,*>'
   ,<«o $%,
        I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
        f                 WASHINGTON. O.C 20460
                               "EC I  6 '99
                                                                   of
 MEMORANDUM

 SUBJECT:  Update of General  Enforcement  Policy Compendium
            Transmittal Memorandum

 FROM:      Cheryl Wasserman,  Acting Directo
            Office of Enforcement Policy  	

 TO:        Associate Enforcement Counsels
            Associate General  Counsels
            HQ  Program Enforcement Offices
            Regional Counsels
            NEIC

      The attached documents  are an update of the General
 Enforcement Policy Compendium.  This  update consists of policies
 which  have been  added,  revised or deleted since the issuance  of
 the  June 11,  1987, update.   The policies are:
DOCUMENT NAMES                                    DATES

Issuance of Enforcement Considerations for           8/15/85
Drafting and Reviewing Regulations and
Guidelines for Developing New or Revised
compliance and Enforcement strategies

The Regulatory Development Process:  Change  in       2/06/87
Steering Committee Emphasis and OECM Implementa-
tion

Procedures.and Responsibilities for Updating     •':  3/10/87
and Maintaining the Enforcement Docket

Enforcement Docket Maintenance

Final Guidance on Use of Alternative Dispute
Resolution Techniques in Enforcement Actions

Policy on Invoking Section 9 of the EPA/DOJ          8/20/87
Memorandum of Understanding
             GM NUMBERS

             GM - 58
             GM - 59




             GM - 60



4/08/88       GM - 61

8/14/87       GM - 62



             GM - 63

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DOCUMENT MMES        .                             Q&1ES.

Processing of Consent Decrees                 '      9/14/87

Processing of Indirect Referrals                    9/29/87

Assertion of the Deliberative Process Privilege
(2 documents):

    A.   Guidance for Assertion of Delibera-
        tive Process Privilege

    E.   Change in Review Process for Concurrent.,.
        in Litigation

Procedures for Assessing" Stipulated Penalties

Procedures for Modifying Judicial Decrees

Expansion of Direct Referral of Cases to the
Department of Justice

Delegation of Concurrence and Signature of         '  1/14/88
Authority                                      .

Case lyfenagement Plans                              3/11/88

Assuring Tijmely FilL:^ and Prosecution of            4/38/88
Civil Judicial Actions                             :

Process  for conducting Pre-Referral Settlawant       4/13/88
Negotiations on Civil Judicial EnforcansTt, Cases

Guidaixe on Certification of Ccnpli-Jice with         6/25/88
Enforcanent Agreements
                                                              (31-64

                                                              01-65

                                                              GM - 66
10/3/84
9/30/87
1/11/8&-
1/11/83
1/14/88


GM - 67
GM - 68
GM - 69
                                                               GM - 70



                                                               GM - 71

                                                               GM - 72



                                                               GM - 73



                                                               GM - 74
    There are  modifications to  existing  policies. "'.'These
policies are:

GM  -•  11     This policy is obsolete and  should be  discarded.   The
             index notes that  it was deleted ar>6  revised.  We  are
             attaching  a permanent cover  page te>  be put in manual
             in its place.                      „       3

GM  -  25     This policy has been revised.   A new Federal Facility
             Compliance Strategy was signed on 11/8/88.  we  have
             excerpted  the enforcement  sections of  the Strategy
             and included them here.  We  are also including  a
             cover page explaining that the previous version is
             obsolete.   The 1984 Strategy should  be removed, and
             the cover  page and  new document put  in the manual,
             its place.

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GM - 41     This policy has been revised.  The old one should be
            discarded and the new one put in its place along with
            the permanent cover page explaining the changes.  The
            revised  index notes that it was replaced.

GM - 46     There was an addendum to this policy issued 8/4/87.
            The attached cover page should go in the. front of the
            current  #46 stating that there is an addendum
            contained there.  The addendum should be added after
            the current f46.
      '. 3 •• •
GM - 57     This policy was revised.  The old one should be
            discarded and the new one, put in its place along with
      \SN '"  the ^^manent cover page explaining the change.  The
            revised  index notes that the old one was replaced.

    Also attached is ;a revised chronological table of contents
and a topical index  of the currently effective general
enforcement, policies and guidance documents.  The revised table
of contents and index replace all previously issued versions.
        it-.-         "* t "
    The complete Compendium now consists of 74 documents numbered
sequentially GM-l through GM-74.  Additional copies of the
Compendium updates or any of the Compendium documents are
available through OECM's Program Development and Training Branch
until the supply is  exhausted.                    "*'

    It has come to our attention that o\$g mailing  list needs
substantial updating.  -Please fill  out  the attached  form
confirming your address and  interest  in receiving compendium
updates.   Then fold  it over so that the OEP return address  shows,
and mail- it, back to  us within four  weeks of the date of this
memorandum.  If we do not receive this  form, we will remove your
name from the mailing list.
       ^ •
       ,.!
    If you have any  questions concerning the compendium text
and/or would like a  copy, please contact
Attachments
     . if
cc:  ;A3$0fiate Administrator for Regional Operations
    -rEFZV library
     Datfid Buente,  Department of Justice

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     TABLE OF CONTENTS  -  GENERAL ENFORCEMENT POLICY COMPENDIUM
 TITLE Or                                DATE OF
 DOCUMENT                                DOCUMENT'

 Visitor's  Releases  and  Hold              11/08/72
 Harmless Agreements as  a Condition
 to  Entry to  EPA  Employees.on
 Industrial. Facilities

 Professional Obligations of               4/19/76
 Government Attorneys

 Memorandum of Understanding Between       6/15/77
 the Department of Justice and the
 Environmental Protection Agency

 "Ex Parte" Contacts in  EPA                8/04/77
 Rulemaking

 Conduct  of Inspections  After the          4/11/79
 Barlow's Decision

 Contacts with Defendants and             10/07/81
 Potential Defendants in
 Enforcement  Litigation

 "Ex Parte" Rules Covering Communica-     12/10/81
 tions Which  are  the Subject of Formal
Adjudicatory Hearings

Quantico Guidelines for Participation     4/08/82
 in Grand Jury Investigations

Agency Guidelines for Participation       4/30/82
 in Grand Jury Investigations

Reorganization of tne Office of           5/07/82
Regional counsel (includes
Administrator's Memorandum of
September  15, 1981)

Coordination of Policy  Development        Deleted
and Review                                  11/88
TAB

GM - I





GM - 2



GM - 3




GM - 4



GM - 5



GM - 6




GM - 7




GM - 8



GM - 9



GM - 10
GM  -  11

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TABLE OF CONTENTS
PAGE 2
TITLE OF
DATE OF
General Operating Precede     .or
EPA's Civil Enforcement Pr~-;ram
Case Referrals for Civil Litigation
Criminal Enforcement Priorities
for the Environmental Protection
Agency
Functions and General Operating
Procedures for the criminal
Enforcement Program
Regional Counsel Reporting
Relationship
Guidance for Drafting Judicial
Consent Decrees
Implementation of Direct Referrals
for Civil Cases
Consent Decree Tracking Guidance
Guidance on Evidence Audit of
Case Files
Policy on Civil Penalties
A Framework for Statute-Specific
Approaches to Penalty Assessments
Guidance Concerning Compliance with
the JencJcs Act
working Principles Underlying EPA's
National Compliance/Enforcement
Programs
Federal Facilities Compliance
(Previous version dated 1/4/84)
 7/06/82

 9/07/82
10/12/82

 1/07/85
                  TAB
                  GM -

                  GM -
                  GM -
    12

    13
    14
                  GM -  15
8/03/83
10/19/83
11/28/83
12/16/83
12/30/83
2/16/84
2/16/84
11/21/83
11/22/83
GM -
GM -
GM -
GM -
GM -
GM -
GM -
GM -
GM -
16
17
18
19
20
21
22
23
24
 11/08/88
GM - 2!

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 TABLE OF CONTENTS
 PAGE 3
 TITLE OF
 PQCUMEN/F

 Headquarters Review and Tracking
 of civil Referrals
                           ~\
 Guidelines for Enforcing Federal
 District Court Orders

 Liability of Corporate Shareholders
 and Successor Corporations for
 Abandoned Sites Under CERCLA

 Guidance on Counting and Crediting
 Civil Judicial Referrals

 Policy and Procedures on Parallel
 Proceedings at the Environmental
 Protection Agency

 Guidance for Implementing EPA^s
 Contractor Listing Authority

 Implementation of Mandatory
 Contractor Listing

 Guidance for Calculating the
 Economic Benefit of Noncompliance
 for a Civil Penalty Assessment

 Policy Against "No Action"
Assurances

 Implementing Nationally Managed or
 Coordinated Enforcement Actions:
Addendum to Policy FrameworJc for
 State/EPA Enforcement Agreements

The Use of Administrative Discovery
 Devices in the Development of Cases
Assigned to the Office of Criminal
 Investigations

 The Role of EPA Supervisors
 During Parallel Proceedings
DATE OF
DQCUMKNf


 3/08/84



 4/18/84



 6/13/84




 6/15/84



 1/23/84




 7/18/84



 8/08/84



11/05/84




11/16/84



 1/04/85





 2/16/84
TAB

GM - 26



GM - 27



GM - 28




GM - 29



GM - 30




GM - 31



GM - 32



GM - 33




GM - 34



GM - 35
 GM  -  36
  3/12/85
 3M -  37

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  TABLE OF CONTENTS
  PAGE 4
  TITLE Of
 Remittance of Fines and Civil
 Penalties

 Enforcement Settlement
 Negotiations

 Revised Regional Referral
 Package Cover Letter and
 Data Sheet
                    - ;,?
 Implementing the state/
 Federal Partnership in
 Enforcement:   State/Federal
 Enforcement "Agreements"
 (Previous version dated 6/26/84)

 Form of Settlement of Civil
 Judicial Cases

 Enforcement Document Release
 Guidelines

 Settlement  of  Enforcement
 Actions Using  Alternative
 Dispute Resolution Techniques

 Division of Penalties  with
 State and Local  Governments

 Policy  on Publicizing  Enforce-
 ment Activities
    Addendum

A Summary of OECM's Role in the
Agency's Regulatory Review
Process

Model Litigation Report Outline
and Guidance

Implementation of Guidance  on
Parallel Proceedings
 DATE OF
 DOCUMENT


  4/15/85



  5/22/85



  5/30/85




  8/25/86
 7/24/84



 9/16/85



10/02/85




11/21/85



11/21/85

 8/04/87

 1/27/86




 1/30/86



 2/03/86
 TAB


 GM -  38



 GM -  39



 GM -  40




 GM -  41
GM - 42
GM - 43
GM - 44
GM - 45
GM - 46
GM - 47
GM - 48
GM - 49

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  TABLE OF CONTENTS
  PAGE 5
  TITLE OF
  DOCUMENT
 Expanded civil Judicial Referral
 Procedures

 Guidance on Calculating After Tax
 Net Present Value of Alternative
 Payments

 EPA Policy on the Inclusion of
 Environmental Auditing Provisions
 in Enforcement Settlements

 Guidance on Implementing the
 Discretionary Contractor Listing
 Program

 Referral Letters for Forwarding
 Judicial Referrals and Consent
 Decrees to  the Department of Justice

 Media  Relations on Matters Pertaining
 to EPA's Criminal Enforcement Program

 Guidance on Determining a Violation's
 Ability to  Pay a Civil Penalty

 Guidance for  the FY 1989 State/EPA
 Enforcement Agreements Process
 (Previous version dated 4/31/87)

 Issuance of Enforcement Considerations
 for Drafting and  Reviewing Regulations
 and Guidelines  for Developing New or
 Revised  Compliance and Enforcement
 Strategies

 The Regulatory Development Process:
 Change  in Steering Committee Emphasis
 and OECM Implementation

 Procedures  and Responsibilities  for
 Updating and Maintaining the Enforce-
ment Docket
DATE OF
DOCUMENT
 8/28/86



10/28/86




11/14/86




11/26/86




11/12/86




12/12/86


12/16/86



 6/20/88




 8/15/85
 2/06/87
 3/10/87
TAB



GM - 50



GM - 51




GM - 52




GM - 53




GM - 54




GM - 55


GM - 56



GM - 57




GM - 58
GM - 59
GM - 60
Enforcement Docket Maintenance
  4/08/88
GM'- 61

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 TABLE OF CONTENTS
 PAGE 6
T:CTLE or                                 DATE OF
DOCUMENT                                 DOCUMENT
Final Guidance on Use of Alternative     8/14/87
Dispute Resolution Techniques in
Enforcement Actions

Policy on Invoking Section 9 of the      8/20/87
EPA/DOJ Memorandum of Understanding

Processing of Consent Decrees            9/14/87

Processing of Indirect Referrals         9/29/87

Assertion of the Deliberative Process
Privilege (2 documents):

    A.  Guidance for the Assertion of   10/30/84
        Deliverative Process Privilege

    B.  Change in Review Process for     9/30/87
        concurrence in Litigation

Procedures for Assessing Stipulated      1/11/88
Penalties

Procedures for Modifying Judicial        1/11/88
Decrees

Expansion of Direct Referral of Cases    1/14/88

to the Department of Justice

Del€)gation of Concurrence and Signa-     1/14/88
ture of Authority

Case Management Plans                    3/11/88

Assuring Tinely riling and Prosecu-      4/08/88
tion of Civil Judicial Actions

Process for Conducting Pre-Referral      4/13/88
Settlement Negotiations on Civil
Judicial Enforcement Cases

Guidance on Certification of             6/25/88
Compliance with Enforcement
Agreements
TAB


GM - 62




GM - 63


GM - 64

GM - 65
GM - 66
GM - 67
GM



GM
- 68
- 69
 GM -  70
 GM

 GM
  71

  72
 GM -  73
 GM -  74

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Memorandum of Understanding Between the Department
of Justice and the Environmental Protection Agency	  GM -  3

Quantico Guidelines for Enforcement Litigation	  GM-8

Reorganization of the Office of Regional Counsel 	  GM -  10

Coordination of Policy Developnent and Review	  GM -  11
(Deleted 11/88)

General Operating Procedures for EPA's Civil
Enforcement Program	  GM -  12

Case Referrals for Civil Litigation 	  GM -  13

Regional counsel Reporting Relationship	  GM -  16

Policy on Civil Penalties 	  GM -  21

A Framework for Statute-Specific
Approaches to Penalty Assessments	  GM -  22

Working Principles Underlying EPA's
National Compliance/Enforcement Programs	  GM -  24

Federal Facilities Compliance Strategy 	  GM -  25

Liability of Corporate Shareholders
and Successor Corporations for Abandoned
Sites Under CEROA	  GM -  28

Implementation of Mandatory Contractor
Listing	  GM -  31

Guidance for Calculating the Econcmic
Benefit of ttnpliance for a Civil
Penalty AsMMHnt	  GM - 33

Implementing Nationally Managed or coordinated
Enforcement Actions:  Addendum to Policy Framework
for State/EPA Enforcement Agreements	   GM - 35

Remittance of Fines and Civil Penalties  	   GM - 38

Implementing the State/Federal Partnership  in
Enforcement:  State/Federal Enforcement  "Agreements" ...   GM - 41

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TOPICAL INDEX
PAGE 2

Enforcement Document Release Guidelines 	   GM -  43

Policy on Publicizing Enforcement
Activities 	   GM -  46

A Summary of OECM's Role in the Agency's
Regulatory Review Process	   GM -  47

Guidance on Calculating After Tax Net
Present Value of Alternative Payments	   GM -  51

Guidance on Implementing the Discretionary
Contractor Listing Program 	   GM -  53

Media Relations on Matters Pertaining to EPA's
Cr Lminal Enforcement Program 	   GM -  55

Guidance on Determining a Violator's Ability
to Pay a Civil Penalty 	   GM -  56

Guidance for the FY 1988 state/EPA Enforcement
Agreements Process 	   GM -  57

Issuance of Enforcement Consideration for
Drafting and Reviewing Regulations and
Guidelines for Developing New or Revised
Compliance and Enforcement Strategies 	   GM -  58

