
As this first universe is addressed, Regions and States
should next consider affected municipalities that are already in
the grants process; this includes those municipalities that have
already received a construction grant and those on the fundable
portion of the State's priority list. The goal here is simply to
move these projects through the grants and construction phases as
quickly as possible, and to manage the grants and the schedules
so that the completed plants will meet certification requirements
one year after initial operation.
Next are those affected municipalities that need construction
to meet statutory requirements and will not, or are not likely to,
receive EPA grant assistance. This group poses the most difficulty
in designing reasonable schedules, and will require the most sensi-
tivity on the part of Regions and States. The goal here will be to
work with these affected municipalities to develop schedules that
enable them to achieve compliance as soon as it is technically and
financially possible. Within this group, the focus should be on
major POTWs and on minors that are contributing significantly to an
impairment of water quality.
The following principles should be used by the Regions and
the States as a guide in developing State-specific strategies and
compliance schedules for affected municipalities.
Responsibility for compliance rests with each municipality.
Municipalities should make every effort to comply expedi-
tiously with the requirements of the CWA, whether or not they
receive Federal funds. Local governments should select an appro-
priate treatment technology and explore the full range of alter-
native financing methods available to them not only to construct
these treatment works, but also to provide for adequate operation,
maintenance, and replacement (OM&R).
Funding decisions should be based on the potential for water quality
improvement.
States should dedicate available EPA funds on a priority basis
toward those POTW construction projects with the greatest potential
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for environmental benefits as provided by the CWA, EPA regulations,
and priority list guidance.1 This may be accomplished by sound State.
management of construction grant project priority systems and lists,
and State review and revision, as appropriate, of water quality
standards (WQS) and waste load allocations (WLA).
Special emphasis should be placed on compliance by POTWs that have
completed construction of the necessary treatment facilities.
Municipalities with fully constructed POTWs must achieve and
maintain compliance with their permit limits. EPA and the States
will exercise all available administrative and judicial options
needed to assure that noncomplying POTWs achieve and maintain
compliance With their NPDES permits.
Construction grant agreements must be honored, arid grant and permit
schedules must be coordinated.
Municipalities that receive EPA construction grant assistance
are responsible for meeting the terms of their grant agreements.
EPA will enforce grant conditions, if necessary, to assure that
POTWs constructed with EPA funds achieve compliance with final .
effluent limits. EPA and the States will ensure that compliance
schedules in construction grant agreements are consistent with com-
pliance schedules in NPDES permits (when a §301(i) extension has
been granted), and also Administrative Orders (AOs), judicial
orders, or comparable state actions. Any changes in grant sched-
ules should be justified and coordinated with the others.
EPA and States should provide municipalities with as much certainty
as possible regarding applicable permit limits prior to requiring
commitments to major capital investments.
EPA will provide technical information on the .redefinition of
secondary treatment (consistent with the 1981 CWA Amendments) and
will issue tentative §301(h) variance decisions as quickly as pos-
sible. EPA and the States are responsible for the review and,
where appropriate, modification of permits to accommodate revised
WQS, WLAs, and secondary treatment criteria in accordance with EPA
regulations. In this context, States should act quickly to notify
municipalities of any proposed secondary treatment changes or modi-
fications to WLA for POTWs. However, municipalities are account-
able for POTW compliance with statutory requirements at all times.
Compliance schedules should be reasonable.
Regions and States will reissue permits to those municipali-
ties eligible under §301(i) of the CWA, or will issue AOs (or will
obtain judicial orders in appropriate cases) with fixed-date compli-
ance schedules. These schedules should provide municipalities with
§216 of the CWA and EPA1s construction grant regulations,
40 CFR 35.2015(b).
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sufficient time to design and construct needed treatment facilities,
and to achieve compliance with applicable effluent limits and other
enforceable requirements; schedules should generally require munici-
palities to be in compliance with their applicable effluent limits
as soon as possible and no later than July 1, 1988.
Where extraordinary circumstances preclude compliance by July
1988, EPA will work with the State and the affected municipal author-
ities to ensure that these POTWs are on enforceable schedules for
achieving compliance as soon as possible thereafter; the presumption
is that any extension beyond July 1988, will be through a judicial
enforcement action. These municipalities should be asked to explain
how they plan to finance interim abatement measures, as well as how
they plan to finance any construction necessary to meet statutory
requirements by the earliest possible date after July 1, 1988.2
Where compliance cannot be achieved promptly, POTWs should take
appropriate, interim steps toward compliance with applicable
effluent limits"!
At any time, EPA and the State may establish compliance sched-
ules that require interim steps toward compliance (phased reduction
of pollutant discharges). Such interim steps may be appropriate
when final resolution of permit limits or final compliance will be
significantly delayed and there are logical abatement measures that
can be. accomplished promptly, or where EPA or the State determines
that final compliance cannot be achieved by 1988. However, resolu-
tion of final or applicable permit effluent limits and the setting
of appropriate final compliance schedules should remain the highest
priority.
Phased reductions may also be warranted where States are re-
vising secondary treatment standards, WQS, or WLA, or are conduct-
ing studies to determine water quality-based effluent limits and
the need for related advanced treatment (AT) facilities. Finally,
EPA or the States may establisn interim effluent limits and asso-
ciated compliance schedules, on a case-by-case basis, as noncom-
plying POTWs move toward compliance with final (applicable) efflu-
ent limits. The use of Federal grant assistance may not allow
phased or segmented projects in some cases (see 40 CFR 35.2108).
The Agency will be providing additional guidance showing how the
information necessary to demonstrate financial capability might
be displayed. fn-addition, the municipality may use any format
it chooses, a capital improvement plan, a financial plan, a
separate chapter in the Facility Plan, or procedures prescribed
by an approved State, provided that the information required is
adequately addressed.
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STATE STRATEGIES: THE FRAMEWORK FOR CARRYING OUT THE POLICY
The National Municipal Policy requires Regions and States to
develop long-range planning documents or "strategies" that describe
how they plan to bring noncomplying facilities into compliance by
the target dates. These documents should be the long-term plans
for achieving compliance based on the specific circumstances that
face affected municipalities and the laws and regulations that
govern each State's actions. The process of developing a strategy
provides each Region and State with an opportunity to establish the
proper protocol and control mechanisms, consistent with the Policy,
for carrying out the goals and intent of the Policy.
From a National program management perspective, development of
strategies will promote uniform, consistent implementation of the
Policy. From the Regional and State manager's point of view, the
strategies will provide a hierarchy of work priorities, a phased
approach to implementation, a reasonable schedule of target dates,
and a convenient way to track accomplishments. Properly prepared,
the strategies will provide contingency plans in the event of cir-
cumstances beyond the control of the regulatory agency.
Regions and the States should form a partnership to develop
State-specific strategies so that the interests of both agencies
are served in reaching a common goal. These strategies should:
1. Describe the basis and method for setting priorities consistent
with the National Policy.
2. Identify (list) all municipalities that are out of compliance
with their statutory requirements.3
3. Develop a schedule for working with affected municipalities to
provide final decisions on applicable effluent limits and com-
pliance schedules by the end of FY 1985. Wherever possible,
such schedules should generally require compliance with statu-
tory requirements as soon as possible, and no later than
July 1, 1988, unless extraordinary circumstances make compliance
by July 1, 1988, impossible.
4. Describe the procedures and coordinating mechanisms to ensure
program consistency, especially between compliance schedules in
permits, AOs or judicial orders, and construction grants sched-
ules.
It is recommended that Regions and States review the attached
"Permit Issuance and Compliance Development Table," and the
accompanying sequence of activities. This will help organize .
the universe of noncomplying municipalities into manageable
subcategories and to identify the basic steps to take in deter-
mining applicable effluent limits and establishing compliance
schedules.
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Examples of such activities included
a. Criteria development for setting priorities for permit,
grant, and compliance actions to carry out the State
strategy.
b. Information gathering for making decisions on applicable
effluent limits.
c. Case-by-case technical review and decision making.
d. Management and information systems, including policies and
procedures.
e. State/EPA coordinating mechanisms to develop and modify
permit and grant schedules, and to track and report compli-
ance improvement activities.
f. Integration with §106 program planning, leading to the
establishment of firm commitments for each fiscal year.
g. Periodic adjustment of State strategies, if appropriate,
during §106 program reviews.
5. Describe a general schedule, by fiscal year, for achieving com-
pliance with all statutory requirements as soon as possible, and
no later than July 1988. Where extraordinary circumstances pre-
clude compliance by July 1, 1988, describe a contingency plan
for achieving compliance beyond that date and develop criteria
and schedules for achieving compliance by the earliest possible
date .thereafter, including interim abatement measures as appro-
priate. The presumption is that all schedules that go beyond
1988 should be established through a judicial enforcement action,
Data to establish applicable effluent limits and compliance
schedules for many noncomplying POTWs should be available imme-
diately; the schedules for these and many other POTWs can be de-
veloped and included in State strategies by March 31, 1984. The
general goal is to establish enforceable compliance schedules for
all affected municipalities by the end of FY 1985.
State activities associated with developing and carrying out
the strategies are eligible for EPA funding under §106 and §205(j.)
of the CWA. States with delegated construction grant programs
under the CWA may also receive grant funds to carry out this policy
under §205(g) of the CWA. . .
EXECUTING THE STATE STRATEGIES
The State strategies described above will provide Regions and
States with a complete inventory of all noncomplying facilities,
The guidance established in the "Enforcement Management System"
(EMS), March 1977, is recommended in developing State strategies.
Use of the Permit Compliance System (PCS) as the primary data
management system will facilitate effective coordination, com-
munication, and data management. States will also benefit from
increased participation in PCS.
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will id-entify affected municipalities consistent with the National
policy and guidance, and will establish the most appropriate way to
achieve compliance given the particular circumstances facing each
affected municipality.
As stated earlier in this guidance, noncomplying municipali-
ties should be addressed in three tiers: completed facilities that
are not in compliance with their final effluent limits; municipali-
ties that have or will receive Federal grant assistance for needed
construction by September 30, 1985; and municipalities that are not
expected to be funded. The following sections describe the special
problems that the permitting authority may encounter in dealing
with each of these categories of noncompliers, as well as the mech-
anisms that should be used to achieve compliance. The final section
presents some special considerations related to routine compliance
monitoring and enforcement activities.
Approach to Take with Completed POTWs
Municipalities that have completed POTW construction, but are
failing to achieve final effluent limits, may be required to per-
form an in-depth, diagnostic evaluation (analysis) of the causes of
noncompliance and to develop a detailed Composite Correction Plan
(CCP) for bringing the POTW into compliance as soon as possible.
The permitting authority can require a CCP through an AO or through
other appropriate enforcement mechanisms. The affected municipality
may choose to complete the CCP with its own in-house expertise or
may use an outside consultant.
Based on the results of the diagnostic evaluation, the CCP
should:
1. Discuss/explain the cause(s) of noncompliance.
2. Discuss the corrective steps required to achieve compliance,
their cost, and the proposed method of financing those steps,
including whether there is:
a. A plan of operation that identifies annual O&M costs.
b. A financial management system that adequately accounts
for revenues and expenditures.
c. A user charge/revenue system that generates sufficient
revenues to operate, maintain, and replace the treatment
works.
3. Provide an expeditious schedule for completing the required
steps and for achieving compliance.
Once the CCP is completed, it should be submitted to the Re-
gion or the State for review. if the CCP appears technically and
financially sound, the permitting authority should use an AO or
judicial Consent Decree to require the municipality to carry out
the plan at its own expense. .
UI7H
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While CCPs will be the most common mechanism for returning
constructed facilities to compliance, there are two other kinds of
situations that Regions and States will encounter. First, section
204(d)(2) of the CWA, as amended in 1981, requires municipalities
that construct POTWs with EPA grants made after May 12, 1982, to
certify the performance of those POTWs one year after initial oper-
ation. Grantees that cannot certify compliance with both perform-
ance and design standards are required to submit a Corrective Ac-
tion Plan (CAP) and to correct the operating deficiencies promptly
at other than EPA expense. EPA will place a high priority on track-
ing the performance certifications, the CAPS, and the resulting cor-
rective actions. Since the CCP and CAP are similar documents, the
CAP should be used in lieu of the CCP where appropriate. The re-
quired elements of a CAP are described in EPA. regulation 40 CFR
35.2218(c)(l>.
Once a plant has been certified as operational, it must con-
tinue to meet its final limits or it is subject to any of the en-
forcement mechanisms available to the permitting authority. The
requirements under §204(d)(2) are designed to protect the public's
investment in the project. If a plant cannot meet certification
requirements, the grant program can enforce grant conditions.
Appropriate enforcement actions may also be taken under §309.
The second situation involves the special circumstances asso-
ciated with enforcement actions against completed POTWs that were
not originally planned, designed or constructed to meet the current
secondary treatment requirements, e.g., P.L. 84-660 facilities'.
Since POTWs previously funded under P.L. 84-660, or otherwise
funded prior to the August 17, 1973, secondary treatment regulation,
may be incapable of meeting secondary treatment, State strategies
must make a conscious determination of whether such facilities
will be treated as completed (tier one) or unfunded (tier three)
facilities.
Finally, Regions and States should exercise sound judgment in
dealing with any Federally funded facility. Since enforcement
actions against these facilities can raise issues affecting the EPA
Construction Grants Program, proposed actions against these munici-
palities should be thoroughly discussed and continuously coordinated
between the compliance and Construction Grants Programs before the
action is taken.
Approach to Municipalities in the Grants Process
Affected municipalities that are currently in the grants pro-.
cess, and that have approved §201 facility plans, do not need to
develop other plans'that describe how they plan to come into compli-
ance. This includes municipalities that already have an approved
construction grant and those that are on the fundable portion of
the State project priority list. The goal is to move these pro-
jects through the grant and construction phases as quickly as
possible, which has the dual benefit of improving compliance plus
reducing unliquidated balances in the Construction Grants Program.
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Many of these municipalities are currently operating on ex-
pired permits and/or compliance schedules. Consequently, the
permitting "authority should reissue the permit and/or use AOs or
§301(i) extensions, if eligible, to establish final compliance
dates in these schedules, and to establish appropriate interim
effluent limits for existing facilities that achieve the maximum
degree of pollution abatement possible in the meantime. Construc-
tion grant schedules should always be coordinated at critical
milestones with any related permit compliance schedules in §301(i)
permit modifications or other enforceable EPA/State mechanisms.
If either document is modified, the change should be reflected in
the other so that the POTW receives a unified response from the
regulatory agency.
Approach to Unfunded Municipalities
Any municipality that requires construction of a wastewater
treatment facility in order to achieve compliance should be re-
quired to develop a Municipal Compliance Plan (MCP) to show how it
plans to meet the enforceable requirements of the CWA. State
strategies should identify the affected municipalities that need
to develop MCPs, and the permitting authority should then work with
these municipalities to establish reasonable compliance schedules
based on the information supplied in the MCP.
MCPs for municipalities that have not constructed the appro-
priate treatment to meet the statutory requirements should identify:
1. The treatment technology needed to achieve compliance, as well
as estimates of capital requirements and OM&R costs.5
2. The financial mechanisms (sources of revenue), to be used to fund
construction and OM&R.
3. The proposed, fixed-date compliance schedule, including, at
a minimum, the milestones by which the municipality plans to
start and complete construction, to attain operational levels,
and to achieve compliance with applicable effluent limits.
4. Any appropriate interim steps that will ensure progress toward
compliance with statutory requirements, such as the completion
of the secondary treatment component of an AT facility, improved
O&M procedures, the implementation of an approved local pretreat-
ment program, or the upgrade of the "existing facility.
The permitting authority should require unfunded municipali-
ties to develop MCPs through a §308 information request, an enforce-
able §309 AO, a judicial order, or an equivalent State action. EPA
Headquarters has issued draft guidance on the form and content of
these §309 AOs and §308 requests. These municipalities should be
given a reasonable length of time to develop MCPs so they can real-
5 See footnote on page five.
-------
-11-
istically assess their compliance needs, examine their financing
alternatives, and work out reasonable schedules for achieving
compliance. In most cases six months from the notification of the
requirement to submit an MCP should be adequate.
within the group of noncomplying municipalities that will not
receive Federal grant assistance, Regions and States should concen-
trate on major POTWs and then on minor POTWs that contribute signi-
ficantly to an impairment of water quality. Finally, lowest prior-
ity for EPA or State action should be assigned to unfunded, minor
POTWs that are not causing significant water quality problems.
EPA or the State agency should review each MCP and, if it is
acceptable, -should incorporate the schedule into a §301(i) permit
(if the POTW is eligible), a §309 AO, or a judicial order. If the
MCP is not acceptable, EPA or the State may establish an appropri-
ate compliance schedule under its own authority or may initiate
other appropriate enforcement actions.
In dealing with unfunded municipalities, Regions and States
should exhibit great sensitivity to their special problems and
needs. In working with these communities, for example, every
effort should be made to provide them with available technical in-
formation on financial capability assessment and on alternative,
less costly, wastewater treatment technologies. The objective is
to help these municipalities develop reasonable and enforceable
schedules, even though it may require a judicial enforcement action
to extend the schedule beyond 1988 where extraordinary circumstances
are shown.
For unfunded municipalities, Regions and States are encouraged
to adopt a community-by-community strategy that involves advance
discussion with each affected municipality before establishing a
final schedule that requires a substantial capital investment.
Since actions against these communities are likely to be controver-
sial, the permitting authority should.also inform its Regional Ad-
ministrator or State Director, as appropriate, of the negotiations
with the affected municipality and the proposed actions necessary
to achieve compliance.
Compliance Monitoring and Enforcement
Regions and States should carefully monitor compliance with
the requirements to develop and submit MCPs and CCPs, and should
take follow-up actions as needed. They should also monitor enforce-
able compliance schedules that are established in §301(i) permits,
§309 AOs, or judicial actions, and should initiate follow-up action
where schedules are not being met. . All activities should be con-
sistent with the priorities in the Policy and the approaches out-
lined in this guidance.
Section 309 AOs (or equivalent State actions) should be used
when such actions are necessary to obtain corrective actions, but
civil enforcement actions should be initiated when necessary.
Negotiated consent decrees can be a useful element of many EPA and
-------
-12-
State civil enforcement actions. Appropriate civil penalties
should be established to deter future violations. Sewer connection
bans (§402(h), CWA) should be sought, when they are needed, to
achieve and maintain compliance. Nothing in the Policy or the
guidance is intended to impede or delay any on-going or future
enforcement actions.
Since municipalities are ultimately responsible for meeting
the contractual terms of construction grant agreements, grant
conditions should be enforced, if necessary. If grantees fail
to correct problems in a timely manner, the regulatory agency
should take prompt action, which may include annulment or termina-
tion of the grant. If required, appropriate legal actions should
also be taken, usually under §309 of the CWA or under comparable
State authority.
PROGRAM MANAGEMENT ACTIVITIES AND OVERVIEW
Regions should use the annual State program grant negotiation
process to reach agreement on the specific activities they will
undertake to carry out the State strategies. EPA and State §106
work plans for FY 1985, for example, should include the necessary
commitments to update State strategies, and to identify any remain-
ing POTWs for which applicable effluent limits and compliance sched-
ules need to be established. Such commitments should include those
contained in the Office of Water Accountability System (OWAS) FY 85
guide and should cover the following areas:
0 The identification of noncomplying POTWs (list) and those that
need construction to meet statutory requirements.
0 The review, approval and/or modification of §201 plans.
0 The request, review, and approval of CCPs and MCPs.
0 The establishment of compliance schedules.
0 The issuance and reissuance of municipal permits.
0 The taking of enforcement actions to obtain compliance.
0 The return of POTWs to compliance (and the improvement in the
level of municipal compliance).
0 The termination of Step 1 and 2 grants.
0 The physical and administrative completion and close out of
active Step 3 or Step 2/3 grants.
By the end of FY 1985, to .the'extent possible, final decisions
should be reached on applicable effluent limits and compliance
schedules for all noncomplying POTWs and State strategies should be
updated accordingly. Updating State strategies should be a contin-
uous process from FY 1984 through FY 1988. Annual EPA permit, con-
-------
-13-
struction grant, compliance monitoring, and enforcement commitments
will be included in the appropriate sections of EPA's annual Office
of Water Accountability System (OWAS), and the Administrator's
Strategic Planning and Management System (SPMS). This will help
assure that EPA's actions under the Policy are conducted in coordin-
ation with related State actions and are consistent with the State
strategies and annual §106 plans.
EPA Headquarters will overview implementation' of the Policy
and will prepare appropriate reports to the EPA Administrator and
to Congress. Headquarters will also analyze the State strategies,
PCS data, and other available information to determine the adequacy
of EPA and State resource commitments, the need for additional guid-
ance and/or technical assistance, and any need for mid-course cor-
rective actions. During this process, the Agency will be looking
for successful State and Regional approaches and management tech-
niques in order to share them with other States and Regions. All
Headquarters overview will be carried out within the context of
OWAS and SPMS, and the EPA/State oversight protocol agreements,
which will be individually negotiated with each State, consistent
with the FY 85-86 Agency Operating Guidance.6
See FY 85-86 Agency Operating Guidance, February 1984, pp. 9-10.
-------
-------
SEQUENCE OF ACTIVITIES
FOR
ISSUING PEPMITS AND DEVELOPING COMPLIANCE SCHEDULES
A discussion of EPA and State actions that should be taken during the
development of the State strategies is presented below. These actions may
occur simultaneously or in sequence. This sequence is consistent with the
attached Table.
1. Review availaole data and identify those POTWs that are not in compliance
with statutory requirements. This includes those that need construction
to meet the 1988 compliance deadline under §301(i).
2. Identify POTWs for which treatment requirements or compliance status
may change as a result of revised WQS ,and WLA, the redefinition of
secondary treatment, §301(h) variance decisions, §301(i) eligibility,
or EPA's AT review and Federal funding decisions.
3. Identify POTWs that need construction to achieve compliance with statutory
requirements.
4. Identify POTWs that have received, or are likely to receive, EPA con-
struction grant funding. States are encouraged to review and revise
their Project Priority Lists (PPL) in order to identify the optimum
number of POTWs that can be funded.
5. Establish applicable effluent limits and tentative compliance schedules
for noncomplying POTWs for which information is already available. For
many POTWs, the applicable effluent limits have already been established
in existing NPDES permits.
6. Establish deadlines by which POTWs must prepare and submit MCPs or
CCPs. To the extent possible, Regions and States should work with
affected communities to require such plans in phases through the end Of
FY 1985, with CCPs for constructed POTWs in noncompliance due in the
near term, and MCPs for POTWs facing somewhat uncertain permit effluent
limits or funding problems at the far end of the schedule.
7. Establish firm compliance schedules and incorporate them into §301(i)
NPDES permits, if eligible, §309(a)(5)(A) AOs, judicial orders, or
comparable State actions (see attached Table). If the Region or State
agrees with the proposed schedule in the MCP or CCP, it may be incor-
porated by reference in the POTW's permit, AO, judicial order, or
comparable State action. Otherwise, the Region or State should work
with the POTW to develop a reasonable schedule for achieving compliance
as scon as it is technically and financially possible.
8. . Establish firm commitments in §106 workplans for actions on POTWs for
which applicable effluent limits are already known or can readily be
made, and action plans for POTWs for which decisions on applicable
limits will be made (in stages) up to the target date, the end of
.FY 1985.
9. Carefully monitor compliance with all of the above requirements and
take follow-up actions as provided for in State strategies, or as
necessary to meet the intent of the Policy.
-------
L*.
DRAFT PERMIT ISSUANCE AND COMPLIANCE SCHEDULE DEVELOPMENT TABLE
co'JSimiciioN
11 1 HOI NIIOIO
1 1
1
1
IcONSinilCIION 1
NCIOIO I
1 1
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lllrind t>( ir.ua*) b> imnad WOS. l«d». Mmxl WOS. Indr. W
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WOS Jnclr IJOI, | ni|h| dauma I JOI|h| atciWan; dKipati; »ioUhn| f f 1. Slip III la mail IMMI Mr IMI. l»ai«ci«. dtp III la wot moil Mr IMI.
dtcriior,. ' rtotolhil III.
Mr IMI. Mr IMI.
not •*ilkfM.f«d
lo) pio|tcl.J
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limdn • mckMiw *-..rl~ w UK AfAI. ika pt'm.1 tncnU (M ••*
oilib|.il>ail na Urn HIM Mr 1. IMS. la MM cnoi. |U»H|
comhiKlian mar •• »IH»OP"«'« and Ikauld bo dothtad on Ika PMiNi
ol «*ik CMO.
1 1n apc»ai>UH cw». fcidW.tJ ankxl .» ba oiad.
4 Sl<» fia|oi1 fiMtllv lt.1 iml baud »• «m*M wlha.IIM.onj.
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WOS - W«le> qlulltr «•»•)•* «nd/a« ojoiM.>ud iUriullaM.
Indr - Hnfcl.rUI.on ol *«o~l»» OKMnmil.
Af A * AdnMniili*.*^ f*ai.Mlaioi Act.
fit - final lpx~.ll •IlkMnl bnutt.
AO - AchokMlutna Oidn.
CCO - CaMlMMM camyl.«nco dloaiollta iMdil) ImpoctlaH. '
COT - Covwoui. Conttbo* fl«n tKvn-id b* CCO-ulo> w
M».al CanwooM Cixokmca fotcr. Ao|uri IMI).
MCf - MMtklpal Coiarkanco fl*i.
* Includes I'OTWs that need
construction under §301(1)
h.u. AO.l ••" '»•"•••
• II conitiyclion
• Coo.ili.xll • Con..lui.lt • nrinu« |». . • II oMaiuir. ••• h ****** *°*
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•1
-------
VI.A.8.
"Available Techniques for Obtaining Compliance with National Municipal
Policy by Unfunded POTWs Requiring Construction", dated September 13, 1984
-------
-------
WASHINGTON. D.C. 20460
OFFICE OF
WATER
SEP 131984
MEMORANDUM
SUBJECT: Available Techniques for Obtaining Compliance with
National Municipal Policy by Unfunded POTWs
Requiring Construction
FROM: Rebecca W. H^Trfmer, Director
Office of /Water Enforcement & Permits
TO: Water Management Division Directors, Regions I •- X
The Office of General Counsel (OGC) responded to our request
for legal opinions concerning the applicability of the £301 (i)
compliance extension and the legality of various methods for
obtaining compliance with the National Municipal Policy.
Attached are copies of those responses dated April 11, 1984
and June 29, 1984. These memoranda address the legal basis for
-use of enforcement or permitting techniques in establishing .......
compliance schedules for unfunded POTWs (those which will receive
no Construction Grant funding) and the potential risks in the
use of administrative enforcement techniques when an unfunded
POTW proposes to meet the 1988 deadline and is eligible to receive
a S301(i) extension. These memoranda should assist you in the
implementation of the National Municipal Policy.
The first OGC memorandum, dated April 11, 1984, states:
(1) that an unconstructed and unfunded POTW which is capable
of meeting the July 1, 1988 deadline in §301(i) of the
Clean Water Act may receive an extension under that
section if it is otherwise eligible (Questions 1 and
2, pp. 1-5);
(2) that such a POTW remains in violation of a permit issued
using $301 (b ) ( 1 ) (B) or (C) deadline requirements until
the extension is granted (Question 3, p. 6); and
(3) that such a violator may be subject to an EPA enforcement
action (Question 4, pp. 6 - 8).
-------
The second OGC memorandum, dated June 29. 1984, confirms Chac
compliance with an Administrative Order does not preclude further
enforcement action by EPA on the underlying violation.
If you have any questions concerning the memoranda, please
contact David Shedroff at FTS - 475-8307 or Greg McBrien at
FTS - 426-2970.
Attachments
cc: Regional Counsel, Regions I - X, with attachments
Associate Enforcement Counsel, Water., with attachments
Associate General Counsel, Water Division, w/o attachments
-------
VI.A.9,
"Finance Manual for Wastewater Treatment Systems", dated April 1985.
(Table of Contents only)-.
-------
-------
V.10.
"The Role of EPA Supervisors during Parallel Proceedings", dated March 12,
1985. See GM-37. Superseded.
-------
-^-,-H t
-------
V.ll.
"Environmental Criminal Conduct Coming to the Attention of Agency Officials
and Employees", dated September 21, 1987.
-------
-------
* UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
SEP 2 ] IS37
Of-Hf ; . •' f.^.a, ••.!> -.'
AVD lOvip; n v E
MEMORANDUM
SUBJECT: Environmental Criminal Conduct Coming To The
Attention Of Agency Officials And Employees
FROM: Thomas L. Adams, Jr.
Assistant Administrator
TO: Assistant Administrators
Regional Administrators
Deputy Regional Administrators
Associate Enforcement Counsels
Program Enforcement Directors
Regional Counsels I-X
It is important that all acts of the regulated community
exhibiting actual or suspected environmental criminal conduct
which come to the attention of any employee of the Agency be
referred to the Office of Criminal Investigations for review-and
possible investigation. I urge each of you to communicate this
policy regularly to all of the employees under your supervision.
It should also be included in any new employee orientation or
training that you conduct.
It is not expected or desired that your staff attempt an in
depth legal analysis of whether environmental criminal conduct
occurred. The highly trained Special Agents in the Office of
Criminal Investigations will do that with the help of attorneys
in the Office of Criminal Enforcement Counsel, the Office of
Regional Counsel and the Environmental Crimes Section of the
Department of Justice. However, in order for employees to
recognize possible environmental criminal conduct generally and
whether the case is meritorious, the factors listed below should
assist their efforts. In addition, my office will help provide
training to your staff in this essential area of enforcement.
FACTORS TO CONSIDER IN DETERMINING WHETHER
A MATTER SHOULD BE REFERRED FOR CRIMINAL INVESTIGATION
1. Knowing or Willful Behavior. All federal environmental
statutes require some degree of intent or voluntariness (usually
expressed in the statute as "knowingly" or "willfully") before a
criminal case can be proved. Prosecutions under the Clean Water
Act can be prosecuted also for simple negligent acts (careless-
ness) without demonstrating intent, although such situations are
generally of lower prosecutorial priority than are knowing
-------
violations. Almost svery federal environmental statuts expres
the type of r.antal state required to be shown for un act -o ca
criminally punishable.
When statutes, .such as the environmental laws, are enacted
for the purpose of protecting public health and welfare, and
especially in subject areas where there is a strong likelihood of
protective governmental regulation, the government generally only
has to prove that a person knew what he was doing and he did it
voluntarily, not accidentally, in order to establish the state of
mind required for a conviction. It is not necessary to show that
he actually knew what the law required or that he acted with the
specific purpose of violating that law. Also, the knowledge
necessary for a criminal conviction may be proven circumstan-
tially; it need not always be shown directly. For example, while
there may be no direct evidence (such as a statement by the
defendant) that he knew a particular material was a hazardous -
waste, a document found in his file describing it as such would
be good circumstantial evidence of knowledge. Thus employees
should be alert to indirect indicators of knowledge and other
elements of the offense.
2. Elements of the Offc ise. In addition to the required
degree of intent, each statut >ry offense cpnsists of a number of
other elements, each one of v >.ich must be proved. For example/
the crime of disposal of hazardous wastes without a permit in
violation of RCRA § 3008 (d) requires the government to prove
beyond a reasonable doubt that (1) a person (2) knowingly (3)
disposed of (4) any hazailous waste listed or identified by
characteristic (5) withou . a permit. Similarly, every
environmental offense mus\ be analyzed in terms of its component
elements.
Determining whether the required degree of intent and each
of the elements of the offense exists and can be proven sometimes
entails a complex legal analysis which should be left to the
investigators and their attorneys. When faced with a possible
criminal case where the intent may -be marginal, it is best to
advise employees to err on the side of caution and refer the
matter for the investigators and attorneys to analyze.
3. Impact on Government's Regulatory Function. Many of
EPA's regulatory systems rely heavily on complete and accurate
voluntary reporting from the regulated community. When infor-
mation or documents required to be filed are falsified, concealed
or intentionally destroyed, the integrity of the system is in
danger. The degree to which an act may have threatened or
damaged the system is another factor that can be weighed in the
decision to prosecute, but is not a requirement.
4. Harm. The extent of harm or threat of harm to human
health or the environment is another factor that is reviewed to
determine whether a case should be prosecuted. Prosecutors may
look at the duration of the harm or threat, the toxicity of the
-------
pollutants ir/. :.lved, and the proximity to population centers,
among otr. ~s. Proof of harm is not a prerequisite to pro-
secution, .at .: a factor considered in exercising prosecutoriai
discretion.
5. Patterns or Practices. It is useful to review a
subject's historical record of noncorapliance before prosecution.
The past practices of a company, whether good or bad, can weigh
heavily in sentencing, thereby effecting its deterrent value and
prosecutoriai merit.
6. Deterrence. A major value of criminal prosecution in an
environmental enforcement context is its ability to deter others
from doing the same type of act for fear of being prosecuted
themselves. For the deterrence to be effective, others similarly
situated must become aware of the prosecution. In some areas,
one criminal conviction with appropriate penalties can motivate
much of the regulated industry to be in compliance. Although
this factor is considered, it is not a prerequisite for prose-
cution.
OTHER CONSIDERATIONS
The factors discussed above are not exclusive and are not in
any particular order of importance. Many of the factors overlap.
How to weigh the various factors in any given case will depend on
the circumstances involved.
It is possible that an eve. c involving environmental
criminal activity will not be investigated further or prosecuted.
There are innumerable reasons for this including, for example,
lack of prosecutoriai merit, inadequate proof, the matter would
be better handled civilly or administratively, the state is
prosecuting the matter, the matter is not commensurate with
Agency priorities, and lack of resources. However, if the Office
of Criminal Investigations determines that criminal activity
occurred after formally opening a case investigation, only the
United States Attorney (or his representative) in the District or
the Department of Justice can decline to criminally prosecute the
case. _ -
If a potential environmental criminal matter comes to the
attention of an employee, consultation with the Office of
Criminal Investigation should be sought at the earliest
opportunity. When in doubt, it is far better to consult with the
Office of Criminal Investigations on matters that may be
questionable than to risk the possibility of overlooking or
failing to recognize serious environmental criminal conduct.