The Regulatory Development Process:  Change in
steering committee Emphasis and OECM Implementa-
tion 	   GM -  59

Procedures and Responsibilities for Updating
and Maintaining the Enforcement Docket  	   GM -  60

Enforcement Docket Maintenance  	;   GM - 61

Procedures for Assessing Stipulated Penalties  	   GM - 67

Delegation of concurrence and Signature of
Authority 	   GM - TO
Attorney Conduct

Professional Obligations of Government Attorneys  	—  GM  -  :

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TOPICAL INDEX
PAGE 3
Memorandum of Understanding Between the Department
of Justice and the Environmental Protection Agency  	  GM  - 3
Quantico Guidelines for Enforcement Litigation 	  GM  - 8
Case Referrals for Civil Litigation 	  GM  - 14
Guidance for Drafting Judicial Consent Decrees 	  GM  - 17
Implementation of Direct Referrals for civil Cases  	  GM  - 18
Guidance on Evidence Audit of Case Files  	  GM  - 20
Guidelines for Enforcing Federal District
Court Orders 	  GM  - 27
Guidance on Counting and Crediting
Civil Judicial Referrals 	  GM  - 29
Policy Against "No" Action" Assurances 	  GM  - 34
Revised Regional Referral Package Cover
Letter and Data Sheet 	  GM  - 40
Form of Settlement of-Civil Judicial Cases  	  GM  - 42
Division of Penalties with State and
Local Governments 	  GM  - 45
Model Litigation Report Outline Guidance 	  GM  - 48
Expanded Civil Judicial Referral
Procedures 	   GM  -  54
civil Judicial Referral
Procedure* 	   GM -  50
Referral Letters for Forwarding Judicial
Referrals and Consent Decrees to the Department
of Justice	   GM -  54
Final Guidance on Use of Alternative Dispute
Resolution Techniques in Enforcement Actions	   GM - 62
Policy on Invoking Section 9 of the EPA/DOJ
Memorandum of Understanding  	   GM - 63

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TOPICAL INDEX
PACE 4


Processing of Consent Decrees	   GM -  64

Processing of Indirect Referrals 	   GM -  65

Assertion of the Deliberative Process Privilege
(2 document:)

    A.  Guidance for the Assertion of Deli-
        berative Process Privilege 	   GM -  66

    B.  Change in Review Process for Concur-
        rence in Litigation

Procedures for Modifying Judicial Decrees 	   GM -  68

Expansion of Direct Referral of Cases to
the Department of Justice  	   GM -  69

Case Management Plans 	   GM -  71

Assuring Timely Filing and Prosecution of
Civil Judicial Actions 	   GM -  72

Process for Conducting Pre-Referral Settlement
Negotiations on Civil Judicial Enforcement Cases 	   GM -  73

Guidance on certification of compliance with
Enforcement Agreements 	   GM -  74

Inspections

Visitor's Releases and Hold Harmless Agreements as a
Condition to Entry to EPA Employees on Industrial
Facilities 	   GM -  1

Conduct of Inspections After the Barlow's Decision 	   GM - 5
Rules RflffMrfllH
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 TOPICAL  INDEX
 PAGE 5
 Consent Decree Tracking Guidance  .......................   GM - 19

 Headquarters Review and Tracking of
 Civil Referrals  ........................................   GM - 26
Negotiation and Sett

Guidance for Drafting Judicial Consent Decrees .........   GM - 17

Enforcement Settlement Negotiations ....................   GM - 39

Settlement of Enforcement Actions Using
Alternative Dispute Resolution Techniques ..............   GM - 44


GENERAL ENTQP^FMian' POLICY - CRIMINAL

Criminal Enforcement Priorities for the Environmental
Protection Agency ......................................   GM - 14

Functions and General Operating Procedures for the
Criminal Enforcement Program ...................... .....   GM - 15

Guidance Concerning Compliance with the
Jencks Act .............................................   GM - 23

Policy and Procedures on Parallel Proceedings
at the Environmental Protection Agency .................   GM - 30

The Role of EPA Supervisors During Parallel
Proceedings ............................................   GM - 37

Implementation of Guidance on Parallel
Proceedings ............................................   GM - 49


Tnvnat" i a At i Ann
Agency guidelines for Participation  in Grand Jury
investigations 	  GM  - 9

The Use of Administrative Discovery  Devices in the
Development of Cases Assigned to the Office of
Criminal Investigations  	  GM  - 36

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-1

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' -v>jl;    UNITED STA   S EnVlrtONf.-ILN'TAL PROTEC1  \AGC.\CY
       '                      WASHINOTO'.'. D.C.  20-:C-'J
                          OFFICli OF Tiiii CKNciVvI. COUNSEL
                                       iDj;  IIALL
                                             NOV   61372
       Memorandum

       To:          All  Regional Counsels

       From:        Assistant Administrator for F.nlorcci.icnt and
                    •General Counsel

       Subject:     Visitors'  Releases and Hold Iinrr.ilcps Af,rei:ncnts
                    as a Condition to 1'ntry of Ei'A Emp]oycciS on
                    Industrial Facilities
            As  a  condition to entry on Industrie! faciJitirs, ccrtnin
       firms have rc'jiiired ]i?A rnploycrr. to si^ri np.rcer.rnts
       purport  to release  tin cor.pany from tort liability.  Tr.c
       "Visitors  Release"  required by the Owens-Corning Fibcrglns
       Corporation is  an cxanple:

                               VISITORS RELEASE

                     In consideration o: permission to enter the
                     premises of Owens-Corning Fibcrclss Corporation
                     and beiny aware of the risk of injury from  •
                     equipment, ncslif.cncc of enployees or of other
                     visitors, and  froir other causes, the undersigned
          ''          assumes nil riuh, rclcnsc-.s said corporation,
             «        and agrees to  hold it harmless front liability
              ^     for any injury to him or his; property while upon
                     its premises.  . .

                         READ CA1UTUUY BEFORE
             In  addition to such "Visitors Releases" onploypcs or
        their supervisors have; been a»l;ecl to sign entry permits which
        include  an npree:nent that KPA will pay for any injury or donate
        resulting  froni our activities at the facility.

-------
                                2

                          .onr.STin.-.-s

     1.  Docs sif.ninj  :-uch  a "Visitor.1? HeJ.iMyt:" off re Lively
waive  the employee's rijjht  to obtain dai'iapes. for tortious injury?

     2.  May EPA  employees  contractually obligate tiic Agency
to pay for any injury  or dan-.agc caused by our activities?

     3.  May firms  condition EPA's entry upon siciunj such
agreements?
            t • !
     1.  Generally,  yes;  onploye.cr? waive their right to
damages and  the  [jovornrcent is prevented fro;:i e::ercisiiif, its
right of subrogation under the Federal Employees' Compensation
Act.

     2.  i.'o; federal tort liability is established and linitcd
hy the Feticrnl Tort  Clr.ir.-.s Act, and cucli n^rcer.cnts arc also
invalid as violctivc of tlic Anti-Deficiency Act.

     3.  No; EFA employees possess a riyht of entry under
both the Clcnn Air Act and the Federal l-.'atcr TolluLion Control
Act /unindncnts of 1972.

                          DISCUSSTo:;

     Althou;;h tlie precise effect of an advance*  release of
liability for negligence cannot be dcterr.incJ vithout reference
to the lav of the state in which the tort occurs, v/c must
assume that  such n^rter.-.c-nts arc nenerally valid.  By signing
such ajrccr.ents  EPA  employees r.ay effectively waive  their  right
to sue for damages and the covcrr.ment 's ri^ht of  subrogation
under tlie Federal Er,;ploy«ses' Coir.pcnsation Act,  5  USC 8101  ct

     The P.esfatnnent of Contracts. Ch. 18, § 575  states:
          A  barfiain for exemption fron liability  for the
          consequences of a willful breach  of  duty  is illegal,
          and  a barnain for exemption iron  liability for
          tlie  consequences of negligence is illegal if

          (a)   the parties arc employer and employee and
                tljc barc.'in rcla:c^ to ncylii'.cnt injury of
                tlic employee in the course of the  or.ploynent,
                or,

          (b)   one of the parties is char/jrd t.'ith a duty of
                public service, and tiilTTjar^r.in rcuJtca to
                ncplif.LMce in the pcrfori."..incc of any part
                of itu duty to the public, for  u-hich it lias
                received or been proir.isod co.npcnsation .  .  ..

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With  the  exceptions mentioned  in  the J\.CM af.T.m
M'lyr.i,  no gcnoral j'u!:lic poiJcy  sccir.s to e.xiyt .i;;.-ii:-.3T~c~:~prcss
agreements for .•u'.'unnption of  risk,  nnil they need not i>o
Supported by consideration.   10  Prom??- on TPV;S 5 55 and
liPStnivMtint of Torrs 2d, Ch.  J7A,  5/.96M.  Uowpjtc tliia i;fciiernl
rule,  c;iacs nr.isJi:,'; under the Federal Tort Cl.-.icis /\c!:' involving
releases  signed l-y civilian pjssen«crs prior to boarJing ill-fated
Rovcrnwant aircraft: indicate  that  the courts do not fr.vor Sucii
agreement:;.  (Tr i.c(!"':in v. I.nc'ji^c-fl  Airrr.i_f f .Corn. . 13S i:. Supp.
530  (liT)6) — n rclc.-.se is no defense -against nrL'3';i willful,  or
wanton  nci;li;;cncc in I»'cw York; not-.r'-' v. U.S. . 173 F. Supp. 5/i7
(1959) — a tc'lcnse is ineffective unless the flight is
Monccn UT v.  1?. S. . 315 F2d  lf.0 (1963)--;i release cio
destroy a cnuse of action for vron2ful death in I-Jiiss.icliusctts.)
Sucli apparent judicijl disfavor  of  ndvnnco rclonses is, of course,
insufficient justification for assu:ninjj the risk of. s:';;nin-  ciu-.Ti,
and ordJn.iry prudence requircr. us  to asr-umc their validity.   Although
signing a release docs not affect  the. employee's ri;:iit to bcnciits
under 3'nCA, such co;"p-oes '  Coi-peanation Act, .1 USC  S131
and 5132, provides r.hnc an Ci;!)loyec r.r.y be  require;! to assign
Jiis rij;ht to sue third parties- to  the United States anc!  that
the employee must, v:ithin lir.ii tr. tions, ji:iy  over any rt:covcry
from third parties as rci::ibur!:c-n:cnt of J'iX'A benefits,  tiia
employee's release prejudices the  government's rij;ht^ as veil
as. his  own.  Kirrloypc's should therefore PC. insiructrt! not  to  )/
sign such rclcasc-a unucr any  circurr.stancp.s .                   •

     Although an Jil'A cnplnyce's  express asi;unption of  tlie  riclc
of injury to himself may be valid,  an ,-igreesent which purports
to oblinate EPA to pay all daira^es caused by our activities  is
not.  The Federal Tort Claims Act,  28 USC 2G74 provides:
     •
              Thte United State.1; shall be liable,  respecting
       /      the provisions o:: this title1, relating  to  tort
              claims, in the s.ine r.;anncr and to  thu s.-i:;:c
              extent ns 'n private individu.-il under li!:e
              circumstances, but  shall not be liable for
              interest prior  to judgment or  for punitive  damages . .  .

Congress  has granted only a .".initcd waiver  of the government's
sovereign immunity, and 28 USC 2650 lists exceptions  to  the

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     jl waiver .stated  in. 2C U.1C 267/1, £ji;irvi.  Kxerptions t.v.ich
nifjir be relevant  in cares  ,-irir.inj; cut of the aci.io«.s til Hi' A
employees include  28 USC 2uiiO(a);

             Any claim hasc'd upon an net or omission of nn
             employee  of the Government, cxrrciPJn;-. due care,
             in  the execution of a statute or regulation,
             whether or not such statute or regulation be
             valid, or bayed upon tin.1 exercise or performance
             or  the failure co exercise or perform a discretionary
             function  or duty on die pr.rt of -a fcdor.il agency
             cr  an "employee of the CovciT.went, whether or not
            . ,thc discretion involved be abused;
           ' ;'                               • •                 '
and 20 USC  26SO(b):                   ....
  •                                        f
             Any claim arising out of assault, battery,
             false inprisonnsnt, false arrest, malicious
             prosecution, abur.o of process, lije.1, .sJander,
             mirrcprccentatior., deceit, or  interference
             with  contract rights ...

Since tlif! fjovcrn.-rrjnc "s tort liability is li;;iitcc! l>y statute,
an ;ul;::iuiy trativc  undcrta!:.in^ to expand /:uc!i li.i'ni.l.iiy by
contracr is  prol>r.I;Jy  invalid.  In any event, KlYi ^'lo-jld  not
create tlie  occasion  lor judicial resolution of  tiiu tjucstion.

     An additional basis for considering sue!) indemnification
ac;:f>e;nc'!us  invalid is  the Anti-Deficiency Act, which  provides
at 31 USC
              No officer or cu.-'loyce. of  the  United  States shall
              nake or authorize nn expenditure from or create
              or authorize an obligation under any  appropriation
              or ftmd in execs.1; of tho amount  available therein. .  ,

S:.nce  the  extent of the £ovcrn;:ient's obligation is uncertain,
the Comptroller General has stated that a  contractual assumption
of tort '-liability is not a lawful oblifoicion  of t)ie United States,
and ^aynrnt may noc ba made1 pursuant to such  ;jj;re(:::u:iits.  (7 CG 507,
16 CG  £03,  and 35 Co 86.)  In fiirncss  co  corrpcmiL-s viiich nay
rely upo:i  the validity of such indemnity provisions, employees  '
should he  instructed not to sign then.

     .Inasmuch as the Clean Air Act and  the  Federal Wat or
J'ollu'.ion  Control Act Amendments of 1772~t;rant EPA employees
a rifiht  of  entry to corporate facilities,  a company /ray not

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lawfully condition  the  c::crciso of  this  rii'.ht upon  ti.o signing
of a release or indemnity nyrceiiicnt.  The Clean Air Act
provides, at 42 USC !Si7c—9(a) (2) :

             . .  .the. Administrator or his authorized
             rrprcscntative,  upon  presentation of h.is
             credentials—(A) shall have a  rifcht of entry
             to,  upon,  or through  any provisos in which
             an emission source is  located or in vhich any
             records required to be maintained'under paragraph
             (1)  of this section are located . . .

Tiie procedure for enforcement of this riyht  is provided  in
42 USC lS57c—8:

     (a) (3)  Whenever,  on the basis of any information
     available to him,  the Administrator finds; that any
     person i;; in violation of.,  .  . any  requirement
     of sc-clj'on l£57c—9 of this title,  he nay issue an
     order requiring such person fo comply v.-ith such Section
    . or requirement, or lie r.iay briny a civil action in
     accordance with subjection  (h) of this  section.
     (b)  The Administrator i;:cv .co.r.T.nncc .;i civil actJo:i  for
     appropriate  relief, including A pcrnan-rnt or  tcrparary
     injunction,  whenever any person—(«'«)  fails or  refuses
     to co-ply v.'ith any requirement of section lS57c—9
     of r.his title.

V.'hen n firm refuses entry to  an KPA employee psrforminj;  his
functions under the Clean Air Act, the employee may appropriately
cite the statute  and rcuind the  cor.ipnny  of D'A's rij;ht  to seek
judicial enforcement.   If the company  persists in  its  refusal,
EPA .should go to  court  in preference  to  signing a  "Visitors
Release."

     In addition  to procedure for  judicial enforcement
similar\to that of  the  Clean  Air Act>  the  federal  Water
Pollution Control Act Amendment.s of 1972 reinforce EPA's
rifcht of entry with crininal  and civil penalties.   Section 309
states:

     (c) (1)  Any  porson who willfully  or negligently  violates
     section .  .  .303 of  this Act  (Note—Section 308  establishes
     the rii;ht of entry).  .  . shall be  punished by a  fine of not
     less than $2,500 nor noru than $25,000  per day of  violation,
     or by imprisonment for not more  than  one: year, or  by both.

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     If the: co-.iviction is for a violation coiimi.tcJ after
     a first  conviction of such person untlcr this p:ira::r.•:;)'.;,
     ptiriir-i;-?iv.'  rlKill  liz by .. fine of iui. i:iorc than JJU.UUu
     per d;iy  of  violation, or by imprisonment for not more
     than  tv.-o years, or by both.
     (3)   For the  purposes of thir. subsection, tho term  'person'
     shall mc;in, in addition to tiie definition conc.i.tn«d ir.
     section  302(5) of this Act, any responsible corporate
     officer.
     (d)   Any person uho violates suction . . .303 of this Act.  .  .
     and any  person who violates any order issued by the
     Administrator under subsection (a) of this section
     (Koto—subsection (a) provides for administrative orders
     to enf&rce  the righc of entry), shall be subject to a
    . civil penalty not to exceed $10,000 per day of such
   •  violation.
                                           0

     In St»e v. Sc.itr3c. 337 U.S. 3'ii(.1.967) the Supreme Cour:
reversed the  conviction of nts required  a
warrant for such iircpuctions, even v.-Ji'jrc the search was
reasonably related to  protecting the public health and safety
and even i.-hcre a corporation, rather than an. individual, was
the subject.  Under Sro evidence ob t a I :-.jd by inapvctor^  of
the 3:ood and  limy  Actiniacrcition hns been held i:t.r.".•'.(•a Cnrcrin-: Corn, v. 1.1. S._. 397  U.K.  72
(1970) and U.S.  v.  niy-.;»il. 92 S. Ct. 1393  (1972), may  create
coubt t".s to wli«tlier £!cc: retains its original vi^.or  (i;ec
Memorandum of tiie  Assistant to  the Deputy General  Counsel.
-ficptcrjber  29, 1972),  tlie possibility that evidence; obtained
under the  F'./'PCA  Amendments of 1972 will be  ruled  inadmissible
is a risk  EPA need not assune.

     S*nce the Amendncnts provide for judicial nnforcer.ent  of
(:hc rishc  of  entry, EPA cirploycas should be  instructed not
f.o mention the civil  or criminal penalties  of Section 309
u-hen faced with  a  refusal to pcrr.it entry.   Klicn  such refusals
cccur,  this office* should be informed  inwcdlately  so that  a
dcciiion can  be  r.uide  as to whether  to issue  nn order of  the
Administrator under 309(a) or seek  an appropriate judicial
re.-nody  under  309 (b).
                                 ohn  K.  Qnarlcs, Jr.

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GM-2

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 ifft
       UN'TED STATES ENVIRONMENTAL PROTECTION AGENCY

                        WASHINGTON. D.C. 20460                        J^
                         19 APR 1976
   orrict OF
6KMKHAL COUNSEL
MEMORANDUM

TO:       All Attorneys - Office of General  Counsel and
                          Office of enforcement
          Regional Counsel

FROM:     Robert V. Zener
          General Counsel

          Stanley I!. Legro
          Assistant Administrator for^nforcemejit

SUBJECT:  Professional Obligations of Government Attorneys

     We believe it might be useful to discuss some of the obligations
that we have as attorneys for the Agency, both under  the Canons  of
Professional Ethics'and under various provisions of law.  The  following
is not intended to be a complete statement of a  government attorney's
professional obligations; rather, it is intended to highlight  some
matters which may deserve attention.

     1.  Confidential commercial or financial information.   The
Agency frequently is the recipient of confidential  commercial  or
financial information.  Under 18 U.S.C. 1905, disclosure of  such
information without consent of the firm involved is against  the
law, and the Agency's regulations carry out this prohibition.
40 C.F.R. 2.119.  Of course, this prohibition is binding on  all
employees of the Agency.  Out we think it especially  appropriate
to remind Agency attorneys of this obligation of confidentiality,
since Agency attorneys are so freqacntly entrusted with this type
of information.

     2.  Civil or criminal investigations.  Agency attorneys are
frequently involved in investigations which could lead to referral
of cases to the Department of Justice for civil  or criminal  prose-
cution.  Extreme care should be taken in making  any public statement

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 concerning  such investigation,  particularly where a possible criminal
 violation is  involved.   Neither the  fact  that an investigation 1s in
 progress  nor  the fact  that  a  case  has  been referred to the Department
 of Justice  should be disclosed  except  where authorized by current
 policy or specifically authorized.   And in any event, a public
 statement should not go beyond  the comment that an investigation is
 in progress;  no conclusions should be  stated.  Any statement that
 the Agency  believes  a  violation has  occurred may be unfair to the
 company or  individuals  involved, and could prejudice the Agency's
 position  in the enforcement action.

      3.   Attorney-client communications.  The professional
 obligations of  an attorney  to his client  attach to a government
 attorney's  relationship to  his  agency.  This includes the confi-
 dentiality  of attorney-client communications.  This also includes
 the obligation  to represent the client's  interest within the
 bounds  of the law and  professional ethics.  The following points
 deal  with specific problem  areas:

          i)   Communications with the Department of Justice.  These
 should  be held  in confidence  unless  tne consent of the attorney
 involved  at the  Department  of Justice  is  obtained.

        ii)   Legal advice.  In  the case of written opinions, some
 judgment  has  to  be exercised with respect to public release.  Some
 written opinions  may constitute "statements of * * * interpretations
 which have  been  adopted  by  the  agency", in which case they must be
 disclosed under  the  Freedom of  Information Act, 5 U.S.C. 552(a)(2)(B).
 In  some cases, a  written opinion is  supplied on the understanding
 that  it will  be  widely  distributed and made available to the public.
 On  the other  hand, written  opinions  may be supplied on a confidential
 basis, in which  case the confidence  should be respected.  In any case,
 oral opinions are  to be  held  1n confidence unless the program people
 involved  agree to disclosure.

       iii)  Support of  Agency  positions.  An attorney's duty is to
 represent his client's  position; and tnis duty applies to government
 attorneys.  Of course, while a  question is the subject of internal
debate, an  attorney  is free to  take  eny position he feels 1s
 reasonable  and lawful on an issue; and this could include disagreement
with the  position taken  by  any  particular program office.  However,

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 once the Agency has taken a position, the attorney should support 1t  •
 in dealings with the outside world.  If he feels he cannot support
 it, he should request to be reassigned from that natter or resign.

      iv)  Dealing with outside parties represented by an attorney.
 When you are dealing witti outside parties whom you know to be
 represented by an attorney in connection with the natter in question,
 the Canons of Ethics require you to communicate with the attorney,
 unless the attorney consents to direct communication with his client.
 This can be especially significant in enforcement actions, where 1t
 would be highly unethical to attempt to obtain leads and evidence
 through direct communication with a party you know to be represented
 by an attorney on that particular matter, unless the party's attorney
 has agreed to this method of proceeding.  Enforcement attorneys can,
 of course, participate in general or routine plant inspections and
 investigations.  However, once the company becomes aware of any
 potential enforcement action and their counsel assumes responsibility
•for the matter, consent from opposing counsel would be necessary before
 any interviewing of company employees occurs during subsequent inspections.
 See Disciplinary Rule 7-10
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Important that these prohibitions against ex parte communications
be observed.  To insure continued public confidence 1n the integrity
of our proceedings, it is imperative that there be no actual  or
apparent improper influence by the staff presenting the Agency's
case to the presiding officer.

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      . UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                      WASHINGTON. D.C. SC-oD                    ^
        .-.;,       ..'..,   .......    .  ••    ......   #3


                        AUG211981                   %


                                            THE AOMINICTHATOM
 Honorable William French Smith                            9
 The Attorney General
 Washington,  D.C.   20530

 RE:  Memorandum of Understanding  Between the  Department
      of Justice And the Environmental  Protection  Agency

 Dear Mr.  Attorney General:

      Under Paragraph  10 of  the Memorandum of  Understanding
 between the  Department  of Justice and  the Environmental
 Protection Agency dated June  15,  1977  (copy enclosed),
 CPA's General Counsel and Assistant Administrator for
 Enforcement,  EPA, were  given  authority to request civil
 litigation from the Department of Justice.

      On July 1, 1981, the Environmental Protection Agency
 underwent an internal reorganization which resulted,  in
 part,  in  the abolishment of the Office of Enforcement as
 well as the  position  of Assistant Administrator for
 Enforcement.   Zn  addition,  the Office  of General  Counsel was
 placed under an Associate Administrator for Legal Counsel and
 and Enforcement.

      The  principal enforcement authorities previously
 delegated to the  Assistant  Administrator for  Enforcement
•vere redelegated  to the Associate Administrator for 'Legal
 Counsel and  Enforcement on  July 14, 1981.  Therefore, the
 authority previously  vested in -the Assistant  Administrator
 for Enforcement under the above referenced memorandum now
 resides in the Associate Administrator for Legal  Counsel and
 Enforcement.

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                          -2-
     Accordingly, requests to the Department of Justice for
routine civil litigation under the terms of the Memorandum
of Understanding will now come from the Associate Administrator
for Legal Counsel and Enforcement. The present Associate
Administrator for Legal Counsel and Enforcement is Mr. Frank
A. Shepherd.
                   • * * i'
     This reorganization and redelegation does not, of
course, affect the authority of Regional Administrators who
may continue to request litigation under Paragraph 10 of the
Memorandum of Understanding in matters requiring an immediate
temporary restraining order.
                           Sincerely yours,
                           Anne M. Gorsuch
cc:  Assistant Attorney General
     Land and Natural Resources Division

     Assistant Attorney General
     Civil Division

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              MEMORANDUM OF UNDERSTANDING
                        BETWEEN
               THE DEPARTMENT OF JUSTICE
                          AND
          THE ENVIRONMENTAL PROTECTION AGENCY
     WHEREAS, the Department of Justice conducts  the  civil

litigation of the Environmental Protection Agency;

     WHEREAS, the conduct of that litigation requires a

close and cooperative relationship between the attorneys
               •                                    4
of the Department of Justice ar.d of the Environmental

Protection Agency;

     WHEREAS, the achievement of a close and cooperative

relationship requires a clarification of the respective

roles of the attorneys of the Department of Justice etna of

the Environmental Protection Agency;

     WHEREAS, the Attorney General may decline to represent

the Agency in particular civil actions, in which case the
                          t
Agency nay be represented by its own attorneys; and

     WHEREAS, most challenges to and enforcement of regulatory
                            t
standards and procedures adopted by the Environmental Pro-

tection Agency involve; scientific, -technical, and policy

issues and determinations developed in lengthy rulemaking

proceedings  in which the Agency's  attorneys  have-been involved

and can provide  the  necessary  expertise.

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                          - 2 -
     j;0.v, therefore, the following memorandum of under-


standing is entered into between the Attorney General of


the United States and the Administrator of the Environmental
   •                          '

Protection Agency for the purpose of promoting the efficient


and effective handling of civil litigation involving the


Environmental Protection Agency;



     1.   The Attorney General of the United States  (herein-


after referred to as the "Attorney General")  shall have



control over all cases to which the Environmental Protection


Agency  (hereinafter referred to as the "Agency") or the


Administrator of the Environmental Protection Agency  (herein-


after referred to as the "Administrator") is a party.


     2.   Khen requested by the Administrator, the Attorney


General shall permit attorneys employed by the Agency


(hereinafter referred to as -"Agency participating attorneys")



to participate in cases involving direct  review  in th'e Courts


of Appeal, and shall also permit such  attorneys to participate


in other civil cases to which either  the  Agency  or the



Admin'Is'trator are a party, provided,  however,  that:


           (a)   the Administrator or his delegate shall



designate  a  specific Agency  participating attorney for


each  cncc  and  shall  communicate the name of such attorney



•in writing  to  the Attorney General;


           (b)   such Agency partic.ipatir.rj attorney shall be


subject to  the  supervision and control  of the Attorney



General; and

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                           - 3 -


           (c)  if required by the Attorney General, an

Agency participating attorney shall be appointed as a

Special Attorney or Special Assistant United States

Attorney and take the required oath prior to conducting

or participating in any kind of Court proceedings.

     3.   Agency attorneys shall not file any pleadings
                     •               •
or other documents in a court proceeding without the prior
     v.
approval of the. Attorney General.

      4.  .  It is  understood that participation by Agency

 attorneys  under -this memorandum includes  appeatan.ces in

 Court,  participation in trials and oral arguments, partici-

 pation in  the preparation of briefs,  memoranda  and pleadings,

 participation in discussions with opposing counsel, -including
                                                        *

 settlement negotiations, and"all other aspects  of  case

 preparation normally associated with the  responsibilities

 of an attorney in the conduct of litigation;  provided,

 however,  that the Attorney-General shall  retain control  ovtr

 the conduct of all litigation.  Such control shall include
   •
 the rignt to allocate tasks between attorneys employed by
                              . '      .                •
 the Department of Justice and Agency participating attorneys.

 •In allocating tasks between the Department's and the Agency's
                                                      •
 attorneys, the Attorney General shall give due consideration

 «-.o the substantive  knowledge of the respective attorneys

 of the matter at issue  so that the Government's resources

 are utilized to the best advantage.

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                          - 4 -

     5.   In the event of any disagreement between attorneys
of the Department of Justice and of the Agency concerning
the conduct of any case/ the Administrator may obtain a
review of the matter in question by the Attorney General.
The Attorney General shall give full consideration to the views
and requests- of the Agency and shall make every effort to
eliminate disagreements on a mutually satisfactory basis.  In
carrying out such reviews, the Attorney General shall consult
with the Administrator.  In implementing this provision, it
is understood t"hat-the Attorney General will not be expected
by the Administrator to interfere with the direction of any
trial in progress.
     6.   The settlement of any case in vhich the Department
of Justice represents the Agency or the Administrator  shall
require consultation with and concurrence of both the  Adminis-
trator and the Attorney General.
     7.   The Administrator and the Attorney General shall
make an annual review of both .the Department's  and the
Agency's personnel requirements for Acjcncy litigation.   The
Attorney General and the Administrator will cooperate  in
making such appropriation r«quests as are required to  ir.ain-
•ain their  respective  staffs  at a level adequate to the  needs
                                                ,«
of the Agency's  litigation.
       .                                          _ •
     8.'  The. Attorney General  shall establish  specific
deadlines,  not  longer  than  60 days, within vhich the Depart-
ment's Attorneys must  either  file complaints in Agency cases

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                          - 5 -


or report to  the Attorney General why any such co.T.plaint

has not bean  filed.  In the event any Department Attorney

does not file a complaint, he shall thereafter submit further

periodic reports to the Attorney General until the complaint"

is filed or a decision is reached that it shall not be filed.
            "                •
Copies of the reports required by this section shall be pro-

vided to the  Agency.if requested.

     9.   If  the Attorney General fails to file a complaint

within 120 days, of the referral of a request for litigation
               w
and a litigatioTi report by the Agency to the Attorney General,

then the Administrator may request the Attorney General to
                                            N
file a complaint within 30 days.  Failure of the Attorney  '.