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FINANCE MANUAL
FOR
WASTEWATER TREATMENT SYSTEMS
APRIL 1985
Prepared by:
Government Finance Research Center
Govenrment Finance Officers Association
Washington, D.C.
Prepared for:
U.S. Environmental Protection Agency
Office of Water Enforcement and Permits
. Under Contract No. 68-01-7050
/, r'
' \ '•:
-------
I/I -?\
-------
Table of Contents
CHAPTER PAGE
Acknowledgments ii
I. introduction
o Objective . 1
o Organization and Limitations of the Manual 1
II. What is Financial Management?
o The Role of Financial Management 3
o The Elements of Financial Management 4
o The Tools of Financial Management 8
o Conclusion 11
III. Planning and Budgeting
o Understanding Planning and Budgeting 13
o Capital Planning and Budgeting 17
o Operations Planning and Budgeting 25
o Improving organizational Planning 38
o Planning/Budgeting System Checklist 42
IV. User Charges and Cost Recovery
o The Role of User Charges in Wastewater
Treatment 45
o User Charge Policies 45
o The Rate Study process 48
o Cost Recovery/User charge Checklist 59
-------
V. procurement
o Introduction: organization of the Procurement
Function 61
o The Purchasing process 62
o Completing the procurement Cycle 70
o Procurement System Checklist 74
VI. Accounting
o Introduction: The Importance of Accounting 81
o Accounting Systems 83
o Accounting for the Financial Functions 107
o Accounting Systems Checklist 108
o Revenue Accounting Checklist 112
o Expenditure Accounting Checklist 117
o Payroll Accounting Checklist 122
o Asset Accounting Checklist 126
o Liability Accounting Checklist 130
VII. Cash Management
o Introduction 133
o Maximizing and Knowing Cash Availability 133
o Investing Excess Cash 140
o Banking Services 144
o Cash Management Checklist 151
VIII. Debt Management
o Debt—Its Uses and Role 155
o Long-term Debt 156
o Short-term Debt 168
o Debt Administration 170
o Debt Management Checklist 173
IX. Conclusion 177
X. Bibliography 179
XI. Glossary 185
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VI.A.10.
"NATIONAL MUNICIPAL POLICY IMPLEMENTATION", dated April 1, 1985.
-------
-------
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
APR •"11985 OFF.CEOF
MEMORANDUM WATER
SUBJECT: National Municipal Policy Implementation
FROM: Rebecca W. Hanmer, Director ««becca 17. Banner
Office of Water Enforcement and Permits (EN-338)
TO: Water Management Division Directors
Regions I-X
During the past year, as we received State municipal strategies
at Headquarters, the Enforcement Division attempted.to create a
national inventory of major POTWs (by name) affected by the Policy.
This list is necessary to stabilize the universe of POTWs, as well
as to track, with confidence, Regional and State progress. Due to
the high visibility of the Policy, information is required that we
cannot presently provide to Congress and other public institutions.
The data we have obtained from the original strategies do not correlate
well with data in PCS. In follow-up discussions with Regional staff
we have been unable to verify, on a name basis, all the POTWs that
are affected and their status with respect to compliance schedules,
final limits, and financial capability.
The attached list has been prepared from the names and permit
numbers of POTWs identified by Regions and States as of the end of
January. In addition to the named permittees, we have succeeded in
merging relevant data from the NEEDS and GICS information systems
using a crossover file linking NPDES permit numbers and their related
Authority/Facility numbers used in the 84 NEEDS survey. The data
is presented to you for your review and use in enforcement decision
making.
We are not certain if this printout represents all major NPDES
permittees affected by the Policy. Late arriving State inventories
indicate some of these POTWs may be incorrectly listed. Please
review the attached printout to assure that it represents all major
POTWs that: (1) are under construction, (2) need construction to
meet statutory requirements, and (3) have a high probability for
construction once decisions on final effluent limits are made. The
corrected list should include all POTWs already on a schedule,
regardless of compliance status.
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- 2 -
.Attached is an instruction sheet to explain the layout of the
information and a sample page that highlights the critical elements
that need verification immediately. Chuck Evans (FTS 475-8327) of
the Enforcement Division will work with your staff to complete this
inventory. I ask that you give this a high priority and submit
the corrected information to the Enforcement Division by Monday,
April 15, 1985. Regions may submit this data by telephone if the
updates are not large.
Once we have stabilized the list of affected major POTWs, we
intend to update the construction milestone dates quarterly through
PCS. For the short term, we need your assistance to learn as many
actual .dates as.possible. As Regions and States update "facility and
NEEDS data, we will amend the merged data set and continue to provide
you with revised lists. At the recent PCS Steering Committee meeting
in Washington, on March 19-20, 1985, we discussed a method for tracking
final schedules and POTW funding capabilities. The use of the PCS
data field to do this (RDF6) needs further evaluation and will be
discussed in a Regional conference call on Thursday, April 4, 1985.
When the codes have been established, our office will provide detailed
guidance on their use and update.
Along with the corrected MCP inventory. Regions should also submit
a list of completed, major POTWs that have been identified in origins^
and updated State strategies as requiring Composite Correction Plans^B
(CCP). Once this list is established, we will review it periodically
with the Regions to follow trends.
I would also like to emphasize a few other developments that
have a significant bearing on this program's success in FY85. At
the National Branch Chief's meeting early in May, one of the main
topics will be the National Municipal Policy. Our office sent a
memorandum to you about this meeting on March 27, 1985. I encourage
each of you, or your Compliance Branch-Chief, to attend this meeting
as there are some developing enforcement issues that must be resolved
before all final schedules are established.
Recently, OWEP and the Office of Municipal Pollution Control
(OMPC) have coordinated to present a series of workshops on financial
capability analysis that will provide basic information on the review
and evaluation of the financial components of MCPs and/or other
demonstrations of affordability. Knowledge in this area is of
increasing importance as we enter the enforcement phase of the National
Municipal Policy. Bill Whittington and I have announced this under-
separate memo and urge you to make arrangements for the appropriate
Regional and State.personnel to attend.
-------
I realize we have given you a short time to review and update
this information on your affected universe of POTWs. Please make
every effort to work with our staff to complete this inventory so
that we can summarize the data and prepare it for discussion at
the National meeting in May. The workload and compliance implications
of the current status of schedules will have a significant impact on
our priorities for the remainder of the fiscal year. The emphasis
placed on the Policy by the Administrator requires that we not lose
any momentum gained in the States by our present activities.
For fur.ther assistance with these issues or plans, please call
me (FTS 475-8488) or Bill Jordan, Director, Enforcement Division
(FTS 475-8304).
Attachments
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VI.A.11.
"NATIONAL MUNICIPAL POLICY IMPLEMENTATION", dated April 12, 1985.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
IX
OFFICE OF
WATER
MEMORANDUM
SUBJECT:
FROM:
TO:
National Municipal Policy Implementation
Jack E.
Assistant Administrator'
for Water (WH-556)
Regional Administrators
Regional Water Management Division Directors
Regions I-X
At the recent National Enforcement Conference, Administrator
Lee Thomas publicly reaffirmed the Agency's intention to uphold the
National Municipal Policy in its dealings with States and to enforce
the statutory deadline of July 1, 1988. I made similar remarks
during that Conference and during the Water Pollution Control
Federation (WPCF) Government Affairs Seminar in March. Also, at the
winter ASIWPCA National meeting, the Director of the Office of Water
Enforcement and Permits (OWEP) again reconfirmed this Agency position.
Now that we are mid-way through the year, I would like to take
this opportunity to discuss my current thoughts regarding
implementation of the National Municipal Policy. We must be convinced
and we must assure the States that FY 1985 is not a trial period.
Each Region must have current, workable, and complete State strategies
that reflect the underlying principles of the Policy. As you know,
enforceable compliance schedules are required, with or without Federal
grant assistance. It is presumed that all schedules beyond July 1988
will require judicial action. Strategies should contain updated
inventories that present current compliance status with applicable
effluent limits, as well as any technical or financial requirements
for full compliance. Regional municipal strategies (or the State
equivalent) should serve as a current work plan as well as the long-
term framework for coordinating EPA and State activities to: (1) set
as many schedules as possible by the target date of September 30, 1985,
and (2) achieve as much compliance as possible before the final
compliance date of July 1, 1988.
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2 -
Potential Implementation Problems
During our National Municipal Policy workshops in the spring
of 1983, one of the main themes was that this program would not
become "business as usual." Current commitments for FY 1985, for
all facilities that need schedules, indicate that only 29% of the
universe is being addressed, including only 67% of the majors that
are not on enforceable schedules. Even if we achieve these commitments,
much work will have to be done in the 33 months after FY 1985 to
meet the goals of the Policy. Examination of the first quarter
SPMS/OWEG results revealed that, although it appears we exceeded our
commitments, we may not have achieved the solid compliance results
we were seeking. For example, we have learned that some NPDER State
Administrative Orders (AO) contain schedules that are reported as
"final" by the State, but are considered to be interim schedules in
many cases until final negotiations with the -permittee are completed.
The compliance schedules established in FY 1985 should address
facilities causing significant impacts to water quality or that need
as much time as possible to meet -the 1988 compliance date. Otherwise,
we will experience even greater problems as we near the statutory
deadline of July 1, 1988. I urge you to review your basic working
agreements with the States to be certain that they are actively
attempting to achieve the Municipal Policy goals, deadlines, and
other enforcement requirements.
Special Issues Identified
Over the past several months, several questions have arisen as
Regions and States move forward to establish enforceable schedules
pursuant to the conditions of the Policy and its Regional and State
Guidance. Since this is a critical step in the successful management
of State strategies, there is a need for National consistency in the
preparation and execution of these legal instruments. Regions need
to make firm and consistent responses to the States on these issues.
The questions raised include:
1. Can EPA or the States issue permits with final compliance dates
past July 1, 1988?
Permits cannot contain a schedule to meet secondary treatment
requirements later than July 1, 1988. In fact, only those POTWs
that applied for and are eligible for a S301(i) extension may be
issued a permit with a schedule to meet secondary treatment past
July 1, 1977. In these cases, the requirement to meet final limits
should be as soon as possible, but not later than July 1988. All
other permits must contain a requirement to meet secondary limits at
the time of issuance, since (as stated above) the final compliance
date for these POTWs was July 1, 1977. Any POTW not meeting
secondary treatment requirements and not eligible for a 301(i)
extension is in violation of the Act and is subject to an enforcement
action. Any compliance schedule to meet secondary effluent limits
for POTWs not eligible for a §301(i) extension must be contained in
an AO and not in an NPDER permit. '
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- 3 -•
2. Can EPA or the States issue an AO that contains a schedule to
meet final effluent limits that extends beyond July 1, 1988?
The National Municipal Policy does not specifically require
that schedules beyond July 1988 be sanctioned by a court. However,
the Regional and State guidance on the Policy that I issued on
April 17, 1984, presumes that all such extended schedules will be
established through the judicial process. This is the Agency's
enforcement policy with respect to the statutory compliance deadline.
Since the April 17, 1984, guidance is not binding on State NPDES
programs, a State could choose to issue an AO with a schedule beyond
July 1988, i.n direct conflict with the spirit of the Administrator's
Policy and the letter of the subsequent guidance. In such cases,
especially where the State's order does not involve imposition of
administrative penalties, EPA Regions should consider: 1) issuing an
AO that specifies a compliance date no later than July 1988, which
then supercedes the State AO, or 2) filing a civil action to obtain a
judicial order that contains a final compliance date deemed appropriate
by the court.
3. What constitutes a "final" and "enforceable" schedule under the
Policy?
One of the main principles upon which the Policy is based is
the assurance of "certainty" prior to requiring commitments to major
capital investments. In order to do this, Regions, States, and
communities should strive to eliminate as many of the "unknowns" as
possible, and as quickly as possible, with respect to final limits,
correct treatment technology, actual costs, available funds, and
revenue systems that are necessary to maintain the plant once it is
completed. Schedules established by Regions and States must reflect
the appropriate legal, technical, and economic circumstances.
Additionally, enforceable schedules must contain sufficient interim
milestones that require demonstrations of progress and allow for
subsequent enforcement actions, if necessary, prior to the final
compliance deadline.
Delays in eliminating the uncertainty of final effluent limits
have focused on three situations. First, limit changes associated
with the secondary treatment redefinition/percent removal should not
cause major problems. The Office of Water Enforcement and Permits
recently sent out draft guidance for Regional and State review and
requested data on how many municipal permits appear to need alteration.
Second, for those cities where 301(h) decisions are pending, Regions
should continue to adhere to the direction contained in Al Aim's
October 29, 1984 memorandum, "Expediting Achievement of Water Quality
Improvement by 301(h) Applicants." And third, advanced waste treatment
(AWT) may be needed to meet Section 101(a)(2) goals (fishable/swimmable)
of the Act. The Water Quality Standards Regulation requires States to
review water quality standards to assure that the standards do reflect
these goals. If a State believes that.AWT may be necessary, then
priority should be given to completing those use attainability analyses
first.
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- 4 -
In closing I want to reemphasize how essential it is for Regions
and States to have as many noncomplying communities as possible on
final, enforceable schedules by September 30, 1985. Unless we show
outstanding results, we will not be able to achieve the statutory
compliance deadline of July 1, 1988. If my office can be of
assistance in resolving additional implementation issues, please
contact us.
14 ~0
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VI.A.12,
Letter to House of Representatives from EPA regarding the NMP with
Congressional Record materials attached, dated July 22, 1985.
115"!
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-------
UNI1LU STATES ENyiKGNMtN I Al.
WASHINGTON. DC. 20460
OFFICE OF
WATER
JUL 221985
Honorable Ed Jones
House of Representatives
Washington, D.C. 20515
Dear Mr. Jones:
Thank you for your letter of June 25, 1985, requesting
our comments on a letter from James E. Word, Commissioner of
the Tennessee Department of Health and Environment. Commissioner
Word is concerned that no more Federal grants for sewage con-
struction projects would be made for publicly-owned treatment
works (POTW's) not in compliance with the Clean Water Act (the
Act) effluent limitations by July 1, 1988.
The key to understanding the issue that Commissioner Word [
has raised is to distinguish between our enforcement policy and
our policy for awarding grants to municipalities for construction
of wastewater treatment facilities. Our enforcement policy is
set forth in the National Municipal Policy (MMP), which was
published in the Federal Register on January 30, 1984, and says
that: "The Clean Water Act requires all publicly-owned treatment
works to meet the statutory deadlines and to achieve the water
quality objectives of the Act, whether or not they receive
Federal funds." The policy also provides for flexibility in
dealing with communities that face extraordinary hardships in
meeting the statutory deadline for reasons of financial or physi-
cal incapability.
EPA grant policy with respect to funding construction of
wastewater treatment facilities does not prohibit EPA (or a
delegated State such as Tennessee) from awarding grants to munici-
palities that may not be able to complete construction by a
statutory deadline. In fact, many municipalities that are now
being addressed under the NMP were supposed to be in compliance
with the earlier statutory deadline (1977), and we have continued
to provide grant funds to.these facilities.
Clearly, some of the facilities that are of concern to
Commissioner Word may be eligible for extensions based on the
finding of physical impossibility. These decisions have to be
made on a case-by-case basis, however. In guidance we issued to
the EPA Regions to help promote consistent nationwide implementa-
AL502187
-------
ot t;i<= N.'-iP, we aavised that cue Uogion or State shouia v/or.-;
any comrnunitv that is seeking an extension based on a tincincj
r.iier Einai'icial or pliys ic al i-.poss ibilicy . Where sucn a
fip.cin..; can L>e; supported by the tacts, we expect the Region/State
co reacr. a^roernent oi\ a compliance schedule that re.sults in
coi.-piiance as soon as possible atcer the July 1, 1988, deadline,
cnu to i incorporate chis sc;»ecul« into a consent decree tnat is
sancticneo by a State or Federal court.
It I or my statt can provide turtner intornation or assis-
tance on .this issue or any other, please contact me.
iiincere.1
Act
A
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H 6094
CONGRESSIONAL RECORD — HOUSE
Juh -V. I'JSi
the House of Reor«entauves and the Com-
mittee on Environment and PUDIIC 'A'oru of
the Senate.
•(T-) ACTHORtlATtOH Or »/FHOfHlATTONS.—
Thtrr 'j minonsed u> be appropriated to
carry out tr.la subsection IZS.OOO.OOO per
fiscal year for eacn of the fiscal years
er.emij Seotemoer 30. 1988. S«otemt>er 30.
19S7. September 30. 1988. September 30.
19S9. and September 30. 1990. Amounts ap-
propriated uncer '-his subsection mail
rerr.iui available until enaer.oed.".
Page 71. line *. sir Lie out "(e)" ar.d lr-sert
In i:eu thereof -sf)".
Pags 7-t. line 13. str.ice out "ind (d)" and
insert in ;:eu thereof ". id), and (e)".
?a«e 74. line H'. liter "Act" insert "and
uncer section 38 of :his Act. relating to
maintenance of water Quality in estuaries.".
Mr. OBERSTAR (dunns the read-
ing). Mr. Chairman.1 I ask unanimous
consent that the amendment Se con-
sidered is read and panted in the
RECORD.
Mr. CHAIRMAN. Is there objection
to the request of the gentleman from
Minnesota?
There was no objection.
Mr. OBERSTAR. Mr. Chairman.
this amendment is in concert with the
previous amendment just adopted by
the Committee. It would provide fund-
in? to States to establish surveys of
their intrastate waters, surface waters.
within their State to determine their
condition of acidity, whether due to
acid deposition of mine drainage to
enable such States to set up programs
for acid ram cleanup.
Mr. ROE. Mr. Chairman, will the
gentleman yield?
Mr. OBERST.*R. I yield to the
chairman of the subcommittee, the
gentleman from New Jersey.
Mr. ROE. I thank the gentleman for
yielding.
Mr. Chairman, this is a very fine
amendment and it is really a technical
amendment and we appreciate it. We
accept the amendment.
Mr. SNYDER. Mr. Chairman, will
the gentleman yield?
Mr. OBERSTAR. I yield to the gen-
tleman from Kentucky.
Mr. SNTDER. I than* the gentle-
man for yielding.
Mr. Chairman, we accept the amend-
ment.
The CHAIRMAN. The question is on
the amendment offered by the gentle-
man from Minnesota (Mr. OBBISTAA].
The amendment was agreed to.
Q 1700
Mr. SOLOMON. Mr. Chairman. I
move to strike the last word.
Mr. Chairman, earlier this afternoon
the Committee of the Whole passed a
committee amendment establishing a
badly needed grunts program to pro-
vide, for the first time aid to localities
where ground water supplies have
been polluted. The same amendment
was added to the Clean Water Act
amendments In the House bill last
year, but it was never passed, as we all
know. .
One of the most seriously affected
municipality in the country was. and
still is. :he town of Moreau In a rural
area of New York State. This was one
of the top priorities of need communi-
ties. according to the debate last year.
At this point. Mr. Chairman. I would
like to ask the chairman of the sub-
committee. the gentleman from New
Jersey CMr. Rot). Lf he would engage
Ln a brief colloquy.
Mr. ROE. Yes. of course. Lf the gen-
tleman will yieid.
Mr. SOLOMON. Mr. Chairman, am I
correct In my- understanding that, as
our discussion last year showed, a new
water distr.ct for the town of Moreau
is considered a top priority of the com-
mittee and would be eligible for full
funding of up to S'J million under the
terms of the Johnson legislation, as In-
corporated in your amendment this
year?
Mr. ROE. Mr. Chairman. If the gen-
tleman will yield. I think the gentle-
man has exactly articulated the entire
Issue Involved. There is no question
that under the Johnson language in
the legislation the town of Moreau
should receive top pr.ority.
Mr. SOLOMON. Mr. Chairman. I
than* the gentleman, and again I
would like to commend the gentle-
woman from Connecticut [Mrs. Jom»-
SON] and the other members of the
committee for developing this work-
able approach to the problem of
ground water contamination, and on
behalf cf all the people in this country
I want to commend Chairman Ror for
the outstanding job he has done on
this subcommittee.
BY KH. MOODY
Mr. MOODY. Mr. Chairman. I offer
an amendment, and I ask unamimous
consent that the amendment be con-
sidered as read and printed Ln the
RECORD.
The CHAIRMAN. Is there objection
to the request of the gentleman from
Wisconsin?
There was no objection .
The text of the amendment Is as fol-
lows:
Amendment offered by Mr. MOODY: Ln the
matter Inserted on page 80 after line 14 by
Mr. Howard's amendment. Insert at the end
of subporagnpn (B) the following:
A permit issued under this section may
cover one or sore tftin one municipal sepa-
rate storm sewer.
Mr. MOODY. Mr. Chairman, this is
a brief technical amendment to make
clear the intent of a section of the
Howard amendments to the committee
amendment that were adopted earlier
regarding the nonexemptlon of urban
areas from requiring a permit for
stormwater overflow.
Mr. ROE. Mr. Chairman, will the
gentleman yield?
Mr. MOODY. I yield to the subcom-
mittee chairman.
Mr. ROE. Mr. Chairman, we have re-
viewed this amendment. It Is really a
clarifying and an Important amend-
ment. We axe prepared to accept the
amendment on this side.
Mr. SNYDER. Mr. Chairman, 'will
the gentleman yield?
Mr. MOODY. I yteld to the gentle-
man from Kentucky.
Mr. SNTDER. Mr. Chairman. *e are
prepared to accept the amendment on
ihts side.
The CHAIRMAN. The question :s on
the amendment offered by the ?en::e-
man from Wisconsin [Mr. MOODY.'.
The amendment was agreed to.
Mr. YOCNG of Missouri. Mr. Chair-
man. I. move to strike the last wcrti.
Mr. Chairman. I will ask c.-.e ?er.tle-
man from New Jersey tMr. ROE!. :he
subcommittee chairman, if r.e -~\'.\
engage in a cciicquy.
Mr. ROE. I will, of course. Mr.
Chairman, if the gentleman wiu yield.
Mr. YOUNG of Missouri. Mr. Chair-
man, it has been brought r.o my a:;en-
t:on that EPA is contempia::n; a
policy that would deny Federal jran:
funds to local treatment project :nat
will not be completed by the July i.
1988 secondary treatment deadline.
Apparently, this unwritten interpreta-
tion is based on the national municipal
policy adopted In 1984 by EPA. Mr.
Chairman, what concerns me is that
we have numerous local agencies that
have been working dili?entiy and
against substantial financial and o:.-.er
limitations to comply with the 1053
secondary deadline. Mr. Chairman, as
you know, there are numerous
projects now under construction to
comply with this deadline/ We also
know that while some of these
projects may not meet the July i.,lSSS
deadline, an EPA policy as I descr-.ied
will g-jrantee that these project w:;i
not meet the deadline.
Mr. Chairman, does the intent of
Congress on this legislation support
such a policy by EPA.
Mr. ROE. No. It is absolutely con-
verse to the policy.
Mr. YOUNG of Missouri. Mr. Chair-
man, furthermore, it seems the wnoie
intent of this legislation before us
today, as well as the Senate bill now
pending before this Chamber, recog-
nizes that despite the best efforts of
many agencies, completion of some
projects will occur after the deadline. I
cannot believe that the intent of Con-
gress could be Interpreted to support a
policy to fund only those projects :hs.:
would be completed by the July 1.
1988 deadline and then deny funds to
a project slated for completion for
August 1. 1988. Such a policy. It seems.
negates the efforts of the Congress :n
developing legislation to assist commu-
nities In coming into compliance with
this Federal requirement before and
after the July 1. 1988 deadline.
Mr. Chairman, do you feel that iddi-
•tional statutory direction \a necessary
to guarantee that this policy will not
be implemented.
Mr. ROE. Mr. Chairman, will the
gentleman.yieid?
Mr. YOUNG of Missouri. I yield :o
the subcommittee chairman.
Mr. ROE. No: I think, as the ner.-.ie-
man has pointed out. that the C:OM-
iiorw of our bill provme that suf.':c:?n:
funding will be available to complete
-------
July JJ, 1985.
CONGRESSIONAL RECORD — HOUSE
H6095
more projects than orurtnally contem-
plated by the administration.
Mr. YOUNO of Missouri Mr. Chair-
man. I than* the gentleman. I am
pleased to know that our agencies can
continue to expect Federal assistance
in meeting these deadlines.
Mr. Chairman, I yield back the bal-
ance of my time.
Mrs. JOKN'SON. .Mr. Chairman. I
move to str.ite the last word.
(Mrs. JOHNSON asked and was
giver, Eerzussioh to revise and extend
her remarKs.)
Mrs. JOHNSON. Mr. Chairman. I
rise In very strong support of the pas-
sage of H.R. 8. and I want to take this
opportunity to commend the chairman
of the subcommittee, the gaocleman
from New Jersey CMr. RotJ. the chair-
man of the committee, the gentleman
from New Jersey (Mr. KOWAJUJ). and
the ranking members, the gentleman
from Kentucky [Mr. S.TTDER) and the
gentleman from Minnesota CMr.
STA^CCUUTD]. These gentlemen have
together worked to craft for us a supe-
rior piece of legislation.
This is not merely a reauthorization
of legislation that has gone far to
clean the rivers and sources of water
in America but Is a refinement of that
legislation. It represents the best In
the legislative tradition of oversight.
and it Improves as well the ability of
States to utilize their resources to im-
plement more economically the re-
qiiirerr.ents cf this Important legisla-
tion. •
I also want to point out that it has
tn it three pontons that are of particu-
lar importance to the Northeast area
that I represent. I do want to call to
the Members' attention that the com-
bined sewer overflow program, which
in the past was not eligible for ordi-
nary sewer grant funds except on a
limited basis, will, as a result of this
thoughtful and thorough piece of leg-
islation, be eligible for any amount of
funding the State desires to make
available to It. That is extremely Im-
portant, especially to the older cities
of America,
It also addresses the crying need for
prevention of non-pointrsource pollu-
tion and [or addressing the serious
proolem of ground water contamina-
tion.
Mr. Chairman. I merely want to
commend the chairman of the com-
mittee and the chairman of the sub-
committee for their thoughtful and
able leadership, and I join them In
supporting r.his reauthorization.
Mr. ROE* Mr. Chairman,' *'lll the
gentlewoman yield?
Mrs. JOHNSON. I yield to the chair-
man of the subcommittee.
Mr. ROE. Mr. Chairman, we express
to the gentlewoman our great appre-
cration for the superb Job she has
done and for having contributed to the
legislation. It xouid not have been
poasiole without her.
Mrs. JOHNSON. Mr. Chairman. I
chant the gentleman,
IT MX. nuax
Mr. BREAUX, Mr. Chairman, I offer
an amendment.
The ClerU read as follows:
Amendment ottered by Mr. BKCAUX: On
page 80. strike out Ur.es 7 inrcuzn it aad
insert in lieu thereof me (ollowinr.
"\nt precipitation runoff and wnicn do not
come into contact wiin wxy overourtien. raw
material. ir.terrneaiate product, flr.isned
produce By-product. or *ast« product local-
ed on trie site o( jucn operation*. A*iy
person dLscnsrs'.ng storm*Bter runoff not
aescr.aed tn trie preceding sentence (raa
mining operation] or oil or pn exploration.
production. 'processing, or treatment oper-
ations or transmission (aciltties snail moni-
tor trie cua:it7 of water in sucn flows and
snail report not less often tfcao annually to
tne Administrator, or at sucn intervals u
the Administrator or the State deems ap-
propriate. '.
Mr. BREAUX (during the reading).
Mr. Chairman. I ask unanimous con-
sent that the amendment be consid-
ered as read and printed in the
RECORD.
The CHAIRMAN. Is there objection
to the request of the gentleman from
Louisiana?
There was no objection.
(Mr. BREAUX asked and was given
permission to revise and extend his re-
marts.)
Mr. BREAUX. Mr. Chairman. I
would say to the members of the com-
mittee that the amendment I am of-
fering goes to a section of the bill, sec-
tion 26. which sets up a procedure for
various exemptions from the permit-
tir.g of certain storm-water r\:r.- if.
What we are dealing with, for in-
stance. is rain water that runs across a
field.
Mr. ROE. Mr. Chairman, will :he
gentleman yield?
Mr. BREAUX. I am glad to yield to
my subcommittee chairman.
Mr. ROE. Mr. Chairman, we have
looked at this amendment. We feel the
amendment is reasonable; and we have
DO objection to it on this side.
Mr. SNYDER. Mr. Chairman, will
the gentleman yield?
Mr. BREAUX. I am glad to yield to
the gentleman from Kentucky.
Mr. SNYDER. Mr. Chairman. I want
to say that this is a good amendment.
and we ore pleased to accept it.
Mr. BREAUX. Mr. Chairman, I am
prepared to provide a further explana-
tion of the amendment, but now. with
the assurance of the chairman of the
subcommittee and the ranking minori-
ty member. I ask for an aye vote on
my amendment.
The CHAIRMAN. The question Is on
the amendment offered by the gentle-
man from Louisiana CMr. BRZAOTTJ.
The amendment was agreed to.
AJorroKKTT ormB> »T KX. cmuo
Mr. CRAIQ. Mr. Chairman. I offer
• an amendment.
The Clerk read as follows:
Amendment otferM By Mr. CRAIO: Page
56. lice 10. before "Section" insert: "^ a) Is
Page 57. after line 4. insert the following:
(b> Scisi or COMCMBJ-— It u tDe MOM of
Coheres* ;nai me Aamuvuu-auoa ana ice
State*, in developing. publUhtac.
ing ««ter auaJrv criteria under/
30-KsMl) of in ->de«J -Water
Control Act she —
(I) consider inc .-concmic effects of irr.sle-
mentation of the proposed vater sui_:y cri-
teria:
(2) consider cyclical charges in t.-.e cu-
mate and envircr_-nent: and
Ol.laxe into account me r-con.-er.ca.
IIOTJ of the concerned States ana t.-.e fi.-.o-
Ings ar.d resulu of site specific in a a.-»»wice
rcsearcn. tests. experiments, ar.d se.T.crjtra-
tlon programs concucted Oy tne ccr.c?m»i
States.
Mr. CRAIG (during the read:.i3>.
Mr. Chairman. I ask unanimous con-
sent that the amendment be consia-
ered as read and printed in '..".e
RECORD.
The CHAIRMAN. Is there objection
to the request of the gentleman from
Idaho?
There was no objection.
Mr. CRAIG. Mr. Chairr.an. ir. 1531.
in concurrence with the Idaho Hea::.i
and Welfare Department, the State
legislature acted to modify proposed
State water quality standards Seio-i-
hydroelectric facilities to establish a
dissolved oxygen standard of 5 milli-
grams/litre (m/1) average durir.g a 4-
hour period between the.months of
May and October and a 6 m/1 average
during the remaining months. EPA
later disapproved these standards
siting that they would not adequately
protect salmonid spawning
other life processes of these
Her this year, the EPA argued
dissolved oxygen standard shouid 5e
6.5 m/1 on a 30-day average. 5 s/ I for
a 7-day average, and a rr.T---~i'~> c: 4
m/1 during nor-spawning penocs.
If the EPA's proposed standard was.
adopted, dams in Ida.no would be
forced to install monitoring devices
and other expensive equipment :o in-
crease the level of oxygen in c-aier
below the dams. 'The issue to be ad-
dressed here is the legitimacy of £?A s
claim that their standards are neces-
sary. -The EPA has testified o-fore tne
Idaho Legislature that it cannot iden-
tify any areas of adverse impact to
fisheries or aquatic life but all the
same, they feel we should modify our
standards in order to meet these aroi-
trary levels.
If the EPA and Idaho can't reach an
agreement regarding the disputed
standards, the EPA will promulgate m
own and enforce them. If tne State re-
fuses to follow the EPA's standards.
we would lose Federal funds for con-
struction of city wastewater treatment
plants.
In closing. Mr. Chairman, my
amendment is a sense of the Congress
that the Administrator and the States
In developing, puollsning. and revrsin*
water quality criteria under section
304(a)
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VI.A.13,
"IMPLEMENTATION OF THE NMP", dated July 24, 1985.
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
5^%? ? WASHINGTON. D.C. 20460
JUL 2 4 1985
OFFICE OF
WATER
MEMORANDUM
SUBJECT: Implementation of the Nat/Lonal M
FROM: . Henry L. Longest, II
Acting Assistant Admin
for Water
' Q A
."fa*-**"
Courtney M. Price
Assistant Administrator for Enforcement
and Compliance Monitoring
TO: Regional Administrators
Regions I - X
The purpose of this memorandum is to reaffirm the Environmental
Protection Agency's (EPA) commitment to implementing the National
Municipal Policy and focus your attention on specific actions EPA
must pursue in order to obtain compliance by the July 1, 1988,
statutory deadline. All noncomplying facilities must achieve
compliance as soon as possible, regardless of the availability of
Federal grant assistance. Publicly-owned treatment works (POTW)
that demonstrate their inability to meet requirements by the
compliance deadline due to extraordinary circumstances may obtain
reasonable schedules with final dates after July 1,.1988, with the
presumption that all such schedules must be established through
judicial orders.
On April 12, 1985, then Assistant Administrator for Water,
Jack Ravan, issued a memorandum clarifying certain enforcement
positions we are taking concerning the National Municipal Policy
(the Policy) and urging that we strive to meet the interim goal of
establishing enforceable schedules for all noncomplying POTWs by
September 30, 1985. Since that time, we have reviewed the second
and third quarter Strategic Planning and Management System/Office
of Water Evaluation Guide (SPMS/OWEG) results, discussed our
implementation progress at the Office of Water Enforcement and
Permits (OWEP) National Branch Chief's meeting on May 2, 1985, and
reviewed the findings of the Office of Management Systems Evaluation
(OMSE) study on how the Regions and States are carrying out the
Policy. You will recall that, at the recent Regional Administrators
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- 2 -
meeting, the Policy was one of the key items on the agenda. During
this session, these matters were reviewed along with the status of
the Policy. Lee Thomas also emphasized the role of enforcement in
carrying out the Policy and the need for Regional leadership to
assure equitable and consistent enforcement toward municipalities.
Highlights of these activities are discussed below, including a POTW
enforcement initiative scheduled for late FY 1935/early FY86. In
addition, we have provided direction on five current enforcement
issues related to the Policy in an attachment.