General to thereafter file a complaint within the said 3C

days may be considered by th~e Administrator or his delegate

to be & failure of the Attorney General  to notify the Adminis-

trator within a reasonable time that he will appear  in litiga-

tion for purposes of Section 305 of the Clean Air Act, 42

U.S.C. 1857h-3, Section 506 of the Federal Water Pollution
                                                            *
Control Act,  33 U.S.C. 13GG,-or Section  1450 of the  Safe

Drinking Water Act, 42 U.S.C. 300j-9; provided, however, that

the failure of the Attorney General to file  a coir.plair.t

within the time period requested by the  Administrator  in a

case in which the Administrator-requested  inaacdiato  action

under Sections  311 (e) and 504 of the Federal Water  Pollution

Control Act,  33 U.S.C. 1321, 136*; Sortion 303  of  the  Clean

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                           - 6 -

Air Act, 42 U.S.C. 1857H-1; or Section 1431 of the Safe
Drinking Water Act, 42 U.S.C. 300i; to protect public
health may *lso be considered by the Administrator to be
a failure of the Attorney General to so notify the
Administrator under Section 303 of the Clean Air Act, 506
of the Federal Water Pollution Control Act or Section 1450
of the Safe Drinking Water Act.
  v
     10.  All requests of the Agency for litigation shall
be submitted by the Agency through its General Counsel or
its Assistant Administrator for Enforcement to the 7\ssistent
Attorney General for the Land and Natural Resources Division
                            • •*
or for the 'Civil Division', except matters requiring an
immediate temporary restraining order may be submitted by
regional Administrators of the Agency simultaneously to a
United States Attorney and the appropriate Assistant
Attorney General.  All requests for litigation shall be
accompanied by a standard litigation report which shall
contain such information as shall be determined from tir.e-
to-time by the Attorney General to bo necessary in order to
procecute Agency litigation.  Similar reports shall also' he
provided for suits in which the Agency or the Administrator
is a defendant, as requested by the Attorney General.
     11.  The Agency shall make the relevant file of any
mo'ctcr that ic uha subject of litigation available to
attorneys for the Department of Justice at a convenient

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                          - 7 - .   .
•  location  when  a  request  for litigation is submitted or
  when the  Department  is required to defend the Agency or
  the Administrator.
       12.   The  Administrator shall undertake to review the
                          9
  Agency's  procedures  for  the preparation of the record in
  cases involving  direct review in the Courts of Appeal,
  including analyses of such natters as assembly, indexing,
  pagination,  timing of preparation, and the allocation of
  tasks between  the Agency and the Department.- The Adnir.is-
                •
  trator shall consult with the Attorney General on the
  re-examination of these  procedures.
       13.   The  negotiation of any agreement to be filed  in
  court shall  require  the  authorization end concurrence of
  the Attorney General.
       14.   In conducting  litigation for the Administrator,, the
 Attorney  General shall  defer to the Administrator's inter-
 pretation of scientific and technical matters.
       15.   Nothing in'this  agreement shall-affect any authority
 •of  the Solicitor General to authorize or decline to authorize'
 appeals by the Government  from any district court to any
                                     •• •
  appellate court or petitions to such courts for the issuance
  of  extraordinary writs, such as the authority conferred by
  28  CFR 0.20,  or to carry out his traditional functions with
  regard to appeals to or petitions for review by the Suorpma
  Court.
        16.  In  order  to.effectively implement the terns of this
 Memorandum,  the  Attorney General and the Administrator will

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transmit copies of this Memorandum  to  all personnel  affected
by its provisions.  This Memorandum shell r.ot  preclude  the
Department and the Agency  from entering  into mutually satis--
factory arrangements concerning  the handling of  a  particular
case.
  """ 17.  This Agreement shall apply to  all cases  filed on  or
after the ditc.;bf approval  of this  Agreement by  the  Attorney
General and the Administrator.
     18.  The Attorney General and  the Administrator r.ay
delegate their respective  functions and  responsibilities
under, thir Agreement.
                           • «                         *
     19.  The Department and the Agency  shall  adjust tl-.e
conduct of cases arising before  the effective  date of this
Agreement in a manner consistent with  the  spirit of this
Agreement.
                          GRIFFIN B.  BELL
                          Attorney General
                                         jfc-^.t_- /*: /f 77
                          Date:   ^x"?   / 0_	/•"". ,,^^x
                          DOUGLAS/.'J.  (j..;iJTLi:
                          Adr.unii.'trr.r-5r
                          Unvironmc'-.tinj. Trotccticn Arency
                          Date:
7):::;

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GM-4

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
   •   '   |p   ' WASHJMGTON.-D.C.

'         .  '    .  •   AUG -4 B77
                                                                   ,,
                       ..           .
SUBJECT:  "£x Parted Contacts in EPA Rulesaking
                   •  •  \                            *
            •    •••••••••....     .  .
FROM:   .  The Administrator   '.••  .     '. •     '..••'             .
       • ' •  ••  '      •-.* .     '.:•    •'• :.'•'.:  .           "•...••   ." "•  - -  ./
TO:    .   Addressees   .    '          •.       '.   »-•••:     :-    -"".
   •••••••     .       - -.-  •     ' •     '    '   *   \  •  ' .        .••.'•
                     •    .     •       ••*.                ^     •       • j
     •In this nsnioranduni I set forth the guidelines all EPA    '•• -    -  .   :
employees should follow in. discussing the merits  of  proposed    • •  :'.  .'
rules vrith interested persons outside the Agency  during the     " . .   .- ' "*•
period between proposal and promulgation.-  The  Deputy AoVainistre tor  "• "^
and I and our immediate staffs will also observe  these' guidelines.
       . '        •             .                     •              ..•-•*•
 . *  ' The General Counsel has recently informed  -you that such     "    -  •  s\
conversations might result in « rule being  held -illegal if they    "  "*••"
took place without notice and opportunity for other  interested    *   .
persons' to participate. .That advice was based  on a  recent decision    . .'."•
of the United States Court of Appeals for the District of Columbia   '* -    .,.
Circuit.  Home Box Office Inc. v. FCC, D. C. Cir. Ko. 75-1230    - .:  ".;-..
(decided March 25, 197?;.  A subsequent opinion by  the sane court   :
has moderated that legal danger substantially.  'Action for Childr.ens*  .   ."
Television v. FCC, D. C.. Cir. Mo. 74-2005 (decided July  ], 1S77).    •
       .      ......        '•'      •     •          •  .   •
   •  However, the legal danger has not disappeared.  .More fundamentally,  ••
I do not believe -that EPA. should base or appear to  bsse  its regulatory •*. " -
decisions on- information or arguments presented informally that do not
appear on the public record.  .Accordingly.'! an estaolishing  the following
guidelines.    '.'......••        .  •    •  .    '           '      c*
                                                       .          . "  .  •
                                                 •                 .   •
     Behavior during crucial period between Proposal and  Promulgation   -  "
     «MM^nMPIMMaK^B|||Bl^B^^M^^M^MHW^rtM^BMMM^BB^^HM^M^BM^MIM^HMHMBM^^^««^HI^«BMII^H^^^BMnB^^B^B^ta^a^HMIBMII^*^^^^^a^H«MaBaMMBMlM^h^BM^M^^^^^» •
  .  .      ' .  •  •       . .                          ••      ' •      .     .
  ; '• During  the period between proposal .and promulgation  of a -rule  all •
employees may arid should be encouraged to respond to -inquiries  about  .  .
the  rule; explain' how  it would work*  and attend public meetings of
interested groups (such  as trade association conventions).      .     •     :
                      ..•'•"'•'•''.    "          '           •'  "
     During  this period  agency employees nay (and often  should) hold
meetings vrith interested persons for. the purpose of batter understanding
any  technical scientific and  engineering issues involved or discussing

-------
the  broader questions  involved.   In  all cases, however, a-written
sunns ry of the significant points made at ths meetings must be placed
in the  cccnent file.  •     t          •  '             .'...-.-

     This  requirement  applies  to  every form of discussion with outside-
interested persons  whether'at.a trade association meeting, at EPA,*or
over the telephone  as  long as  the discussion is significant.  The  .
memorandum should be prepared  and forwarded within"two or three days'
of tha  meeting at the  latest.  All new data or significant afgunents
presented  at ths meeting .should be reflected in the Bsnorenduis.'     •  - •
Discussions of generalities  or. simple explanations of ho« the rule
would work need not be included.-.'          ^.           /
                    *   ,   *     •        *               *                  *
      I  will continue to explore with the General Counsel's office and  -
others  whether further 'actions to ensure that vie provide full notice  -"
and  opportunity for comment  in all our procedures are necessary.  ••

              *                 .       •
ADDRESSEES   ' ..     .        '  "   ''
                        *           *
                    • '
Deputy,Administrator
Assistant  Administrators
Deputy  Assistant Administrators   .
Office  Directors
•Regionc',1 Administrators          .
Associcte  General Counsels
Reoi-onal Counsels       '

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GM-5

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       '   UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                            WASHINGTON. O.C.  20460
                            I 1 M.'fx  ../J


                                                                r ENFORCEMENT
 TO:       Regional Administrators
          Surveillance and Analysis Division Directors
          Enforcement Division Directors

 FROM:     Assistant Administrator
           for Enforcement         	     —

 SUBJECT:  Conduct of Inspections After the Barlow's Decision
I.   Surrrary

     This document is intended to provide guidance to the Regions in
the conduct of inspections in light of the recent Supreme Court decision
in Marshall v. Barlow's, Inc.,  	U.S.	, 98 S. Ct. 1816 (1978).
The decision bears upon the need to obtain warrants or other1 process for
inspections pursuant to EPA-administered Acts.

     In Barlow's, the Supreme Court held that an OSHA inspector was  not
entitled to enter the non-public portions of a work site without either
(1) the owner's consent, or (2) a warrant.  Hie decision protects the
owner against any penalty or other punishment for insisting upon a warrant.

     In summary, Barlow's should only have a limited effect on EPA
enforcement inspections:

     o Inspections will generally continue as usual;

     o there an inspector is refused entry, EPA will seek a warrant  through
       the U.S. Attorney;

     o Sanctions will not be imposed upon owners of establishments vfco insist
       on a warrant before allowing inspections of the non-public portions
       of an establishment.

     The scope of the Barlow's decision is broad.  It affects all current
inspection programs of EPA, including inspections conducted by state
personnel and by contractors.  Die Agency's procedures for inspections,
particularly there entry is denied, were largely in accord with
the provisions of Barlow's before the Supreme Court issued its ruling.
Nevertheless, a number of changes in Agency procedure are warranted.
Ihus, it is important that all personnel involved in the inspection
process be familiar with the procedural guidelines contained in this docu-
ment.

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                                   - 2 -
     This docunent  focuses on  the preparation  for and conduct of inspec-
 tions,  including  (1) how to proceed when entry is denied,  (2) under what
 circumstances  a warrant  is necessary, and  (3)  what showing is neces-
 sary to obtain a  warrant.

 II.  Conduct of Inspections

     The following  material examines the procedural aspects of conducting
 inspections under EPA-administered Acts.   Inspections are considered in
 three stages:  (1)  preparation for inspection  of premises, (2) entry onto
 premises, and  (3) procedures to be followed where entry is refused.

   A.   Preparation

        Adequate preparation should include consideration of the following
 factors concerning  the general nature of warrants and the role of personnel
 conducting inspections.

        (1) Seeking  a Warrant Before Inspection

        The Barlow's decision recognized that,  on occasion, the Agency may
 wish to obtain a  warrant to conduct an inspection even before there has
 l«en any refusal  to allow entry.  Such a warrant may be necessary when
 surprise is particularly crucial to the inspection, or when a company's
 prior bad conduct and prior refusals make  it likely that warrantless
 entry will be  refused.   Pre-inspection warrants may also be obtained where
 the distance to a U.S. Attorney or a magistrate is considerable so that
 excessive travel  time would not be wasted  if entry were denied.
 At present, the seeking  of such a warrant  prior to an initial inspection
 .should  be an exceptional circumstance, and should be cleared through
 Headquarters,  if refusals to  allow entry  without a warrant increase, such
 warrants may be sought more frequently. (For specific instructions on
 how to  obtain  a warrant, see Part 0.)

        (2) Administrative Inspections v. Criminal Investigations

        It is particularly important for both inspectors and attorneys to
 be aware of the extent to which evidence sought in a civil inspection can
 l« ustd in a criminal matter,  and to know  when it is necessary to secure a
 criminal rather than a civil search warrant.   There are three basic rules
 to renumber in this recard:  (1) if the purpose of the inspection is to
 discover and correct, through  civil procedures, noncompliance with regulatory
 requirements,  an  administrative inspection (civil) warrant may be used;
 (2) if  the inspection is in fact intended, in  whole or in  part, to gather
 evidence for a possible  criminal prosecution,  a criminal search warrant
must be obtained  under Rule 41 of the Federal  Roles of Criminal Procedure;
 eind (3) evidence  obtained during a valid civil inspection  is generally
admissible in  criminal proceedings.  These principles arise from the recent
 Supreme Court  cases of Marshall v. Barlow's, Inc., supra;  Michigan v. Tyler,
 	U.S.	,  98  S.Ct. 1942 (1978); and U.S. v. LaSalle National Bank,
~	U.S.	f,  57  L. Ed.  2d 221 (1978).  It is  not completely clear whether
a combined investigation for civil and criminal violations may be properly
conducted under a civil  or "administrative" warrant, but we believe that

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                                 - 3 -
a civil warrant can properly be used unless the intention is clearly to
conduct a criminal investigation.

       (3) The Use of Contractors to Conduct Inspections

       Several programs utilize private contractors to aid in the conduct
of inspections.  Since, for the purpose of inspections, these contractors
are agents of the Federal government, the restrictions of the Barlow's
decision also apply to them.  If contractors are to be conducting
inspections without the presence of actual EPA inspectors, these con-
tractors should be given training in how to conduct themselves when
entry is refused.  With respect to obtaining or executing a warrant,
an EPA inspector should always participate in the process, even if
he was not at the inspection where entry was refused.

       (4) Inspections Conducted by State Personnel

       The Barlow's holding applies to inspections conducted by State
personnel and to ;joint Federal/State inspections. Because some EPA
programs are largely implemented through the States, it is essential
that the Regions assure that State conducted inspections are conducted
in compliance with the Barlow's decision, and encourage the State inspec-
tors to consult with their legal advisors when there is a refusal to
allow entry for inspection purposes.  State personnel should be encouraged
to contact the EPA Regional Enforcement Office when any questions con-
cerning caroliance with Barlow's arise.

       With regard to specific procedures for States to follow, the
important points to remember are:  (1) The State should not seek for-
cible entry without a warrant or penalize an owner for insisting upon
a warrant, and (2) the State legal system should provide a mechanism for
issuance of civil administrative inspection warrants.  If a State is
enforcing an EPA program through a State statute, the warrant process
should be conducted through the State judicial system.  Where a State
inspector is acting as a contractor to the Aqency, any refusal to allow
entry should be handled as would a refusal to an Agency inspector as
described in section II.B.3.  Where a State inspector is acting as a
State employee with both Federal and State credentials, he should utilize
State procredures unless the Federal warrant procedures are more advantageous,
in which case, the warrant should be sought under the general procedures
described below.  The Regions should also assure that all States which
enforce EPA programs report any denials of entry to the appropriate
Headquarters Enforcement Attorney for the reasons discussed  in section
II.B.4.

    B. Entry

       (1) Consensual Entry

       One of the assumptions underlying the Court's decision  is  that
most inspections will be consensual and that the administrative  inspec-
tion framework will thus not be severely disrupted.  Consequently,  inspec-

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                                - 4 -
tions will normally continue as before the Barlow's decision was issued.
This means that the inspector will not normally secure a warrant before
undertaking an inspection but, in an atterpt to gain admittance, will
present his credentials and issue a notice of inspection where required.
The establishment owner nay complain about allowing an inspector to enter
or otherwise express his displeasure with EPA or the Federal government.
However, as long as he allows the inspector to enter, the entry is voluntary
and consensual unless the inspector is expressly told to leave the premises.
On the other hand, if the Inspector has gained entry in a coercive manner
(either in a verbal or physical sense), the entry would not be consensual.

   Consent must be given by the owner of the premises or the person in
charqe of the premises at the time of the inspection.  In the absence
of the owner, the inspector should make a good faith effort to determine
who is in charge of the establishment and present his credentials to
that person.  Consent is generally needed only to inspect the non-public
portions of an establishment - i.e., any evidence that an inspector obtains
while in an area open to the public is admissible in an enforcement
proceeding.