Status of Enforceable Schedules
As stated previously, one of the goals of the Policy is to have
all noncomplying POTWs on final, enforceable schedules by_ the end of
FY 1985. Despite good efforts by some EPA Regions, the combined
efforts of Regions and States have addressed less than half the
national workload for major POTWs as of the end of the third fiscal
quarter. We will need a tremendous fourth quarter effort in order to
meet our SPMS commitments, let alone the interim Policy goal for all
noncomplying POTWs. ..
Obtaining Management Information
Additionally, we are- concerned about the OMSE study finding that
EPA Regions and States may not have all the necessary information to
carry out their oversight and enforcement roles. Such information
needs should have been a significant component of original State
municipal strategies and deficiencies should have since been addresse
in State/EPA agreements. OWEP is presently, working with EPA Regions
and States to automate fully the tracking of municipal data in the
Permit Compliance System (PCS). Unfortunately, this cannot be
accomplished until late FY 1985 or early FY 1986. In the interim,
Regions and States must establish information sharing procedures so
that administrative activities proceed smoothly. Regional Water
Enforcement staff must also coordinate with Construction Grants staff
to make better use of the available information on grant and funding
status. Toward this end, OWEP and the Office of Municipal Pollution
Control (OMPC) have initiated an effort to integrate PCS, NEEDS, and
GICS files so that users can review pertinent compliance schedule,
treatment, and construction grants information on POTWs by using the
appropriate NPDES permit numbers.
Enforcement Initiative
In order to underscore EPA's resolve to enforce the July 1988
statutory deadline and the other National Municipal Policy requirements,
EPA Headquarters, working with the Department of Justice, is developing
a municipal enforcement initiative to supplement previous municipal
referrals. The initiative will focus on major POTWs that need
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- 3 -
construction to comply with FELs. Regions should closely examine
all POTWs that are possible candidates for this initiative; the
more varied they are in terms of location and size, the more likely
the initiative will achieve its desired impact. Each Region will be
expected to prepare its best case(s) for referral early in FY86 so as
to send a truly national message to the POTW community. Our offices
are already in touch with Regional staff to identify appropriate
candidates. In the near future, we will send you further information
about this initiative by separate memorandum.
It is clear that Regions and States must act now in concert to
address the backlog of uncompleted schedules and to establish an
effective working relationship that will allow them to gain the
momentum necessary to achieve full compliance by 1988. We believe
this will take your personal support and involvement, as well as
that of your program and legal staff, in order to maintain EPA's
resolve that the Policy be carried out with equal determination by
all partners in the NPDES program. We ask that you lend additional
emphasis to this Policy and see that EPA/ State activities are
coordinated in a way that assures the integrity of the Policy.
We have also asked the technical and legal staffs in our offices
to work closely with you and your staff to resolve any matters of
concern. Should you need assistance, please contact William Jordan,
Director, Enforcement Division, OWEP at (FTS) 475-8304, or
Glenn Unterberger, Associate Enforcement Counsel for Water, OECM, at
(FTS) 475-8180.
Attachment
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ATTACHMENT
Enforcement Issuest
Issue: Necessary EPA action where final, enforceable schedules are
not in place by September 30, 1985.
Action: OWEP will prepare a summary report of the POTWs in this
category for the Administrator. EPA Regions should work
with their States now to develop individual action plans
for each POTW, beginning with those that need long-term
construction schedules. Where States do not take action to
require schedules or to establish enforceable schedules,
-the Region should take independent actions to do so. FY86
SPMS commitments should reflect the most expeditious time-
tabl-e for completing enforceable schedules for the remaining
majors and a substantial percentage of the minors.
Issue: EPA's position concerning POTWs eligible for grants in
FYs 1986, 1987, or beyond.
Action: In all. cases, Regions and States are to continue to require
POTWs to comply with orders to establish schedules and meet
statutory requirements by July 1, 1988, regardless of future
eligibility for Federal grant assistance. POTWs must begin
the work now to achieve compliance.
Issue: EPA's response where States extend the 1988 compliance
deadline in a manner inconsistent with the "extraordinary
circumstances" provisions of the National Municipal Policy
(and its associated Regional and State guidance), or extend
the deadline by using nonjudicial actions.
Action: Approved States must obtain judicial orders to establish
enforceable schedules beyond the 1988 deadline to be in
conformance with the Policy. If not, they must defer to EPA
enforcement. All extensions beyond the statutory deadline
should receive judicial review, be sanctioned by a Federal
or State court, and be based on a demonstration of physical
or financial impossibility. If a State does not wish to
use court actions, or subscribe to the physical or financial
impossibility requirement for extensions, or will not accept
the Agency's premise that all extensions must be sanctioned
by a court, Regions should: 1) issue an Administrative
Order (AO) that specifies a compliance date no later than
July 1, 1988 (where compliance by the statutory deadline
is possible), or 2) prepare referrals of these POTWs to
the Department of Justice, starting with the most serious
cases. Regions and States are to confer on all schedules
that are expected to go beyond July 1, 1988, to assure
consistency with the National Policy and the accompanying
Regional and State guidance.
t Detailed discussion papers have been prepared on each issue and
will be provided to your staff in the near future.
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- 2 -
Issue: Treatment of §301(h) applicants within the Policy.
Action: In all cases where a §301(h) waiver is denied, the POTW
should be placed on an enforceable schedule to achieve
compliance as soon as possible/ but not later than
July 1, 1988. In cases where the POTW demonstrates it
cannot achieve compliance by the statutory deadline, the
schedule should be incorporated in a judicial order. If
a final decision on the waiver application has not yet been
made, the Region should continue to monitor the permittee
for compliance with applicable requirements and act on
-those items which the POTW will have to do regardless of
the decision on the application.
«*
Issue: Treatment of wet-weather bypasses within the Policy.
Action: Wet weather bypasses are not a priority category within the
Policy. The Policy does apply to dry weather bypasses and
the Region should use appropriate enforcement action to
eliminate such activities and assure compliance.
Issue: Up-front penalties for violations of the July 1988
compliance deadline.
Action: "AS a matter of policy, EPA will seek up-front penalties for
violations of the July 1, 1988, deadline. These penalties
should consider the economic benefit to the municipality
from noncompliance and the fact that EPA could not obtain
acceptable action by the municipality short of litigation.
In addition, these penalties should result from the exercise
of sound, case-by-case judgment which reflects past violations
and mitigating circumstances such as good faith efforts to
comply, other regulatory issues affecting the certainty of
final limits (revised water quality standards, wasteload
allocations, pending §301(h) decisions, or §208 studies),
and the ability to pay.
/if ,4
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APR 121885
SUBJECT: f4ational Municipal Policy Implementation
FROM: Jack E. Havan
Assistant Administrator
• for Water (KH-55fi)
TOs Regional Administrators
Regional Water Management Division Directors
Regions I-X
At the recent National Enforcement Conference, Administrator
Lee Thonas publicly reaffirmed the Agency's intention to uphold the
National Municipal Policy in its dealings with States and to enforce
the statutory deadline of July 1, 19*58. I made similar remarks
during that Conference and during the Water Pollution Control
Federation (WPCP) Government Affairs Seminar in March. Also, at the
winter ASIWPCA National meeting, the Director of the Office of Water
Enforcement and Permits (OWEP) again reconfirmed this Agency position.
Now that we arc mid-way through the year, I would like to take
this opportunity to discuss n»y current thoughts regarding
implementation of the National Municipal Policy. We must be convinced
and we must assure the States that PY 1985 is not a trial period.
Each Region must have current, workable, and complete State strategies
that reflect the underlying principles of the Policy. As you know,
enforceable compliance schedules are required, with or without Federal
grant assistance. It is presumed that all schedules beyond July. 19S8
will require judicial action. Strategies should contain updated
inventories that present current compliance status with applicable
effluent limits, as well as. any technical or financial requirements
for full compliance. Regional municipal strategies (or the State
equivalent) should serve as a current work plan as veil as the long-
term framework for coordinating EPA and State activities to: (1) set
as many schedules as possible by the target date of September 30, 1985,
and (2) achieve as much compliance as possible before the final
compliance date of July 1, 19RB.
-------
d«adline ° with the 5t MoniciP
issued aP7l. I" 'Vp°ssibl :-equU-*™«nt «he " l^
1
-------
2. Can EPA or the states issue an AO that contains a schedule* to
meet final effluent limits that extends Hoyond July 1, 193a?
T.he National Municipal Policy does not specifically reouire
that schedules beyond July l9Bft be sanctioned by a couirt. However,
tho Regional and State guidance on the Policy that I issued on
April 17, l^KA, presumes that all such extended .schedules will he
established through th.o judicial process. This is the Agency's
enforcontent policy with respect to tho statutory compliance deadline.
Since the April 17, 1934, guidance is not binding on State N'PDGS
programs, a-State could choose to issue zr\ AO with a sctiedulf* beyond
July 19H8, in direct conflict with the spirit of the Administrator1«
Policy and tho letter of the subsequent Guidance. In such cases,
especially where the State's order does not involve imposition of
administrative penalties, EPA Regions should consider: 1) issuing an
AO that specifies <» compliance date no later than July 1988, which
th«n supercedes the State An, or 2) filing a civil action to obtain a
judicial order that contains a final compliance date deemed appropriate
by the court.
3. What constitutes a "final" and "enforceable" schedule under the
Policy?
One of the main principles upon which the Policy is based is
tho assurance of "certainty" prior to requiring commitments to major
capital investments. In order to do thin, Regions, States, and
communities should strive to eliminate as many of the "unknowns" *s
possible, and as quickly as possible, with respect to final lini.ts,
correct treatment technology, actual costs, available funds, and
revenue systems that are necessary to maintain the plant once it is
completed. Schedules established by Regions and States must reflect
the appropriate legal, technical, and economic circumstances.
Additionally, enforceable schedules must contain sufficient interim
milestones that require demonstrations of progress and allow for
subsequent enforcement actions, if necessary, prior to the final
compliance deadline.
Delays in eliminating the uncertainty of final effluent limits
have focused on three situations. First;, limit changes associated
with the secondary treatment redefinition/percent removal should not
causo major problems. The Office of Water Enforcement and Permits
recently sent out draft guidance for Regional and State review and
requested data on how many municipal permits appear to need alteration.
Second, for those cities where 301(h) decisions ar« pending Regions
should continue to adhere to the direction contained in Al Aim's
October 29, 1984 memorandum. "Expediting Achievement of Water Ouality
Improvement by 301(h) Applicants." And third, advanced waste treatment
(A%'T) nay bo needed to meet Section 101(a)(2) goals (fishable/swimnanle)
of the Act. The Water Ouality Standards regulation requires States to
review water quality standards to assure that the standards, do reflect
these goals. If a State believes that AWT may be necessary, then
priority should be given to completing those userZattainstli Lit=v^ anal
first. - - ". . -.1.'- ----r— ----- -. •-.:.
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- *
•ott
al
1 -S "• •
i.^V" ^OV>
si'e. •:
-.1^
e, •
C^
-------
VI.A.14.
"Relationship Between the National Municipal Policy and Construction Grants
Extending Beyond FY 1988", dated July 26, 1985. (See also number 12 above
for a copy of the letter referenced in this document)
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-------
f
&£\ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
AM*. ., WASHINGTON. D.C. 20460
OFFICE OF
WATER
JUL26S85
MEMORANDUM
SUBJECT: Relationship Between National Municipal Policy
rand Construction Grants Extending Beyond FY 1988
r\cA^VOC~— I \t~v~r-> Y>-J*\f
FROM: Rebecca W. Hanmer, Director
Office of Water Enforcement and Permits
TO: Water Management Division Directors
Regions I - X
There has recently been some confusion about EPA's
policy with respect to award of grant funds for construction
of facilities that will not be completed until after the
July 1, 1988 statutory deadline. This has prompted me to
reinforce with you the importance of maintaining close coordi-
nation between the staffs assigned to implementation of the
National Municipal Policy (NMP) and those working with Con-
struction Grants for municipalities that are affected by the
policy. Misinformation and poor coordination can seriously
undermine our efforts to implement the NMP.
On the policy issue, we recently responded to a Con-
gressional inquiry on behalf of a State official whose staff
was verbally advised that no more Federal grants for sewage
treatment construction projects would be made where construc-
tion would be completed past July 1, 1988. Furthermore, he
believed that EPA was about to transmit this policy to the
States in written form. Exactly the same issue was raised
during the House of Representatives floor debate on the Clean
Water Act earlier this week. I have enclosed a copy of the
transcript of the colloauy between Congressman Young. (Missouri)
and Congressman Roe (New Jersey) so that you will better
understand the nature of the concern.
Our enclosed response to Congressman Jones sets forth
what has always been our position on this issue: neither
the NMP nor EPA policy with respect to fundina construction of
wastewater treatment facilities prohibits EPA or delegated
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-2-
Statas from awarding grants to municipalities that may not be
able to complete construction by the statutory deadline. Tn
fact, we have been doing it for years with respect to fundinq
POTWs that missed the 1977 statutory deadline for compliance.
I urge you to distribute copies of this letter and the
House debate to all members of your grants and enforcement
staffs. Where there seem to be problems, I would also ask
that you make every effort to set the record straight with
your States as well. If we hear of similar problems in any
other Regions, I have asked Jim Elder to get in touch with
you personally.
Attachments
-------
VI. A. 15'.
Speech by Assistant Administrator, OECM to Association of Metropolitan
Sewerage Agencies, dated August 8, 1985V
-------
-------
^ot° S7«>
3 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON, D.C. 20460
AIJ3 3 1985
OFflCF OF FNM>KCtMI M
AMX.OMCI !\SCI
MDMKIHISf.
MEMORANDUM
SUBJECT: Speech by Assistant Administrator, OECM to
Association of Metropolitan Sewerage Agencies
FROM: ' Glenn L. Unterberger
Associate Enforcement Counsel
for Water
TO: . Regional Counsels
Regions I - X
Attached is a copy of Courtney Price's recent enforcement
speech on the National Municipal Policy and pretreatment. She
gave the speech on July 31 at the summer meeting of the
Association of Metropolitan Sewerage Agencies (AMSA) held at
the Greenbrier Hotel in White Sulpher Springs, West Virginia.
This forceful statement concerning the Agency's responsibi-
lities for the National Municipal Policy and pretreatment
should be of assistance to you in the Region's water compliance
and enforcement program.
Attachment
cc: Water Management Division Directors,
Regions I - X
- f
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ADDRESS BY COURTNEY F CE, ASSISTANT ADMINISTRATOR
FOR ENFORCEMENT A;,J COMPLIANCE MONITORING
TO ASSOCIATION OF METROPOLITAN SEWERAGE AGENCIES
JULY 31, 1985
Introduction
Thank you for inviting me here to speak today. Your
timing is excellent, as we are into perhaps the most momentous
task your organization and my Agency have undertaken since
the passage of the Clean Water Act - implementation" of the
National Municipal Policy. I would also like to bring you
up-to-date on pretreatment, a highly significant area which
we think will strongly reinforce and supplement the National
Municipal Policy. I believe you may be familiar with some of
the things I am going to say, but since this is my first meeting
with you, I want you to know where I am coming from.
EPA has set the National Municipal Policy and implementation
of pretreatment requirements as the two highest priority
objectives for the Agency in the water enforcement area for
this year and probably for the rest of this Administration.
These are the areas where the most remains to be done, and
where the most can be accomplished. Let me turn first to the
National Municipal Policy.
National Municipal Policy; background
As you know, the Clean Water Act has never distinguished
between the fundamental obligations of municipal and industrial
sources to comply with the terms of .their NPDES permits.
Congress set up various mechanisms for developing effluent
guidelines and obtaining exceptions and waivers, and put in
••• "I'
-
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- 2 -
different deadlines for different levels of technology. But
onee those requirements are incorporated into NPDES permits,
the obligation to comply is absolute. As we lawyers say, the
Clean Water Act is a strict liability statute. There are no
defenses.
Aware that after decades of neglect, compliance would
be very expensive for many municipalities in the 1970's,
Congress appropriated billions of Federal dollars to get
compliance going, and to work out what bugs there were in the
technology. In the CWA amendments of 1981, however, Congress
reduced.appropriations, and made clear its view that ulti-
mately compliance with the Act remained a State and local
responsibility. As you know, whatever happens in this and
subsequent Congresses, there is little likelihood that
construction grant funding will go back to what it was, and
will never be sufficient to pay for the whole program.
Therefore, in January 1984 Bill Ruckelshaus issued the
National Municipal Policy. The policy was issued after a year
of deliberation and extensive consultation with you, with cities,
with states, and with other interested groups. It has been
strongly endorsed in public testimony and many private meetings
by our present Administrator, Lee Thomas. As you know, the
National Municipal Policy sets forth two fundamental principles:
1. All municipalities must achieve compliance with
their NPDES permit limits as soon as possible but
no, later than July 1, 1988, unless it is physically
or financially impossible to do so; and
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- 3 -
2. Municipalities must comply on time whether or not
they .receive federal funds.
In a sentence, the National Municipal Policy decouples compliance
from Federal funding.
As I mentioned at the outset, carrying out the National
Municipal Policy has become - and probably will remain - the
Agency's top priority in the water enforcement area for some
time. It is particularly important because in none' of the
discussions of re-authorization of the Clean Water Act has
anyone suggested that the 1988 date be .extended. It is as
firm a deadline as any I have seen.
National Municipal Policy; progress to date
When the Agency issued the National Municipal Policy in
January 1984, we knew that we had set ourselves and the country
a highly ambitious goal, one that would require a great deal
of work, local money and determination to accomplish.
Nevertheless, eighteen months into the program, I can
report some solid progress. Knowledge of the National Municipal
Policy is virtually universal. Word of its requirements has
reached every municipality that will have to take action.
The Agency has received a good deal of support for its firm
position from both States and localities despite the logistical
difficulties that we all recognize.
EPA's immediate goal has been to put all cities required
to construct on realistic, enforceable schedules by October 1,
1985. This is a big chunk of work for both the Agency and the
thirty-six states that manage the NPDES program: we estimate
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- 4 -
that there are about 1300 - 1400 major POTWs (out of a total
of 3700) which will need construction. To date, schedules
have been established for almost 50%. States and EPA Regional
offices are at this very moment drawing up detailed strategies
for finishing work with the rest.
In the meantime, the Agency is -trying to expedite the
process by removing as quickly as possible whatever obstacles
remain to the determination of final effluent limits. We are,
for example, trying to reduce the backlog of expired permits,
resolve pending §301{h) waiver applications, and speed water:
quality decisions. We are also trying to anticipate problems
in such areas as sludge and toxics. Rebecca Hanmer, the Director
of EPA's Office of Water Enforcement and Permits, will discuss
these areas later at your meeting. Pursuant to the 1981
amendments to the Clean Water Act, we revised the definition
of secondary treatment to permit some relaxation of effluent
limits, particularly for smaller cities that build trickling
filters and waste stabilization ponds. Within our own organi-
zation, we in enforcement are trying to work more closely with
the offices responsible for permits and construction grants in
order to take advantage of their accumulated expertise. EPA's
Office of Water, for its part, is revising the construction
grant regulations to be sure that no one receives further
funding until a schedule meeting the requirements- of the National
Municipal Policy is in place.
National Municipal Policy - most important message
In a few words, this is what .we are doing. What do we
"A
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- 5 -
expect of you? If there is one message that I want you to .take
away from these brief remarks, it is this: we expect every
municipality that is not in compliance with final NPDES permit
limits now to begin work immediately to achieve compliance by
July 1, 1988, or before. This applies to each municipality
which is presently in violation of the Act, whether or not it
received federal funds in the past, whether of not it is likely
to receive a grant in the future, whether or not it knows if it
will receive a grant. Even if you are certain you will receive
a grant in 1986 or 1987, we expect you. to begin construction
as soon as you can and proceed as quickly as possible, using
locally raised money if necessary. We will provide what
assistance we can in suggesting methods to raise funds locally.
However, I cannot sufficiently stress that the time for action
is NOW. Many cities have already begun work on their own;
indeed, many have completed secondary treatment and more, on
their own. It can be done. Both the Clean Water Act and
fundamental fairness require that the Agency not allow other
cities to continue pollution unabated for years after the
announcement of the National Municipal Policy, in the hopes
that the law will be changed or new funds forthcoming. The
best way for a city now in violation to avoid formal EPA enforce-
ment action - a lawsuit, with penalties - is to agree to a
federal or State administrative order with a schedule providing
for compliance by July 1, 1988.
On the positive side, Agency analysis suggests that most
major POTWs can finance adequate treatment on their own, without
imposing undue Burdens on local residents and ratepayers.
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- 6 -
Moreover, there are real advantages to 100% local financing.
Cities have found that they can often build projects faster,
and at a significantly lower cost, when they are not subject to
federal construction grant regulations. Some cities have
found that they can meet all their permit limits with smaller,
more practical, easier-to-operate facilities than those presently
called for in their Facility Plans.
An active and effective pretreatment program, as now
required by law, should reduce the size or the cost, or both,
of facilities in municipalities with significant industrial
contributors.
National Municipal Policy; enforcement
Enforcement is not a particularly upbeat subject: clearly
the Agency prefers and expects voluntary compliance, and many
cities are already complying as quickly as they are able. In
addition, of course, the federal government is particularly
reluctant to sue sister governments. I know too that munici-
palities often have fewer resources and more complicated
management than a private corporation. Nonetheless, as the
senior Agency official responsible for enforcement, I must tell
you that the Agency plans to enforce the law vigorously against
any municipality that fails to comply with the National Municipal
Policy. The Administrator feels this is necessary to be fair
- ^
to those cities that have already gone ahead on their own, often .
at significant expense. Stiff enfprcement is also necessary
to maintain the momentum of the policy so that the 1988 goal
can be met. We plan to take action in all Regions and ngainsc
-------
- 7 -
municipalities of all sizes that are violating the-Clean Water
Act. Indeed, about 50% of the cases filed by the Agency in the
last two years under the Clean Water Act have been against
municipalities, and frankly, I expect that percentage to grow.
Enforcement of the National Municipal Policy comes at a
time when the Agency has increased its enforcement presence
generally as measured by the total number of Clean Water Act
cases filed. In fact, the number of water cases filed nearly
doubled between FY83 and FY84. In addition, a multi-case
initiative against municipalities is contemplated for FY86 to
emphasize the importance we attach to compliance with the
National Municipal Policy.
You should also know that the Federal courts have uniformly
upheld the Agency's position in regard to municipalities under
the Clean Water Act. Four courts - including the U.S. Court of
Appeals for the 6th Circuit last year - have looked at the
question of whether a city can be required to build if it fails
to receive federal funds. These courts have decided that Federal
funding (or lack of it) is irrelevant. The courts all held
without qualification that a city's obligation to comply with
its NPDES permit limitations is absolute. This responsibility
does not and cannot depend on whether a city receives grant
funds. In addition, in at least two recent cases where the
courts issued written opinions [Providence, R.I., Woodbridge,
N.J.], the courts upheld the imposition of stipulated penalties
against municipalities for failure to meet compliance schedules
established through judicial consent decree.
-------
- 8 -
Finally, in the last two years, there have been at least
five decided cases holding that Discharge Monitoring Reports
disclosing effluent violations can be sufficient grounds for
summary judgment on liability against a discharger. While these
were all cases against private industry, there is no reason to
think the result is not equally applicable to municipalities.
A city that gets into difficulty complying with the National
Municipal Policy should not look to the courts for 'relief..
National Municipal 'Policy; objectives in new enforcement cases
Therefore, you should know that in every case we file
against a municipality from here on out, we will seek compliance
by July 1, 1988, or sooner, unless it is physically or financially
impossible. If ability to pay is raised as an issue, we will
bring in financial consultants to scrutinize the numbers. We
have also asked our Regional offices to take federal enforcement
action - either an administrative action or a lawsuit - in the
case of any state order which goes beyond July 1, 1988, without
adequate justification [Price/Longest memo of July 24, 1985].
In addition, as a matter of policy, we plan to seek
penalties in National Municipal Policy cases. Indeed, the Agency
is presently drawing up a formal water penalty policy which
will in part expressly address municipalities. The Agency's
position on penalties stems at least in part from the fact that
a municipality typically will have failed to respond to an
opportunity to'commit to an acceptable, enforceable compliance
schedule in an Administratve Order without penalties before
EPA takes the POTW to court. In each of 12 municipal cases
-------
- 9 -
recently concluded, the Agency has obtained signficant cash
penalties in settlement, ranging from several thousand dollars
to $250,000. In the future, the Agency will be looking parti-
cularly hard at whether a city started to take action to meet
permit limits after the announcement of the National Municipal
Policy, or whether it waited for a grant. The Agency is totally
serious about the expeditious municipal compliance. Compliance
is no longer dependent on any grant action.
Pretreatment
Let me now turn to pretreatment, where you and I should
be on the same side - national, state and local governments
working together to clean up the environment and spread the
cost equitably.
In 1977, Congress revised the Clean Water Act to place
the responsibility for developing, implementing and enforcing
the pretreatment program with those most affected by disruptive
industrial pollutants. And who is most affected by such
disruption? It is you, the POTWs. That is why it is very
appropriate for us to talk now about pretreatment.
After 1977, EPA adopted regulations to implement the
pretreatment program enacted by Congress. We required all POTWs
with a design flow greater than 5 million gallons per day, and
other POTWs (as determined by the approved pretreatment State .
or EPA) to obtain approval of pretreatment programs no later
than July 1, 1983. Generally,.an approvable program will
contain mechanisms for identifying the industrial users and
the character of their effluent, and for .establishing local
-------
- 10 -
limits when necessary. The approvable program must also provido_
-authority for the POTW to require effluent monitoring and to
enforce both the categorical standards and applicable local
limits.
The objectives of the pretreatment program are (1) to
provide the POTW with a means of insuring its own operational
integrity and (2) to place the financial burden of treating
large amounts of toxic or hazardous pollutants which POTWs
typically are not built to control where it belongs, with the
industry which produces them.
Of course, in those instances where a POTW is capable of
removing large amounts of industrial pollutants, the pretreatment
program provides that POTWs with approved programs may apply
for removal credits. If approved, removal credits allow the
POTW some flexibility to relax the requirements for one or
more of its industrial users so long as that relaxation does
not cause the POTW to violate its National Pollutant Discharge
Elimination System (NPDES) permit.
2. Prior Agency focus
In the last ten years, the Agency has sought to implement
the pretreatment program by promulgating two types of pretreatmen:
regulations. We issued "general" regulations which interpret
statutory phrases such as prohibitions against "interference"
and "pass-through" and set up procedures that apply to indirect
dischargers. We also promulgated "categorical" standards,
which set technology-based numerical limits on discharges of
toxic pollutants from specified categories of industrial sourcej^
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- 11 -
The Agency's most notable success is the establishment of
categorical standards for the electroplating category. Electro-
plating, with approximately 10,000 dischargers, is by far the
largest industrial category to be regulated.
For EPA's part, we have brought nationally coordinated
cases against two major integrated electroplaters, Chrysler
and General Motors, as well as against several smaller industrial
dischargers. In a precedent setting settlement, Chrysler
agreed to pay a penalty of $1.5 million in cash in addition to
meetir.3 interim and final compliance requirements. Pursuant
to our Clean Water Act authority, we expect to maintain a
national presence in enforcing the electroplaing standards 'as
well as other categorical pretreatment standards as they take
effect. Nevertheless, in the pretreatment provisions of the
Clean Water Act, Congress clearly was looking for local munici-
palities such ^s yourselves to be the primary implementation
and enforcement arm of this program. Just as clearly., EPA is
ready to use the strong enforcement authorities Congress
established to make sure that all parties, including munici-
palities, are pursuing their legal responsibilities to implement
successful pretreatment programs.
3. POTW emphasis (1983 - present)
While the Agency was expending resources on establishing
regulations and standards, very little was done beyond the
issuance of a few guidelines between 1978 and late 1982 to
establish the local POTW pretreatment programs as required by
40 C.F.R. §§403.8 and 403.9. As a result, in early 1983 about
-------
- 12 -
73% of the 1455 POTW'-s required to develop pretreatment programs
either had not submitted plans or had submitted incomplete
plans. With the deadlines for the development of approved plans
(July I, 1983) and for compliance with categorical standards
(April and June 1984 for electroplaters) rapidly approaching,
the Agency became concerned that an indeterminate portion of
these POTNs without approved plans were not prepared to enforce
pretreatment requirements.
In February 1984, the Agency convened an advisory committee,
the Pretreatment Implementation Review Task Force (PIRT), to
assist the Agency with implementation of the pretreatment
program. The committee was composed of representatives of
industry, State regulatory agencies, POTW's, environmental
groups and EPA personnel. In January 1985, PIRT submitted its
Final Report to the Administrator. It recommended issuance
of a strong Agency policy statement to support enforcement of
the national pretreatment program. PIRT further recommended
aggressive Agency enforcement action to compel the remaining
1152 affected POTWs (as of April 1, 1984) to submit approvable
pretreatment programs.
Since April 1984, many POTWs have developed POTW
pretreatment programs which have been approved. EPA has set
as a national goal in this area to have all required POTWs
obtain approval programs or be referred for court action by
September 30, 1985. In support of this goal, EPA launched a
Pretreatment Multi-Case Enforcement Initiative earlier this
year. Lawsuits were filed simultaneously on April 18, 1985,
-------
- 13 -
against eight non-complying POTWs that had failed to develop
apprcvable programs. These cases are now in the negotiation
stage, but EPA expects to obtain from each case a judicial
decree requiring expeditious submittal of an approvable program,
specific steps to ensure proper implementation of that program,
and significant penalties because the POTW failed to meet
responsibilities which many others pursued more seriously and
effectively. If you read the trade press, you will also know
that the Ageacy expects to file a second wave of similar cases
against a number of remaining non-complying POTWs by our
September 30 target date.
There is good news that emerges from all this. By combining
your efforts with those of the State and Federal approval
authorities, the list of POTWs without approved programs has
•dwindled from 1,152 as of April 1, 1984, to 377 as of June 30,
1985. The bad news is that 377 POTWs still do not have approved
programs or schedules for submitting them. The Agency and
States intend to make every effort to obtain approvable local
pretreatment programs from this group by the end of FY 1985 by
whatever means are necessary, including the use of judicial
enforcement and the imposition of penalties. Indeed, we have
made it clear to all levels within the Agency that "good progress'
on program developments is no longer sufficient. If approvable
programs are not forthcoming, it is time to take -the action to
court.
In addition, the Agency is hard at work developing a
national strategy to insure effective implementation of approved
-------
- 14 -
pretreatment plans through Federal State and local efforts.
An important objective for FY36, and beyond, will be to help
you to insure that your industrial contributors comply with
the applicable pretreatment standards, both categorical standards
and the highly important local standards. Again, EPa is quite
prepared to use the enforcement authority provided to it, not
only against your industrial users where a matter of Federal
interest is at stake, but also against POTWs which are failing
to implement or adequately enforce approved local pretreatment
programs. Now that I have come on as the "heavy", let me offer
that if we (the States, EPA and the POTWs) work together, .
we can jointly obtain three important things. We can ensure
(1) that all industrial users comply with pretreatment standards,
(2) that you are able to remain in compliance with your own
NPDES limits, and (3) that the costs of compliance with the
Clean Water Act are paid by the parties responsible for the
pollution.
I have appreciated this opportunity to talk with you about
pretreatment and the National Municipal Policy. I look forward
to your help as we continue to implement these important
programs.
-------
VI.A.16.
"HIGHLIGHTS FROM DECIDED AND SETTLED CASES UNDER THE NMP", dated August 27,
1985.
-------
I MITl) M AIKS KNVIKONMr.MAl. I'KOIIX I ION A(,l.\( V
\\ ASHIN(;i()N. |).( . 2I
7 'CC:
I ibex
M E M 0 RAX D U M
SUBJECT: Highlights from Decided an.2 Settled Cases under
the National Municipal Policy
FROM: Glenn L. Unterberger -^r^.,.^.
Associate Enforcement Counsel
for Water
f
TO: Regional Counsels
Reaions I - X
The Agency has accumulated considerable enforcement
experience under the National Municipal Policy (49 FR 3832,
January 30, 1934) during the past year and a half since the
Policy was signed by the Administrator. I want to review some
of the results of this experience with the hope that it will
help you to enforce the National Municipal Policy during the
months ahead. As I look at our enforcement track record, I
find it most useful to review (1) relevant -decided cases, (2)
noteworthy consent decrees and (3) statistics on the amounts of
municipal penalties obtained. Accordingly, I will briefly
discuss each of these areas.
I. Case Law Has Established that POTWs' Must Comply
with the Clean Water ^ct in the Absence of.
Federal Funding
As you know, the most important principle established
by the National Municipal Policy is that compliance by publicly
owned treatment works (POTWs) with final effluent limits is
independent of Federal"construction granfcr funding. More simply
put, the Policy decouples compliance and Federal funding. Case
law, which establishes the appropriateness of compliance with-
out funding, therefore becomes strong support for implementation
of the Policy.
The most significant case establishing the requirement of
compliance in the absence of Federal funding is State Water
Control Board v'. Train, 559 F.2d 921 (4th Cir. 1977), an opinion
seven years older than the National Municipal Policy itself.
In that case, Virginia's Water Control Board sought a declaratory
judgment that POTWs were not subject to certain effluent
-------
receive:": Feu
funding. The Fourth Circuit -ier.io.l r-ilic-f to Virginia ar.r: hell
the following:
"Section 301(b)(i)'s effiuer.t 'li.T.i tat ions
are, on their face, unconditional, and no
other provision indicates any link between
their enforceabi li'ty ar. .: the timely receipt
of federal assistance." 559 F.2r: at 924.
The Sixth Circuit has taker, a position similar to the
Fourth Circuit. In U.S. v. Wayne County (Mich.) Dept . of
Health, City of Detroit, et al. 720 F.2d 443, 19 ERG 2091
( 6 th C i r . 1963 ) , the District Court below had unilaterally
reserved allocated but unobligated Federal construction grant
funds to defendant City of Detroit. EPA appealed this action
as unauthorised and prevailed before the Sixth Circuit. The
Circuit Court held:
"It is fundamental that Title III compliance
may be sought by the EFA without a corresponding
conditioning of Title II grant funds. State
Water Control Board v. Train, 559 F . 2d 921
(4th Cir. 1977)." 720 F.2d at 446, ERG at
2091.