       (2) Withdrawal of Consent

       The owner may withdraw his consent to the inspection at any time.
The inspection is valid to the extent to which it has progressed before
consent was withdrawn.  Thus, observations by the inspector, including
samples and photographs obtained before consent was withdrawn, would be
admissible in any subsequent enforcement action.  Withdrawal of consent
is tantamount to a refusal to allow entry and should be treated as
discussed in section II.B.3. below, unless the inspection had progressed
far enough to accomplish its purposes.

       (3) When Entry is Refused

       Barlow's clearly establishes that the owner does have the right
to ask for a warrant under normal circumstances.  Therefore, refusal
to allow entry for inspectional purposes will not lead to civil or criminal
penalties if the refusal is based on the inspector's lack of a warrant
and one of the exemptions discussed in Part C does not apply.   If the
owner were to allow the inspector to enter his establishment only in
response to a threat of enforcement liability, it is quite possible that
any evidence obtained in such an inspection would be inadmissible.  An
inspector may, however, inform the owner who refuses entry that he intends
to seek a warrant to compel the inspection.  In any event, when entry is
1
 FIFRA inspections are arguably not subject  to  this aspect of Barlow's
See discussion, p. 5 and 6.

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                                  - 5 -
refused, the inspector should lea\« the premises immediately and telephone
the designated Regional Enforcement Attorney as soon as possible for
further instructions.  The Regional Enforcement Attorney should contact
the U.S. Attorney's Office for the district in which the establishment
desired to be inspected is located and explain to the appropriate Assistant
United States Attorney the need for a warrant to conduct the particular
inspection,  The Regional Attorney should arrange for the United States
Attorney to meet with the inspector as soon as possible. The inspector
should bring a copy of the appropriate draft warrant and affidavits.
Samples are provided in the appendix to this document.

       (4) Headquarters Notification

       It is essential that the Regions keep Headquarters informed of
all refusals to allow entry.  The Regional Attorney should inform the
appropriate Headquarters Enforcement Attorney of any refusals to enter
and should send a copy of all papers filed to Headquarters.  It is
necessary for Headquarters to monitor refusals and Regional success in
obtaining warrants to evaluate the need for improved procedures and to
assess the impact of Barlow's on our compliance monitoring  programs.

    C.  Areas Where a Right of Warrantless Entry StillExists

       1.  Emergency Situations.

       In an emergency, where there is no time to get a warrant, a warrant-
less inspection is permissible.  In Camara v. Municipal Court, 387 U.S. 523
(1967), the Supreme Court states that "nothing we say today is intended
to foreclose prompt inspections, even without a warrant, that the law has
traditionally upheld in emergency situations". Nothing stated in Barlow's
indicates any intention by the court to retreat from this position.  The
Regions will always have to exercise considerable judgment concerning
whether to secure a warrant when dealing with an emergency situation.
However, if entry is refused during an emergency, the Agency would need
the assistance of the U.S. Marshal to gain entry, and a warrant could
probably be obtained during the time necessary to secure that Marshal's
assistance.

     An emergency situation would include potential imminent hazard
situations, as well as, situations where there is potential for destruction
of evidence or where evidence of a-suspected violation may disappear during
the tine that a warrant is being obtained.

       (2) FIFRA Inspections.

       There are some grounds for interpreting Barlow's as not being
applicable to FIFRA inspections.  The Barlow's restrictions do not apply
to areas that have been subject to a long standing and pervasive history

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                              - 6 -
of govenrr.sr.t regulation.  An Agency administrative law judge held recently
that even after the Barlow*s decision, refusal to allow a warrantless
inspection of a FIFSA regulated establishment properly subjected the
owr.sr to civil penalty.  K. Jonas & Co., Inc., I.F. & R Docket No. III-121C
(July 21, 1978).  For the present, however, FIFRA inspections should be
conducted under the sane requirements applicable to other enforcement
programs.

        (3) "Open Fields" and "in Plain View* situations.

       Observation by-inspectors of things that are in plain view, U.e.,
of things that a meniSer of the public could be in a position to observe) does
not require a warrant.  Thus, an inspector's observations from the public
area of a plant or even from certain private property not closed to
the public are ad-nissible. Observations made even before presentation of
credentials while on private property which is not normally closed to the
public are admissible.

       D.  Securing a Warrant

       There are several general rules for securing warrants.  Three
documents have to be drafted:  (a) an application for a warrant, (b) an
accompanying affidavit, and (c) the warrant itself.  Each document should bd
captioned with the District Court of jurisdiction, the title of the action,
and the title of the particular document.

       The application for a warrant should generally identify the statutes
and regulations under which the Agency is seeking the warrant, and should
clearly identify the site or establishment desired to be inspected
[including, if possible, the owner and/or operator of the site).
'[he application can be a one or two page document if all of the factual
background for seeking the warrant is stated in the affidavit, and the
application so states.  The application should be signed by the U.S.
Attorney or by his Assistant U.S. Attorney.

       The affidavits in support of the warrant application are crucial
(Jccuraents.  Each affidavit should consist of consecutively numbered para-
graphs, which describe all of the facts that support warrant issuance.  If
the warrant is sought in the absence of probable cause, it should recite
or incorporate the neutral administrative scheme which is the basis for
inspecting the particular establishment.  Each affidavit should be signed
Ijy someone with personal knowlege of all the facts stated.  In cases where
entry has been denied, this person would most likely be the inspector
who was denied entry.  Note that an affidavit is a sworn statement that
nust either by notarized or personally sworn to before the magistrate.

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                                  - 7 -
     The warrant is a direction to an appropriate official (an EPA
inspector, U.S. Marshal or other Federal officer) to enter a
specifically described location and perform specifically described
inspection functions.  Since the inspection is limited by the terms of
the warrant, it is important'to specify to the broadest extent possible
the areas that are intended to be inspected, any records to be inspec-
ted, any samples to be taken, any articles to be seized, etc.  While
a broad warrant may be permissible in civil administrative inspections,
a vague or overly broad warrant will probably not be signed by the
magistrate and may prove susceptible to constitutional challenge
The draft warrant should be ready for the magistrate's signature at the
time of submission via a motion to quash and suppress evidence in
Federal District court.  Once the magistrate signs the draft warrant, it
is an enforceable document.  Either following the magistrate's signature
or on a separate page, the draft warrant should contain a "return of
service" or "certificate of service".  This portion of the warrant should
indicate upon whom the warrant was personally served and should be signed
and dated by the inspector.  As they are developed, more specific warrant-
issuance documents will be drafted and submitted to the Regions.

       E.  Standards or Bases for the Issuance of Administrative Warrants.

       The Barlow's decision establishes three standards or bases for the
issuance of administrative warrants.  Accordingly, warrants may be obtained
upon a showing:  1) of traditional criminal probable cause, 2} of civil
probable cause, or 3) that the establishment was selected for inspection
pursuant to a neutral administrative inspection scheme.

       1.  Civil specific probable cause warrant.

       Where there is sane specific probable cause for issuance of a warrant,
such as an employee complaint or competitor's tip, the inspector should be
prepared to describe to the U.S. Attorney in detail the basis for this
probable cause.

       The basis for probable cause will be stated in the affidavit in
support of the warrant.  This warrant should be used when the suspected
violation is one that would result in a civil penalty or other civil
action.

       2.  Civil probable cause based on a neutral administrative
           inspection scheme I

       Where there is no specific reason to think that a violation has been
committed, a warrant may still be issued if the Agency can show that the
establishment is being inspected pursuant to a neutral administrative
scheme.  As the Supreme Court stated in Barlow's:

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                               - 8 -
     "Probable cause in the criminal law sense is not required. '
     For purposes of an administrative search, such as this, probable
     cause justifying the issuance of a warrant may be based not only
     on specific evidence of an existing violation, but also on a
     showing that "reasonable legislative or administrative standards
     for conducting an ... inspection are satisfied with respect
     to a particular [establishment]".  A warrant showing that a speci-
     fic business has been chosen for an OSHA search on the basis of a
     general administrative plan for the enforcement of the act derived
     frOT neutral sources such as, for example, dispersion of employees
     in various type of industries across a given area, and the desired
     frequency of searches in any of the lesser divisions of the area,
     would protect an employers Fourth Amendment rights."

Every program enforced by the Agency has such a scheme by which it prioritizes

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                                    -9-
distinction bet-^een administrative inspections and criminal warrant
situations is discussed in Section II.A.2.

      F. Inspecting with a Warrant

       Once the warrant has been issued by the magistrate or judge, the
inspector may proceed to the establishment to commence or continue the
inspection.  Where there is a high probability that entry will be refused
even with a warrant or where there are threats of violence, the inspector
should be accompanied by a U.S. Marshal when he goes to serve the warrant
on the recalcitrant owner.  The inspector should never himself attempt
to make any forceful entry of the establishment.  If the owner refuses
entry to an inspector holding a warrant but not accompanied by a U.S.
Marshal, the inspector should leave the establishment and inform the
Assistant U.S. Attorney and the designated Regional Attorney.  They will
take appropriate action such as seeking a citation for contempt.  Where
the inspector is accompanied by a U.S. Marshal, the Marshal is principally
charged with executing the warrant.  Thus, if a refusal or threat to
refuse occurs, the inspector should abide by the U.S. Marshal's decision
whether it is to leave, to seek forcible entry, or otherwise.

       The inspector should conduct the inspection strictly in accordance
with the warrant.  If sar.pling is authorized, the inspector must be sure
to carefully follow all procedures, including the presentation of receipts
for all samples taken.  If records or other property are authorized to be
taken, the inspector must receipt the property taken and maintain an
inventory of anything taken from the premises.  This inventory will be
examined by the magistrate to assure that the warrant's authority has
not been exceeded.
2 continued fron page 8.

to Federal court enforcement when entry  is refused".  There is thus
some question as to vhether the existence of a non-warrant Federal
court enforcement mechanism in a statute requires  the use of that
mechanism rather than warrant issuance.  We believe that the Barlow's
decision gives the agency the choice of  whether to proceed through warrant
issuance or through an application for an injunction, since the decision
is largely based on the fact that a warrant procedure imposes virtually
no burden on the 'inspecting agency.  In  addition,  an agency could attempt
to secure a warrant prior to inspection  on an ex parte basis, something
not available under normal injunction proceedings.  Several of the acts
enforced by EPA have provisions allowing the Administrator to seek
injunctive relief to assure compliance with the various parts of a
particular statute.  There may be instances where  it would be more appro-
priate to seek injunctive relief to gain entry to  a facility than to
attempt to secure a warrant for inspection, although at this point we
cannot think of any.  However, since the warrant process will be far
more expeditious than the seeking of an  injunction, any decision to
seek such an injunction for inspection purposes should be cleared through
appropriate Headquarters staff.

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                               - 10 -
        G.  Returning the Warrant.

        After the inspection has been conpleted, the warrant must be returned
tc the magistrate.  Whoever executes the warrant, (i.e., whoever performs
the inspection), must sign the return of service form indicating to whom
the warrant was served and the date of service.  He should then return
the executed warrant to the U.S. Attorney who will formally return it to
the issuing magistrate or judge.  If anything has been physically taken
from the premises, such as records or samples, an inventory of such itens
sntst be submitted to the court, and the inspector must be present to certify
that the inventory is accurate and complete.
                     • \t*
III.   Conclusion

       Except for requiring the Agency to formalize its neutral inspection
spheres, and for generally ending the Agency's authority for initiating
civil and/or criminal actions for refusal to allow warrantless inspections,
Barlow's should not interfere with EPA enforcement inspections.

       Where there is doubt as to how to proceed in any entry case,
do not hesitate to call the respective Headquarters program contact for
assistance.
                              Marvin B.  Durning

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                              APPENDIX
The Appendix contains three attachments.

     Attachment I is a warrant application, affidavit and warrant to
conduct an inspection, vftere the Agency has specific probable cause to
believe that a civil violation of an EPA regulation or Act has cccured.
In particular, care should be taJcen in spelling out the specific facts
that give rise to probable cause.  Note also, that the scope of the
warrant is carefully articulated.

     Attachment II is a warrant application, affidavit and warrant to
conduct an inspection in which the establishment to be inspected has
been selected under a neutral administrative inspection scheme.  Note
the extraordinary detail of the administrative scheme describe in
paragraphs 8-20 of the affidavit.  Such detail should not be necessary
for most EPA neutral administrative inspection schemes.  Note also
the executed inventory and return of service forms attached to
Attachment II.             '                                '    '

     Attachment III contains a neutral administrative scheme for
CFC inspections.  In implementing such a scheme, the Regions must still
utilize neutral criteria in selecting the individual establishment to
be inspected.

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                UNITED STATES DISTRICT COURT
                MIDDLE DISTRICT OF LOUISIANA
IN BIS MATTER OF              :
CLEAN LAND AIR AND WATER,     :    no-. "7/-vi *i
CORPORATION. D/B/A CLAW:
ROLLINS ENVX.KON::K::TAL SKRvxcss:    APPLICATION FOR WARRANT TO
OF LOUISIANA INCORPORATED;    :    ENTER, INSPECT. PHOTOGRAPH.
E::VIKC::::-::;TAL PURIFICATION    :    SAMPLE, COLLECT I::FO?:^T:OS.
ADVANCE;srr INCORPORATM;     :    INSPECT AND COPY RECORDS
E?A, INC.; IN I3ERVILLE       :
PARISH, LOUISIANA             j

          TO THE UNITED STATES MAGISTRATE, by Che United
States of America, Environmental Protection Agency, through
James Stanley Lemelle, Assistant Uaic«d Scaccs Actomey. for
the Kiddie District of Louixiaxu, hereby applies for a
varraat pursuans eo teecion 308 of the Federal Vacer Pollution
Control Act, 33 U.S.C. 1318, and the Rejouree Conservation
and Recovery Act of 1976, 42 U.S.C. 6927. for the purpose of
conducting aa inspection as follows:
                                                •
          To eater to, upon, or through the preaises of a
vaste disposal operation known by various names including
the CLAW facility, which consists of three sites, to wit:
              *
aa injection veil sice, a field office and storage tanks.
and waste pits and landfill site located in Iberville Parish.
Louisiana in or near the Bayou Sorrells coosunity.  The
facility can be reached for disposal purposes by  truck or
barge.  The ownership and operation of the CLAW facility
veste disposal operation has been known, by several different
names, to wit:  Clean Land Air Water Corporation  (CLAW);
EPA, Incorporated; Environaental Purification Advancement;
Environmental Purification Abatement  (EPA, Inc.)  and Rollins
Environmental Services of Louisiana.  .A company letterhead
vsiag the names of CLAW and EPA, Inc.  lists an address of
Route 2, Box 380B, Plaquemine, Louisiana  70764.'  It is
reported in the newspapers and elsewhere, that on July 28,
1978 - three days after the death of  the  truck driver on  the
                                                   •
CLAW facility - that  the injection well on the CLAW  facility
was sold to the Rollins Environmental  Services of Louisiana.
Unsubstantiated reports say that CLAW no  longer  has  any

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               	_.	  .- 	   ..	 —..*.. k.
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Local unraic and fear of the facility was reported co Che
Enforcement Division of Region VI, Dallas, Texas en Tuesday,
August 1. 1979 and EPA was requested to inspect the facility
which is a disposal site for chemical wastes and numerous
ell wastes of a hazardous and toxic nature.
          Much local unrest, and agitation and cosplaints
have been reported on television aad in newspapers concerning
Che operation of the CLAW facility as well as the untimely
death of a 19 year old truck driver at said facility while
he was discharging waste into an open pit at Che facility.
The death was possibly caused by his inhalation of toxic
fumes caused by a reaction of mixing incocpatible toxic
wastes is the open pit.  Allegedly two eye witnesses to the
  •
death of the driver reported the presence of choking fumes
in the area when they opened Che doors to their truck to
Assist the driver who died.  They also reported that his
truck was parked at the edge of the open pit truck rasp,
with doors open at the time of his dea'th.  Subsequent
laboratory tests of waste taken from the pits have shown
waste materials present in the pit, which, when mixed with
the speat caustic being discharged from the driver's truck
could have caused the death.  Final autopsy reports are
•till pending.  It is reported and alleged that CLAW facility
officials directed the driver to take and discharge his
wastes at the truck ram? in the open pit, rather than in  the
injection well.  Discharging toxic waste into as open pit,
«t Che edge of a pit. is not a safe, desirable, or acceptable
•practice since toxic chemical reactions are very probable
aad can result in the death of anyone nearby.
          Edward.KcKaa made a preliminary  inspection
in which he obtained two pit samples and observed evidence
of oil, hazardous wastes, waste spillage and a  "sloppy"
operation which appears to be dangerous to the  environment
                               .3-