". . . it is fundamental that the compliance
and grant provisions of the FWPCA are not
mutually dependent. State Water Control Board
v. Train, 559 F . 2d 921 (4th Cir. 1977) . If the
federal forurn possessed the authority to mandate
EPA contributions under Title II in Title III
compliance actions, then the EPA would be
pragmatically restricted to seeking compliance
only in actions where it would guarantee federal
funds to effect the compliance judgments obtained.
This was patently not the intent of Ccnaress.
Train, supra. " 720 F.2d at 451, 19 ERC'at 2096.
The two cases above provide a background for several
court orders which have discussed the legal question or the
National Municipal Policy. In U.S. v. City of Kansas City,
Kansas (Civ. Action No. KC-3628, D. Kan., April 25, 1984)", the
City sought to tie compliance with final effluent limits by
July 1, 1983, to the availability of Federal grant funds. The
Court rejected the City's position and required final compliance
by June 30, 1988. The one limiting feature of the order is
that the Court obtained signatures of counsel, as if it were a
consent decree, subsequent to issuance of the decree. Neverthe-
less, the Court .transcript shows that the matter was fully
litigated.
The Court noted in its unpublished order in U.S. v. City of
Kansas City at page one that ' • • .
-------
"the statutory • obligation of publicly
treatment works to comply with the July 1, 1977,
deadline [subsequently extended by statutory
amendments to July 1, 19S8 for eligible muni-
cipalities] is not co:id itior.a I on the receipt
of federal grant funds or any other
circurr.star.ee ..."
also quoted specifically from the National
Municipal Policy, finding that only extraordinary circumstances
are allowed under the Policy a.£ a basis for compliance beyond
July 1, 19S5. Specifically, the Court wrote at page two of its
order that:
". . . Defendant has not made or endeavored
to rr.ake any shewing concerning the existence of
extraordinary circumstances that would preclude
its compliance with the statutory July 1, 1988,
deadline, and EPA has made no determination that
such extraordinary circumstances either do or do
not exist. "
Although the order did not define extraordinary
circumstances (which EPA considers to be only physical impossi-
bility or financial incapability to complete construction
by July l, 1988), the Court did find that under the policy the
POTW bears the burden of showing extraordinary circumstances,
not EPA. The Court also implicitly affirmed the National
Municipal Policy as an appropriate enforcement response by
EPA. The order should be useful in future litigated cases or
in settlement discussions.
There have also been a series of court orders in the case
of Township of Franklin Sewerage Authority v. Middlesex County
Utilities Authority (Civ. Action No. 80-4041, D . N . J . , Feb. 24,
•1984, Dec. i5~, 1984, July 5, 1985) holding, and subsequently
reaffirming, that a. municipality ' s obligation to comply with
its NPDES requirements is not contingent on Federal funding.
Indeed, in the July 5, 1985 order at page 2, Judge Thompson
held the Township of Woodbridge, N.J. in contempt for failing
to comply with 'an earlier order and advancing lack of federal
funding as a defense:
"We will deny Woodbridge 's motion. We have
addressed the issue presented - whether the
obligation to comply with the Act is
contingent upon the receipt of funding from
the United States - on two previous occasions.
Woodbridge offers no new analysis or
authority • which would lead the court to
modify its holdings on this issue. The
specific argument advanced, that the 1931
amendment to 33 U.S.C. §1311 .allows Woodbridge
to avoid liability, has been explicitly
-------
_ 4 -
i~"t"-l*n"nt'.'nt. "' ^l£S£^^
«•• .^rnS&^^^^lT^^r
£2^22iJ^'77rIc^ ««»i«X1w s» •"*.
•-.. stfSS^-^^ffi-^
. «^^SS^S£^SsS •>
inciuatng s^%nis «"f^s 0££i^iVexcelle^/^^^ ,
<.«^<=nceo 3-u ._;„,-, of t--^ _fc.,ov this «= .^jACat.e P"__i_i0al
Policy- incaE^iii^ £inancial
The FinSBS^i overcome a - ree wx^^
A. iHS f -now to « 4 consent lt
•^.^T.por* .^.."..i V "ifa' lt.P«^MfUr.l ?»»tin"
rcla:
-------
trie cci:utercinirr., enlisting the assistance of construction
•Trarits attorneys in the Agency's Office of General Counsel, who
wrote much of the brief. The Agency pursued extensive discovery
and negotiations in the case, which also involved a nv.rr.ber of
private parties (contractors) who had participated in the POT'.-;
construction. In the end, Garland agreed to achieve compliance
by July 1, 1033, and to pay an upfront civil penalty of 3150,OCC
in a consent decree filed June 24, 19S5.
C. Cor.pliance Not Contingent on Federal Funding
The Wyoming Valley Sanitation Authority, located near WiiV-.es
Barre, Pennsylvania and made up of sons twenty municipalities,
had been slow to comply for years. In fact, it took_twenty-
five years of State pressure to get the Authority to build a
primary facility. EPA filed suit on May 3, 1983, to obtain
secondary treatment by July 1, 1988.
Only after issuance of the National Municipal Policy did
negotiations with the Authority becoir.e productive. The Authority
tried to tie compliance to Federal funding. However, the
Authority finally agreed to a consent decree that made compliance
by 1938 independent of Federal funding, which is the standard
language we like to see in all municipal consent decrees. EPA
and Pennsylvania (also a party) did agree, however, to expedite
consideration of the Authority's grant application. The authority
also agreed to pay an upfront penalty of $66,000 to the Federal
government and $56,500 to the State. The consent decree was
filed on May 6, 1985.
D. Use of Environmental Security Account
One of the most difficult series of recent negotiations
involved Cincinnati's Mill Creek POTW. This case involved
negotiations with the Sewer District, the City of Cincinnati and
Hamilton County in which the facility is located. Mill Creek
had completed secondary treatment construction in 1978, but the
POTW's sludge unit, heat exchangers and vacuum filters have
never worked properly. Consequently, only a small portion of
the effluent received secondary treatment. This made the Mill
Creek POTW one of the worst polluters on the Ohio River. The
case was complicated by State administrative action that could
be construed as permit modification.
As negotiations continued, it became apparent that the
penalty issue was a major obstacle to obtaining a settlement.
In the end, the Agency obtained a commitment to final compliance
by 1988, significant combined sewer overflow relief, and estab-
lishment of a $750,000 Environmental Security Account to be
managed by a court-appointed trustee. The Account must be -
used to finance environmentally beneficial projects connected
to the Clean Water Act which will benefit the general public.
The account should address the particular .type of environmental
effect of the defendant's noncompliance and be in addition to any
-------
— o —
ieaai obligation defendant might have. A final consent J.ecroe (
was lodged on March 11, 1985, and should be entered shortly.
Although the Agency now generally requires, as a matter of
policy, upfror.t penalties rather than environmental projects,
a" combination of a substantial upfront penalty (which as a
natter of policy is now an Agency objective in all municipal.
cases) ar.r. an environmental security account may be accent ar, le
in other municipal cases. In addition, stipulated penalties
tier, to a compliance schedule are required.
III. Penalties Assessed Against POTWs
We typically expect to obtain penalties in POTW cases.
Penalties act as a substantial deterrent to noncompliance and
speed the municipality's effort to comply. As explained below,
in recent cases, penalties have had a demonstrable effect on
securing POTW compliance.
Since the passage of the N'MP, penalties have been sought
and assessed against many PGTWs violating the CWA. During the
last three years, from 1933 to 1985, 'the Agency has obtained
penalties in 17 of 27 cases brought against POTWs.
The two largest penalties are $170,000 and $150,000,
assessed against two Region VI municipalities. There are
also four cases with $100,000 penalties. Two of these cases
are in Region VI, one is in Region III and one is in Region
II. The remaining twelve cases have penalties under $100,000,
the smallest being the Welch Sanitation Board, Welch, West
Virginia, in Region III. Noting this community's depressed
economy with 23% unemployment, the court advised the parties
to work out a mutually agreeable solution in lieu of litigation.
The Board agreed to pay a penalty of $1,000 each to the United
States and the State for violations of the CWA. Finally, in
four of the ten cases in which cities, did not pay a cash penalty,
they agreed to complete environmentally beneficial projects not
required by £3w.
An example of a municipal case where a penalty was not
imposed involved the City of Tallulah, Louisiana, in Region VI.
The court informally advised the United States that no penalty
would be assessed in this case due to the community's economic
situation. ^here is very low per capita income and many
residents ar'^Fon welfare.)
Another case where a penalty was not sought involved, a
small suburb- of Louisville, in Okolona, Kentucky, Region IV.
The POTW agreed' to stop dumping the effluent into a creek and
to hook into the County's Municipal Sewer District (MSD) line.
In order to use the line, the POTW had to legally dissolve
itself as an entity. An imposition of a penalty would have
delayed the POTW ' s dissolution and MSD ' s ability to assume its '
responsibilities. In order to facilitate Okolona 's prompt
compliance, EPA did not seek penalties for past CWA violations.
-------
A chart is attached listing all reported C'.vA cases
during 1983 to 1985 including the amount of the penalties we
obtained against certain POTV.'s. In sor.:e ins-.ancos penalties
were not obtained. As mentioned above, some settlements provide-:
for environmental projects or trust funds rather than penalties.
Most decrees also included stipulated penalties for future
violations.
I trust the information in this merr.cradum will be
to you. If you have any questions or corrections to the
information in this report, please feel free to call me or
Maria Orozco of my staff at 475-8320. I anticipate issuing
updates of this report on a periodic basis.
Attachment
cc: Rebecca Hanmer
Jim Elder
Bill Jordan
Regional Water Division.Directors
OECM Water Attorneys
Cheryl Wasserman
David Buente
Carol Green
-------
-------
Pacjo I
CWA MUNICIPAL CASKS CONCmOKI) IN CALENDAR WARS 1903-1985
WITH AND WITUOW PKNAJ.TII-S ASSIISSKD AGAINST
P.I-:C;ION CASK
1 U.S.
1 . U.S.
2 tJ'.S.
2 U.S.
3 U.S.
NAMK
v. M.D.C. (City of Hoston)
v. City of Providence
v. PRASA (II PR Aquod. & Swr)
v. City of Utica
v. City of Philadelphia
STATE
MA
RI
PR
MY
PA
DATI;:
OONCL.
3/20/04
0/0/04
3/1/05
9/12/04
12/15/03
PKNAI.TY
ANKJUW
$ 15,000, Offer of Judy.
No cash. 250,000 Environ.
credit, contein>t action
100,000
5,000
No cash. C.D. established
•1
U.S. v. City of New Mart it is vi I lo
V/V
12/28/03
U.S. v. City of Welch (Welch Sanit. l',d)
U.S. v. Pi strict, of Columbia (I5hie Plains
V.V/I'I'.)
U.S. v. City of Wilkos 1'virre (UyniiiiKj
Valley Sniiitaiy Authority)
U.S. v. Cily of Jacksonville (Dist. U WI'P
and Muckniin Street V/I'P)
U.S. v. City of Okolona
V.V
ix;
PA
1-1,
KY
1/30/R5
1/31/05
7/1/05 •
5/20/03
11/0/04
an env. trust fund in
UK; aiirxmt of $2,165,000
None. CO did not tx-cjuost
pjnalties for jvist viol.;
jxMialtics for future viol.
wore .soiKJlit bit l.iv: P(71W
cam1 into coi'pl. w/il.s
p'l'rnit after tin1 c.ir.e was
n foi t»l to
1.000 to IISITA and
1,000 to Stal e
50,000 p-nalty and 200,000
•.•nv. r- red it
50,500 jonalty to USriPA
plus (jfj.OOO to Poi in.
No cash. 300,000 [jiviron.
Cn?di t
K'oii'.'. Dissolution of
t In1 UMW V.TIS i''> |ni red
in 01 d- -r to ur.c MSP's
faci I it i.'S
-------
to
rO
Paqe 2
KKCION .CASi: MAM1::
f,
f,
U.S. v. Gary Sanit. District
U.S. v. City of Raton I\(XKJO
u.r,. v. (.'ity of Roswell.
U.S. v. City of l-.'ort Smith
U.S. v. St. Ikmiard Parish (MUMStor
Troai;i;rnt Faci I i ty)
U.S. v. City of Tal hilah
.5i. v. City of West
U.S. v. City of Vernon f« Celcnese
l-'U>:-rs;, Inc.
II. .S. v. City of (]arl;ind (Dnc-k Ci
l t Cri-«;k WI'P)
I!.::, v. .)••( f(!i-f;r.ii Parish (W..-:.l. Paul
5 ;< 'fj. \t\r-i l.'j ;.;(; rj(.;l )
STATK
CONCL.
Af-KHlUT
ron Hridfje WWI'P) KL
-t IN
(Mill Crook Wl'P) Oil
? IA
NM
AU
(Mi 11 is tor IA
\ 1 la iky Cik) OK
LA
is Al<
.
Jlcneso TX
u-k C)-..-t. action. Ori'jinal
suit, cart i'.'d a |x-n. il ty
of ^140,000
Mfji'ie. City had insuffi-
I'ii-nl resouro..'s with
which to jxiy any j vanity
.Illl It lilt
30,000
OS, 000
1 50, 000
170,000
yi:l cnl «.• i'«.•(!
-------
KJ'XHON
CASK NAMI-:
STATK
CONCl..
AM.'rt JNT
o
U.S. v. City of Richfield
10 U.S. v. City of Twin Falls
10 . U.S. v. City of 'IWin Falls
LTF
II)
ID
2/18/03
4/24/04
] Ixit not
yet entered
None, (old case) stip.
penalties were sourjlit
7.2, OHO
r>(),000, contenpt acLi
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VI.A.17.
"DEADLINES AND THE NATIONAL MUNICIPAL POLICY", dated January 30, 1986.
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3 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
/ WASHINGTON, D.C. 20460
JAN 3 0 1985
OhrlCE 'If ?V
MEMORANDUM
SUBJECT: Deadlines and Che National Municipal Policy
FROM: Glenn L. Unterberger :£#.*~-
Associate Enforcement Counsel
for Water
TO: Regional Counsel I - X
Introduction
Recently I have noticed, both in the Agency and outside,
some imprecise language about "statutory deadlines" and the
National Municipal Policy. I am afraid this may lead to some
confusion, particularly among those who do not have to deal
with the policy often. Therefore, I have prepared in this
memorandum a brief summary of the legal basis for the July 1,
1988 deadline in the policy, and the legal consequences of that
basis, for anyone who would like a more detailed background
than is presented in the policy itself.
ISSUE NO. 1
There is no uniform July 1, 1988 statutory compliance deadline.
The legal compliance deadline for a Publicly-Owned Treatment
Work (POTW) is the date set in its permit.
The July 1, 1988 date is set forth in the Clean Water Act
to address a single specific situation. In Section 301(i),
Congress authorized NPDES permitting authorities (delegated
States or EPA) to modify the permits of those POTWs that applied
and qualified to extend the deadline for compliance with final
effluent limits (as described in Sections 3-01 (b) (1) (B) and (C))
until, but not beyond, July 1, 1988. For all other. POTWs, the
Congressional mandate of 301(b)(1) typically remains in effect:
the permitting authority must issue them permits requiring
compliance with statutory requirements by July 1, 1977. And
under the Clean Water Act, the POTW is required to comply by
whatever date appears in its permit.
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Although July 1, 1977 constitutes in most cases the date
for compliance with final effluent limitations, the Clean
Water Act sets out no uniform statutory deadline which will
apply in all situations. This legal structure has a number of
consequences for enforcement. First, any POTW not in compliance
with final effluent limits by the date specified in its permit
(even if it is 1977) is in violation of the Act. {See pages
6-8 of the attached memorandum from the Office of General
Counsel, dated April 11, 1984.)
In the National Municipal Policy, the Agency recognized
that many POTWs were in violation of the Act long after 1977,
and that sound policy after promulgation of the 1981 Clean
Water Act Amendments required these POTWs to come into
compliance as soon as possible. The Policy called for the
development of compliance schedules for municipalities affected
by the Policy. As a policy matter, the Agency selected July
1 , 1988 as the latest date to be included in such schedules
(unless a POTW could demonstrate extraordinary circumstances).
The date seemed a sensible choice, in part because §301(i)
Congress authorized permit extensions up to no later than .
1988. However, it must be remembered that the legal, statutory-
based deadline for compliance for each POTW is and will remain
the deadline in its NPDES permit, which will be July 1, 1988
or earlier.
ISSUE NO. 2
As a general matter, EPA has clear authority to sue a POTW
which will not meet the July 1 , 1988. deadline only if that"
POTW is violating or has violated applicable permit require-
ments.
The second consequence for enforcement is a corollary of
the first. As a general matter, a POTW in compliance w'ith its
permit is in compliance with the Act. Section 402(k) of the
Act states this expressly. Therefore, in the absence of com-
pelling circumstances, the Agency typically should not sue a
POTW because it will not complete construction by July 1,
1988, Lf it is and has been in compliance with all its present
permit requirements.
ISSUE NO. 3
As a legal matter, administrative or judicial orders
establishing enforcement compliance schedules lasting beyond
July 1, 1988, are not "extensions" of final compliance deadlines.
Although such orders may have the effect of staying further
enforcement action, the legal deadline is still in effect.
Section 309 is the basis for Agency enforcement of most of
the provisions of the Clean Water Act, and NPDES permit
provisions. Section 309 authorizes the Administrator, upon
finding a violation, to issue an administrative order or file
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- 3 -
a lawsuit. Therefore, an administrative order issued under
Section 309(a)(5)(A) setting a date for compliance-for a POTW
which is later than the date in its permit is an enforcement
remedy, not an extension of the POTW's legal deadline. The
same is true for a comparable judicial order.
As indicated above,, a POTW can obtain an extension of its
legal deadline only by having its permit modified. The legal
consequences of this distinction between a deadline in an
administrative order and a permit modification are explained
in more detail on pages 8-10 of the attached memorandum from
the Office of General Counsel previously mentioned. The
distinction between extensions and enforcement remedies also
is relevant to the extent to which EPA establishes enforcement
compliance schedules lasting beyond July 1, 1988. EPA does
not in such instances establish a legal deadline beyond July
1, 1988. It merely establishes an additionally enforceable
schedule without acquiescing in the underlying statutory
violation. In fact, a recent federal decision handed down in
the Boston Harbor litigation, the court held that the issuance
of an administrative order did not constitute acquiescence in
_a .violation... .LL..S. v. Metropolitan District Commission, et al.
(D. Mass. Sept. 5, 1985, Civil Action Nos.85-0489-MA and
83-1614-MA).
If you have any questions about the points raised above,
please contact Patricia Mott of my office at FTS 475-8320.
Attachment
cc: Courtney Price
Richard Mays
Rebecca Hanmer
Bill Jordan
Regional Water Management Division Directors
Jim Hanlon
Bob Blanco
Colburn Cherney
David Buente, DOJ
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V-J
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VI.A.18.
"Letter of the Administrator to James Borberg, President of the Association
of Metropolitan Sewerage Agencies", (concerning penalties against
municipalities), dated October 21, 1986, (See No. IV.C.ll this Compendium).
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VI.A.19,
"National Municipal Policy Litigation," dated December 23, 1986.
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NATIONAL MUNICIPAL POLICY
.ENFORCEMENT STRATEGY'
August 1987
I. Background
Since issuance of the National Municipal Policy (NMP) in.
January 1984, EPA and the States have made substantial progress
toward bringing nor.complying POTWs into compliance with the goals
and requirements of the Clean Water Act (CWA). However, the
results of the most recent NMP audit show that a significant
number of facilities have not yet started construction, and,
where construction has commenced, many facilities are in violation
of the interim milestones in their schedules.
There are several different estimates of the number of major
POTWs that will not meet the July 1, 1988 deadline: the Regions
identified 229 major POTWs during «-he NMP audits; ASIWPCA reported
280 major POTWs (based on a 42 State survey); and OWEP estimates
300 - 400 major POTWs by next year. The estimates with respect
to minor PCTWs no*- meeting «-he deadline are even larger: the
Regions reported IS" minor POTWs; ASIWPCA1s survey identified 792
ninor POTWs; and OWEP expects the number to reach 1000 (which is
about one half of the universe of unconstructed NMP minors).
The NMP audit results show that, out of a total of 638 major
facilities that were scheduled to start construction by 12/31/86,
82% had actually begun construction, leaving 114 facilities in
violation of their start construction date. In addition, cur of an
audit sample of 252 facilities, the Regions/States had verified
that 78% of the major POTWs scheduled to start construction had
actually done so. Finally, there are a large number of major
facilities (412) that were not scheduled to start construction by
12/31/36, which puts in doubt that «-hese facilities will be able
to complete construction by the July 1, 1988 deadline.
In addition to problems with schedule slippage, there are
also some problems with the requirements and provisions in the.
enforceable schedules that are in place. Several States have
recently initiated or settled cases involving NMP facilities »-ha-
will no" meet the July 1, 1988, deadline for compliance wi*-h
applicable effluent limits: more than 65 cases have been settled
in State courts to date, and another 40 cases have been referred
••o State Attorneys General for action. Based on an analysis of
available settlements, i* appears tha*- many of the schedules
allow far too much time for compliance without sufficient jus«-i-
fication on either a »-echnical or financial b-nsis, extend well
beyond *he July 1, 1998 deadline, and/or are based on receipt of
construction grants. In addition,, very few Sra^es have been
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-2-
collecting civil penalties or imposing equivalent sane-lens fcr
pas*-, violations.
II. The Regions' Approach to These Issues
A" the recent National meeting of the Compliance and Permits
Branch Chiefs, the Regional representatives from all Regions
discussed the issues outlined above and how these problems night
be handled. The discussion resulted -in formulation of four basic
questions, and, in a subsequent poll of all the R'egions, the
majority concluded the following:
1. Q: Should administrative orders (AOs) be used to establish
schedules "hat extend beyond July 1, 1988 (majors and minors) :-
A: EPA and the States should not use AOs for major POTWs
with schedules that extend beyond July 1, 1988; all such
schedules should be contained in judicial orders. EPA should
also consider judicial action for minor POTWs; where available
resources preclude judicial action, EPA and the States should
use AOs with penalties.
2. Q: How should EPA respond where States establish enforceable
schedules that are unnecessarily long or that are based on
receipt of grant funding?
A: Where States establish inappropriate schedules (excessively
long without a sound technical basis or based on receipt of
a construction grant), EPA should initiate direct Federal
action in order to obtain the most reasonable, expeditious
schedule.
3. Q: How should EPA respond where State actions do not contain
appropriate penalties or equivalent sanctions?
A: Where States assess penalties that are grossly deficient or
fail to impose equivalent sanctions', EPA should initiate
direct Federal action in selected cases. Where resources
preclude judicial action, Regions may also want to consider
using their administrative penalty authority in certain
cases.
4. Q: How should EPA respond to serious delays in schedules
Cjudicial and nonjudicial), especially where such a delay
jeopardizes the July 1, 1988 deadline? What warrants an
escalation of enforcement response?
A: Where there is significant slippage in meeting compliance
schedules, EPA should escalate enforcement action (including
situations in which "he S"ate does not take appropriate
enforcement response). Significant delays are defined as: '
days or more beyond -he.s-art construction da"e; and 120 ia
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- J-
or more beyond '•he end cons* rue*: ion da*-e. EPA should escalade
enforcement by firs*-, exercising its administrative penai'-y
authority, and la*-er moving i-o judicial action if violations
continue.
EPA should consider judicial action in all cases where schedule
slippage for major POTWs jeopardizes the July 1, 1988 deadline
(and for ainors as resources allow).
Ill. Candidates and Priorities for Enforcement Action
CATEGORY At MAJOR POTWS NOT YET ON SCHEDULES OR REFERRED. All
aajor POTWs that are not yet on enforceable schedules should
be considered candidates for judicial action except where
there is a reasonable expectation that the POTW can meet the
July 1, 1988 deadline"! Regions and States should typically
place low priority on action against §301(h) facilities,
except where there are violations of requirements that will
not be affected by the waiver process. Where a POTW does not
have final effluent limits, that facility should be excluded
from enforcement until resolution of applicable effluent
limits.
CATEGORY 2; POTWs ON STATE NONJUDICIAL SCHEDULES PAST JULY 1,
1988. Where r.ajor POTWs are on State nonjucicial schedules
"hat extend beyond July 1, 1988, especially where schedules
appear to be excessively long, Regions should initiate judicial
actions for those facilities v/ith schedules that extend the
farthest past the deadline. In other cases, especially where
it appears that the facility v.ill complete construction
before the deadline but not achieve compliance until afterward.
Regions should issue administrative orders for penalties.*
Regions should also initiate some judicial actions against
r.inor POTWs in this category. Where resources preclude
judicial action, Regions should use administrative orders
for penalties.
CATEGORY C; POTWS WITH SERIOUS SCHEDULE DELAYS. Where major
POTWs on Federal and State enforceable schedules are not
making acceptable progress, Regions should escalate the
enforcement response based on the length of delay in meeting
key milestones. Where major PCTWs are on administrative
schedules and have missed their "start construction" date by
more *-'nan 90 days and are likely to miss the July 1, 1939,
deadline as a result, Regions and States should take judicial
action; .administrative orders for penalties may be used for
some of fhe less serious crises involving major POTWs and for
ninor POTWs if resources are not sufficient »-o proceed wi*h
judicial action.* In caser, where major and ninor POTWs are on
.ionjudicial schedules and slippage of 90 days will no«- jeopar-
dize needing fhe July I, 1938 deadline, Regions and S(-a*-es-
shoul-.i issue ad.nin is • r a-i. ve orders for penalties.
* Ir. -hese -wo cases, AOs :or penalties only should be used
rather ••'nan AOs »-o expend the schedule.
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Where any facility fails ho comply wi»-h any ailes'-or.e in a
judicial order, Regions and S'-a'-es should demand s*ipula-ed
penalties or impose sanctions as defined in '•he judicial
order.
CATEGORY D; DEFICIENT STATE ACTIONS/REFERRALS THAT AR£ NOT
FILED IN"~A TIMELY MANNER; Where major POTWs are on S*-ate
judicial orders that do not contain appropriate timetables
and/or obtain a grossly deficient penalty or equivalent sanc-
tion EPA should initiate direct Federal action. Where cases
have been referred but not filed in a timely manner, EPA
should initiate direct Federal action. In making determina-
tions regarding appropriate timetables, Regions should consider
the following factors: schedules that do not appear «-o have 2.
sound technical basis or financial justification; schedules
that are significantly extended in order to allow a facility
*o obtain a construction grant; and schedules that depend on
receipt of a construction grant and would be unenforceable'in
the event the grant is not awarded. With respect to penalties
or equivalent sanctions, Regions should adhere to the National
Oversight Guidance that calls for direct Federal action where
a penalty (or equivalent sanction) is grossly deficient in
the circumstances of a given case (page 19). With respect to
timeliness of referrals, Regions should use the guidelines in
the National Oversight Guidance that call for cases to move
from referral to filing in 60 - 90 days (page 13).
In carrying out this entire enforcement strategy, Regions shouli
be familiar with the "Guidance on State Actions Preempting Civil
Penalty Actions," which was recently circulated in conjunction
wi«-h the materials prepared to support implementation of the new
WQA administrative penalty authorities.
Regional Comments on the Draft Enforcement Strategy
The primary comments on the strategy involved EPA's ability
to assess administrative penalties when there are violations of
administrative schedules. A strict reading of the statute shows
that 309Cg) administrative penalties may not be assessed directly
for violations of a compliance schedule in an 309(a) administrative
order. This, however, is not inconsistent with the enforcezient
strategy. A penalty assessment in such a case would be based on
violations of the underlying permit limits (which were used as
••he basis for issuing the 309(a) order.) Essentially, a 309(a)
order implies that EPA will refrain (informally) from enforcing
'•he underlying permit violations if the permittee complies with
the 309(a) administrative schedule. When the permittee violates
"he administrative schedule, the underlying permi*- violations are
not (informally) 'excused' ana are subject to further enforcerr.en*
In this case, »-he enforcement is '•hrough assessment of an
administrative penally. The scared basis of a 309(g) penalty in
"hese cases will always be '•he underlying permi*- violations,
which is consis.te.T- ^irh '•he guidance on adminis^ra'- ive
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O.C. 20460
S£F : . 1987 •
WATER
MEMORANDUM
SUBJECT: NMP Enforcement Strategy
FROM: James Jr/TFTaerT Director
of Water Enforcement & Permits
TO: Water Management Division Directors
Regions I-X
Attached is the NMP Enforcement Strategy, and the list of
your Region's enforcement candidates that is the key to carrying
out the final push to July 1, 1988. We have reviewed comments
from nine Regions and have incorporated them into the final
strategy. Regional responses were generally positive and sup-
portive of the strategy. The draft strategy was also discussed
with ASIWPCA's Compliance Task Force which agreed in principle.
There were some concerns expressed over the proper use of §309(,0
administrative penalties and these have been addressed in this
strategy as well as the agency guidance on the subject. Each
Region should work with its States to carry out this strategy.
Approximately 60 POTWs in seven Regions have been targeted by
either the Region or the State for enforcement action. In most-
cases, this will occur before the end of the first quarter
FY 1988.
The Administrator is sending a memorandum to your Regional
Administrators stating his interest and asking for support in
achieving the goals of the Policy. The Enforcement Division will
continue to track the progress of these candidates (and others)
monthly and will keep the Adminstrator apprised of the status of
the Policy throughout the year. The status information the Regions
provided in response to our draft list of enforcement candidates
gave evidence of good State oversight and we look forward to main-
taining this level .of knowledge. I encourage you and your staffs
to work closely with my staff to make the best accounting possi le
of our achievements.
Attachments
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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. O.C. 20460
SEP ZZ 1987
- . - — THE ADMINISTRATOR
MEMORANDUM
SUBJECT: National Municipal Policy Enforcement
TO: Regii al Administrators
Following the Office of Water's FY 1987 National Municipal
Policy (NMP) Regional Audits and mid-year program evaluations,
I received an update from Larry Jensen on EPA Regional and State
progress in carrying out the Policy. 1 then discussed our
progress with you at the June 25th Regional Administrator's
meeting. I am convinced we must continue to demonstrate strong
senior management support in the final phases of the NMP effort.
We have achieved a great deal since the Policy was signed
in January 1984. At that time, about 41% of our major POTWs
had not installed the treatment necessary to meet CWA require-
ments (over 1500 facilities). Since 1984, over 400 major POTWs
have achieved compliance and all but 30 of the remaining majors
are on enforceable schedules or have been referred for judicial
action. Although this represents an early positive return on our
efforts, 1 am still concerned about the remaining workload that
must be addressed.
If we are to fulfill the objective of the Policy, we must
continue to push for the settlement of more than 100 EPA and
State referral actions as well as oversee and enforce over 100
C.PA and State consent decree settlements or judicial actions.
Further, and equally important, we must assure that wastewater
treatment system construction for over 800 major POTWs on permits
or administrative orders is completed in a timely manner to
bring these facilities into compliance. Recently surfaced
facts on construction schedule slippage are alarming. In the
Office of Water FY 1987 NMP audits, the EPA Regions estimated
229 major POTWs with schedules ast July 1, 1988 (96 with
existing post-1988 schedules ana 133 with anticipated schedule
slippage past July 1988). The Association of State and Inter-
state Water Poli-tion Control Administrators (ASIWPCA) in a
Spring 1987 survey covering forty-two States estimated 280
post-1988 schedules for major POTWs. ASIWPCA also estimated
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over 750 minor POTWs will require schedules past July 1988.
EPA and the States must act to set initial enforceable schedules
for many facilities and take timely and appropriate enforcement
action to stem the mounting number of violated schedules.
Given the size of the job and the time remaining until
July 1, 1988, I ask that you become personally involved in
seeing that your Region and States work together to: 1) maintain
intensive oversight and tracking of remaining uncompleted POTWs,
2) enforce compliance schedules, and 3) assure that all Region
and State actions are taken in a nationally consistent manner.
To assist in this final push toward July 1988, I have
approved an enforcement strategy aimed at the following types of
noncomplying POTWs:
* Majors not yet on enforceable construction schedules
or referred.
0 State nonjudicial construction schedules past July
1988.
0 Construction schedules that are not making acceptable
progress.
0 Deficient State judicial actions and unfiled referrals.
This strategy has been transmitted to your Water Management
Divisions along with a mutually developed list of candidates
for enforcement action. I plan to monitor our progress regularly
on the remaining workload. This activity will continue to be a
focal point of our future meetings and I expect that you will
keep this high on the agenda with your States. We must work
together in the coming months to successfully complete implemen-
tation of- the National Municipal Policy.
Lee M. Thomas
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VI.A.21,
"National Municipal Policy Enforcement", dated September 22, 1987, with
attachment.
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VI.A.20,
"Interim Guidance on Joining States as Plaintiffs," dated December 24,
1986, as corrected February 4, 1987. Reproduced at IV.B.32., this
compendium.
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Remedial measures
For purposes of evaluating and Initlatinp civil
actions against POTW's, all referral packages should contain
an analysis of the POTW's compliance deficiencies and the
possible solutions to those problems. As explained In prior
communications with your office JV, our goal Is to develop
sufficient Information to allow us to present a particularized
plan of action for compliance, Including practical alternatives,
to the court. The need for such Information Is three-pronged:
1) development of an appropriate remedial program Is Important
In these cases; 2) consideration of'available remedies Is
vital to a financial capability evaluation; and 3) it is
crucial that we demonstrate that compliance is reasonably
attainable by the municipality.
In a memorandum dated December 11, 19^2, former
Associate Water Enforcement Counsel Louise Jacobs stated that
municipal enforcement referrals should contain the following
regarding remedy:
Information about alternatives for
solving the problem which are likely,
In the opinion of an Informed individual,
to be successful. The informant should
be someone who knows the plant, is familiar
with the kind of violations occurring, is
knowledgeable about sewage treatment systems
In general, and Is of the opinion that.these
particular violations are possible to solve
by one of several alternatives posited. The
See memorandum of Stephen D. Ramsey dated January 3,
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Informant should be identified In the referral.
A JRB [diagnostic] report may ordinarily
suffice to meet this requirement.
We concur with these criteria. Such information should
overcome any threshhold concerns regarding whether compliance
Is reasonably attainable by the POTW.
At a minimum each referral should Include the
following information concerning compliance:
1. A technical explanation of the causes
of the violations, including what equipment
and/or management systems are inoperative or
ineffective; problems caused by excessive
hydraulic or organic loadings; causes of
any bypasses of treatment -or collection
systems; and how the breakdown or deficiency
relat s to the particular violations.
2. A description of the types of corrective
act is which will rer*dy the violations.
Thl should Include an analysis, based on
knov .edge of the treatment works and load
characteristics, of whether the problems
can be cured by changes In operation and
maintenance practices, whether new equipment
Is needed, or whether some combination
thereof is necessary.
3* Where construction appears warranted,
a general description of the appropriate
technology should be given, Including
information on whether any special or
unique circumstances exist that would
necessitate more elaborate equipment,
construction problems, etc.
i». Where construction appears warranted,
credible estimates of the costs Involved
and the time needed for implementation*.
This should Include an evaluation of whether
the 7/1/F date can be met.
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5. A full description of the POTW's
past and current grant activities and future
prospects, Including documentation of
significant events or agreements. This would
Include all funded proje ts or eligible
projects under appllcatl n.
Also, evidence and analysis of a recent plant
Inspection by EPA (or the State) should be included, which
would document the violations and assess compliance problems.
Also, we strongly urge that to the extent possible each
referral be accompanied by a JRB report or other detailed
diagnostic report. Such Information quickly puts us in
command of salient facts, aiding both trial preparation and
settlement discussions. JJ/
The Information listed above should be Included
in all referrals, regardless of the potential for quick
settlement. To evaluate the merits of settlement or to
proceed with litigation of any referral, we need to have the
background information necessary to support a fully-litigated
case.
V We suggest that, to the extent possible, the "Informant"
~" supplying this Information be FPA or contractor personnel
who presumably would be available for case preparation and
trial purposes.
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Financial Capacity
We will contend In litigation that a municipality
must comply with the Clean Water Act regardless of the availability
of public grant funds or the existence of other municipal
expenditures. Thus, as a matter of law, we argue that munici-
palities cannot raise financial Impossibility as a defense to
Judicial enforcement actions. Nonetheless, municipalities
frequently attempt to make showings of financial hardship,
often with -the sanction of the court.
Thus, where the region reasonably anticipates at
the time of referral that the municipality may raise financial
capability as an Issue In litigation, civil referrals should
Include a threshhold financial evaluation. Financial evaluations
are particularly necessary In those cases which will Involve
large capital outlays to finance large, long-term plant
construction, expansion and/or rehabilitation projects by the
municipality. Such projects typically require outside financing.
Also, in cases where a large upfront penalty Is sought or
where sizeable amounts need to be spent to revamp operation
and maintenance practices, financial Information is necessary.
The analysis should allow a determination that a
given remedy or range of remedial options, reasonably related
•
to compliance, will not be impossible for the municipality to
finance. Through such analysis we should be able to determine,
for purposes of evaluating the litigation merits of a given
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referral, that financial capacity issues will not be a bar to
obtaining relief. This test would assure that the government
can expect to rebut competently (at a later stage in the
litigation) a showing by the municipality that It cannot
afford to comply. This Initial analysis would not approach
the scope or detail of an evidentiary presentation necessary
to rebut a well-presented financial hardship showing.
To facilitate a preliminary financial capability
determination, we recommend that the regions gather and
analyze two types of basic information: 1) financial condition
and revenue-raising ability of the municipality and 2) cost
of necessary remedial measures.
First, we understand that the Agency will use its
Financial Capability Guidebook and other guidance materials
to do a basic work-up of the municipality's financial picture.
Information necessary for the analysis should be obtainable
by the regions from local authorities and other sources.
This basic evaluation would Include the following information:
1. the current bond rating and capacity
of the municipality;
2. the amount of outstanding Indebtedness
and other factors which may impinge
on the municipality's ability to Pund
remedial programs;
3. population and Income information;
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ft. grant eligibility and past grant
experience;
5. state or local laws which limit the
municipality's ability to raise funds
for remedial programs; and
6. the presence or absence of user charges
and whether Increased user charges would
be an effective fund-raising mechanism.
Second, the Agency should develop credible cost
figures on the major components of the necessary remedial
program. Such Information should be generated as part of
the remedial analysis of the referral. For purposes of
preliminarily evaluating financial condition and preparing
to rebut financial Impossibility showings, we suggest an
analysis of the "worst case" scenarios, I.e. the most
expensive (but reasonable) compliance options. For such
remedies, or anything less expensive, we can prepare to
effectively rebut a hardship claim.
In this perspective, then, the referral can produce
a rough-cut "snapshot" of the financial burden of a given
project.
Should the municipality make claims of financial
hardship In the litigation, we will need to develop this
Information further with the assistance of a municipal finance
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expert. For NMP referrals, we understand that the Agency
will also utilize.the services of Its outside financial
consultants (who presumably would later be our expert witnesses
as well) for this purpose. Such an expert should be retained
before discovery commences to enable the expert to participate
In developing discovery plan, Interrogatories and requests
for production on this Issue.
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UN7TED STATFS DISTRICT COURT
] DISTRICT OF [
UNITED STATES OP AMERICA, ) »
)
Plaintiff, )
)
V. ) CIVIL ACTION MO.
)
[CITY OP / UTILITY AUTHORITY])
and THE STATE OP [ ] )
)
Defendants. )
COMPLAINT
Plaintiff, the United States of America, by authority
of the Attorney General of the United States, and at the request
of the Administrator of the United States Environmental Protec-
tion Agency ("EPA"), alleges as follows:
1. This Is a civil action brought pursuant to
Sections 309(b) and (d) of the Clean Water Act ("the Act"),
33 U.S.C. §§ 1319 (b), (d) for injunctlve relief and the assessr.er.t
of a civil penalty against the [City of / Utility Authority] for
violations of the Act and the [City's/Utility Authority's] National
Pollutant Discharge Elimination System ("NPDES") Permit
Issued by [EPA /State of ] pursuant to Section
ti02 of the Act, 33 U.S.C. § 13*2, and against the State of
[ ] pursuant to Section 309 (e) of the Act, 33
U.S.C. § 1319(e).
2. This Court has Jurisdiction over this action
pursuant to Section 309(b) of the Act, 33 U.S.C 5 1319(b),
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- 2 -
and 28 U.S.C. § 13^5. Plaintiff has notified the State of
[ ] of the commencement of this action pursuant to Section
309(e) of the Act. 33 U.S.C. $ 1319(e), by naming the State
of "[ ] as a party.
3. Defendant [City of / Utility
Authority] ("the City"/ "Utility Authority"), Is a political
subdivision of the State of [ ] within the [ ]
District of [state] and Is a "municipality" within the meaning
of Section 502(4) of the Act, 33 U.S.C. § 1362(4).
4. Defendant State of [ ] Is a party to this
action for relief pursuant to Section 309(e) of the Act,
33 U.S.C. S 1319(e).
5. At all relevant times the [City/Utility Authority]
owned and operated, and continues to own and operate, a
sewage treatment plant known as the [name] Sewage Treatment
Plant ("[ ] STP"), a publicly-owned treatment works located
In the City of [ ], [ ] County, [State], The
[name] STP treats and treated wastewater from residential,
commercial, and industrial sources located in [city, state ].
6. The [name] STP discharged and discharges pollutants
Into [receiving stream], thence into the [name] Fork of the [name]
River, thence into Lake [name] of the [name] River Basin.
These discharges were and are discharges of pollutants into
navigable waters as defined by Sections 502(7) and (12) of
the Act, 33 U.S.C. §§ 1362(7) and (12).
-------
7. Section 301(a) of the Act, 33 U.S.C. § 1311(a),
prohibits the discharge of any pollutant except In accordance
with Section 301 of the Act, 33 U.S.C § 1311, and as authorized
by and In compliance with a permit Issued under Section 402
of the Act, 33 U.S.C. $ 1342.
8. Section 308 of the Act, 33 U.S.C. 5 1318, requires
the owner or operator of a point source to monitor Its discharges
and make reports as mandated by a permit Issued under Section 402
of the Act, 33 U.S.C. § 1342.
9. Sections 309(b) and (d) of the Act 33 U.S.C.
§§ 1319(b) and (d), authorize the commencement of a civil action
for Injunctlve relief and for civil penalties not to exceed
by the Administrator $10,000 per day for each violation of
Sections 301 or 308 of the Act, 33 U.S.C. §§ 1311 or 1318, or
of any permit condition or limitation Implementing Sections
301 or 308 of the Act, or of any violation of an administrative
order Issued pursuant to Section 309 of the Act.
FIRST CLAIM FOR RELIEF
(City of/Utility Authority)
10. Plaintiff realleges and Incorporates herein para-
graphs 1 through 9*
11. Effective [date], [EPA/State of ] Issued,
pursuant to Section 402[(a) or (b)] of the Act, 33 U.S.C.
§ 1342[(a) or (b)), NPDES Permit No. [ ] to the [City
/Utility Authority], setting effluent limitations and other
conditions for the discharge of pollutants from the [ ]
STP, with an expiration date of [date]. On or about [date],
-------
[EPA/ State of ] extended the perrlt administratively,
and [EPA/ State of ] reissued the permit effective
[date], with an expiration date of [ date ]. [EPA/
State of ] modified the permit, effective [ date ],
The NPDES permit authorized the discharge of pollutants from
the [name] STP to [receiving stream] subject to the terms and
conditions of the permit.
12. On [date], pursuant to Section 309(a) of the
Act, 33 U.S.C. § 1319(a), EPA Issued Administrative Order
[number] to the [City of / Utility Authority],
Administrative Order [number] found 'that the [City/Utility
Authority] had failed to comply with the effluent limits
contained In the permit, had failed to monitor correctly the
effluent from the [name] STP, and had failed to notify FPA of
permit violations. Administrative Order [number] ordered the
[City / Utility Authority] to take, within [ ] days of
the effective date of the order, whatever corrective action
was necessary to comply with the NPDES permit.
13. The [City / Utility Authority] failed to
comply with Administrative Order [number] within the time
limit specified In the order. Thereafter, EPA Issued
Administrative Order [number] on [date]. This Administrative
Order found that the [City/Utility Authority] had exceeded
the effluent.limits contained In the permit, had failed to
monitor effluent discharges as frequently as required by the
-
-------
permit, and had failed to operate and maintain the [name] STP
properly. Administrative Order [number] directed the [City/
Utility Authority] to come Into full compliance with Its
NPDES permit by [date]. The [City/Utility Authority] failed
to comply with Administrative Order [number],
1U. During the following periods, the [City/Utility
Authority] discharged the following monthly (30-day) average
and weekly (7-day) average concentrations of 5-day Biological
Oxygen Demand ("BOPj") from the [name] STP Into the [receiving.
stream], In excess of the effluent limits for BOD5 contained
In NPDES Permit No. [ ]:
Period -30-day Average (mg/1) 7-day Average (mg,
a) [montr./yedr] [concentration] [concentration!
b) [month/year] [concentration] [concentration!
etc. etc. etc.
15. During the following periods, the [City/Utility
Authority] discharged the following monthly (30-day) average and
weekly (7-day) average quantities of 8005 from the [name] STP Into
the [receiving stream], In excess of the effluent limits for
8005 contained In NPDES Permit No. [ ]:
Period 30-day Average (Ibs) 7-day Average (Its
a) [month/yee-} [quantity] [quantity]
•
b) [month/year] [quantity] [quantity]
etc. ' etc. etc.
-------
16. During the following periods, the [City/
Utility Authority] discharged the following monthly (30-day)
average and weekly (7-day) average concentrations of Total
Suspended Solids ("TSS") from the [name] STP Into the [receiving
stream], In excess of the effluent limits for TSS contained
In NPDES Permit No. [ ]:
Period 30-day Average (mg/1) 7-day Averace (-c
a) [month/year] [concentration] [concentration
b) [month/year] [concentration] [concentration
etc. etc. etc.
17. During the following periods, the [City/
Utility Authority] discharged the following monthly (30-day)
average and weekly (7-day) average quantities of TSS from the
[name] STP Into the [receiving stream], In excess of the
effluent limits for TSS contained In NPDES Permit No. [ ]:
Period 30-day Average (Ibs) 7-day Average (Ifc
a) [month/year] [quantity] [quantity]
b) [month/year] [quantity] [quantity]
etc. etc. etc.
18. During the following periods, the [City/Utility
Authority] discharged the following monthly (30-day) average
•
and weekly (7-day) average concentrations of Fecal Coliform
from the [name] STP Into the [receiving stream], In excess of
the effluent limits for Fecal Coliform contained In NPDES
Permit Mo. [ ]:.
-------
- 7 -
Period 30-day Average (rrg/l) 7-day Averare 're
a) [month/year] [concentration] [concentration;
b) [month/year] [concentration] [concertratier
etc. etc. etc.
19. At relevant times the [City/Utility Authority]:
(a) discharged pollutants from the [name] STP
into navigable waters on numerous occasions in a manner that
bypassed the treatment plant;
(b) failed to adequately operate and maintain
the [name] STP;
(c) failed to monitor effluent discharges as
required by NPDES Permit No. [ ];
(d) failed to report monitoring results properly; and
(e) failed to notify EPA of permit violations as
required by NPDFS Permit No. [ ].
20. The discharges described In paragraphs 14
through 18 above violated Section 301 of the Act, 33 U.S.C.
§ 1311, and/or permit conditions or limitations Implementing
Section 301 of the Act. The discharges and omissions described
In paragraphs 19(a) and (b) above violated permit conditions
or limitations Implementing Section 301 of the Act, 33 U.S.C.
§ 1311. The failure to comply with the monitoring requirements
described In paragraphs 19(c) and (d) above violated permit
conditions implementing Section 308 of the Act, 33 U.S.C.
§ 1318. The omissions described In paragraph 19(e) above violated
-------
permit conditions Implementing Section 308 of the Act, 33
U.S.C. § 1318. The discharges, omissions and violations
described In paragraphs H*-l8, and 19(b), (c), (d), and
(e) above violated the Administrative Orders Issued by the
EPA pursuant to Section 309(a) of the Act, 33 U.S.C. § 131
-------
• - 9 -
Impending enforcement activities by EPA for failure to corcply
with statutory requirements and compliance deadlines In the
Act. Under the Policy, affected municipalities would be
required to submit to EPA either a Composite Correction Plan
(for a municipality with a constructed POTW) or a Municipal
Compliance Plan (where construction of new facilities was
required), with schedules in either event requiring compliance
as soon as possible but in no event later than the July 1,
1988 statutory deadline.
24. Implementing the National Municipal Policy,
and citing the violations described in the United States'
First Claim for Relief above, EPA on [date] Issued Administrative
Order [ number ] to the [City/Utility Authority] under
Section 309(a) of the Act, 33 U.S.C. § 1319(a), requiring the
[City/Utility Authority] to submit a [Municipal Compliance
Plan/Composite Correction Plan], requiring compliance not
later than [ date ], to EPA by [ date]. The [City/Utility
Authority] has failed to comply with Administrative Order
[number],
25. Pursuant to Section 309 of the Act, 33 U.S.C.
§ 1319, the [City of / Utility Authority] is
liable for the imposition of injunctlve relief and the assessment
»
of a civil penalty not to exceed $10,000 per day of violation
based on the [City's/Utility Authority's] violation of Admini-
strative Order [ number]. On Information and belief, the
[City/Utility Authority] may In the future continue to violate
-------
Administrative Order [ nupfcer ], unless the Court orders
the relief sought herein.
THIRD CLAIM FOR RELIFF
(State of CJT"
26. Plaintiff realleges and incorporates herein
paragraphs 1 through 25.
27. Pursuant to Section 309(e) of the Act, 33 U.S.C.
§ 1319(e), the State of [ ] is joined as a party and is
liable for the payment of any Judgment, or any expenses Incurred
as a result of complying with any Judgment, entered against
the [City of / Utility Authority] In this action to
the extent that the laws of the State prevent the [City/Utility
Authority] from raising* revenues needed to comply with such
Judgment.
WHERFFOPE, the United States of America prays that
the Court order:
1. Defendant [City of / Utility Authority]
to undertake a diagnostic study to (a) identify all aspects
of noncompllance with the Act, the permit, and the Administrative
Orders Issued by EPA, (b) identify the causes of the violations,
(c) evaluate fully the need to construct additional capacity
or to take other steps to treat properly Influent to the plant,
and (d) to submit sue*, study to EPA;
2. Defendant [City of / Utility Authority]
to develop a [Municipal Compliance/Composite Correction] Plan
for the [name] STP that describes the corrective actions
-------
- 11 -
necessary to achieve compliance with the NPDES permit and the
Act with respect to both current and projected future wastewater
loadings and flows, and that provides a schedule for completlnr
the required work and for achieving compliance at the earliest
possible date but in no event later than July 1, 1988, and
that the [City/Utility Authority submit such plan to FPA and
make revisions to the plan as directed by EPA;
3. Defendant [City of / Utility Autl-.orlty]
to Implement the [Municipal Compliance/Composite Correction]
Plan including, as necessary, the construction of additional
capacity to treat Influent;
H. Defendant [City of / Utility Authority] to
comply with the Act and the NPDES permit Issued thereunder;
5. Defendant [City of / Utility Authority]
be permanently enjoined from any and all discharges of pollutants
except as authorized by the Act and the NPDES permit;
6. Defendant [City of / Utility Authority]
be assessed, pursuant to Section 309(d) of the Act, 33 U.S.C.
§ 131Q(d), a civil penalty not to exceed ten thousand dollars
($10,000.00) per day for each violation of Sections 301 or
308 of the Act, 33 U.S.C. §§ 1311 or 1318, or of any permit
condition or limitation Implementing Sections 301 or 308 of
the Act, or of the Administrative Orders Issued by EPA;
7. This Court order relief as appropriate in favor
the United States and against the State of [ ] pursuant to
-------
- ... - 12 -
Section 309(e) of the Act, 33 U.S.C. § 1319(e);
8. Defendants be ordered to reimburse the United
States for the costs and disbursements of this action; and
9. This Court grant the United States such other
relief as It may deem just and proper.
Respectfully submitted,
F. HENRYHABICHT II
Assistant Attorney General
Land and Natural Resources Division
United States Department of Justice
Washington, D.C. 205530
[ Name ]
United States Attorney
[ ] District of [
I Name J
Assistant U.S. Attorney
[address]
OP COUNSEL:
C ]
Office of Regional Counsel
United States Environmental
Protection Agency
C 1
INameJ
Environmental Enforcement Section
Land and Natural Resources Division
United States Department of Justice
Washington, D.C. 20530
(202) 633-C ]
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VI.A.22,
"PRESS BRIEFING MUNICIPAL COMPLIANCE WITH THE CLEAN WATER ACT", dated July
27, 1988. Selected portions.
-------
-------
PRESS BRIEHNG
MUNICIPAL COMPLIANCE
WITH THE CLEAN WATER ACT
JULY 27,1988
LEE M. THOMAS
ADMINISTRATOR
OFICE OF WATER
U. S. ENVIRONMENTAL PROTECTION AGENCY
-------
MUNICIPAL COMPLIANCE WITH THE CLEAN WATER ACT
National Press Briefing
July 27, 1988
Table of Concents
0 National Press Release
0 Graphs and Charts
Progress Meeting National Municipal Policy (NMP) Goals
- Meeting the NMP Goal
- Status of NMP Majors
State-by-State Compliance Achieved by
Major Sewage Treatment Plants
Treatment Levels of Post 1988 Majors
Status of NMP Minors
Major vs. Minor
0 Status Sheets
Summary Tables of National Status as of July 15, 1988
Majors and Minors
- List of NMP Majors that met Clean Water Act Requirements
List of NMP Majors that did not meet Clean Water Act
Requirements but which are on a Schedule
List of NMP Majors that did not meet all Clean Water Ace
Requirements and are not on Final Schedule
List of Federal Judicial Enforcement Cases
0 Fact Sheets
Background on Municipal Treatment Plants and the Environment:*'
Impact of- Compliance with the Clean Water Act
- Outreach Activities to Promote Compliance
Summaries of Key Enforcement Cases
0 Questions and Answers
-------
PRESS BRIBING
MUNICIPAL COM3
WITH THE CLEAN WAT2R
JULY 27,1933
GRAPHS AND CHARTS
Progress Meeting "IMP Goals
Meeting the NMP Goal
Status of the NMP Majors
Status of the NMP Minors
- Treatment Levels of Post 1988 Majors
State-by-State Compliance Achieved by Major Sewage
Treatment Plants
Major vs. Minor
DEFINITION OF TERMS
NMP - National Municipal Policy which was signed in January 1984
and is discussed in the press release.
Majors - generally those sewage treatment plants which provide
service to a population of 10,000 or more persons or have a flow
of one million gallons or more per day.
Minors - all sewage treatment plants other than the majors which
provide service to a population of under 10,000 or a flow of
under one million gallons per day.
Treatment Levels - primary featment, secondary treatment and
advanced wastewater treatment processes; for a detailed
discussion please see the Fact Sheets in this package.
OF WATER
U. S. ENV3K3NMENTAL FflOTECTCN
-------
United Start*
Environmental Protection
Agency
Office of
Public Affairs (A. 107)
Washington OC 20460
<&EPA Environmental News
FOR RELEASE: WEDNESDAY, JULY 27, 1988
Dave Ryan (202) 382-2981
SPA ANNOUNCES
SIGNIFICANT
PROGRESS IN
MEETING U.S.
:LEAN WATER
DEADLINES
Eighty-seven percent of all publicly-owned sewage
treatment plants in the country met the congressionally-
established July 1, 1988, deadline for legally-required
pollution cleanup, EPA Administrator Lee Thomas announced
today. As a result, 95 percent of the total sewage
processed in the United States receives secondary or
better treatment. Secondary treatment protects public
health from the disease potential of human waste and a'.-^
protects fish and other aquatic life.
Thomas cited both voluntary compliance and federal
and state enforcement efforts as reasons for achievement
of the 87-percent compliance figure. Municipal compli-
ance with water pollution control laws has been an EPA
priority since 1984, when the agency established its
National Municipal Policy (NMP). The NMP required
municipal compliance by July 1, 1988, whether or not a
city got federal funding for sewage treatment plant
construction.
The 87 percent which achieved compliance with the:-.
water pollution control permit requirements serve 108
million people nationwide. Of the remaining 13 percent
of sewage treatment plants in the United States, most
are oh enforceable timetables leading to compliance 01
are in some stage of a judicial process leading to the
establishment of these timetables.
Speaking at a joint Washington press briefing wic^
Roger Marzulla, U.S. Justice Department Assistant
Attorney General for Land and Natural Resources, and
Roberta Savage, Executive Director of the Association ->?
State and Interstate Water Pollution Control Admin 1st: a-.-;
131
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-2-
Ihomas praised the cooperative federal and state effort that made this
compliance success possible:
"Under the landmark 1972 Amendments to the federal Clean Water
\ct, Congress set for a pollution-plagued nation the formidable goal ~?
naking most U.S. waters fishable and swimmable again," Thomas said. " Ji
large part of this task was cleaning up wastewater from pur often over'.r a :•? :
and overworked municipal sewage treatment plants. To meet this chaH-?-*. : •. - ;
goal, Congress mandated a joint federal-state cooperative effort in poll.-.".:-
cleanup. Since 1972, SPA has provided over S45 billion in federal gra--s
;o help local communities build and upgrade sewage treatment facilities.
*ith state and local governments contributing an additional S15 billi?-.
Hatching funds. Although the majority of municipalities have met the
lation's clean water goals, there has been recalcitrance, but EPA, the
J.S. Justice Department and state officials have been aggressive in br i-i-; •.--
:hese cities into compliance. More than 125 lawsuits have been filed T/
:he federal government against municipalities since 1984 to obtain compi •. a-.r-
jnder the NMP. The 87 percent compliance rate of U.S. sewage treatment
jlants is a success story of which state and federal environmental otfic:i'.s
ran truly be proud."
The vast majority of Americans are served by publicly-owned (
supported) sewage treatment plants ( POTWs ) . Of the rivers and streams
Inited States that do not meet their state water quality standards,. 1'
jercent are failing because of pollution from POTW' s . For estuaries, ::
>ercent are not meeting their standards because of POTW ' s .
For Treatment plants, meeting the July 1 deadline meant comply I-.-; -•-.--
ermit requirements to provide at least secondary treatment of wastes.
econdary treatment is the second stage of sewage treatment, in which
acteria is used to eliminate organic human waste. (The first step i~
ewage treatment is called primary treatment, in which screens and sei •.-->-•
anks are used to remove most materials that float or settle.) Second a :/
reatment protects communities from the disease potential of untreated
.uman waste and removes materials that can rob waters of oxygen necessa: .
or aquatic life. For some treatment plants, the July 1 deadline was -..-?•
.o permits requiring more advanced waste treatment that significantly
educes materials like nitrogen and phosphorus, which can also choke a-*
ill water bodies and their fish.
The National Municipal Policy, established in January 1984, grew :.-
•f congressional, federal, and state concern in the early 1980 's that ^a-.
ities were not making expected progress in treatment-plant construe-::--.
he original deadline in the 1972 Amendments for plants to meet their
ermit requirements was 1977; Congress later extended this deadline ftr
ome cities to 1983, and then to July 1, 1988.
Also, diminishing federal funding of the program raised the quesi.
t that time of whether cities would be required to comply with ds.sc-a::-
imits. Since 1977, the couits had ruled that treatment plants had
omply with their discharge limits, regardless of the availability •::
ederal money.
-------
-3-
The NMP read* it clear that, with or without federal funding, EPA and
the states would b« pushing municipalities to meet their permit requirements
by July 1, 1988, or sooner if possible. The sole exceptions were those
cities that could prove they were physically or financially unable to
complete construction by this deadline; however, they generally would have
to abide by court-enforceable schedules to achieve compliance as quickly
as possible.
There are about 15,500 publicly-owned treatment plants in the United
States. About 3700 are what EPA calls "majors," defined geaerally as
plants designed to serve 10,000 or more people and to process one million
gallons or more of wastewater a day. The rest, which EPA calls "minors,"
total about 11,800.
Of the 3,700 total majors, 2,200 had achieved compliance by 1984.
The NMP focused on the remaining 1,500 major sewage treatment plants
which had not achieved compliance as of 1984. As of the July 1, 1988,
deadline, over 1000 achieved compliance. Of those not achieving compliance,
the majority are on enforceable court schedules or are the subject of
federal or state judicial actions. Further, over 60 percent of the remaining
NMP majors not in compliance already provide secondary treatment or better.
Of the 11,800 total minors, 9,300 had achieved compliance by 1984. The
focused on the remaining 2,500'minor sewage treatment plants which had
achieved compliance as of 1984. As of the July 1, 1988, deadline, ove:
800 have achieved compliance. Of the rest, approximately 1,500 are on
enforceable schedules or are the subject of federal or state enforcement
actions.
"As impressive as these figures are," said Thomas, "EPA and the states
have no intention of slacking up on our enforcement efforts. We are
reaffirming our commitment to bring all sewage treatment plants in this
country into compliance with the law and to 'make sure these plants remain
in compliance. Together, we will ensure that all plants currently on
enforceable compliance schedules stay on those timetables and that those
plants not yet on schedules are put on them as soon as possible. I want to
make it absolutely clear that EPA is prepared to take additional enforcement
actions against cities that refuse to cooperate in orotecting the
and health of thtir citizens."
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-------
I
o
cc
o
PROGRESS MEETING NMP GOALS
MOO
1400-
1200
1000
800
600
400
200
|NMP=*UT10NAL MUNICIPAL POUCYl
OH SCHEDULE
OR UNDER REFERRAL
[CONSTRUCTION STARTS|
lACHKVn) COWPUANCtl
12341234123412341234
FYB4
FY85
FISCAL QUARTERS
rra« nr«7
nraa
-------
Progress Meeting NMP Goals
-------
STATUS OF NMP MAJORS
All MAJORS
POST 1988 NMP
PHE-NMP - 22IS
ACH COMPLIANCE
NMP ACHIEVED
COMPLIANCE - MM
TOTAL MAJOM UNIVEME - 1791(2241 PflE-NMP)
TOTAL NMP MAJOM UNIVEME - M7t
ACHIEVED COMPLIANCE - 22M+10M |M« OF ALL MAJOM)
PO*T !••• NMP - 423 (11% OF ALL MAJOM)
• JUDICIAL - IM
ADMINISTRATIVE - 4O
•• PILED -«0
REfCMED MIT NOT YET RLED - tO
PLANNED REFBUIAL OR OTHER ACTION - M
-------
TREATMENT LEVELS OF POST 1088 MAJORS
NMP ACHIEVED
COMPLIANCE
ADVANCED
TREATMENT -624
ALL MAJORS
PAE-NMP ACHIEVED
COMPLIANCE - MM
NMP ACHIEVED
COMPLIANCE -
POST 1988 NMP
TOTAL POTW'S SECONDAHY Oil QREATEH - M74 (••« TOTAL POTW>
PNE-NMP - 2U3
NMP ACHIEVED COMPUANCE - 10M
POST !••• NMP - 2»4 (174 SEC./00 AT.I
-------
BY MAJOR SEWAGM iTMENT PLANTS
I < HMPI UNO
•>• - ««>
i : ;>i
-------
STATUS OF NMP MINORS
Alt MINORS
POST 1988 NMP
ON ENFORCEABLE
SCHEDULES - Ull •
TOTAL MINORS UNIVERSE - tf7M4*207 PRE-NMPt
TOTAL NMP MINORS UNIVERSE - 24«S
ACHIEVED COMPLIANCE - «S7-f Stt (••« Of ALL MINORS)
rOST ItSS NMf - 1S72 RffCMREO - US
PLANNED REFERRAL OR OTHER ACTION - 1S2
-------
MAJOR VS MINOR
TOTAL SEWAGE TREATMENT FLOW
POPULATION SERVED
TOTAL 8EWAOE TREATMENT FLOW - 10.000 MOO
MINOR SEWAOE TREATMENT HOW • UH MOO
TOTAL POPULATION SERVED - I4O MILLION
MINOR POPULATION SERVED - !• 7 MILLION
-------
-r-^
Y
-------
PRESS BRIEFING
MUNICIPAL COMPLIANCE
WITH THE CLEAN WATER ACT
JULY 27,1988
STATUS SHEETS
OF WATER
U. S. ENVIRONMENTAL PROTECTION AGENCY
-------
\ <•
-------
Municipal Compliance
with the
Clean Water Act
National Municipal Policy,
(Issued January 1984)
Total Major Sewage Treatment Plants: 3731
Affected by the Policy: 1478
Met CWA Requirements: 1055*
Have Not Met CWA Requirements: 423
On Enforceable Schedules: 235
8 Judicial 195
0 Administrative 40
Not On .Schedules : 188
0 Judicial Referrals: 150
28
10
0 Planned Referrals
0 Other
2253 majors met
CWA by Jan 1984.
(NMP Date)
40% Needed Construc-
tion as of Jan 1984
71% (of NMP)
89% (of all Majors)
* Figure includes 90 POTWs that have either completed construc-
tion and are operational, but whose effluent data have not been
verified, or who will achieve compliance by the end of September,
-------
Municipal Compliance
wich che
Clean Water Ace
National Municipal Policy
(Issued January 1984)
Tocal Minor Sewage Treatment Plants: 11755
Affected by the Policy:
4.
Met CWA Requirements:
Have Not Met CWA Requirements
On Enforceable Schedules:
0 Judicial 252
8 Administrative 979
Not On Schedules:
0 Judicial Referrals: 259
0 Awaiting Action: L82
2498
826
1672
1231
441
9257 minors (79%)
met CWA by Jan 1984,
(NMP Date)
21% Needed Construc-
tion as of Jan 1984,
33% (of NMP)
86% (of all Minors)
-------
PRESS BRIEFING
MUNICIPAL COMPLIANCE
WITH THE CLEAN WATER AC
JULY 27,1988
MAJOR MUNICIPAL FACILITIES
LIST A : NMP Majors Sewage Treatment Plants
that have met requirements
3300
(2253 Pre-NMP,
1055 NMP)
LIST B : NMP Majors that did not meet all
CWA requirements and final
schedule is established 235 •
LIST C : NMP Major that did not meet all
CWA requirements and final
schedule not established or
other unresolved issues 188
NOTE: The National Municipal Policy majors are presented in
Lists A, B, and C which follow.
(See Fact Sheets for definition of treatment level)
OFRCE OF WATER
U. S. BWmONMBflAL PROTECTION AGENCY
-------
-------
CLEAN WATER ACT - NATIONAL MUNICIPAL POLICY
MODEL LI" .CATION REPORT OUTLINE
I. SYNOPSIS OP CASE
Brief summary of referral, nature of violations,
relief requested and EPA efforts to gain compliance.
II. REGULATORY PROGRAM
Description of the statutory and legal authority
by which POTW's are required to comply with secondary
treatment or water-quality based standards, and a
description of the permitting process. Include summary
of National Municipal Policy.
III. FACTUAL NARRATIVE
A. Facility Description - Age of plant, design capacity,
type, of process, industrial users, discharge point(s)
description of stream or river to which discharged, etc.
B. Effluent and Other Violations - List NPDES permit
limitations and effluent violations as Indicated by
discharge me itorlng reports and Inspection reports.
Summarize on-slte inspections. Describe other violations,
I.e. bypasses, monitoring deficiencies, etc.
C. Construction Grant Status - Provide details on any
outstanding grants or applications, including all pertinent
documentation, and evaluate prospects for future grants
as may affect case.
D. Environmental Harm.- Information on known or suspected
Impact of discharges to receiving waters.
IV. INFORMATION IDENTIFYING DEFENDANT
A. Name
E. Location and Judicial District
C. Size of plant (MOD), industrial usage .
(number and percentage) and population served.
D. Agent for service of process
E. Name and address of appropriate state official
for service of process
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V. ELEMENTS OF PROOF
A. Elements of Violation - Identify each element
of each clalir.