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 as veil as hazardous to cht health and welfare  ef  citizens.
 He further observed high water markings en  Che  adjacent
 trees as the pi: sice and a lack ef levees  betveea che sices
                                       •     ^
 asd the Grand River and other waterways.  la addition, there
 Bay be hazardous wastes and conditions which cay pose a
 substantial present, or potential hazard te human  health
 or the environsenc whea improperly treated, stored,  trans-
 ported, or disposed of, or otherwise managed.
           •The inspection will be eemaeaced  in daytime
 within regular business hours and will begin as soon as
                                       •
 practicable after issuance of this warrant  And  will be
 completed with reasonable promptness.
           The inspection will be conducted  by the
 Baited States Environmental Protection Agency (E?A)  inspec-
 tors, who will be aecospaaied by the United States Marshal
 to ensure entry so that the EPA inspectors  Bay  perfora an
 inspection of the premises, inspect aad copy records, take
 photographs, gather information and evidence aad collect
 eair?lea in accord with 33 DSC 1318 and 42 CSC 6927.
.          A return will be nade to the .Court upon  completion
 ef the inspection.
           HEE3ETORE, it Is respectfully requested  that a
 warrant to enter and inspect the CLAW facility be  issued.
                                   . Respectfully submitted,
                                    DONALD L. BECOER
                                    UNITED STATES ATTORNEY
                                   'Assistant U.S. Attorney

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                            AT7I3AVI?
  STATE OF LOUISIANA
  PARISH OF EAST BATCH ROUGE
                                        •
            I, Edward MeHan, being duly sworn,  hereby depose
  and say:
            1.   I am a duly authorized employee of the United
  States Environmental Protection Agency,  and By title is
  Chemical Engineer, Surveillance and Analysis  Division,
  Region VI. which includes the Scate of Louisiana.   In ay
  capacity. Z am responsible for inspecting facilities subject
  to various federal environmental statutes as  directed by ay
  supervisors.
            2.   On Tuesday. August 1, 1978 from about 7:45
.  p.m. to 8:45 p.m., I made a preliminary  inspection of the
  CLAW facility and took two saaples at Che open pits.  On
  Wednesday. August 2. 1978 I took a few photographs of Che
  facilities from around 3:30 p.m. until 5:30 p.m.   On Thursday,
  August 3. 1978 accompanied by another EPA employee,.! visited
                                        •
  the facility and area from about 11:30 a.m. to 2:00 p.m. and
  also took a few additional photographs.   These brief visits
  to the site have only involved facility  employees a few
  minutes each tise in order to obtain passes from the field
  office and to open gates at various guard houses.
            3.   On Friday, August 4, 1978, a local deputy
  sheriff, state and local officials and I were refused admit-
                                        •
  taace to the CLAW facility.  Also, CLAW officials were no
                                        •
  longer at the field house or available elsewhere to issue
  passes to enter.  My previous sampling and inspection was
  sot sufficient for laboratory purposes' and needs to be
  resumed.
            4.   Information I have gathered in the local
  community, in newspapers, on television, from laboratory

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tests of the sasples, frox the Xbcrvilla Sheriffs Offict,
and at the CLAW facility strongly suggest and support the
need to enter and inspect the facilities for possible Section
301. 311 and other violations of Che Federal Water Pollution
Control Act.  Further, it is possible that there are hazardous
vastes and conditions on the premises as defined in Section
1004(2) of the Resource Conservation and Recovery Act of 1976,
(42 USC 6903)(5).which constitute an imminent hazard under
section 7003 of the Resource Conservation and Recovery Act
Of 1976 (42 USC 6973).  These observations are:
                                      •
             :-;•' a.   Obvious spillage of waste material on
Che (rounds of the CLAW facility subject to entering waterway's.
               b.   Contaminated landfills with obviously
exposed and damaged barrels with their contents eoptied or
nearly empty.
                             •
               c.   Drainage from landfills into a "fishing"
lake and other adjacent areas leading to various waterways.
               d.   Open pits containing oil wastes and
hazardous, toxic cheaical wastes with the appearance of
overflow wastes on the adjacent grounds as well as high
          •
vater marks on trees next to the open pits equal to or
higher than the pits.
               e.   The lack of levees beween the facility
grounds and drainage areas to the Grand River, "fishing
lake", bayous and barrow ditches.
               f.   Copies of a few facility log records and
ether documents which were previously copied by the local
Sheriff's office.  These records indicate the receipt and con-
                                      •
tent of oil and hazardous cheaical wastes accepted at the
facility.
               g.  —Poor maintenance and sloppy "housekeeping"
practices at the facility which leads a reasonable person to
recognize the likelihood of  these prohibited pollutants
                          -2-

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                    CNirrs  STATES DISTRICT COURT
                    KIDDl£  DISTRICT OF LOUISIANA
   THX KATTE3  OF
      LA.VD AIR AND WATER,
CORPORATION, d/b/a CiAW;
rrc., rr Ai.
HARRANT OF ENTRY, INSPECTION
AND MONITORING PURSUANT TO
33 U.S.C.51318 and 42 U.S.C.J6927
TO:  THE UNITED STATES OF X'CHICA, UNITED STATES
     PROTECTION AGENCY, THROUGH ITS DUT.Y DESIGNATED REPRESENTATIVE
     OR RSJRESrrTATIVES, THE UNITED STATES MARSHAL OR ANY OTHER
 •   . FEDERAL OFFICER
          An application having b«en made by tht United States of
Aaerica, Unittd States Environmental Protection Agency, for a
warrant of  entry,  inspection  and monitoring pursuant to 33 U.S.C.51318
                                                                 •
«ad  42 0.S.C.5^927, as part of an inspection prograa designed to
assure compliance  with the Federal Hater 'Pollution Control Act
 (coa&only referred to as the  Clean Hater Act), 33 O.S.C.S12S1, et
seq., and the Resource and Recovery Act of 1976  (42 O.S.C.S6901, et
•eq.),.and  an Affidavit having been made before ae by Edward McSaa,
« duly authorized  employee of the Onited States Environmental
Protection  Agency, that he'has reason  to believe that on the premises
•hereinafter described there exist a danger to the public's health,
welfare and safety and to the property, rivers and environment of
the  United  States, and that in order to determine whether the
federal Hater Pollution Control Act  (commonly referred to as the
dean Hater Act),  33 O.S.C.J12S1, et seq., and the Resource and
Useovery Act of 1976  (42 0.S.C.S6901,  et seq.), and the rules,
regulations and orders issued pursuant to the Acts have been or
are  being violated, an entry  on, and inspection and monitoring
      t                               «
of tho said described property is required and necessary;

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          And, the Court being satisfied that thera his beta a

sufficient shewing that reasonable legislative or adainistrative
                                         •
standaria for conducting an inspection and Investigation have been

satisfied with respect to the said described property aad -that

prebabie cause exist tc issue a warrant for the entry, inspection,

investigation and aonitoriag of the said described presises:

          Z? IS HTRT3Y CR3E3SO AN3 COWMANDEO that the Onitod States

of Anerica, Onited States Environmental Protection Agency, through
                                                •
its duly designated representative or representatives, the Onited

States Marshal, or any other federal officer are heresy entitled tc

«ad shall be authorized and peraitted to have entry upon the

following described property which is located in the Kiddle District

ef .Louisiana:

             Those preaises known as the Claw Corporation
             waste disposal facility in Iberviiie Parish,
             Louisiana, also known as E?A, Inc., Clear Land
             Air Water Corporation, Environmental Purification  '
             Advancement, Environmental Purification Abateaent
             and possibly as the ftcllins Cnvironaental Services
             ef Louisiana, or which are owned or operated by
             any other person or company/ corporation or part-
           •  aership, which premises and property are more
             particularly ar.d further described as follows:

             •from the intersection ef La. Highway 75 and
             •La. Highway 3066, proceed South for approximately
             7 miles; turn right and travel across the Sayor-
             Sorrel-Pontoon Bridge, a distance of approxinataly
             0.2 miles; turn right, proceed northwest on Route
             2, the Lower levee Road, for approximately 1.6
             miles at which point the pavenent ends; at this
             point turn right, travel approximately 0.1 miles
             to the entrance of the injection well, which is
             believed to be owned by Rollins Environmental
             Services of Louisiana, Incorporated, all as is
             shown on the attached photas identified as
             Coverasent Exhibits 1 aad 2.*

             •Prom the Rollins Environmental Services of
             Louisiana, Incorporated office, proceed South on
             the shell/gravel road for approximately 1.4 miles
             until the road deadends.  This  is the  location of
             the field office of Clean Land Air and Water
              (CLAW), and storage tanks which are believed to be
             owned by Rollins Environmental Services of Louisiana
             Incorporated, all as  is shewn  on the  attached  photos
             identified as Government Exhibits  3,  4, aad  5.

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             •From th« field office of CJW. return to the
             • ite of the intersection At the paved lower levee
             road and the road leading to the dee? veil injecticn
             •ite (Rollins Enviror..T2r.sal).  Proceed northwest
             en the unsaved shell/gravel low«r levee road
             •eeroxinately 6.1 miles to the entrance road and
             bridge leading to the gate guard house and gate
             of the EPA, Inc. waste disposal pits.  This sase
             •ntranee road is 7.7 miles northwest along the
             lower levee road from the intersection of the lover
             levee road and Bayou Scrrel Pontoon Bridge Jtoad.

          XT IS rUKTHTS OICUTO that the entry, inspection,

investigation and monitoring authorized herein shall be conducted
                                                •
during regular working hours or at ether reasonable tises, within

reasonable linits and in a reasonable Banner fsca 6:00 a.m. to

10:00 p.a.

          IT IS FUJCEZa ORDEAE3 that the warrant issued herein shall

be for the purpose of conducting an entry, inspection, investigation

and monitoring pursuant to 33 0.S.C.51318 and 42 O.S,C.$6327

consisting of the following:

            (1)  entry to, open or through the above described
                 precises, including all buildings, structures,
                 equipment, machines, devices, materials and
                 sites to inspect, sample, photograph, monitor
        . •       er investigate the said premises,•

            (2)-  access to, seizure of and copying of all records
            ••   pertaining to or related to the operation of
                 the facility, equipment, waste materials
                 which are accepted and stored en the premises
                 mnd records which are required to be maintained
                 tinder 33 O.S.C.51318(a) (A) , and 42 O.S.C. S6901,
                 •t seq., including any rules and regulations
                 and orders promulgated thereto;

            (3)  inspection, including photographing, of an/
                 monitoring equipment or methods required by
                 33 O.S.C.S1318U) (A), and 42 U.S.C.S6927;

            (4)  inspection, including photographing,of any
                 equipment, processes or methods used in stapling,
                 monitoring or in waste characterization;

            (5)  inspection, including photographing, of any
                 equipment or methods used  to dispose of er store
                 waste substances;

            «)  sample and seize any pollutants, effluents,
                 runoff, soil, or other materials or substances
                 which may reasonably be expected to pollute
                 the waters of the United States under various
                 conditions or threaten the  public health, safety
                 or welfare of the people of the United States;
                                     •3-

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             (7)   seize, Inspect, sample, and pnetcraph any
                  •vidcnea which constitutes or relates to or
                  is part of a violation of the federal watar
                  Pollution Control Act  (cwssr.c.-.iy referred to
                  as the Clean Water Act, 33 U.S.C.S12S1, et
                  (eg., and the Resource and Recovery Act of 1576
                  .(42 U.S.C.S6901, «t seq.J;
             (8}   taJce such photographs et the tbovo authorized
                  procedures as may be required or necessary.
           X? IS FUR7H5X ORDERED that « copy of this warrant shall
 he left at the premises at the time of the inspection.
           XT IS FURTHER OP.SERED that if any property is seized,
                    o
 the officer conducting the search and seizure shall leave a receipt
 for the property tsJcen and prepare a written inventory of the property
 seized and return' this warrant with the written inventory before
 tee within 10 days froa the date of this warrant.
           IS IS FURTHER CR3SRT3 that the warrant authorized herein
#
 shall be valid  for a period of 10 days frca the date of this warrant.
           XT JS ru*T££R ORDERED that the Doited States Marshal Is
 hextby authorized and directed to assist the representatives of the
 United States Environmental Protection Agency in such Banner as
 may be reasonably necessary and required to execute this warrant
 and the provisions contained herein, including but net liaited to
.Saining entry upon the premises, the inspection and sonitoring
 thereof, the seizure and sampling of materials, docuaents or equipment,
 *ndthe photographing of the premises, and the materials or equipment
 thereon.
           BATED this     /&   day of    0"*~1nJ~           _, 1578.
                                       7—?

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      APPLICATION FOR
      ADMINISTRATIVE
               IN TEE UNITES STATES DISTRICT COURT
               FOR THE EASTERN DISTRICT OF MICHIGAN
                        SOUTHERN DIVISION
 IN THE MATTER OF:
 GENERAL MOTORS CORPORATION
 GENERAL MOTORS A£SE.W.3LY DIVISION
 WILLOW RUN AIRPORT
 TPSILANTI, MICHIGAN  48197
          AND
 VEHICLE EMISSION LABORATORY
 GENERAL MOTORS PROVING GROUND
 HILFORD, MICHIGAN  48042

      ROW COMES the Administrator for the Environmental
 Protection Agency (EPA), by and through the United States
 Attorney, and applies for administrative warrants to
 enter, to observe a Selective Enforcement Audit (SEA)  test
 on a configuration of motor vehicles manufactured by the
 General Motors Corporation (CM) as specified in a SEA test
 order issued on July 28, 1978, by the Assistant Administrator
 for Enforcement of EPA, and to inspect GM's records, files,
 papers, processes, controls, and facilities which are
.involved in and associated with the manufacture and testing
 of said configuration pursuant to said test order at the'
 premises of the CM Willow Run vehicle assembly plant,  Tpsilanti,',
 Michigan, and the CM vehicle emission laboratory at Milford,
 Michigan, in accordance with Sections 206(b) and (c), 208(a)
 and 301(a)*of the Clean Air Act, 42 U.S.C. $7525(b) and (c),
 7S42(a) and 7601(a), and regulations promulgated thereunder.
 In support of this application, the Administrator respectfully
 submits an affidavit and proposed warrants.
James K. Robinson
United States Attorney
   Assistant United States Attorney

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              r.j T::E UNITED STATES DISTINCT COVRT
              FOR THE £AST£r.:J DISTRICT or
                              r.:: SIVISICN
IM THE .'rATTER O?:
                                     }
G.rrK.v.L MOTcr.s CORPORATION           )   AOM:S'IST?.\TIVE K/JIRWJ?
cr.:;z.v^ KOTSSS AISEKELY civ:sio;j    'j   ENTR* AN.C i*:.-?EC7*o« c-xsss
v.iiLc:; SUN Aistpoat                   )   THS CICAS AI.I AC?
                     48197           )
     TO: XA?tSDT A. LW, Acting Chief, Manufacturtrs Projrans
Branch, Mobile Source Enforccsant Division, Office of
Enforcsaer.t, United States Envircncsntal Protection Agency
(E?A), and any other duly designated enforcement officers or
employees of the EPA:
     .Application having been oede, and Matthew Low having shown
probable csuse for the issuance of an adainistrative warrant
for entry; observation of a Selective Enforcement Audit
(S£A) test on the configuration of notor vehicles aanufactured
by General Motors Corporation  (CM) of engine  f&nily 840B2
and engine code 2, with 4000-pound inertia weight, A-3
transmission and 2.56 rear axle' ratio, as specified in a SSA
test order issued on July 28,  1978, by the Assistant Administrator
for Enforcement of EPA; and inspection of GM's records,
                                           •
files, papers, processes, controls and facilities which  are
involved in and associated with the manufacture  and testing
of said configuration pursuant to said test order at  the
premises of the CM Willow Run  vehicle assembly plant, Ypsil&nti,
Michigan;
     WHE?J5ro^£, pursuant to the Clean Air Act as amended, 42  U.S.C.
57401 £t scg., and the regulations thereunder, you and any  duly
designated enforcement officers and employees of the  Environnnnbal
Protection Agency are hereby authorized  to  enter the  above-described
premises at reasonable times during normal  operating  hours  for the

-------
purpose of csnductir.g an administrative inspection pursuant
to Sections 206(b) and (c), 206(4) and 301(a) of the Clean
Air Act, 42 C.S.C. 557325(5} *nd {c), 7S42(e) zr.d 7601, and
40 C.F.R. £§5.601 et sec.  You and any duly designated
enforcement officers and employees of E?A a?e authorised to
observe activities conducted by CM pursuant to the SSA test
order issued on July 28, 1978, concerning the vehicle
configuration specified in said test order to determine
whether CM it coaplying with 40 C.F.R Ptrt 86 and with the
test order.  The activities that you and the designated
persons ar.e authorized to observe include the following:
        • • ,*
vehicle and engine manufacture, assesbiy, and storage
procedures; sanple test vehicle selection procedures;
and related activities.  You and any designated enforcement
officers and employees are authorized to inspect at reasonable
tines during normal operating hours the records, files,
papers, processes, controls and facilities which are
involved in and associated with the above activities and
are maintained, used and generated by CM at that location.
You and any duly designated enforcement officers and ecployees
                            •
are authorized to copy documents and photograph components,
£es€ vehicles and facilities.
     The Duration of this inspection shall be of such  reasonable
length as to enable you and the authorized enforcement officers
end employees of EPA satisfactorily to complete such inspection
according to 40 C.F.R. $86.601 et seq.