B. For each claim and each element:
1. Summarize evidence (facts, documents, expert opinions),
Including table of violations
2. Identify documents
3. Identify witnesses
VI. ENFORCEMENT HISTORY
Include discussions of:
A. Contacts with POTW, Including pertinent contacts In
grant areas (update with current ~.ntacts If appropriate);
8. Administrative orders Issued and responses;
C. Recalcitrance;
D. EPA attempts to resolve prior to referring case;
E. State activities;
F. 301(1) status.
VII. REMEDY AND COMPLIANCE SCHEDULE
A. Injunctlve Relief
1. Available Control Technology and Remedial Action -
describe what Is needed for compliance (new construction,
O&M Improvements, both?). Include details and status
of any facilities plan. Break down critical elements
and cost of remedial options. (See DOJ Memo on Remedial
Issues). Specify POTW's likelihood of meeting 7/1/RR.
deadline, and whether outside expert will be needed on
this point.
2. Compliance schedule - with and without grant
funding.
3. Prohibitory relief - e.g. enjoin new sewer connections
1. Economic feasibility - showing that reasonable
compliance measures not impossible to finance. Provide
limited analysis of Financial capabilities, Identify who
prepared the analysis (see DOJ Memo on Financial Capability),
and state whether outside expert will be needed on this
point. Summarize grant prospects.
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B. Penalty -
Include anticipated penalty request at trial, suggested
negotiating figure and bottom-line settlement figure
(based on known facts and litigation risks), and explanation
of basis for calculation of penalty. Discuss known aggravating
and mitigating factors.
VIII. ANTICIPATED DEFENSES AND OTHER ISSUES
A. Legal defenses
6. Equitable problems
C. Precedential Issues/policy Issues
D. Evidence or other matters favorable to defendant,
or other significant litigation risks
IX. ATTACHMENTS
A. Current NPDES permit plus any application for
renewal or modification
P. Facility diagram
C. Discharge Monitoring Reports
D. Inspection or other evaluative reports
E. Correspondence and other contacts with POTW
F. Administrative Orders and response
G. Draft complaint
H. Table of effluent and other violations
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L.S. Department o
DTB:RWN.;-ar
90-5-1-0
D.C. 20530
October 25, 1985
Glenn L. Unterberger, Esq.
Associate Enforcement Counsel
for Water (LE-131W)
U.S. Environmental Protection
Agency
101 M Street, S.W.
Washington, D.C. 20160
J. William Jordan
Director, Enforcement Division (EN-338)
U.S. Environmental Protection
Agency
101 M Street, S.W.
Washington, D.C. 20160
Re: National Municipal Policy Enforcement Initiative
Dear Glenn and Bill:
As promised, enclosed please find materials we have
prepared to aid In processing and Initiating NMP referrals.
These materials Include a model complaint, model litigation
report outline and memoranda on remedial and financial capability
Issues.
In addition, we have enclosed a proposed filing schedule
for the approximately twelve NMP cases currently on target for
the initiative. The proposed schedule shows a single, coordinated
filing date as was initially planned; however, recent conversations
with your staffs Indicate we may wish to consider a rolling series
of filings as cases become ready, cumulating in a comprehensive
media event. I suggest we discuss this possibility further in
the next few weeks. Also, it appears a second group of ten or
so NMP referrals may come to Headquarters by mid-December. We
should discuss the structure and timing of a "second wave" in
the near future-.
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We were pleased by the effort and enthusiasm reflected
in the regional conference calls last week, and It appears the
Initiative Is on the right track. We look forward to continuing
this endeavor with you.
Very truly yours,
Assistant Attorney General
Land and Natural Resources Division
By:
Senior Attorney
Environmental Enforcement Section
Section
Land and Natural Resources Division
U.S. Department of Justice
Washington, D.C. 20530
cc: EPA Regional Counsels, Regions I-III, V-VIII
David Buente •**•"
Carol Green
Ken Reich
John Wlttenborn
Bruce Buckhelt
Wayne Walters
Sheila Jones
Ross Connealy
Pobert Oakley
David Hackett
Eva Heffernan
Ellen Mahan
Mary Ellen Leahy
Alan Miller
Bruce Eerger
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PCS DELAY CODESt LEGEND
Column It Status Codes
O = Unresolved state water Quality standard(s)
V = Variance (pending Section 301(h) decision)
W = Unfinished wasteload allocations
X = Administrative order issued requiring submission of MCP
Y • Other delay
2 - Enforcement action under development
Column 2t Financial Factors
0 = Unknown
1 = Affordability not an issue
2 = Affordabiliy is an issue
3 = Under construction P.L. 92-500 funds
4 = Under construction other funds
Column 3; Quarter Code
A, B, and C = Second, third and fourth fiscal Quarters, 1984
D, E, F, and G = Fiscal year 1985 fiscal quarters
H, I, J, and K = Fiscal year 1986 fiscal quarters
L, M, N, and O » Fiscal year 1987 fiscal quarters
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3 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
f WASHINGTON, D.C. 20460
OFFICE OF ENFORCEMENT
AND COMPLIANCE
MONITORING
HEHORAKDUM DEC ? 3 1986
SUBJECT: National Municipal Policy Litigation
PROM: James R. Elder, Director .
Office of Water Enforcement and Permits
Glenn L. Unterberger
Associate Enforcement Counsel
for Water
TO: Regional Counsels, Regions I-X
Water Management Division Directors, Regions I-X
In this memorandum, we re-emphasize the need for continued
and firm effort on municipal enforcement litigation on the
part of enforcement staffs at EPA and the Department of Justice.
Obtaining municipal compliance remains the Agency's highest
Clean Water Act priority. In addition, this memorandum
identifies some specific actions which we are pursuing at
Headquarters and DOJ and others which we suggest the Regions
take to aid the national municipal enforcement effort.
Obtaining municipal compliance remains the Agency's highest
Clean Water Act priority. We have made considerable progress
in implementing the National Municipal Policy (NMP) , but much
work remains. Although the Agency's non-1 it igative efforts
will continue, civil actions against publicly owned treatment
works will remain an important part of obtaining cities'
compliance with their permits.
The Agency has achieved considerable success in its
municipal lawsuits to date. Currently the universe of municipals
which most urgently need to be addressed includes two categories,
as follows:
•
1. Major POTWs which have not been placed on enforceable
schedules achieving compliance by July 1, 1988. (See
attached a list of approximately 63 facilities as of
the end of the fourth quarter of FY 86, derived from
data in the national tracking system.)
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- 2 -
2. POTWs not complying with milestones in enforceable
schedules that will prevent compliance by July 1, 1988.
Headquarters/National Activities
The two categories of POTWs listed above which have current
priority under the NMP should produce a considerable number of
potential c ses. To deal expeditiously with this litigative
load, Head arters will pursue a concerted effort at the national
level to support municipal litigation.
The Agency has informed Department of Justice managers
th NMP cases should be given their highest Clean Water Act
pr. ity. Department officials have agreed to participate
in efforts to expedite cases.
We will continue to meet on approximately a monthly
basis with Department officials to review the national docket
of referred and filed cases. The focus of the meetings will be
-to identify issues track progress of cases and where necessary
break logjams to move cases along.
We and DC nave agreed to the following trigger dates to
flag cases for .-oser management attention, with the under-
standing that they are subject to further consideration at our
monthly meetings.
0 35 days for OECN to act on a municipal referral received
from the Regions (typically, to refer the case to the
Department).
0 60 days from referral to the Department to filing in
the appropriate court.
0 6 months from filing to a motion for summary judgment on
liability.
0 One year and a half from filing to conclusion.
We understand that many Regional water program managers
feel that 3 mor s or less for summary judgment filing and 1
year for case resolution would be more appropriate as action-
oriented goals for these activities, and will strive toward
these goals where possible.
The Office of Enforcement and Compliance Monitoring and the
Office of Water will issue quarterly activity reports on NMP
implementation and litigation. In the report, we will track
the progress of scheduling activity, the filing and conclusion
of cases, and any issues of interest.
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- 3 -
The Office of Water will continue to provide expert
services on financial and technical issues through in-house
capability and national contracts.
Finally, we are close to agreement, along with the Depart-
ment, on ways to expand the Region VI pilot project for using
a limited period to pursue profiling settlement negotiations
as an option for other Regions.
Matters Requiring Regional Attention
To support this national emphasis, we need help from the
Regions in several specific areas.
Regional compliance and enforcement staffs should continue
to track noncompliance and to target, consistent with NMP
priorities, municipal violators for enforcement action. We
wish to emphasize the importance of selecting for judicial
enforcement those municipalities that further the NMP or lend
credibility to the national effort.
When Regions forward a case against a POTW to Headquarters
for review and referral to the Department, the case should be
ready for immediate filing. To ensure that the Department can
file or prosecute a proposed case on an expedited basis
consistent with the time-frames set out above, the Regions must
pay increased attention to providing certain basic information
in its litigation reports, including the following:
0 information on the POTW's financial capabilities for
funding necessary compliance work which is at least
sufficient to provide EPA and DOJ with a reasonable basis
for a position on the issue at the outset of the case and
settlement negotiations.
0 the grants history of the potential defendant,
including applications; past funding; and, if
applicable, current status on the state priority list,
current status of any present projects, or future
prospects for funding.
• a complete list of EPA and state contacts with defendant
POTWs on issues relating to compliance.*
* a summary of violations reported in the potential defendant's
Discharge Monitoring Reports. Inclusion of the Discharge
Monitoring Reports themselves will enable the Department to
file a motion for summary judgment most expeditiously.
0 a bottom-line settlement amount consistent with the
Agency's penalty policy.
0 a target final compliance date and schedule.
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- 4 -
Recent litigation reports have lacked information in
these areas in some instances. Absence of this information has
impeded the government's ability to file and prosecute municipal
cases expeditiously. We attach existing guidance on municipal
case litigation reports to assist in their preparation.
To support the development of litigation reports for cases
which are readily filed, Headquarters will strive to better the
above target dates in support of municipal referrals which are
complete in all these respects. Conversely, we will take a
hard look at whether to return referrals to the Regions for
further development where significant pieces of requisite
information are still incomplete/ or where the Region prefers
to conduct pre-filing settlement discussions with the POTW on
anything other than a strict timetable.
On occasion, the Regions have conducted administrative nego-
tiations with a POTW with the result that a POTW might expect a
non-judicial resolution of its compliance problems. Where a
Region decides that such negotiations are at an end for whatever
reason, the Region should indicate to the POTW that judicial
action is under consideration. This will help us avoid complaints
from a POTW that EPA unfairly "blindsided" it with a lawsuit.
Finally, we must stress that it is crucial for the Regions
to continue both their support of cases once referred by
assisting in the firm and prompt prosecution of cases through
to closure. It is through broadened success in completed
prosecutions that the national enforcement effort is most
likely to ensure broadscale POTW responsiveness to compliance
requirements of the Clean Water Act.
Conclusion
We believe that the above measures will result in the
expeditious filing and prosecuting of municipal cases.
Developing these streamlined procedures and case management
techniques ought to assist in working through the present
case load as well as to prepare the Agency and the Department
to deal with the expected burden of future NMP enforcement.
We ask the Regions to contact us with any suggestions they
have regarding improved support for our mutual efforts on
Clean Water Act municipal litigation. We thank you for your
cooperation and significant investment of time and resources
in this effort.
Attachments . . .
cc: F. Henry 'Habicht Lawrence Jensen
David Buente Rebecca Hamner
Scott Fulton Richard Mays
Sheila Jones Thomas Adams
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B. PRETREATMENT
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VI.B.I.
"Coordination Between Regional Enforcement and Water Programs Personnel in
Implementing the National Pretreatment Program", dated November 29, 1978.
-------
-------
ra '*
^^2. 5 UNITED STATES ENVIRONMENTAL PROTECTION _AGENCY
•V; ^i^ WASHINGTON. D.C. 20460
NOY 2 9 1978
MEMORANDUM
TO: Regional Administrators w/o attachments
Regional Water Division Directors
Regional Enforcement Division Directors
FROM: Deputy Assistant Administrator for Water Programs Operations
(WH-546)
Deputy Assistant Administrator for Water Enforcement (EN-335)
SUBJECT: Coordination Between Regional Enforcement and Water Programs
Personnel in Implementing the National Pretreatroent Program
... the general pretreatanent regulation (40 CFR Part.403) promulgated
en. June 26, 1978, requires that certain publicly owned treatment works
'(PO'TWs) develop pretreatment programs to control the introduction of
industrial wastes into POTWs. The-successful implementation of these
pretreatment programs requires a careful integration of Regional
Enforcement Division efforts-in overview!ng the creation of such
programs and Construction Grants efforts in providing funding for the
development of these programs. The purpose of this memorandum is to
outline the respective roles of these two groups with regard to the
initial stages of POTW p-etreatsnent program development. The recom-
mendations in this memorandum reflect the proposals for coordinating
Enforcement and Construction Grants activities found in the Interim
National Municipal Policy and Strategy. October, 1978, and the latter
Document should be read in concert with this memorandum.
Identification of POTVs Recuired to Develop a Program
The pretreatnent regulation specifies that two groups of POTWs
should be required to develop a pretreatment program (see section
403.8). First, all POTWs with an average design flow greater than
5 million gallons per day (mgd) and receiving industrial wastes which
1) pass through the POTW untreated, 2) interfere with the operation of
the POTW or, 3) are otherwise subject to pretreatment standards
developed under section 307 of the Clean Water Act are required to
develop a program. In addition, the Regional Administrator or Director
of the State HPDES program nay require that POTWs with an average
de.sign flow of 5 mgd or less develop a pretreatment program if their
industrial influent meets any of the three criteria listed above.
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A computer print-out of all POTWs in each Region broken down by
majors and minors is attached to this memorandum. The Regional
Enforcement Division should take the lead in developing from the
attached computer print-out: 1) a list of those POTWs (both above and
below 5 mgd) in non-NPDES States which should develop a pretreatment
program and, 2) a list of those POTWs above 5 mgd in NPOES States which
must be required to develop a program. The Regional Water Division
must assist 1n this effort and provide such necessary information as
is available in the Water Division files. Attachment A suggests means
by which the Regional office can identify these POTWs.
In compiling the non-NPDES State 11st, the Regional office should
check the appropriate boxes next to the POTW name on the computer
print-out. Copies of this print-out should then be forwarded to the
Permits and Municipal Construction Divisions at Headquarters.- A copy
of this print-out should also be maintained by both the Enforcement and
Water Divisions in the Regional office and both Divisions should be
consulted on any changes to the 11st.
The MPDES State 11st should be sent to NPOES States to assist them
.in identifying appropriate POTWs. NPOES States will be responsible for
adding to the Regional list those POTWs with flows of 5 mgd and less
which will be subject to the program development requirement. Once the
NPOES State has developed a list of all POTWs within its jurisdiction
which will be required to implement pretreatznent programs, it should
forward this list to the Grants and Enforcement personnel in the Regional
office who will, in turn, send this information on to Headquarters.
Lists of those POTrfs in both NPDES and non-NPDES States which will
be required to develop a program should be sent to the Headquarters
Permits and Municipal Construction Divisions no later than January 15,
1979. The cover memorandum transmitting the completed lists should be
signed jointly by the Directors of the Regional Water and Enforcement
Divisions. These lists will eventually be incorporated into the Permit
Compliance System (PCS) which will provide a convenient mechanism for
tracking and updating progress in developing POTW p re treatment programs.
Application for Construction Grants Amendment
Once the lists of POTWs required to develop a pretreatment program
have been compiled, the Construction Grants staff should notify the
appropriate POTWs in NPDES and non-NPOES States of the need to apply for
an amendment to their existing Step 1, 2 or 3 grant in order to acquire
funding for the development of a pretreatment program (see Construction
Grants regulation 40 CFR 35.907). Concurrent notice of POTWs which
Should apply for grant amendments should be sent to Grant personnel in
NPDES and non-NPDES States so that the States may plan future funding
requirements. Existing construction grants should be amended no later
than June 30, 1979, to provide pretreatment program funding.
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As individual POTWs apply for and are awarded an amendment to
their construction grant for pretreatment program implementation,
this information should be conveyed to Regional Enforcement personnel.
As will be seen in the subsequent discussion, timing of the construe*
tion grants award can have an impact on the development of the
pretreatment compliance schedule incorporated into the POTW's NPDES
permit.
Reissuance of Permits to Include Pretreatment Requirements
The pretreatroent regulation requires that NPDES permits for POTWs
which are required to develop a POTW pretreatment program incorporate a
compliance schedule for the development of such a program [see 40 CFR
403.8(d)]. This compliance schedule should be incorporated into the
POTW's permit upon reissuance at the end of the existing permit term or
at the time the permit is modified or reissued to grant a section
301(i)(l) time extension or a section 301(h) modification of secondary
treatment requirements. In addition, a POTW's NPDES permit may be
modified in mid-term to incorporate a schedule for the development of a
POTW pretreatment program where the operation of a POTW without a
pretreatment program poses significant public health, environmental or
related concerns, or where a pretreatment program compliance schedule
must be developed to coordinate with construction grant awards. A
detailed explanation of the development and application of pretreatment
compliance schedules will be found in Attachment B along with a model
compliance schedule.
The pretreatment strategy envisions the type of close coordination
between Enforcement and Construction Grants staffs outlined in the
Interim National Municipal Policy and Strategy for developing these
compliance schedules. Botn the Construction Grants regulation (40 CFR
35.907, 35.920-3) and the pretreatment regulation (40 CFR 403.8) impose
time limitations on the various activities to be undertaken in the
pretreatment compliance schedule. The pretreatment compliance schedule
incorporated into a POTW's NPDES permit should contain milestones
derived from the grants process. As the discussion in Attachment B
indicates, in order to develop a compliance schedule which meets both
the pretreatment and Construction Grants regulatory requirements, the
Enforcement staff must coordinate with Construction Grants staff in
determining the current grant status of the permittee and the schedule
•for receipt of future grant funding.
Enforcement of • POTW -Pretreatment Programs
Tne preceding discussion of coordination between Construction
Grants and Enforcement in developing POTW pretrea'finent programs should
noc be understood to imply that availablity of funding is a prerequisite
to the development of a pretreatment program. 'The requirement to
develop a pretreatnent program should be enforced and not dependent on
-------
Federal funds. The development of pretreatnent programs is critical;
it Is the nain tool to address toxic discharges from POTW's. The costs
of developing such programs are not capital costs and they, can be
recovered from users of the municipal system in most cases. In
balancing these considerations, the Agency's policy is to enforce
requirements for municipalities to develop pretreateent programs
without dependence on Federal funding.
This policy applies equally to funding the operation of municipal
pretreatment programs once they are developed and running. They are
expected to be self-supporting. A user charge system may be used for
this purpose.
If you have any questions on the implementation of this coordination
effort or its relation to the Interim National Municipal Policy and
Strategy, please feel free to contact Nancy Hutzel or Shanna Hal pern
18-755-0730) in the Permits Division or Ron OeCesare (8-426-8945)
in the Municipal Construction Division.
T. Rhett
Attachments
cc: Regional SiA Division Directors
NEIC
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ATTACHMENT A
Procedures to Icer.ify PQTWs Which Will be Required to Develop
"POTW Pretreatment Programs"
»
\
The permit-issuance authority (Regional office or KPDES State) must
have the anility to determine which of its municipal permittees will
be required to develop a POTW pretreatment program. As section 403.8(a)
of the pretreatmer* regulation explains, POTWs required to develop a
program will induce those POTWs with a design flow over 5 mgd receiving
from industrial users wastes which:
o pass through the fC.TW untreated
o interfere with the operation of the treatment works
o are subject to pretreatment standards developed under the authority
of section 307(b) or (c) of the CWA.
In determining which POTWs are above 5 mgd, the permit-issuance authority
should look at average design flow. In addition, if one permittee
controls several treatment works, the cumulative flow of the treatment
works should be considered in calculating average design flow. For
example, one Regional Authcrity controlling 3 treatment works with
average design flows of 3, 2 and'1.5 mgd respectively would be viewed,
for the purposes of the pretreatment regulation, as a single operation
with an average design flow greater than 5 mga.
A reconsnended first step in determining which POTWs over 5 mgd fall
within the 3 categories listed above would be to determine which POTWs
receive wastes from one or more industries within tne 21 industrial
categories listed in the NRDC Consent Decree (for reprinting of Consent
Decree see The Environmental Reporter-Cases, 8 ERC 2120). EPA antici-
pates that categorical pretreatmentstandards under section 307(b)
and (c) will be developed for almost all industria-1 subcategories
within the 21 industrial categories listed in the NRDC Consent Decree.
A possible approach to detecting these sources would be to examine
industrial inventories sucn as the Dun and Bradstreet Market Identifiers.
the Directory of Chemical Producers, pupllsneo py tne Stantoro, Research
Institute, and the State industrial directories to determine which of
the listed sources are within the State or Region ana discharging into
POTWs.' ' . .
A second step in identifying POTWs required to develop a POTW pretreat-
ment program might be to look at those POTrfs which are not meeting their
NPDES permit conditions. Such permittees would be likely candidates
for a pretreatment program aimed at controlling pollutants which
interfere with the operation of or pass-through the POTW.
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IDENTIFYING
POTVs
Section 403.8(a) of the pretreatment regulation also gives the permit-
issuance authority the ability to require the development of a pre-
treatment program by POTWs with average design flows of 5 mgd or less.
It is recommended that the permit-issuance authority require the
development of a program wherever the POTV meets one of the 3 criteria
outlined earlier. The permit-issuance authority is strongly urged to
exercise its option to extend the requirement to develop a pretreatment
program .as broadly as possible.
The burden of proof for demonstrating that a program is not needed
should rest on the POTW. Where there is some doubt that a certain POTW
has industrial influent subject to pretreatment requirements, the POTW
can be allowed to show that it need not develop a program. In such
cases, a clause should be inserted in the municipal permit along with
the compliance schedule for the development of a pretreatment program.
This clause would state that if the industrial waste inventory required
by the compliance schedule demonstrates that the POTW has no contribution
of industrial wastes which would be subject to pretreatment requirements,
the POTW would not be required to continue development of the program.
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ATTACHMENT B
GUIDANCE ON PREPARING COMPLIANCE SCHEDULES FOR
*
DEVELOPING POTW PRETREATMEMT PROGRAMS-
GENERAL COMMENTS:
Section 403.8(d) of the gener* pretreatment regulation (40 CFR
part 403) requires that NPDES'per is for POTWs which are required to
develop a POTW pretreatroent prog incorporate a compliance schedule
for the development of such a program. In some cases, this compliance
schedule will be incorporated into affected POTW permit upon reissuance
at the end of its existing term.
In many cases, however, the compliance schedule will be .incorporated.
into the POTW permit in mid-tenn through a permit modification. It is
anticipated that in many instances this pretreatment compliance schedule
will be inserted into the NPDES permit for applicable POTWs when the
permit is modified or reissued in mid-term in connection with a 301 (i Ml)
determination (i.e., the determination as to whether or not the schedule
for development of secondary treatment should be extended under the
provisions of section 301 (i Ml) of the Act, see 40 CFR 124.104).
Similarly, a POTW which is required to develop a pretreatment program
will have a pretreatment compliance schedule inserted in its NPDES
permit if that permit is modified or reissued in order to grant
a waiver of secondary treatment requirements under the provisions of
section 301(h) of the Act. (See proposed 40 CFR Part 233.) In addition,
a POTW permit will be modified in mid-term to incorporate a schedule
for the development of a POTW pretreatment program, where the operation
of a POTW without a pretreatment program poses significant public
health, environmental or related concerns, or where a pretreatment
program compliance schedule must be developed to coordinate with
construction grant awards.
The compliance schedule will require that the permittee develop
the authorities, procedures and resources, as defined by 40 CFR 403.8
and 403.12, which comprise an approvable POTW pretreatment program.
The activities listed in the attached model compliance schedule summarize
the more detailed requirements found in sections 403.8 and 403.12 of
the pretreatment regulation. It is recommended that the permit-issuance
authority review the more detailed requirements set forth in the
regulation before developing the pretreatment compliance schedule, and
insert additional schedule activities where appropriate.
There are several time 1 imitations 'imposed by the pretreatment
regulation and the construction grant regulation (40 CFR part 35)
which should be considered in establishing compliance schedule dates.
The pretreatment regulation provides that the compliance schedule will
require the development and approval of a POTW pretreatment program as
soon as reasonable and within 3 years after the schedule is incorporated
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COMPLIANCE SCHEDULE
'GUIDANCE
Into a POTW's permit but in no case later than July 1, 1983 (see §403.8).
Since up to 6 months must be allowed for the program approval process
according to section 403.11 of the pretreatsient regulation, the compli-
ance schedule date for submission of a pretreatment program for approval
(activity 8 of the compliance schedule) should be 2-1/2 years from the
incorporation of a compliance schedule or January 1. 1983. whichever Is
sooner.
Provisions of the construction grants regulations impose what may
be in some cases stricter time constraints on the development of an
approvable program. For example, section 35.920-3 of the construc-
tion grants regulation provides that no grantee may receive a Step 3
grant after December 31, 1980, until It has developed an approvable
pretreatment program. Thus, a permittee which is scheduled to receiv
a Step 3 construction grant in January 1981 will be required to develop
an approvable program at the outside by January 1981. However, if that
same permittee received a compliance schedule for the development of a
pretreatment program in December 1978 it would be allowed, by the
pretreatment regulation, an outside date of June 1981 (i.e., 2-1/2
years from the incorporation of the compliance schedule) to develop an
approvable program. In this case, the more stringent time limitation,
i.e., that posed by the construction grant regulation, would apply.
As the example above indicates, in developing the schedule date
for the submission of an approvable pretreatment program, the permit-
issuance authority must use that date prescribed by either the pretreat-
ment regulation or the construction grants regulation which provides the
shortest time for the development of the program. In addition, the
permit-issuance authority may impose reasonable time limitations which
ara more restrictive.
DEVELOPMENT OF THE PRETREATMENT COMPLIANCE SCHEDULE
It is apparent from the general discussion above that several
different regulatory provisions influence the development of the
schedule date for submitting a POTW pretreatroent program for approval
(compliance schedule activity 8). Regulatory limitations on the time
frame for developing a program can be summarized as follows:
o approval within 3 years from the incorporation of a
pretreatment compliance schedule in the municipal permit '
(application for approval within 2-1/2 years). See 40 CFR
403.8. '
o approval by July 1, 1983 (application for approval by
January 1, 1983). See 40 CFR 403.8.
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COMPLIANCE SCHEDULE
GUIDANCE
o approval prior to payment of grants beyond 901 of the Step 3
funding (application for approval 6 months before'this date).
See 40 CFR 35.935-19.
o development of an approvable pretreatment program by the
end of the Step 2 grant for certain permittees. See 40
CFR 35.920-3.
o approval by whatever more stringent time limit is imposed
by the permit-issuance authority.
In addition, the construction grant regulation imposes an interim
time limitation on the development of compliance schedule activities
1-3. According to this regulation, grantees with amended Step 1 grants
must have completed activities 1-3 by the time of application for the
Step 2 grant if the Step 2 is to be awarded after June 30, 1980.
Facilities reouired to develop a POTV pretreatment program can
generally be divided into 4 groups depending upon the applicablity of
the time limitations discussed above. See attached Chart A.
GROUP 1 Facilities which will have received Step 1 and 2 construction
grants of amendments before June 30, 1980, and a Step 3
construction grant before December 31, 1980. .
If a grantee is scheduled to receive its Step 2 and 3 construction
grants before June 30, 1980 and December 31, 1980, respectively, the
construction grant regulation (40 CFR 35.935-19) requires that, in most
cases, tne grantee have an approved POTW pretreatment program before it
receives the last 105 of its Step 3 grant funding. This means that the
grantee would be required to apply for POTW pretreatment program
approval at least 6 months before it is scheduled to receive payment
beyond 90S of its Step 3 funding.*
The oretreatment regulation (40 CFR 403.8(d)) provides that such a
grantee should request approval of the POTW pretreatment program within
2-1/2 years from the incorporation of a pretreatment compliance schedule
into its NPDES permit or by January 1, 1983, whichever is sooner.
In developing the compliance schedule for permittees in this
group, the permit-issuance authority should determine which of the
above dates provides for the earliest development of a POTW pretreatnent
program. This date should then be used as the pretreatment compliance
schedule deadline for activity 8. '
*As a 6 months period is needed to approve a POP^ pretreatment program,
in order to receive approval of a program by the date upon which the
grantee is scheduled to receive payment beyond 90S of its Step 3
funding, the application for approval must be submitted 6 months
earlier.
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COMPLIANCE SCHEDULE
GUIDANCE
Dates for the remaining compliance schedule activities are
negotiable with the permittee. Generally, however, the deadlines
for completing activities 1-3 should not exceed 15 months from the
initiation of the compliance schedule.
Facilities receiving their Step 3 grant before June"'30, 1980,
shall be subject to the same time limitations described above.
GROUP 2 Facilities which will have received Step 1 and 2 construction
grants before June 30, 198Q, and a Step 3 construction grant
after Decemoer 31, 1980.
The construction grant regulation provides that a grantee which 1s
scheduled to receive a Step 3 grant after December 31, 1980, must have
completed compliance schedule activities 1-7 before it can receive Its
Step 3 funding. Therefore, in developing the compliance schedule, the
permit-issuance authority should use as an outside compliance date for
activities 1-7 the date for completion of the Step 2 grant as determined
by the construction grants compliance schedule as long as this data would.
not be later than 2-1/2 years from the Initiation of the pretreatment
compliance schedule or Janurary 1, 1983, whichever is sooner.
The compliance date for pretreatment compliance schedule activity
S (request for program approval) should not exceed 2-1/2 years from the
initiation of the compliance schedule, January 1, 1983, or 6 months
before the permittee is scheduled to receive payment beyond 90% of its
Step 3 funding, whichever is sooner.
Again, the interim pretreatment compliance schedule dates are
negotiable. It is recommended that the completion date for activities
1-3 not exceed 15 months from the initiation of the compliance schedule.
GROUP 3 Facilities which will receive a Step 2 construction grant after
June 30, 1980, and a Step 3 construction grant before December 31,
1980.
Under to the construction grant regulation, in order to receive a
Step 2 grant after June 30, 1980, a grantee must first have completed
activities 1-3 of the pretreattnent compliance schedule. The permit-
.issuance authority should therefore ensure that the compliance schedule.
dates for the completion of activities 1-3 do not exceed the scheduled
date for the completion of the Step 1 grant activities'. The permit--
issuance authority may at its discretion impose a. more stringent time
limitation for the completion of these activities. It is recommended
that the completion date for activities 1-3 not exceed 15 months from
the initiation of the compliance schedule.
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COMPLIANCE SCHEDULE
GUIDANCE
The construction grant regulation provides that grantees which
will receive a Step 3 grant before December 31, 1980,"must have an
approved pretreatment program in order to receive the final 10« of the
Step 3 grant funds. The final compliance date for activity 8 of the
pretreatment compliance schedule therefore should be no -later than
6 months* before the date upon which the grantee is scheduled to
receive payment beyond 90S of the Step 3 grant funding unless this date
exceeds 2-1/2 years from the initiation of the compliance schedule, or
January 1, 1933, in which case the final date for activity 8 should be
no later than January 1, 1983, or 2-1/2 years from the initiation of
the compliance schedule, whichever is sooner.
The interim dates for activities 4-7 are negotiable with the
permittee.
GROUP 4 Facilities which will receive a Step 2 construction'grant
after June 30, V980, and a Step 3 construction grant after
December 31, 1980.
. * The construction grant regulation provides that in order to
receive a Step 2 grant after June 30, 1980, a grantee must first have
completed -activities 1-3 of the pretreatment compliance schedule. The
permit issuance authority should therefore ensure that the compliance
schedule dates for the completion of activities 1-3 do not exceed the
schedule date for the Step 2 grant application. The permit-issuance
authority may impose a more stringent time limitation for the completion
of these activities. It is recommended that the completion date for
activities 1-3 not exceed 15 months from the initiation of the compliance
schedule.
In order to receive a Step 3 grant after December 31, 1980, a
facility in this category must also have completed compliance schedule
activities 4-7. The final compliance dates for activities 4-7 should
therefore be no later than the completion date for the facilities
Step 2 grant as determined by the construction grants schedule. If the
scheduled completion -date for the Step 2 construction grant activities
is later than 2-1/2 years from the initation of the compliance schedule
or January 1, 1983, then the final compliance date for activities 4-7
should not exceed January 1, 1983, or 2-1/2 years from the initiation
of the compliance schedule, whichever is sooner.
In establishing the pretreatment compliance schedule dates for
activities 4-7, sufficient time must be allowed for the grantee to
accomplish activity 8 (application for program apprcval) by January 1,
1983, 2-1/2 years from the initiation of the pretreatment compliance
schedule, or 6 months before the permittee is scheduled to receive
payment beyond 90% of its Step 3 funding*, whichever is sooner.
See footnote, page 3
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Cv-
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MODEL PRETREATMENT COMPLIANCE SCHEDULE LANGUAGE
Under the authority of section 307(b) and 402(b)(8) of'-the Clean
Water Act, and implementing regulations (40 CFR 4U3), the permittee 1s
required to develop a pretreatment program. This program shall enable
the permittee to detect and enforce against violations of categorical
pretreatment standards promulgated under section 307(b) and (c) of the
Clean Water Act and prohibitive discharge standards as set forth in
40 CFR 403.5.
The schedule of compliance for the development of this pretreatment
program is as follows. The permittee shall:
ACTIVITY
NO. ACTIVITY DATE
Submit the results of an industrial user sur-
vey as required by 40 CFR 403.8(fH2M1-H1),
including identification of industrial users
and the character and volume of pollutants
contributed to the POTW by the industrial
users.
Subnit an evaluation of the legal authorities
to be used by the* permi ttee to apply and
enforce the requirements of sections 307(b)
and (c) and 402(b)(8) of the Clean Water Act,
including those requirements outlined in
40 CFR 403.8(f)(l).
Submit a determination of technical informa-
tion (including specific requirements to
specify violations of the discharge prohi-
bitions in 403.5) necessary to develop an
industrial waste ordinance or other means of
enforcing pretreatment standards.
Submit an evaluation of the financial
procrams and revenue sources, as required by
40 CFR 403.8(f)(3), which will be employed
to implement the pretreatment program.
Submit design of a monitoring program which
wil'l implement the requirements of 40 CFR
403.8 and 4U3.12, and in particular those
requirements referenced in 40 CFR
403.8(f)(1)(iv-v), 403.8(f)(2)(iv-vi) and
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6 Submit list of monitoring equipment required
by the POTW to implement the pretreatraent
program and a description of municipal
facilities :o be cc--tructed for monitoring
or analysis of indus-*ial wastes.
7 Subr.it specific ?OTW effluent limitations
for prohibited pollutants Us defined by 40
CF* 403.5) contributed to the POTW by
ir-ustrial users.
8 Submit a request for pretreatment program _______
approval (and removal credit approval, if
desired) as required by 40 CFR 403.9.
The terms and conditions of the POTH pretreatment program, when
approved, shall be enforceable automatically through the permittee's
NPDES permit.
Quarterly Reporting
The permittee shall report to the permit-issuance authority on a
quarterly basis the status of work completed on the POTW pretreatment
program. Reporting periods shall end on the last Cay of the months of
March, June, September and December. The report shall be submitted to
the permit-issuance authority no later than tne 28th day of the month
following each reporting period.
Removal Allowances
Any application for authority to revise categorical pretreatment
standards to reflect POTV removal of -^llutants in accordance with the
requirements of 40 CFR 403.7 must be submitted to the permit-issuance
authority at the time of application for POTW pretreatment program
approval or at the time of permit expiration and reissuance thereafter.
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O CIIAR'i
OUTSIDE I'RETREATMENT COMPLIANCE DATES RASED ON CONSTRUCTION CRANT AWARDS AND PRETREATMENT REQUIREMENTS
iroup
I Step i
Awarded
JUNE 30, 1980
Step 2
Awnrdod
DECEMBER 31, 1980
Step 3
Awarded
2-1/2 YEARS FROM INITIATION OF
COMPLIANCE SCHEDULE, JANUARY 31,
1983. OR 6 MONTH:; IIEFORE THE
FINAL 10Z OF STEP 3 CRANT
WHICHEVER IS SOONUK
Actlvl lea 1-8 Due
Step 1
Awarded
Step 2
Awa rdcd
Step 3 /Activities 1-
Awardcd I due by appli
\ tlon Cor Step
1-7 \
iCA- I
ep 3/
Actlvi y fl Due
3 Step 1
Awarded
Step 2 /Activities l-
Awardedl due by appll
\ tlon for Step
l-3l
lea-I
ep 2)
Step 3
Awa rdcd
Activl lea 4-8 DUG
Step 1
Awn rdnd
Step 2 /Activities l-
Awnrdedl due by appl
(. tlon Cor Step
1-3 \
icn- )
cp 2/
Step 3 /Activities A-
Awardedl due by appli
\ tlon Cor Step
«-7 \
ica- I
ep 3/
Actlvi y 8 Due
*Inter Ira dates are negotiable and arc established by the permit-Issuance authority
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DOCUMENT C"
Explanation of Procedural/Funding Requirements
for State Pretreatment Programs
1. Procedures/Funding to Identify POTVs Which Will be Required to
Deveioo POiW Pretreatment Programs
The State must have the ability to determine which of its municipal
permittees will be• required to develop a POTW pretreatnent program.
As section 403.8(a) of the pretreatment regulation explains, POTVs
required to develop a proe-ara will include those POTVs with a
design flow over 5 mgd receiving from industrial users wastes
which:
o pass through the POTW untreated
o interfere with the operation of the treament worts
o are subject to pretreatnent standards developed under the
authority of section 307(b) or (c) of the CWA.
In determining which POTVs are above 5 mgd, the State should look
at average design flow. In addition, if one permittee controls
several zreataent works, the cumulative flow of the treatment works
snould be considered in calculating average design flow. For
example, one Regional Authority controlling 3 treatment works with
average design flows of 3, Z and 2 mgd respectively would be
viewed, for the purposes of the pretreattnent regulation, as a
single operation with an average design flow greater than 5 mgd.
A recommended first step in determining which POTrfs over 5 mgd
should be required to develop a pretreatnent program would be to
determine which PQTVs receive wastes from one or more industries
within the 21 industrial categories listed in the NROC Consent
Decree (for reprinting of Consent Decree see The Environmental
Reporter-Cases, 8 ERC 2120). EPA anticipates tnat categorical pretreatneni
stanaaras under section 307(b) and (c) will be developed for almost
all industrial subcategories within the 21 industrial categories
listed in the NRDC Consent Decree. A possible approach to detecting
these sources would be to examine industrial inventories such
as the Dunn and -Bradstreet Market Indicator and the Directory of
Chemical Prooucsrs. puo'hsned Dy tne Stanford Researcn institute,
to aetenmne wnicn of the listed sources are within the State and
discnarging into POTVs.
A second step in identifying POTrts required to develop a ?07»/
pretreament program might oe to look at those ?OT«'s which are not
.•nesting their permit conditions. Such permittees would be likely
candidates for a pretrea'nnent program aimed at'controlling pollutants
which intarfers with the .operation of tne POTrf.
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Section 403.8(a) of the pretreatment regulations also gives the
Sta'ie authority to require the development of a pretreament
program by POTWs with average design flows of 5 tngd or less. It is
recommended that the State require the development of a program
wherever the POTW receives industrial wastes from sources in one
or more of the 21 industrial categories listed 1n the NROC Consent
Decree, is not meeting its permit conditions or where municipal
sludge is not meeting applicable requirements. The State is
strongly urged to exercise its option to extend the requirement to
develop pretreatnent program as broadly as possible. The burden of
proof for demonstrating that a program is not needed should rest on
the POTW. Where there is some doubt that a certain POTW has
industrial influent subject to pretreatnent requirements* the POTV
can be allowed to show that it need not develop a program. In such
cases, a clause can be inserted in the municipal permit along with
the compliance schedule for the development of a pretreataent
program. This clause would state that if the industrial waste
inventory required by the compliance schedule demonstrates that the
POTW has no significant contribution of industrial wastes which
would be subject to pretreataent requirements, the POTW would not
be required to continue development of the program.
In brief narrative form, the State should explain those procedures
it has currently developed for identifying POTWs above and below 5
nod required to develop a pretreatnent program. The narrative
should be accompanied by a statement of the resources currently
devoted to this undertaking. If a program to identify appropriate
POTWs is planned for the future, the State should indicate what
approaches to identifying POTWS will be used and what criteria will
be applied in identifying the pollutants and industries subject to
pretreatnent requirements. The State should also descn'be briefly
its planned procedures for providing technical and legal assistance
to POTVs where help is needed in developing a POTV pretreatnent
program.
2. Procedures/Funding to Notify POTVs of Pretrsatnient Requirements
The State should indicate those procedures it has developed to
notify POTWs of applicable pretrea-onent requirements as set forth
in 40 CrR 4Q3.3(2){111). This may consist of a mailing system for
distributing information such as copies of the pretrearnent regula-
tion and any guidance on developing a POTW pretreatnent program
•prepared by the State or EPA. Any such distribution system should
be coordinated with similar information networks employed by State
personnel in charge of EPA construction grants.
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3. Procedures/Funding to Incorporate Pretreetnent Requirements in Municipal
Permits ———-—-—-—-———-—-—————. __
Where States currently have the authority to revoke and reissue or
modify municipal permits to incorporate an approved pretreatnent
program or a compliance schedule for developing such a program,
(see Attorney General's Pretreatment statement section 2) they will be required
to exercise this authority. Otherwise, a State must include a
modification clause in appropriate POTV permits which calls for the
incorporation of pretreatnent requirements at a later date. The
State should indicate to EPA the priorities 1t will use for incorporat-
ing pretreatnent requirements into POTW permits and an estimate
of the additional resources* if any, which will be required to
carry out this task. For example, the State should indicate to the
best of its ability:
o the number of municipal permits which will incorporate pretreatnent
requirements at the same time as they are revoked and reissued
or modified for the purpose of meeting the provisions of 301(1)
or 301 (h) of the Clean Water Act;
o -the number of expiring municipal permits not receiving 301(1) or
301 (h) modifications which wil-1 incorporate pretreataent conditions -
upon reissuance
o the number of municipal permits to be revoked and reissued or
modified to include an approved pretreatnent program or a
compliance schedule for developing such a program
tt. Procedures/Fungine to Make Determinations on Requests for POTV
Pretreatmen* Program Approval and Removal Allowances
Tne State must have the procedures and funding to receive and make
determinations on requests for POTW pretrea'Cnent program and
removal allowance approval. In general this responsibility will
require that the State have procedures and funding to:
o comply, with the public notice provisions, of section 403.11(b)(l)
of the regulation which requires the State to:
1. mail notices of the request for approval to adjoining
States whose waters may be affected;
2. mail notices of the request .to appropriate area-wide planning
agencies (Section 208 of the.CWA) and other persons or organiza-
tions with an interest in the request for program approval or
removal allowance;
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3. publish a notice of the request in the largest daily newspapers
of the municipality in which the POTW requesting program
or removal allowance approval is located., These notices
shall indicate that a comment period will be provided for
interested parties to express their views on the request for
program approval or removal allowance.
o Provide a public hearing 1f requested by any affected or Interested
parqy as provided for in section 403.1Kb)(2). Notice of such a
hearing will be published in the same newspapers where the
original notice of request for program or removal credit approval
appeared.
o Make a final determination on the request 1f EPA has not objected
in writing to the approval of the request during the comment
period* In making the final determination, the State should
take into consideration views expressed by interested parties
during the comment period and hearing, if held.
o Issue a public notice of the final determination on the request.
This notice shall be sent to all persons who submitted comments
and/or participated in the public hearing. In addition, the
notice will be published in the same newspapers as the original
notice of request for approval was published.
The State should indicate to EPA by October 10, its current ability
to carry out these responsibilities, focusing primarily on staffing
and funding availability. This assessment should be based on an
estimate of the number of POTVs which will be scheduled to receive
rOTW prstred'Caent program and removal allowance approval during the
remainder of the State's budget year. The State should then
indicate the projected resource levels for P0?« pretreatment
program and removal allowance approval in each of the budget years
1979-1983 based on the estimated number of POTWs requesting program
and removal allowance approval during each of these years. Finally,
the State should explain how it can insure, to the best of its
aaility, that the funding required to carry out this activity will
be available each year.
5. Procedures/Funding for Identifying and Notifying Industrial
Users Susject to Prgtrea^en* Requirements
The pretrearnent regulations provide that where a POTrf is not
required to develop a POTrf pretreatsnent program, the State.will
assume responsibility for identifying industrial users of the POTV
which mignt be subject to pretreatment standards.. The Stats may
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devise its own methods for obtaining this information, including
requiring -the POTW to identify the industrial users in question.
Reference to the Dunn and Bradstreet and Directory of Chemical
Producers listings, as mentioned earlier, may provide a convenient
first step. In many cases this Information may already have been
provided by the POTW through part 4 of the municipal permit applica-
tion form. Through whatever means it chooses, the State should
insure that all industrial users which fall within one or more of
the El industrial categories listed 1n the NRDC Consent Decree are
identified. In addition, the State should Identify as subject to
pretreatment standards all industrial users which contribute
pollutants which interfere with the operation of the treatment
worts or pass through the POTV untreated.
Once the app'roprlate industrial users have been identified, the
State must ensure that they are notified of all applicable existing
pretrea-onent standards and of applicable pretreatnent standards
which might be forthcoming. Acceptable procedures would include
a mailing list for industrial users or an arrangement with the POTW
requiring it to provide the requisite notice.
The State should indicate by October 10, whether it has presently
in operation effective procedures for Identifying and notifying
industrial users currently or potentially subject to pretreatment
standards. If such procedures are not currently on line, if
for example, information supplied by part 4 of the municipal
application form is not sufficiently detailed to provide the
required information, the State should indicate how it plans to
develop the ability to identify and notify appropriate industrial
users. The description of these procedures should be accompanied
by an assessment of resources needed to implement them, the current
availability of resources to meet this need and plans for obtaining
additional resources if required.
6. Procedures/Funding for Identifying the Character and Volume of
Pollutants ContriDuted by Inoustrlal Users to POTus
Section 403.10{f)(2)(i) of the pretrea-Snent regulation provides
that where a POTW is not required to develop a POTW pretrea-anent
program, the State will be required to 'carry out those procedures
which would otherwise have been the respo-nsiblity of the P.OTW. One
of these responsiblities is the identification of the character
and volume of pollutants bexng contributed to the POTW by sources
subject to pretreattnent requirements (see 403.8(fM2)(1O).
Inaustrial users subject to pretreatment requirements include those
which are subject to preireame.it standards promulgated under
section 307(b) and (c) and/or, contribute pollutants which interfere
with the operation of the POTW or which pass through the POTW
untreated. This responsibility is complicated by the fact that
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analytical and monitoring techniques are not yet available to
provide a quantitative analysis of the presence of many of the
pollutants in question. In recognition of this problem, EPA
recommends that States follow the procedures outlined below in
developing their inventory of industrial waste contribution.
o The first step in the waste Inventory should be a qualitative
analysis of pollutants being contributed by all industrial
sources within the system. The individual Industrial users
should be asked to provide information on the type and approximate
quantity of pollutants discharged by the facility. This information
should be derived entirely from knowledge of the facility's
process and. should not require any sampling at the source.
o Second, the State should review this qualitative information on
the pollutants being.discharged into the system and remove from
further consideration those pollutants which are not within the
1Z9 pollutants to be regulated with national pretreavnent
standards and/or which are known not to interfere with the operation
of the POTW or pass through the POTV untreated.
o Third, the State (or POTW if the Stats so directs) will then
sample the influent to the POTW to determine which of the
pollutants remaining after step two appear in significant
concentrations in the influent to the POT*. In carrying out
tnis sampling, the State should use tnose sampling and analytical
techniques set forth in 40 C?R part 136. If a pollutant
appears at such a low concentration tnat it is highly unlikely
that it would have an adverse effect on the operation of the
POTW, pass through untreated, or if the pollutant io*s not
appear at all in the influent to the POTV, it should be excluded
from further consideration.
o Fourth, the analysis in preceeding steps has resulted in a list
of tnose pollutants contributed to the system which may affect
tne operation of the POTW or pass through the POTW untreated.
The next step is to determine which 'industrial users have such
pollutants in their effluent.
o Fifth, those industrial users identified in step four will be
required to do sampling and analysis to quantify the amounts of
those pollutants being discharged by that source into- the POTW.
If necessary, the State may theft impose uson that industrial
user an effluent limitation which will ensure that sucii pollutants
are discharged at levels which will nst interfere witn the
operation of the treatnent works or pass through in unacceptable
amounts.
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o Finally, as Federal pretrea-Bnent standards for industrial
subcategories are promulgated, the State will require that
industrial users belonging to those subcategories sample
and analyze their effluent to quantify the amount of pollutants
regulated by the standard being discharged by that industrial
user.
The .bove procedures can be characterized as a 2-part program.
In- ..ally, prior to the development of sampling and analytical '
techniques for many of the complex pollutants regulated within the
21 industrial categories (and approximately 400 industrial subcate-
gories) set forth in the NRDC Consent Decree, the State will focus
on identifying and quantifying only those pollutants which interfere
with the operation of the treatment worts. Then, as Federal
pretreament standards for the 129 pollutants in the 21 Industrial
categories emerge, along with recommended sampling and analytical
techniques for such pollutants, the State will be required to
elicit specific quantitative information on the character and
volume of pollutants discharged by indstrial users regulated by
Federal standards.
PCTWs which are required to develop a POTW pretrea-cnent program are
responsible for carrying out the industrial waste inventory in lieu
of the State (see 4Q3.8(f)(ii) and step 2 of the municipal pretreat-
ment compliance schedule). The State should recommend that this
2-step program be used by such POTWs.
The State should indicate to EPA by October 10 its current ability
to carry out the industrial waste characterization program described
above. Particular attention should be paid to the availability of
resources to implement tms survey, the technical ability of the
State to sample influent to POTVs as required by step 3 above, and
the State's technical ability to develop effluent limitations for
industrial users where necessary to control the introduction of
pollutants which interfere with the operation of the POTW. The
State should discuss those resources and technical abilities which
it will need to acquire to fully implement the components of the
industrial waste inventory described above.
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8
7 Procedures/Fundinc to Make Determinations on Requests for Fundamentally
iJTrrerent radar variances
Section 403.13 of the pretreatment regulation provides that States
will be responsible for considering requests for fundamentally
different factors variances. Any interested person believing that
factors relating to an industrial user are fundamentally different
from the factors considered during the development of a categorial
pretreatment standard applicable to that user may apply for a
fundamentally different factors variance allowing a modification of
the discharge limit specified in that standard.
The State must have procedures to review such requests, and make a
determination to deny the request or recommend to EPA that the
request be approved. In making this determination, the State must
consider the factors outlined in 403.13(c) and (d). The State
should submit to EPA by October 10, 1978, a discussion of its current
ability to consider requests for fundamentally different factor
variances. Emphasis should be placed on current funding availability
and projected funding needs. In addition, the State should
identify the existing or required technical expertise it will need
to evaluate the various factors listed in 403.13(c) and (d).
8. Procedures/Funding to Ensure Compliance with Pretrea-Snent Standards
anc Permit Conditions
Where a POTVf is not required to develop a POTW pretreatment program,
the State will be required to ensure that industrial users of that
POT* subject to pretreataent standards comply with those standards.
In order to do so, the State must develop procedures which include
the following:
o Where State law provides adequate authority, the State should
have the technical ability to review the technology which the
industry proposes to install in order to meet State or Federally
imposed pretreataent standards.
o Once the compliance date for a pretreatment standard has passed,
the State must have procedures to receive and analyze the report
suomitted by the industry, in compliance with the requirements
of 403.12(d), indicating whether or not the industry nas complied
with applicable effluent limitations.
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o The State raus* evelop the administrative and technical ability
to receive anc. nalyze the periodic reports submitted by industrial
users indicating continued compliance with pretreatment standards
(see 403.12(e)).
o The Stats must ensure that it has adequate resources and technical
expertise to determine, independent of reports submitted by
the industrial u *r, that the user is in compliance with applicable
pretreatment standards. For example, the State should have
procedures for scheduling periodic checks on industrial users
to spot-check cooplunce, sampling the effluent at the industrial
sources and analyzing this effluent to ensure compliance, with
applicable limitations.
Where a POTW pretreatsent prograr, has been developed and the POTW
has been granted a removal allowance for certain pollutants, the
State must have procedures to:
o receive and analyze periodic reports from the POTW indicating
continusd removal at the rate allowed by the POTW's permit and
continued compliance with sludge requirements;
o sample and analyze the influent to and effluent from the POTW to
aetsraine, independent of reports submitted by the POTW, that the
POT*' is maintain:•: the approved level of removal and is in
compliance with an applicable sludge requirements.
It is recognized that the sampling and analytical requirements
exp'. iined in this section may impose a substantial resource burden
on tf.8 State. While it is preferred that the State devslcp its owr.
technical expertise, an acceptable alternative would be for the
Stats to contract with pr-?ate consultants, universities or other
groups with sufficient technical expertise to carry out the sampling
and analytical requirements described in this section;
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VLB. 2.
"Incorporation of Pretreatment Program Development Compliance Schedules
into POTW NPDES Permits", dated January 28, 1980.
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\ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
| WASHINGTON. O.C. 20460
ff
.jTfc ti 2 ? ffiO
OFFICE 0- ENFORCEMENT
MEMORANDUM n - £ 0 ' 3
TO: Regional Enforcement Division Directors
Regional Permits Branch Chiefs
FROM: Acting Deputy Assistant Administrator
for Water Enforcement (EN-335)
SUBJECT: Incorporation of Pretreatment Program Development
Compliance Schedules Into POTW NPDES Permits
The General Pretreatment Regulation (40 CFR Part 403)
requires that certain publicly owned treatment works (POTWs)
develop programs to ensure compliance with pretreatment discharge
standards by. nondomestic sources discharging into the POTW. A
necessary first'step in developing these programs is the insertion
of a compliance schedule for program development in the POTW's
KPDES permit. The purpose of this memorandum is to re-emphasize
'.the importance of incorporating pretreatment compliance schedules
into all appropriate permits at the earliest possible time.
BACKGROUND • . . . • .....
It is the intention of the Clean Water Act and the National
Pretreatment Strategy that the primary responsibility for enfor-
cing pretreatment standards be delegated to local POTWs. This is
to be accomplished by EPA and NPDES States overseeing the develop-
ment of POTW pretreatment programs meeting the .requirements of
the General Pretreatment Regulation. Section 403.8(d) of that
regulation requires that,
If the POTW* does not have an approved Pretreatment Program
at the tine the POTWs1 existing Permit is reissued or •
modified, the reissued or modified 'Permit will contain the
shortest reasonable compliance schedule, not to exceed three
'• years or July 1, 1983, whichever is sooner, for the develop-
ment of the legal authority, procedures and funding required
by paragraph (f) of this section. Where the POTW is located
in an K-PDSS State currently without authority to require a
POTW Pretreatment Program, the Permit shall incorporate a
modification or termination clause as provided for in
section 403.10(d) and the compliance schedule shall be
incorporated when the Perr.it is modified or reissued pursuant
to such clause. ' •
* As defined by section 403.8(a)
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I
The insertion of these compliance schedules is a critical element
in launching the.development of many POTW pretreatment programs.
Compliance schedules also serve as a means for EPA and NPDES
States to track program development.
• Those POTWs required to develop a pretreatment program
have been identified by States and Regional offices. Preliminary
information on these POTWs was forwarded to Headquarters at the
start of 1979. Since that time, the Regions and -States should
have developed a firmer list of exactly which POTWs will need
pretreatment programs. For those POTWs so identified, the
task of incorporating compliance schedules should be well underway.
CURRENT STATUS AND NECESSARY ACTIONS
Despite the importance of compliance schedules to program
development and the need for their swift incorporation if
regulatory deadlines are to be met, there have been indications
that schedules have not been inserted in all appropriate permits.
While some Regions and States have moved forward strongly in this
area, others have not. If the pretreatment program is to be
successful and the* momentum for local program development that
has been generated is to be maintained, it is essential that this
activity is given appropriate priority.
In order to meet both the July 1, 1983 program approval
deadline and allow POTWs adequate time for program development,
compliance schedules should be established as soon as possible.
3y inserting schedules in permits as they expire or are modified,
the disruption and waste of resources created by reopening
permits solely to incorporate pretreatment compliance schedules
will be avoided. Although it is desirable to avoid opening
permits just to insert pretreatment .schedules,;this step may
become necessary as the 1983 deadline approaches. As first round
permits expire in FY 80, the insertion of compliance schedules
will be a priority activity in this fiscal year. Less than
complete attention to this activity will create a backlog with
cciientially disastrous program consequences.
I understand that the timely insertion of compliance
schedules has been made more difficult by the delay in approval
of State pretreatment programs. However, in many cases, this
delay need not affect the development of POTW compliance schedules.
The General Pretreatment Regulation and the National Pretreatment
Strategy make it clear that those States, which currently have the
authority to reissue, modify or reopen POTW permits to incorporate
oretreatment requirements should exercise that authority and put
compliance schedules into expiring permits or those being modified
for soTTie other reason. This should be the case with the r.ajor
of NPDSS States. Those few States which at this time lack the
necessary authority to incorporate .compliance-schedules-'
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should continue to put modification clauses in permits. These
modification clauses should require that such permits be promptly
reissued or modified after State pretreatment program.approval to
incorporate an approved POTW program or a compliance schedule for
the development of a pretreatment program. To alleviate future
delays, all States should move quickly to receive State program
approval.
The incorporation of compliance schedules into permits
should not be a major resource burden on either Regional offices
or States. Individual schedules should not vary a great deal
from the model provided in guidance material. A model compliance
schedule accompanied by a detailed explanation of how to develop
such a schedule was included in the November 29, 1978 memorandum
from the Deputy Assistant Administrator for Water Enforcement and
the Deputy Assistant Administrator for Water Programs Operations
which is attached for your assistance. This information was
expanded upon in the Pretreatjnent Guidance Document for NPDES .
States that was distributed in February, 1979. Additional copies
of this Document are available from Headquarters Permits Division.
If these models are followed, it should require a minimal amount
of resources to carry out this critical function. The investment
of resources in this effort now will yield a long term resource
saving for EPA and States. Pretreatment programs developed as a
result of these compliance schedules will shift most program
responsibilities to POTWs.
CONCLUSION
To allow us to evaluate the progress of this program,
and to help us plan where we can best utilize our contract
collars, we ask that you provide us with the. following information
on compliance schedule activities:
o Your current count of the number of POTWs or POTW
Authorities which are required to develop pretreat-
ment programs.
o Of those POTWs or POTW Authorities required to develop
programs, how many have pretreatment compliance schedules?
How many have modification clauses?
o Kow many POTWs or POTW Authorities, required to develop
pretreatment programs, do not yet have either a compliance
schedule or a modification clause?
o Kow do you plan to deal with those PCTVrs or PCTW
Authorities with neither, a compliance schedule nor a'.
r.cdificaticn clause, in a -a-nner that will allow them
sufficient time to develoo a orocrar. orior to the Julv
1, 1553 deadline? -----
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Fcr purposes of answering the first three questions, we have
attached a form that can be filled in for each State in your
Region. Because of the need to finalize pur contract planning
process, we need this information as soon'-as possible and would
like to have it within four weeks of your receipt of this memorandum,
Please send the completed .forms to Michael Kerner, Permits
Division, (EN-336),~US EPA, 401 M Street SW, Washington, D.C.
20460. If you-have any questions on this or any other aspect of
the National Pretreatment Program you can call Michael Kerner at
(202) 755-0750 (FTS).
By diligently pursuing this compliance schedule activity,
we should be able to prevent any further program slippage and
encourage the rapid and successful development of this important
pollution control program.
Leonard A. Miller
Attachments • • • ' '
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VLB. 3.
"Statutory Deadlines for Compliance by Publicly Owned Treatment Works Under
the CWA", dated March 4, 1983.
\bl9
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\(c7T>
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» UNITED STATES ENVIRONMENTAL PROTECTION AGEN
V* ^^^jf • WASHINGTON, DC 20460
'«< PPO*0
4 MAR 1983
MEMORANDUM ueGAU ANO ,N,oTOMBNT COON.ei.
SUBJECT: Statutory Deadlines for Compliance by Publicly
Owned Treatment Works under the Clean Water Act
FROM: Robert M. Perry
Associate Administrator
• and General Counsel
TO: Frederic A. Eidsness, Jr.
Assistant Administrator for Water
ISSUE
Section 21 of the Municipal Wastewater Treatment Construction
Grant Amendments of 1981, amended §301(i) of the Clean Water Act
by substituting "July 1, 1988," for "July 1, 1983." What effect,
if any, does this amendment have on the statutory compliance dead-
lines for publicly owned treatment works contained in S301(b)(1)(B)
and §301(b)(1)(C), and on the authority of EPA and States to
establish compliance schedules by the exercise of enforcement
discretion?
ANSWER
Section 21 of the 1981 Amendments does not amend the July 1,
1977, compliance deadlines for POTWs contained in §301(b)(1)(B)
and §301(b)(1)(C). However, under §301(i) es amended, EPA and
States with approved NPDES programs may extend this deadline in
NPDES permits up to, but not beyond, July 1, 1988, for POTWs which
satisfy the criteria in §301(i) and implementing regulations.
Although permits for POTWs which do not qualify for §301(i) exten-
sions must require immediate compliance, EPA and States may use
their enforcement discretion to establish compliance schedules in
the context of enforcement actions, such as administrative orders
and judicial decrees.
DISCUSSION
In 1972, Congress established July 1, 1977, as a statutory
deadline by which publicly owned treatment works (POTWs) were
required to comply with effluent limitations based on secondary
treatment (§301(b)(1)(B)) and any more stringent limitations,
including those necessary to meet water quality standards (§301(b)
(!•)(€)). Numerous administrative and judicial decisions held that
the Agency lacked authority to extend the date for compliance in
NPDES permits beyond the statutory deadline.
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Bethlehem Steel Corp. v. Train, 544 F.2d 657 (3d Cir. 1976);
United States Steel Corp. v. Train, 556 F.2d 822 (7th Cir. 1977);
Republic Steel Corp. v. Costle, 581 F.2d 1228 (6th Cir. 1978).
With respect to POTWs in particular, the Fourth Circuit held
thart EPA lacked authority to extend the 1977 deadline in an NPDES
permit issued to a POTW, notwithstanding that the Federal Govern-
ment had illegally impounded Federal construction grant money.
State Water Control Board v. Train, 559 F.2d 921 (4th Cir. 1977).
However, the court also noted that the Agency had discretion in
enforcing the deadline, and that it expected the Agency to exercise
its discretion in a responsible manner:
•
Our holding in this case does not mean that, absent
Congressional action, severe sanctions will inevitably be
imposed on municipalities who, despite good faith efforts,
are economically or physically unable to comply with the
1977 deadline. We fully expect that, in the exercise of
its prosecutorial discretion, EPA will decline to bring
enforcement proceedings against such municipalities.
Furthermore, in cases where enforcement proceedings are
brought, whether by EPA or by private citizens, the courts .
retain equitable discretion to determine, whether, and to what
extent fines and injunctive sanctions should be imposed
for violations brought about by good faith inability to
comply with the deadline. In exercising such discretion,
EPA and the district courts should, of course, consider the
extent to which a community's inability to comply results
from municipal profligacy. 559 F.2d at 927-28.
«
Realizing that many dischargers would fail to meet the 1977
deadline despite good faith efforts, EPA formalized a system by
which to establish realistic compliance schedules through the
exercise of enforcement discretion. . Under this policy, EPA and'
NPDES States issued "Enforcement compliance schedule letters"
(ECSLs) to POTWs and industrial .dischargers'which were unable to
meet the July 1, 1977, deadline despite all good faith efforts.
An ECSL contained: 1) an expeditious but realistic compliance
schedule; 2) the discharger's commitment to abide by the schedule
and acknowledgement that the schedule was achievable; and 3) the
Agency's commitment not to take further enforcement action if the
discharger complied with the schedule.
The Clean Water Act Amendments of 1977 addressed the issue of
noncompliance with the 1977 deadline in different ways for munici-
pal dischargers and" industrial dischargers. For direct industrial
dischargers, Congress chose not to allow any extensions of the 1977
deadline to be contained in NPDES permits. Rather, Congress
directed the Agency to use its enforcement discretion in such
cases, and authorized EPA to issue "extension orders" under the•
authority of §309(a)(5)(B). Thus, for industrial dischargers,
Congress clearly defined the terms upon which it authorized the
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"X
Agency to use -its enforcement authority to address noncompliance
with the 1977 deadline.
Congress took a different approach for POTWs. Section 301(1)
(1) authorized EPA and NPDES States to extend, in NPDES permits,
the July 1, 1977, deadline up to July 1, 1983, for POTWs which met
certain criteria. EPA was ..able to establish compliance schedules
for most POTWs in §301(i) permits, and stopped issuing ECSLs.- As
1983 approached, it became clear that many POTWs could not comply
by July 1, 1983, and EPA again needed a device to establish
realistic compliance schedules. Rather than resurrect the ECSL
policy,, EPA decided to use its enforcement authority under S309(a)
(5) (A). This subsection, added by the 1977 CWA Amendments,
authorizes EPA to issue administrative orders which "specify a time
for compliance . . . not to exceed a time the Administrator deter-
mines to be reasonable in the case of a violation of a final dead-
line, taking into account the seriousness of the violation and any
good faith efforts to comply with applicable requirements." The
October 1979 National Municipal Policy and Strategy directed EPA
Regions to issue §309(a ) ( 5) ( A) orders to POTWs, establishing
compliance schedules which could exceed the 1977 deadline, for
secondary treatment, but which were not to exceed the 1983 deadline
for the more stringent "best practicable waste treatment technology
over the life of the works" ("BPWTT") required by S301(b) (2) (B) .
In the 1981 CWA Amendments, Congress chose not to supercede
the Agency's practice of using §309 (a) ( 5) (A) orders as a means of
establishing compliance schedules for POTWs through the use of
enforcement discretion. However, Congress repealed §301(b) ( 2) (B) ,
thereby eliminating the major reason for requiring that such orders
not extend beyond July 1, 1983. Congress also amended §301(i) by
substituting "July 1, 1988" for "July 1, 1983," wherever the latter
appeared, thus allowing NPDES permits for qualifying POTW's to
contain compliance schedules up to July 1, 1988.
However, Congress did not modify the 1977 statutory deadline
contained in Section 301(b) . In fact, §21(a) of the 1981 amend-
ments explicitly states that the Amendments are not intended to
extend schedules of compliance then in effect, except, where
reductions in financial assistance or changed conditions affecting
construction beyond the control of the operator made it impossible
to complete construction by July 1, 1983.
There is even stronger support for the authority of the
Agency (acting through the Department of Justice) arid the district
courts to establish compliance schedules in judgments entered in
civil enforcement actions, including compliance schedules that
extend beyond a statutory deadline.* (indeed, if the compliance
1 As you are aware, the Administrator has issued a policy on
enforcement of the December 31, 1982 deadline for attainment of
primary ambient standards under the Clean Air Act. This policy
assumes that equitable relief may be obtained in judicial enforce-
ment proceedings.
•23
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schedule did .not extend beyond the statutory deadline, there
would probably not be a need to resort to an enforcement action.)
The quotation from the State Water Control Board case cited above
supports this position. Moreover, the recent Supreme Court
decision in Weinberger v. Romero-Barcello, 50 L.W. 4434 (April 27,
1982) provides strong confirmation of this view.
V
It is important to emphasize the limited purpose and effect
of an administrative order, or a judicial decree, that establishes.
a compliance schedule extending beyond a statutory deadline.
Such an order or decree does not "extend the deadline," in a legal
sense; for neither the Agency nor the judiciary has authority to
amend or disregard a statute.2 Rather, such orders and decrees are
a means of enforcing the statute, and achieving compliance.
Neither administrative orders nor judicial decrees "allow"
or
"permit" continued violations of the law, but rather require
compliance with it, as expeditiously as possible.