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                            -3-
      A prorrpt return oi this warrant .hall be Bade to
thi.  court  s^ing that the arrant has been .,.cutt{! tnd
inspection  has  been «*pl.t.d within .uch r.3,on*bl. tlmt
PA75D:       f\*^  31             1978
                                                             .
                                         TiU  STATES  KAGIilflAn
                                           •.  »• •.  / :.-   »\ • .•  • •
                                                       . •:»
                                         -' //-

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                      i»rrt;n:r c:-  scr.vrcs

     I hereby  certify that a copy of the within warrant was

       by presenting  a copy of came to  rlp!'d'a   \ i'ivc<.r  r..(  7*-
an acvjrst of General  Motors Corpsrztion (C::) on  A' Je '-'-'''  i.
                                                    J
1973, at the CM  Willow Hun vthicle asstebly plant,  Vpsilanti,  Michi;
'  (Nace of parson making service)
     i-iciiL'l  Title within
  Scatis Envircnnental Protection Agency)
     Inspection of the establishment described  in this


warrant was  completed on    r^^i^f   V      ,  1978.
          v*

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Inventor/ of Property Received Pursue to Adeinistrtiive
                    '''arrant'
                                              (ytllewi
  These ere the it CBS thtt E?A has received under
                              Bruce Lunefy
                              Enforcement Officer
                               11:30 ta  8/4/78
                                                               i..

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               IN TEE UNITED STATES DISTRICT  COURT
              FOR THE EASTERN DISTRICT OF MICHIGAN
                         SOUTHERN DIVISION
                                       AFFIDAVIT IN  SUPPORT OF
                                       APPLICATION FOR WARRANTS
                                       TO ENTER AI.'D  INSPECT
                                       PURSUANT TO THE CLEAN AIR
                                       ACT (42 C.S.C.  S"?-101 «t ser.)
IN TBE MATTER OF i
GENERAL MOTOR CORPORATION
CENEF.AL MOTORS ASSEMBLY DIVISION
WILLOW RUN, AIRPORT
YPSILANTI, MICHIGAN  48197
    AKD         .  •
VEHICLE EMISSION LABORATORY
GENERAL MOTORS PROVING GROCJNO
MILFORD, MICHIGAN  48042
     Matthew Low being duly iworn upon his oath,  according  to
law, deposes and says:
     1.  Z an Acting Chief, Manufacturers Programs Branch,
Mobile Source Enforcement Division, Office of Enforcement,
United States Environmental Protection Agency (EPA),
Washington, D.C.  Z am in charge of a program known as  the
Selective Enforcement Audit (SEA) program, which will be
described below.  Z report to the Director of the Mobile
Source Enforcement Division, who is under the Deputy Assistant
Administrator for Mobile Source and Noise Enforcement;  in
turn, he is under the Assistant Administrator for Enforcement,
vbo reports to the Administrator of the Environmental
Protection Agency.
         i
     2.  This affidavit is made in support of an application
for Administrative warrants to eater; observe a Selective
Enforcement Audit (SEA) test on the configuration of motor
vehicles manufactured by the General Motors Corporation (CM)
of engine family 840B2 and engine code 2, with 4000-pound
inertia weight. A-3 transmission and 2.56 rear axle ratio as
specified in a SEA test order issued on July 28, 1978,  by
                       »
the Assistant Administrator for Enforcement of EPA; and
inspect GM's records, files, papers, processes, controls,
and facilities which  are involved  in and  associated with

-------
                          -2-

the manufacture and testing of said configuration pursuant
to said test order at the precises of the 
-------
                           -3-
•re subjected to a 4000-mile test.  The emission levels of
the emission-data vehicles during their useful life are determined
by applying the 'deterioration factor* calculated froa the
50,000-oile test results for that engine family to the emission
data obtained after 4000 miles of operation.  Xf it is demonstrated
that the prototype vehicles of the various configurations within
an engine family comply with the emission standards over their
useful life and with other regulations, the Administrator issues
to the manufacturer a certificate of conformity for the particular
engine faaily described in the application.  '                       •
     4.  To determine whether new motor vehicles actually being
manufactured, as distinguished froa pre-production prototypes*
meet the regulations, including emission levels, with respect to
which the certificate of conformity was issued, Section 206(b),
42 O.S.C. $7525(b), authorizes the Xdainistrator to test and to
require the testing of new production vehicles.  In addition, to
enforce Section 206, Section 206(c) provides that officers or
employees designated by the Administrator may enter a manufacturer's
plant to -conduct tests of vehicles and to inspect records, files,
papers, processes, controls, and facilities.  Section 208(a), 42
O.S.C. $7542(a), further requires manufactuers to establish and
maintain such records, make such reports, and provide such
information as the Administrator may reasonably require to enable-
him to determine whether the manufacturer has acted or is acting .
in compliance with Title XX of the Act and the regulations
                      »
promulgated thereunder and to permit duly-designated EPA officers
or employees to have access to and copy such records.  Section
301{a), 42 O.S.C. $7601(a), authorises  the Administrator to
prescribe such regulations as are necessary to carry out his
functions under the Act and to delegate to any EPA officer or

-------
                             -4-

enployee such e£ his powers and duties under the Act, except t
                                                  s t~y
aaking of regulations, as he Bay deem necessary, er impcaiin^,
Based upon the authority of Section 206, 208 and 301, 42 O.5.C.
$57525, 7542 and 7601, EPA has established a program for spot
assembly-line testing known as the Selective Enforcement Audit
(SEA) program.  Regulations concerning the SEA program are set
forth at 40 C.F.R. $86.601 rt «o., 41 Fed. Beg. 31472 (July 28,
1976).
     5.  Under the SEA program, the manufacturer can be required
to test a representative sample of production vehicles from a
designated motor vehicle configuration to determine whether the
configuration is being manufactured to conform to the applicable
emission requirements.  The SEA regulations prescribe specific
procedures by which SEA testing is to be conducted, including
procedures for vehicle selection, preparation and pre-conditioning,
for dynamometer operation to simulate driving conditions and fol
collection of vehicle exhaust gas samples for analysis.  A SEA
is initiated by the issuance of a test order to a manufacturer
requiring that manufacturer to conduct emissions testing and
specifying, among other items, the motor vehicle configuration
to be tested, the plant or storage facility from which vehicles
must be selected and the procedures to be employed in selecting
sample vehicles for SEA testing.  Section 206(b) of the Act,
                                                                 *
42 O.5.C. $7525(b), authorizes the Administrator to issue a
test order.  Pursuant to Section 301(a) of the Clean Air Act,
42 O.S.C. 57601(a), the Administrator has delegated the authority
to conduct testing through the issuance of test orders to EPA's
Assistant Administrator for Enforcement along with the further
authority to redelegate this power to the Deputy Assistant
Administrator for Mobile Source and Noise Enforcement, and  in

-------
                               -5-
tum to redelegate to the Director, Mobile Source Enforcement
Division.  EPA Delegation 7-30, November 10, 1977.  Such re-
delegation to the Deputy Assistant Administrator was aade en
Hovember 14, 1S77.
                    *
     6.  Under Sections 206(b) and (e). 208(a) and 301(a) of
the Clean Air Act, 42 O.S.C. f$7525(b)  and (e), 7S42(a)  and
7601(*}, and 40 C.P.R. $86.601 £t «o., duly designated  EPA
•nforceaent officers and employees are  authorized under  the
SEA program to enter the manufacturers' facilities at reasonable
times during noraal working hours for the purpose of observing
activity relating to the SEA testing  and inspecting records,
files, papers, processes, controls and  facilities to deterain* if
the manufacturer is acting in compliance with regulations and the
test order.  Ordinarily, the EPA monitoring includes observation
of vehicle and engine manufacture, assembly and storage  procedures
•ample test vehicle selection procedures; sample test vehicle
preparation, pre-conditioning, mileage accumulation, emission, test
maintenance and soaking procedures, as well as the calibration of i
         i
equipment; and related activities.  Commonly, EPA inspects
                *
records, files, papers, processes, controls, and facilities which
are involved in and associated with the above activities and are
maintained, used or generated by the manufacturer at the locations
where test vehicle assembly, SEA test vehicle selection  and
testing take place. Also, EPA is authorized to copy documents,
photograph components, test vehicles and facilities and  obtain
reasonable assistance from facility personnel in executing its
functions under the SEA program. EPA attempts to enter and
conduct these inspection-related activities in conjunction with
each SEA test order for the purpose of monitoring* the activity of
the manufacturer undertaken pursuant to the test order to ensure

-------
                              -fi-
that such activity conforms to the requirements of the test
order and the SCA regulations.
     7.  The manufacturer is notified by the test order of
the configuration (or alternate) to be tested, the location
from which test vehicles will be selected, when the testing
is to begin and when E?A officers and employees will be
present.  The date of completion of the test, and therefore
the duration of the E7A inspection, is not specified at the
outset because it is not possible to do so.  SCA selection
       • :,*
and testing normally take up to two weeks.  If the manufacturer
elects to retest vehicles in an attempt to avoid failing an
audit, or if upon failing an audit a re-audit is necessary,
audit activity under the test order may continue for a
month.  The Clean Air Act Selective Enforcement Audit
regulations, 40 C.F.R. $86.601 •£ see., <1 Fed. Reg. 31472
(July 28, 1976), and the test order define the scope and
purpose of.the audit. The test order identifies the EPA
                                                    •    •
enforcement officers and employees who have been designated
to enter, observe activities, and inspect records, files,
papers, processes, controls and facilities used in or
associated with the audit.
     8.  Under the regulations and the Clean Air Act, a SLA
test order may be issued to any manufacturer at any time for
any motor vehicle configuration being manufactured.  When a
SCA test order provides less than 24 hours notice to the
manufacturer, the SEA test order must be authorized in
writing by the EPA Assistant Administrator for Enforcement.
     9.  The frequency with which SEA test orders are issued
to any given manufacturer is generally based on that manufacturer's
proportionate share of total vehicle production.  A manufacturer's

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                            -7-

projected sales volume is used as the basis for establishing
the preliminary number cf SEA test orders to which that
manufacturer Bay be subject annually.  A higher production
voluae requires more audits for sufficient review of the
manufacturer's production.  The maximum number of SEA test
orders that may issue to a given manufacturer during • given
model year is preliminarily set at the number obtained by
dividing that manufacturer's total projected sales for that
model year by 300,000 and rounding to the nearest whole
number.  40 C.F.X. $86.603(f).  Any manufacturer with
projected sales of less than 150,000 may be subject to an
initial annual liait of one SEA test order.  One additional
SEA test order may issue to a manufacturer for each configuration
failing an audit and, when the annual limit figure, inceased
by these additional test orders, has been met, for each
configuration for which-evidence exists indicating noncompliance.
Because the agency's resources are limited, EPA may undertake
fewer SEA's than are authorized by its regulations.
     10. ( Within these annual limits on the number of ttst
orders EPA may issue to each manufacturer, EPA employs a
systematic process, as discussed below, for choosing which
configuration of which manufacturer to subject to an audit.
Initially, EPA seeks to issue test orders proportionately among
manufacturers according to their respective annual projected
sales and to distribute those test orders evenly over the course
of • model year.  This.process then employs three primary sources of
information, assembly-line test data, projected sales volume, and
certification data, as bases for assigning points to rank
configurations for the purpose of determining which configuratin
would be most appropriate for an audit at a given time.  Once

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configurations are ranked, the process also considers other,
non-quantifiable  factors  in reaching an ultimate decision about
which configuration to audit.
     II.  Where data being evaluated by EPA from any of these
three sources pertains to individual configurations, points are
assigned to the respective individual configurations according to
the guidelines of the ranking system.  If the data evaluated
pertains to engine families, points based on a engine family's
data will be assigned for ranking purposes to an individual
configuration within the  engine faaily.  The 'configuration
receiving the engine faaily's points will be identified according
to two factors.  To begin with, its production rate must be high
•nough to enable  sample test vehicles to be selected for testing
in an expeditious manner.  Once that determination has been made,
its actual physical characteristics (such as engine code, inertia
weight, type of transmission, or rear-axle ratio) which distinguish
it from other configurations within the engine faaily must make
it the configuration most likely to produce the highest level of
emissions of the  configurations in that family.
         t
     12*  Before  ranking  configurations/ SEA's systematic
configuration selection process applies the general objective
that each manufacturer should receive at least one half of
its annual limit of audits as computed froa its projected
•ales during the model year, with those audits distributed
over the model year, to ensure proper review of the total
production of each manufacturer,  thus under the plan
described below,  a configuration of a particular manufacturer
may replace another configuration of any manufacturer which
otherwise would have been chosen for an audit.  This result
                       •                          *
occurs whenever issuing the test order to the manufacturer

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                           -9-

of the replaced configuration would havt subjected that
manufacturer to a disproportionate nuaber of audits as of
that time in the nodel year.
     13.  The nost important factor considered quantitatively
by EPA is a configuration's Missions data which havt been
generated by a manufacturer's own quarterly assembly-line
testing and submitted to EPA.  The data Allows CPA to
evaluate both the rate at which production vehicles coming
off the assembly line fail to Beet an emission standard
for a given pollutant and the mean eaission value aeasured
                                            *
froa assembly-line vehicles as compared to a pollutant's
eaission standard.  Points due to failure rates are assigned
to a vehicle configuration as follows:
       Failure Kate
          Range                      Points
         0-10%                          0
         11-201                         5
         21-30%                        15
         31-40%                        20
         40% and above            •     SO
Points according to the configuration's mean emission value
compared ,to the emission standard (ltd) are assigned as follows:
          Range
     Mean value is between 0.9
     of the std and the std
     Mean value is greater than        15
     the std but less than or
     •qual to 1.1 of the std
     Mean value is greater than        30
     1.1 of the std
Application of the point total derived from these calculations
vill take into account tne reliability that can be attributed
to the data submitted by a manufacturer,  for exanple, EPA
vill assess the nuaber of vehicles tested in order to
determine the failure rate or mean emission value.  Data