In summary, the 1977 deadlines in §§301(b)(1)(B) and
301(b)(l)(C) remain in effect for any POTW which does not qualify
for an extension under §301(i). However, both judicial
interpretation and Congressional acquiesence support EPA's view
that the Agency may, and should, use enforcement discretion in a "
responsible manner to establish expeditious but realistic compli-
ance schedules for POTWs. Use of judicial enforcement and
§309(a)(5)(A) orders for this purpose, in appropriate cases, are
responsible methods by which to exercise that discretion.
^ Therefore,courts have held that issuance of an administrative
order - even if the discharger complies with it - does not absolve
the discharger from liability for the violation, or preclude the
Agency from commencing a judicial enforcement action based on the
same violation. United States v. Earth Sciences, Inc., 599 F. 2d
368 (10th Cir. 1979). United States v. Outboard Marine Corp., 12
ERC 1346 (N.D. 111. '1978). United States v. Detrex Chemical Indus-
tries, Inc. , 393 F. Supp 735 (N.D. Ohio 1975) Nor does issuance
of an administrative order preclude citizens' suits against the
discharger under §505 of the Act.
162
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VLB. 4,
"Example Language for Modifying NPDES Permits for Pretreatment Program
Approval", dated September 22, 1983.
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\ UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
WASHINGTON. D.C. 20460
r
OFFICE OF
WATER
.- SEP 2 2 1983
MEMORANDUM
SUBJECT: Example Language for Modifying NPDES Permits
for Pretreatment Program Approval
FROM: Martha G. Prothro, Director
Permits Division (EN-336)
TO: Water Management Division Directors
There are over 1700 POTWs that must develop local pretreatment
programs. To date, over 100 POTW programs have been approved and
many of the remaining POTWs have submitted or are very close to
submitting a final program. Therefore, many programs will be
approved in the next several months.
After an industrial pretreatment program is approved, the
POTW's discharge permit must be modified or reissued to incor-
porate the program as an enforceable component as required in 40
CFR §403.8(c). The modification of permits is authorized under
40 CFR S122.62(a)(7) where reopener conditions have been used
in the permits. In 40 CFR §122 .44(j ) (2 ), permits must include
conditions such that, "... The local program shall be incor-
porated into the permit as described in 40 CFR Part 403. The
program shall require all indirect dischargers to the POTW to
comply with the reporting requirements of 40 CFR Part 403."
Reporting requirements for the POTW that are inserted in the
modified permit are covered under 40 CFR §122.48(c) which
references §122.44.
There have been several requests from Regional and State
agency personnel for help with appropriate permit language. We
have reviewed example language for modifying permits from several
Regions and States (attached) and have developed example language
ourselves. While there are a number of differences.among the
examples, you will notice that a common element among the examples
is the requirement that the POTW submit an annual report on
pretreatment activities. Such reports usually require information
on the POTW pretreatment activities during the past year, a
summary of its effectiveness and proposed program modifications.
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The reports summarize industrial user monitoring, compliance and
enforcement activities conducted over the past year. Regardless
of which example modification language your staff chooses to
adopt or modify, we strongly recommend and advise you to include
an annual reporting element in the modified permit.
I request that you and your pretreatment staff review the
attached draft permit modification materials and submit comments
to Dr. Gallup of my staff by October 14. Please call me or Jim
Gallup at FTS 755-0750 if you have any questions.
Attachments
cc: Pretreatraent Coordinators
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STANDARDIZED LANGUAGE FOR MODIFYING
NPDES PERMITS FOR PRETREATMENT PROGRAM APPROVAL
The goals of the National Pretreatment Program are to improve
opportunities to recycle and reclaim wastewaters and sludges, to
prevent pass through of pollutants into receiving waters, and to
prevent interference with the operation of the publicly owned
treatment works (POTWs) when hazardous or toxic industrial wastes
are discharged into the sewage system. The primary responsibility
for developing pretreatment programs and for enforcing national
pretreatment standards for industries rests with the local POTW
authorities. EPA estimates that more than 1,700 POTW Authorities
must develop programs which will protect over 2,000 permitted
municipal treatment facilities.
EPA and State regulatory agencies participate in the
pretreatment program by overseeing the development, implementa-
tion, and continued effectiveness of local pretreatment programs.
In non-NPDES States, EPA issues or modifies permits and retains
authority for the pretreatment program, although the States may
participate in some activities. In NPDES States without pretreat-
ment authority, EPA reviews and approves POTW submissions, but
the State is responsible for permit modification and permit
compliance. In these cases, it is important for EPA to develop
an agreement with the State to ensure that permits are modified
to reflect pretreatment program approval. Program approval and
permit modifications are equally important in NPDES States with
Pretreatment authority. EPA can obtain some consistency and ease
the States' workload by providing standard permit modification
language to them.
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POTWs have been notified by EPA and State agencies of the
requirement to develop a local program. Program development
.compliance schedules have been inserted into the POTWs1 NPDES, or
State-issued permits, making development and submission of local
pretreatment programs an integral and enforceable component of
the permits. Compliance schedules usually require POTWs to
develop and document the authorities, information, and procedures
necessary to implement the General Pretreatment Regulations.
Municipalities develop the local program with technical and
financial assistance from EPA and the States.
Generally, a POTW prepares a plan describing how it will
implement the pretreatment program in its service area and submi^j
the plan to the EPA or the delegated State regulatory agency for
review and approval. EPA or the delegated State must then review
the submission to ensure that:
o All necessary legal authorities are in place.
o The technical information presented demonstrates the
POTW's understanding of the industrial community that
will be controlled (type, size, pollutants, necessary
pollutants limits, problems to be addressed, etc.).
o Administrative, technical and legal procedures for
implementing the program are consistent with the complexity
of the industrial community served.
o The estimated cost of implementing the program (including
manpower and equipment), based on the procedures established,
is reasonable and revenue sources are available to ensure
continued, adequate funding.
o The objectives and requirements of the General Pretreatment
Regulations are fulfilled by the planned program. —
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It should be reiterated that the POTW's submission at this
point represents only a plan for operating a program to comply
with the regulatory requirements. To date, more than 100 POTW
pretreatment programs have been approved nationwide. Most of the
remaining POTWs have already submitted portions of their programs
for interim comment or review. Accordingly, a large number of
programs should soon be ready for approval without substantial
additional effort.
After approval, the POTW begins implementing the pretreatment
program plan subject to oversight by EPA or the State regulatory
agency. At this time, the Approval Authority turns from
considering program development problems to considering
implementation, verification and compliance issues, such as:
o Documentation of POTWs1 Compliance with Approved Programs.
For the individual case this means that each POTW must
demonstrate, through reporting requirements, that the
elements of its pretreatment program are actually being
carried out. In the general case, the Approval Authority
will have to plan oversight and surveillance activities
•that regularly cover all POTWs within its jurisdiction.
o Documentation of the Effectiveness of POTW Programs.
A POTW complying with provisions of its approved pretreatment
program may still not be adequately protecting site-specific
receiving water quality and sludge disposal options,
especially as new requirements are developed.. Appropriate
measures must be developed to ensure that local environmental
goals are being met by the POTW and that improvements can
be evaluated.
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In addition to considering these issues, Section 403.8(c) of
the General Pretreatment Regulations specifies that the NPDES
permit must be modified or reissued to incorporate the conditions
of the approved program as an enforceable component. The language
placed in the permit must take into account the issues mentioned
above and must ensure that:
o The general requirements of the National Pretreatment
Program and the specific requirements of the .local program
will be implemented in a manner that achieves the objec-
tives of preventing pass through, interference and sludge
contamination.
o The Approval Authority will be able to bring about POTW
compliance with the responsibilities established in the
regulations and the approved local program submission.
o The POTW understands its obligations and the standards
and benchmarks against which its performance will be
judged.
Permit modification, then, is a very important part of the
overall process of implementing the National Pretreatment Program.
Because there are so many important issues to be addressed in
local programs, and because so many agencies will be responsible
for permit modification and oversight activities, we have
developed the attached model permit language that can be adapted
to most POTWs across the country. The attachment includes standard
permit modification language (adapted from actual permit language
from Regions and States) that can be used to incorporate
into the permit a POTW's approved pretreatment program and other
conditions and requirements with which the POTW must comply.
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This package also includes examples of special condition
clauses. In certain circumstances, additional substantive or
notification permit requirements may be appropriate for a partic-
ular POTW. Some examples of situations that might indicate the
need for special pretreatment permit conditions are listed below.
o Where the industrial flow represents a very large
percentage of the total flow of the POTW.
o Where only one or two major industrial user(s) discharge
to the POTW.
o Where industrial users have the potential to discharge
highly toxic, hazardous, or unusual wastes.
o Where there are a large number or variety or industrial
users.
o Where a POTW has a history of NPDES permit violations.
o Where the receiving waters have unusual water quality
needs because of sensitive species or intolerance to high
or varying pollutants loads.
o Where a POTW's wastewater or sludge is reused on agricul-
tural or recreational land or where treated sludge is
sold commercially.
o Where a POTW receives wastes from septage haulers, or
other waste haulers that .could be handling hazardous
wastes that have a potential for adverse impacts on the
treatment plant.
o Where the POTW service area is large or made up of
numerous political jurisdictions requiring cooperation
and coordination between several local agencies.
For these more difficult situations, we have developed five special
conditions as part of the following standard permit language.
These may be useful when tailored to a POTW with special problems
or circumstances that cannot be covered by the more general,
standardized language. .
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SUGGESTED PRETREATMENT LANGUAGE
FOR NPDES PERMITS
The following language should be inserted into the "Other
Requirements" section of the POTW's NPDES permit after the local
pretreatment program is approved.
Industrial Pretreatmeht Program
1, The permittee is responsible for enforcing any National
Pretreatment Standards (40 CFR 403.5] (e.g., prohibited
discharges, Categorical Standards, locally developed effluent
limits) in accordance with Section 307(b) and (c) of the Act.
The permittee shall establish and enforce specific limits to
implement the provisions of 40 CFR 403.5(a) and (b) as
required by 40 CFR 403.5(c). These locally established
effluent limitations shall be defined as National Pretreat-
ment Standards.
2. The permittee shall implement the Industrial Pretreatment
Program in accordance with the .legal authorities, policies,
procedures, and financial provisions described in the permit-
tee's Pretreatment Program submission (and related documents)
entitled, and
dated, , and the General Pretreatment Regulations
(40 CFR 403). The permittee shall also maintain adequate
funding levels to accomplish the objectives of the pretreatment
program.
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3. The permittee shall provide the EPA or State with an annual
report that briefly describes the permittee's program activi-
ties over the previous twelve months. The permittee must
also report on the pretreatment program activities of all
participating agencies [name them], if more than one juris-
diction is involved in the local program. This report shall
be submitted no later than • of each year and
shall include:
(a) An updated list of the permittee's industrial users,
or a list of deletions and additions keyed to a
previously submitted list. A summary of the number of
industrial user permits (or equivalent) issued this past
year and the total (cumulative) issued;
(b) A summary of the compliance/enforcement activities during
the past year including total number of enforcement act if
any discharge restrictions or denials against industrial!
users and the amount of any penalties collected. In
addition the summary shall contain the number & percent
of industrial users in compliance with:
(1) Baseline Monitoring Report requirements;
(2) Categorical Standards; or
(3) Local limits
(c) A summary of the monitoring activities conducted during the
past year to gather data about the industrial users, including
inspections to verify baseline monitoring reports;
(d) A narrative description of program activities during the past
year including a general summary of the effectiveness of
the program in controlling industrial waste. A descrip-
tion and explanation of all proposed substantive changes
to the permittee's pretreatment program. Substantive
changes include, but are not limited to, any major
modification in the program's administrative structure
or legal•authority, a significant alteration of the scope
of the monitoring program, or a change in the level
of funding for the program, a major change in the staffing
or equipment used to administer the program, change in
the sewer use ordinance, regulations, or rules, a proposgg|
change or addition to locally established effluent
limits (pursuant to 40 CFR 403.5(c));
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(e) A summary of analytical results from flow proportioned,
composite sampling for [list priority pollutants] at the
POTW influent, effluent, and sludge for the same [number
of days] period and bioassay data for (list pollutants)
for a (number of days) period; and
(f) For Baseline Monitoring Reports (where applicable), a
summary of the industrial users notified during the past
year, the total cumulative notifications, the number of
reports received/approved during the year and total
cumulative.
(g) If EPA (or State) does not object to any proposed
modifications described in the annual report within 90
days, the changes shall be considered approved.
4. The EPA (or State) has the right to inspect or copy records or
to initiate enforcement actions against an industrial user or
the permittee as provided in Sections 308 and 309 of the Act.
5. EPA (or State) retains the right to require the POTW to
institute changes to its local pretreatment program:
(a) If the program is not implemented in a way that satisfies
the requirements of 40 CFR 403;
• • - 'r • • • . . ' .•
(b) If problems such as interference, pass through, or sludge
contamination develop or continue;
(c) If other Federal, State, or local requirements (e.g.,
water quality standards) change.
Special Conditions (Case-by-Case)
The following types of requirements should be inserted into
a POTW's NPDES permit when special circumstances, such as
continuing noncompliance or significant or unusual industrial
discharges, which could cause interference, pass through, or
sludge contamination, are encountered.
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1. The permittee shall notify EPA (or State) 60 days prior to
any major proposed change in sludge disposal method. EPA (or
State) may require additional pretreatroent measures or controls
to prevent or abate an interference incident relating to
sludge use or disposal.
2. The permittee shall establish and enforce regulations to
control the introduction of septage waste from commercial
septage haulers into the POTW. These local regulations shall
be subject to approval by EPA (or State).
3. The permittee shall monitor the following major industrial
users for the pollutants of concern on a [frequency, e.g.,
monthly, quarterly] basis arid forward a copy of the results
to EPA (or State).
List Industrial Users
a. . •. .
b.
c.
List Pollutants of Concern
"'I.-' ' ' ""' .-•"••
ii.
iii.
4. The permittee shall sample and analyze its influent, effluent,
and sludge for [list toxic pollutants] on a [frequency] basis
and forward a copy of the results to EPA (or State).
5. The permittee shall monitor the receiving waters for [list
toxic pollutants] on a [frequency] at [describe monitoring
site location] and forward a copy of the results to EPA
(or State) .
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2SKPLE 1
Implementation of G-J Town Pretreatment Program
After the POTW pretreatment program meets all requirements under
§403.9(b) and is approved by the Approval Authority, the G-J town
Joint Sewer Board's NPDES permits must be modified to include
permit conditions for Industrial pretreatment program implemen-
tation.
A set of the special permit requirements has been drafted as follows;
a. The permittee has been delegated primary responsibility
for enforcing against discharges prohibited by 40 CFR
403.56 and applying and enforcing any National Pretreat-
ment Standards established by the United States Environ-
mental Protection Agency in accordance with'section
307(b) and (c) of the Act.
b. The permittee shall implement the G-J town Industrial
Pretreatment Program in accordance with the legal
authorities., policies, and procedures described in the
permittee's Pretreatment Program document entitled,
"Industrial Pretreatment Program, G-J town" (Date to be
inserted). . -•;••• •• . '---•'••. -•- ••;' -••.•-.; ;•->•••:; •.• -. ••• •• ..-
c. -The permittee shall provide the State of Department of
Environmental Conservation and EPA with a semi-annual
report describing the permittee's pretreatment program
activities over the previous calendar months in accordance
with 40 CFR 403. 12.
d. Pretreatment standards (40 CFR 403.5) prohibit the
introduction of the following pollutants into the waste
treatment system:
o Pollutants which create a fire or explosion hazard in
the POTW,
o Pollutants which will cause corrosive structural
damage to the POTW, but in no case, discharge with a
pH lower than 5.0,
o Solid or viscous pollutants in amounts which will
cause destruction to the flow in sewers, or other
interference with operation of the POTWs.
o Any pollutant, including oxygen demanding pollutants
(BODs, etc.), released in a discharge at such a volume
or.strength as to cause interference in the POTW, and,
o Heat in amounts which will inhibit biological activity
in the POTW, but in no case, heat in such quantities
that the influent to the sewage treatment works exceeds
104°F (40eC).
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e. In addition to the general limitations expressed in
paragraph d above/ applicable National Categorical
Pretreatment Standards must be met by all industrial
users of the POTW.
f. USEPA and the permit issuing authority (DEC) retains the
right to take legal action against the industrial user
and/or the permittee for those cases where a permit
violation has occurred because of the failure of an
industrial user to meet an applicable pretreatment
standard.
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EXAMPLE 2
NATIONAL PRETREATMENT PROGRAM
MEMORANDUM OF AGREEMENT
BETWEEN THE
CITY OF WESTMINSTER, COLORADO
AND THE
UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, REGION VIII
The United States Environmental Protection Agency, Region VIII (hereinafter,
the "EPA") hereby approves the City of Westminster's (hereinafter, the "City")
Pretreatment Program described in the City's November..15,.1982 submittal
document entitled "Industrial Pretreatment Program", as meeting the requirements
of Section 307(b) and (c) of the Clean Water Act (hereinafter, the "Act") and
regulations promulgated thereunder. Further, to define the responsibilities for
the establishment and enforcement of National Pretreatment Standards for
existing and new sources under Section 307 (b) and (c) of the Act, the City and
EPA hereby enter into the following agreement:
1. The City has primary responsibility for enforcing against discharges
prohibited by 40 CFR 403.5, and applying and enforcing any National
Pretreatment Standards established by the United States Environmental
Protection Agency in accordance with Section 307(b) and (c) of the Act.
2. The City shall implement the Industrial Pretreatnent Program in
accordance with the legal authorities, policies, and procedures
described in the permittee's Pretreatment Program document entitled,
"Industrial Pretreatment Program", November 1932. Such program commits
the City to do the following:
a. Carry out inspection, surveillance, and monitoring procedures that
will determine, independent of information supplied by the incus-
trial user, whether the industrial user is in compliance with the
pretreatnent standards; •.•-.. ... .... ..
b. Require development, as necessary, of compliance schedules by each
industrial user for the installation of control technologies to
meet applicable pretreatment standards;
c. Maintain and update, as necessary, records identifying the nature
and character of industrial user inputs;
d. Obtain appropriate remedies for noncompliance by any industrial
user with any pretreatment standard and/or requirement; and,
e. Maintain an adequate revenue structure for continued
implementation of the pretreatment program.
3. The City shall provide the United States Environmental Protection
Agency and the State of Colorado with an annual report briefly
describing the City's pretreatment program activities over the previous
calendar year. Such report shall be submitted no later than March 2Sth
of each year and shall include:
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a. An updated listing of the City's industrial users.
b. A descriptive sunmary of the compliance activities including
number of major enforcement actions, (i.e., administrative orders,
penalties, civil actions, etc.).
c. An assessment of the compliance status of the City's industrial
users and the effectiveness of the City's pretreatment program in
meeting its needs and objectives.
d. A description of all substantive changes made to the permittee's
pretreatment program description referenced in paragraph 2.
Substantive changes include, but are not limited to, any change in
any ordinance, major modification in the program's administrative
structure or operating agreement(s), a significant reduction in
monitoring, or a change in the method of funding the program.
4. Pretreatnent standards (40 CFR 403.5) prohibit the introduction of the
following pollutants into the waste treatment system from any source of
nondomestic discharge: ..... ..
a. Pollutants which create a fire or explosion hazard in the publicly
owned treatment' works (POTW);
b. Pollutants which will cause corrosive structural damage to the
POTW, but in no case, discharges with a pH lower than 5.0;
c. Solid or viscous pollutants in amounts which will cause
destruction to the flow in sewers, or other interference with
operation of the POTW;
d. Any pollutant, including oxygen demanding pollutants (BOD?,
etc.)» released in a discharge at such a volume or strength as to
cause interference in the POTW; and,
e. Heat in amounts which will inhibit biological activity in the
POTW, but in no case, heat in such quantities that the influent to
the sewage treatment works exceeds 104° F (40° C).-
5. In addition to the general limitations expressed in paragraph 4. above,
applicable National Categorical Pretreatment Standards must be met by
all industrial users of the POTW. These standards are published in the
Federal Regulations at 40 CFR 405 et. seq.
6. The Agreement contained herein shall be incorporated, as soon as possible,
in the City's NPDES permit. Noncompliance with any of these requirements
shall be subject to the same enforcement procedures as any permit violation.
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Nothing in this Agreement is intended to affect any Pretreatment requirement
including any standards or prohibitions, established by state or local law as
long as the state and local requirements are not less stringent than any set
forth in the National Pretreatment Program Standards, or other requirements or
prohibitions established under the Act or regulations promulgated thereunder.
Nothing in this Agreement shall be construed to limit the authority of the
U. S. EPA to take action pursuant to Sections 204, 208, 301,304, 306, 307, 308,
309, 311, 402, 404, 405, 501, or other Sections of the Clean Water Act of 1977
(33 USC 1251 et seq).
This Agreement will become effective upon the final date of signature.
City of Westminster, Colorado U.S. Environmental Protection Agency
Region VIII
By By
Date Date
State of Colorado Department of Health
Water Quality Control Division
By.
Date
IcH
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EXAMPLE:
DRAFT COPY
ATTACHMENT 3 ^gj^j TQ REY1S1QH
OTHER REQUIREMENTS
APPROVED PRETREATMENT PROGRAM CONDITIONS
Under the authority of (Section 307(b) and (c) and 402(b)(8) of the Clean
Water Act or applicable State law) and implementing regulations (40 CFR
Part 403), the permittee's final pretreatment program application as submitted
on _ is hereby approved. The permittee, hereinafter
referred to as the "Control Authority", shall apply and enforce against
violations of categorical pretreatment standards promulgated under
Section 307(b) and (c) of the Act and prohibitive discharge standards as set
forth in 40 CFR Part 403.5. The Control Authority shall Implement the condi-
tions of the Approved Pretreatment Program in the following order:
A. APPROVED PRETREATMENT PROGRAM CONDITIONS
1. Apply and enforce the legal authorities and procedures as approved on
_ which shall include, but not be limited to, those
specific local effluent limitations established pursuant to 40 CFR
403.5(c) and enforceable on industrial users of the system for the
parameters listed in Part III, Section D of this prmit in accordance
with the approved program plan industrial allocation scheme.
2. Maintain and update, as necessary, records indentifying the nature,
. character, and volume of pollutants contributed by industrial users
to the publicly owned treatment works (POTW).
•
3. Enforce and obtain appropriate remedies for non-compliance by any
industrial user with any applicable pretreatment standard and require-
ment as defined by Section 307(b) and (c) of the Act, Section 403.5,
and any State or local requirement, whichever is more stringent.
4. Issue (wastewater discharge permits, orders, contracts, agreements,
etc.) to all affected industrial users in accordance with the approved
pretreatment program procedures and require the development of
compliance schedules, as necessary, by each industrial user for the
installation of control technologies to meet applicable pretreatment
standards and requirements as required by Section _ of
Sewer Use Ordinance _ .
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5. Carry out inspection, surveillance, and monitoring requirements fa
which will determine, Independent of Information supplied by the \X
industrial user, whether the Industrial user 1s 1n compliance with
the applicable pretreatment standards.
6. Comply with all confidentiality requirements set forth in 40 CFR Part
403.14 as well as the procedures established in the approved pretreat-
ment program.
7. Maintain and adjust, as necessary, revenue sources to ensure adequate
equitable and continued pretreatment program implementation costs.
B. REPORTING REQUIREMENTS
The Control Authority shall prepare and submit to the (USEPA, Region V,
Permits Section or the State) a report on the th
of and the th of
which describes the pretreatment program activities for the (previous
calendar year or 6-month period or more frequently as required by the
Approval Authority). Such report(s) shall include:
1. An updated listing of the Control Authority's industrial users which
identifies additions and deletions of any industrial users from the
19 industrial waste inventory. Reasons shall be
provided for the aforementioned additions and removals., . •
2. A descriptive summary of the compliance activities initiated, ongoing
and completed against industrial users which shall include the number of
major enforcement actions (i.e. administrative orders, show cause hearings,
penalties, civil actions, fines, etc.) for the reporting period.
3. A description of all substantive changes proposed for the Control
Authority's program as described 1n Part III, Section A of this permit.
All substantive changes must first be approved by (Agency Name) before
formal adoption by the Control Authority. Hereinafter, substantive
changes shall include, but not be limited to, any .change in the enabling
legal authority to. administer and enforce pretreatment program conditions
and requirements, major modification In the program's administrative
procedures or operating agreements(s), a significant reduction 1n monitoring
procedures, a significant change in the financial/revenue system, or a
significant change in the local limitations for toxicants enforced and
applied to all affected industrial users of the sewage treatment works.
4. A listing of the industrial users who significantly violated applicable
pretreatment standards and requirements, as defined by section 403.8(f)(2)
(vii) of the General Pretreatment Regulations, for the reporting period.
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5. The sampling and analytical results for the specified parameters as
contained in Part III, Section C of this permit.
6. (optional) The Control Authority shall submit to the (USEPA, Region V,
; Permits Section and/or State) by December 31 of each year, the names and
address of the tanneries receiving the sulfide waiver pursuant to the
procedures and conditions established by 40 CFR 425.04(b) and (c). This
report must identify any problems resulting from granting the sulfide
waiver as well as any new tanneries tributary to the sewerage system for
which the sulfide standards may apply or any tannery receiving the sulfide
waiver which no longer is applicable.
7. (optional) The Control Authority shall submit to the (USEPA, Region V,
Permits Section or State Permit Section) by December 31 of each year, the
name and address of each industrial user that has received a revised
discharge limit in accordance with Section 403.7 (Removal Allowance
Authority). This report must comply with the signatory and certification
requirements of Section 403.12 (1) and (m).
C. SAMPLING AND MONITORING REQUIREMENTS
1. The Control Authority shall sample, analyze and monitor its influent,
effluent and sludge in accordance with the techniques prescribed in 40 CFR
Part 136 and amendments thereto, in accordance with the specified moni-
toring frequency and schedule for the following parameters:
(1) Parameters Units Frequency Sample Type . (2) Permittee's
Total Arsenic (As)
Total Cadmium (Cd)
Total Chromium (Cr,)
Total Chromium (Cr)
Total Copper (Cu)
Total Cyanide (CN)
Total Iron (Fe)
Total Lead (Pb)
Total Mercury (Hg)
Total Nickel (Ni)
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4
(1) Parameters Units Frequency Sample Type (2) Permittee's
Total Phenols
.Total Silver (Ag)
Total Zinc (Zn)
Total Kjeldahl Nitrogen (TKN)
(1) Approval Authority should Include other parameters as needed.
(2) Note whether sampling apply to permltte's Influent, effluent and sludge.
D. SPECIAL CONDITIONS
1. At no time shall the following dally Influent values be exceeded by
the Control Authority for the specified parameters:
Parameters Mg/ 1 Pounds / Day
Total Cyanide (Cn)
Total Cadmium (Cd)
Total Chromium (Cr, T)
Total Copper (Cu)
Total Iron (Fe)
Total Lead (Pb)
Total Mercury (Hg)
Total Nickel (N1)
Total Silver (Ag)
Total Zinc (Zn) / , •
(Others) '
2. If the sampling data results from Part III, Section C of this permit meet
the criteria of 40 CFR 403.5(c), then this permit will be modified to include
influent values for these parameters.
3. (optional) The Control Authority shall notify (USEPA. Region V, Permits
Section or the State) 60 days prior to any major proposed change in existing
sludge disposal practices.
4. (optional) The Control Authority shall monitor the following Industrial
users discharge for th'e specified parameters in accordance with the following
frequency and schedule and submit the results to (Region V or the State) on
the th of and the the of
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Sample
List Users Parameter Units Frequency Type Notes
a.
b.
(Others)
E. RETAINER
The USEPA, Region V and the State retains the right to take legal action
against the industrial user and/or the Control Authority for those cases
where a permit violation has occurred because of the failure of an industrial
user's compliance with applicable pretreatment standards and requirements.
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PART III
Page 14
A. OTHER REQUIREMENTS
1. Contributing Industries and Pretreatment Requirements
a. The permittee shall operate an Industrial pretreatment program 1n
accordance with section 402(b)(8) of the Clean Water Act and the General
Pretreatment Regulations (40 CFR Part 403). The program shall also be
implemented in accordance with the approved POTW pretreatment program submitted
by the permittee which is hereby Incorporated by reference.
b. The permittee shall establish and enforce specific limits to
implement the provisions of 40 CFR §403.5(a) and (b), as required by 40 CFR
§403.5(c). All specific prohibitions or limits developed under this requirement
are deemed to be conditions of this permit. The specific prohibitions set out
in 40 CFR §403.5(b) shall be enforced by the permittee unless modified under
this provision.
c. The permittee shall, prepare annually a list of Industrial Users
which, during the past twelve months, have significantly violated pretreatment
requirements. This list is to be published annually, 1n the largest newspaper
in the municipality, during the month of , with the first
publication due .
d. In addition, at least 14 days prior to publication, the following
information is to be submitted to the EPA and the State for each significantly
violating Industrial User:
1. Condition(s) violated and reason(s) for v jlations(s),
2. Compliance action taken by the City, and
3. Current compliance status.
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• •, ••„-.'" ^ ,
£ ";*T"£. . *
•:V ^C
"*C,
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EXX&I2 5
STATE OF GEORGIA ' PART III
DEPARTMENT OF NATURAL RESOURCES
ENVIRONMENTAL PROTECTION DIVISION • Page 12 of 13
Permit No. GA0024449
•
A. APPROVED INDUSTRIAL PRETREATMENT PROGRAM FOR PUBLICLY • " .
OWNED TREATMENT WORKS (POTW)
I. The terms and conditions of the permittee's approved pretreatment
program, approved by the Environmental Protection Division (EPD)
on April 8, 1983 , (as provided for in
Chapter jVi-3-6-.07(6oj oi.tne Rules ana Regulations for Water
Quality Control), shall be enforceable through this permit.
2. Based on the information regarding industrial inputs reported by the
permittee pursuant to Part III paragraph B(2), the permittee will be
notified by EPD of the .availability of industrial effluent guidelines
on which to calculate "allowable inputs of incompatible pollutants
based on best practicable technology for each industry group. Copies
of guidelines will be provided as appropriate. Not later than 120 days
following receipt of this information, the permittee shall submit to .
the EPD calculations reflecting allowable inputs from each major
contributing industry. The permittee shall also require all such major
contributing-industries to implement necessary pretreatment require-
ments, providing EPD with notification of specific actions taken in
this regard. At that time, the permit may be amended to reflect the
municipal facility's effluent limitations for incompatible pollutants.
3. Starting on April 15, 1984 the permittee shall
submit annually to crp a report to induce rn'e i olio wing information:
a. A narrative summary of actions taken by the permittee to insure.; ,
that all major contributing industries comply witn the requirements :•.
of the approved pretreatment program. .
b. A list of major contributing industries using the treatment works, ;
divided into SIC categories, which have been issued permits, orders, - .
contracts, or other enforceable documents, and a status.of compli-
ance for each Industrial User.
c. The name and address of each Industrial User that has received a
conditionally or provisionally revised discharge limit. .
4. The permittee to which reports are submitted by an Industrial User
shall retain such reports for a minimum of 3 years and shall make
such reports available for inspection and copying by the EPD. This
period of retention shall be extended during the course of any un-
resolved litigation regarding the discharge of pollutants by the
'Industrial User or the operation of the approved pretreatment program
or when requested by the Director.
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STATE OF GEORGIA ' PART in
DEPARTMENT OF NATURAL RESOURCES
ENVIRONMENTAL PROTECTION DIVISION , . Page 13 of; J3
. Permit No.. GX0024449
B. INDUSTRIAL PRETREATMENT STANDARDS
f. The permittee shall require all industrial dischargers- into the permitted
system to meet State and Federal Pretreatment Regulations promi^tted
in response to Section 307(b) of the Federal Act.; Other infcrmatfc* snay
be needed regarding new industrial discharges and will be requested from
" the j$arm#tee after &D "has received no.ti<» pt the hew industrial cUtscnv ge.
2. A major contributing industry is one that: (1) has a flow of 50,000 gallons
or more per average work day; (2) has a flow greater than five percent of
; the> flow carried by ; the 'municipal system receiving the waste; (3) has in
its^ waste a toxic ^allutant in toxic amounts as defined in standards issued
lhdi^•&(£tian:^j^Ca>.oi.t^•FdterJy Act; or (<0 has significant impact,
either singly «F in corftiJiBition with other contributing industries, on the
trearnfeflt warks-or the qsaif ty- of its effluent, or interferes with disposal
ofits sewage
3. Any change in the definition o4 9. major contributing industry as a result
of promulgations in response t& Section 307 of the Federal Act shall
become a part of this permit.
REQLfikESte-NTS FOEl EFFLUENT LliVfFTATION^ ON POLLUTANTS ATTRIBUTABLE
TO INDUSTRIAL USERS .
1. EfJTiuerft iimitatiofts for the permittee's discharge are listed in Part 1 of
^ermitr.: Other ;pollutartts attributable to Inputs from major contributing
siflg!the.:n»umcipal,s.^5em may also be: present in the permittee's
At such timfc as suificiefit information becomes avaUable to establish
such poliul!8irtts^ this permit may be revised to specify effluent
for any or all olsoch other pollutants in accordance with best practi-
cabie technolcsgy; |^ water 'quality standards. Once the specif ic nature of indus-
trial co^fribut«^:l^sbee»io^tif;ied^d^ and reporting requirements
may be levied for other parameters in addition to those specified in Part I of this
permit.' • ' •••'"'. "'.- ;>. •'• :': " ; • -•/
With regard to the efttuent requirements listed in Part I of this permit, it may
be necessary for tfte permittese to supplement ttte requir .ierhents of the State
and Federal Pretf eatme«t Regulations to ensure; compliance by the permittee
with all applicable .effluent Jimltations^ Such actiohs bjy the permittee may be
necessary regarding some or all of the major contributing industries discharging
to the municipal system,
Information Resources Center !iJ'':''-'" ' ." '"""•' ':-:'L:°nter .
' US EPA {;«04) ' '-;.'". .,• ' - . • •
«vsw :;V;,-;;-,/ :::;..n,__.
cn, DC 20430 '"'"' '"';;''" '"'~
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