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                             -10-

reliability also depends upon the extent to which a discrepancy1
is found in a comparison between past SEA data pertaining to
the configuration in question and the manufacturer's most
recently submitted internal assembly-line data,  furthermore;
•valuation of this point total also will consider both
whether a manufacturer has failed to provide test data for
one or more configurations in production at the time the
assembly-line data was generated and whether any 'running
changes" incorporated into the manufacturer of a configuration
since that time may be expected to cause the emissions level
of the configuration to exceed standards for a pollutant.
     14.  The next most important factor in this point
ranking system is the configuration's (or engine family's)
projected annual sales figure as provided by the manufacturer
in its application for certification.  Points based upon
projected sales are assigned as follows:
        Annual Projected Sales              Points
            0-20,000                           0       '
            20,000-50,000                     10
            50,000-100,000                    20
            100,000 and above                 30
This factor focuses on higher-production models and tends to
assure through SEA review that a high percentage of vehicles
produced complies with the emission standards.
     15.  Finally, certification data generated from prototype
testing and regarding configurations currently in production
are examined; that ia, EPA reviews the pertinent certification
data en configurations .being manufactured either according to
the manufacturer's original application for certification or
according to its latest running change application for an amended
certificate of conformity.  Zf the configuration'.s emission
performance level based on that data is within 10% of the emission

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                              -11-

 standard for a given pollutant,  IS  points  are  assigned  to that
 configuration.  Application of this factor may be adjusted where
 analysis by EPA't certification  group indicates that certification
 test data nay not be indicative  of  whether production vehicles  of
 that configuration are likely to Beet emission requirements.  The
 focus of this factor is en vehicles that have  demonstrated only
 marginal compliance during the certification or running change
 approval process.
      16.  Aside from these quantitative factors and the
 objective of distributing audits aaong manufacturers
 throughout the model year, in choosing which configuration
 of which manufacturer to audit EPA  taJces into  account the
 location of the manufacturer's assembly plant  and test
 facilities.  This factor generally  is given significant
 consideration if these establishments are  located overseas
 or are otherwise geographically removed from the Midwestern
•United States.  Most manufacturing  and testing establishments
 •re located in the area, and therefore most audit activity
 can be expected to taJce place there.  EPA  also considers
          i
 whether a configuration is being manufactured  at a sufficiently
 high rate to allow staple vehicles  to be selected expeditiously
 for testing.  Information on current production rates of
 configurations might not be requested from a manufacturer
 •o as to avoid suggesting to manufacturers which configur-
 ations may be subject to an imminent test  order.  Thus, a
 test order can designate an alternate configuration of  that
 manufacturer for testing, chosen according .to the normal
 systematic process described above  subject to the constraints
 regarding location and production rate, in the event that the
                                                  •
 primary configuration is unavailable for  testing.

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                           -12-

     17.  Automobile manufacturers for the aost part have
centralized their testing facilities in eastern Michigan.
Consequently, they generally have expressed a preference
that vehicle selection for any audit of any configuration
produced in that area and ethers baJce place at a plant in
that area. Pursuant to 40 C.F.R. $86.«03(d), EPA complies
with these indicated preferences when specifying locations
for vehicle selection pursuant to a test order unless the
Administrator determines that information exists indicating
     ' •'•**>
nencompliance at other plants.  If a manufacturer does not
indicate a preferred plant for a configuration being
audited, the test order will specify that test vehicle
•election be conducted at the location closest to the
manufacturer's testing facility at which a sufficient number
of vehicles are available from which a sample representative
of the configuration can be chosen expeditiously, unless it
is determined that evidence exists indicating non-
compliance at another plant.  Siaee the goals of the EPA
program can be accomplished with a relatively high percentage
of audits testing vehicles selected from locations in eastern
Michigan, a relatively high percentage of vehicle selection
for SCA's takes place in that area.  Once a test order has
been issued covering a specific manufacturer, configuration
and facility for sample test vehicle selection, EPA sends a
team of enforcement officers to the manufacturer's facilities
where selection and testing take place for the purpose Of
monitoring the manufacturer's activity performed in response
to the test order.
     18.  Experience with the administration of the SEA program
                      •                          *
has produced indications that providing a manfacturer with advance

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                              -13-
eotice of an intent to require SEA testing before EPA enforcement
officers can gain access to the manufacturer'• facilities pursuant
to that test order can give the manufacturer an opportunity to
alter its production processes.  The manufacturer thereby can
bias production of a vehicle configuration so that «aaple vehicles
•elected for, SEA testing will not provide representative data
which would enable EPA to review accurately the manufacturer'*
production of that configuration on the whole.  Such
notice would occur if EPA enforcement officers requested
permission to enter a facility to monitor activity related
                                            •
to the SEA, and permission to enter were refused, before
a warrant authorizing that entry were obtained.
     19.  On 'the basis of 1978 model year projected sales
alone General Motors may be subject to 20 test orders during
the model year and has been subject to 10 orders thus far.
Ford may receive 11 test orders on the basis of projected
•ales and has been issued 8.  Chrysler may receive S test.
orders biased on projected sales and has received 6, since
one of its configurations failed an audit.  See 40 C.F.ft.
S86.603(f).  American Motors may be issued 1 test order
based on projected sales and has not yet received any.  four
European and three Japanese auto manufacturers have been
audited during the current model year.
     20.  CM is a manufacturer of automobiles and operates
facilities devoted to that purpose at its Willow Run vehicle asses
plant in Xpsilanti, Michigan.  CM also operates emission
testing facilities at its vehicle emissions testing laboratory
in Milford, Michigan, where GM usually ships ears for
SEA testing after such cars have been selected at a vehicle
assembly plant as SEA sample test vehicles.  GM produces
hundreds of different configurations during the model year.

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                           -14-

      21.  CM is still eligible to receive 10 SEA test orders
for model year 1978 configurations.  The configuration specified
in the SEA test order issued on July 28, 1978, has been chosen
•s the subject for SEA testing because of the configurations
currently under production and available for selection it has
accumulated the greatest number of points under EPA's systematic
process for choosing configurations to audit and because no
non-quantitative factors indicate that another configuration is
more appropriate for auditing.  Assembly-line test data submitted
by CM which, according to our analysis, pertains to its engine
code 2 configuration of its 840B2 engine family with 4000-pound
inertia weight, A-3 transmission and 2*56 rear axle ratio shows a
56% failure rate of vehicles tested with respect to the emission
standard for nitrous oxides (HOx), giving that configuration
50 points for ranking purposes.  The mean emission value for NOx
derived from this assembly-line testing (1.99 grans/mile) falla
within 0.9 of the NOx emission standard (2.00 grans/mile),
contributing another 5 points.  The projected annual sales
for this configuration is 63,741, giving the configuration
an additional 20 points.  Certification testing conducted for
this configuration produced data which showed the prototype
CO emissions level (15 gram/mile) to be within 10% of the CO
emission standard (also 15.0 grams/mile), thereby assigning the  .
configuration IS more points.  The configuration's point total
of 90 is the highest for any configuration remaining in production
long enough and at a-rate high enough to allow for expeditious
sample test vehicle selection pursuant to the SEA regulations.

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                            -15-
     22.  The document, which_ is attached and incorporated
by reference, and sets forth the SEA test order for this
configuration will be delivered to CM by an EPA enforcement
officer at the same tiae the designated officers and employees
appear at CM's vehicle asseably facilities in Tpsilanti,
Michigan, to begin monitoring CM's activities performed
pursuant to the SEA test order.  The entry, observation and
inspection there and at CM's vehicle emission testing
laboratory in Milford, Michigan will be consistent in
purpose, scope, location and timing with the Clean Air Act,
this Court's administrative warrants, EPA regulations, the
test order and the program described in this affidavit.
                                  MATTHEW LOW
Sworn and subscribed before ae
this     •       day of 	 , 1978

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     iv^T III
            NEUT3AL INSPECTION SCHEME FDR AEFDSOL FILLERS
1.    Tne rule published by EPA on March 17, 1978 (43 FR 11318) bans
      processing of fully halogenated chlorofluoralkanes, or CFC's,
      for aerosol propellant uses after December 15, 1978, except for
      certain essential uses.  Such processing would be done by busi-
      nesses known as aerosol fillers.

2.    Only aerosol fillers who have bought CFC's since October 15,
      1978 or who are otherwise known to be in the position to fill
      aerosols with CFC's after December 15, 1978 will be candidates
      for inspection.  Such fillers may be identified by inspections
      of the records of CFC manufacturers, by infonnation frcra the
      Consumer Product Safety Commission (CPSC)/ or by other Beans.

3.    Such candidates for inspection will be ranked according to the
      relative quantity of CFC's estimated to have been received after
      December 15, 1978.  Fillers estimated to have received nore CFC's
      will be assigned higher priorities for inspection.  Such esti-
      mates shall be based on the records of quantities distributed
      by CFC manufacturers.  If the anoint of CFC's received by a
      candidate for inspection is unknown, then that filler will be
      assigned a ranking in the middle of the ranked list.

4.    A ranked list of candidates for inspection will be sent to each
      Regional Office.  Such lists may be amended later by information
      from the CPSC or other sources.

5.    The total number of aerosol fillers to be inspected in FY 79
      by each Regional Office will be determined first.  Then the
      ranked list will be used to identify the particular fillers to
      be inspected.  The total number to be inspected in each Region
      will be inspected, and so that an approximately equal proportion
      of the fillers in each Region will be inspected.

6.    The sequence of inspection shall be determined by the rank order
      of the list, except that this sequence may be adjusted to conserve
      Agency resources (such as by combining several inspections in one
      trip.)

7.    This- neutral inspection scheme will be modified after the annual
      reports required by the CFC rule to be submitted by March 31/
      1980 have been analyzed.

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 entering into nearby waterways including waters of the
 United States and its tributaries, as well as posing a
 threat to the environaent and the public health and welfare
 of Che United States.
                h.   The reported death o! a 19 year eld
 truck driver ae the CLAW (IPA, lac.) open pies on July 25,
 1978 while he was discharging waste into an open pit at chc
 facility.  The death was possibly caused by his inhalation
 of toxic fuoes caused by a reaction of mixing incompatible
 toxic wastes in the open pit.  Two eye witnesses to the
                                       •
. death of the .driver reported the presence of choking fuses
             ".,*
.'la the area when they opened the doors to their truck to
 assist the driver who died.  .They also reported that his
 truck was parked at the edge of the open pit with the doors
 open at the tiae of death.  Subsequent laboratory.tests of
 waste taken from the pits have shown waste materials were
 present is the pic, which,when mixed with the spent caustic
 being discharged fron the driver's truck could have caused
 the death,  final autopsy reports are still pending.  It is
'allegedly reported that CLAW facility officials directed the
           •
 driver to take and discharge his wastes to the truck rasp on
 the edge of aa open pit.  Discharging toxic waste into an
 open pit at the edge of a pit is not a safe, desirable, or
 acceptable practice since toxic ehamieal. reactions are very
 probable and can result in the death of anyone nearby.
                5.   Section 308 of the. Federal Water Pollution
 Control Act, 33 USC 1318, and section 3007 of the Resource
       •
 Conservation and Recovery Act of 1976. (42 USC 6927), pro-
                                       •
 aiding for entry, inspection, record inspection and copying
 and saspling are reasonable, in the public interest and
 necessary in order "to" carry out the provisions of these
 Acts, which Acts are designed to protect the environment, as

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veil AS ehi public health And welfare.  Za the tnstanc
tutter ic is reasonable te Assuae tho need for inspection
based en the infomation And observation* >ec cue in perAgraph
4 Above And in the public interest.
                                     C. NC nX.-i
                              CKLMZCAL ENGINES*
                              Ui:iTED STATES ENV
                                P&OTEC7IOK AGENCY
Subscribed And rworn co before me
AC BAton Rouge, Scace of Louisiana,
this    /o    of    ^.^-r-,,3*-  - 1978.
                              •4-

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GM-6

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 1       •/  UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
  •j                    WASHINGTON. O.C 204«0
                            OCT   T 68I~         .      e,P«,o,
                                               ia0AL eOUNMl. AND INFOMCtMIMT
 MEMORANDUM

 SUBJECT:   Contact! with Defendants and "Potential
            Defendants in Enforceaent Litigation

 TO:         Addressees
                              •
 FROM:       William A. Sullivan, J
            Enforcement Counsel

     Most of the Agency's staff is aware of the need to
 consult with the Departaent of Justice  (DOJ) before contacting
 defendants in enforcement litigation or potential defendants
 in esses referred to Justice  for  filing.   Z want to stress the
 iaportance of giving DOJ an opportunity to participate in any
 meetings with such persons or firms to review their compliance
 status.   Failure to observe proper practice in this regard can
 seriously undermine the Department's ability to effectively
 represent EPA and ultimately  diminish the  prospects for satis-
 factory enforceaent of environmental laws.

     Headquarters and regional enforcement personnel saould
 already be aware of the iaportance of including Justice in
 such discussions when they : -* initiated by EPA, and of giving
 the Departaent notice of anu  opportunity to attend meetings
 requested by potential defendants or their counsel.  Justice's
 caseload may not always permit them to send a representative,
 in which ease EPA staff should thoroughly  coordinate the
 ground  rules of the contact with  DOJ in advance.  Follow-up
 information should be provided to the Department's attorneys
 promptly after the conclusion of  any meetings.  This is the
 procedure Z shall expect to be followed at all times.

     Z also want to urge anforceaent staff to caution their
 •client* program offices and  others within the Agency about
 the sensitivity of contacts with  persons or firms that have
 been named in cases referred  to Justice for filing.  There
 are many matters unrelated to an  enforcement action — proces-
 sing of  grants,  development of rules, etc.— in which a party
may be  interested and which may be discussed without counsel
present.   Care should be taXen, however, to determine the
purpose(s)  for which meetings are aought by defendants and
potential defendants so that  appropriate arrangements can be
-ade.   Zf matters relsted to  a pending case are raised by such
 •ersons  during the course of  a meeting arranged for other
purposes,  the discussion should be interrupted and continued
only after consulation with in-house enforcement counsel and
DOJ.

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                                 - 2 -
      Tour cooptration will assure that litigation strategy
 is not compromised by inappropriate discussions, and can avoid
 embarrassment from last minute cancellation  or rescheduling
 of meetings.   If you have questions about whether a particular
 person, firm, or state or local government it a defendant in
 tnforceaent litigation or is a potential  defendant in a ease
 which has been referred to the Department of Justice, please
•contact Jonathan Libber of my staff at 426-7503.

      Addresseesi John Daniel, Chief of Staff
                  Assistant Administrators
                  Enforcement Office Directors
                  Regional Administrators
                  Regional Enforcement Division Directors

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GM-7

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^!
             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                         WASHINGTON, D.C. 20460
                              DEC I C 1331
MEMORANDUM
                                                           orrici or
                                                        •KNKNAk COWNSIL.
SUBJECT
FROM:
TO:
         Ex Parte Rules Covering Communications
         on Issues Which are the Subject of Formal
         Adjudicatory Bearings
         Robert M. Perry
         General Counsel  (A-130)
                                   **•
         John E. Daniel
         Chief of Staff
         Office of the Administrator  (A-100)
     The Office of General Counsel has been asked to advise your
office on the handling of ex parte communications on issues
Arising in formal Agency adjudications.  This question is impor-
 ant because ejc parte communications may occur when, for example,
a party to pending or ongoing litigation seeks a speedier, more
direct resolution of the litigation than is offered by the formal
adjudication. In some cases, telephone calls, letters or even
casual remarks relating to a substantive issue in litigation can
constitute an improper ex parte communication.  In general, such
communications concerning the merits of a proceeding create the
risk that an adjudicatory decision may be set aside by a reviewing
court.  However, the ex parte rules do not preclude the Administrator
from engaging in discussions with persons regulated by EPA
merely because those persons happen to be involved in a formal
adjudication.

     Accordingly, we have prepared this memorandum to guide your
staff (1) in recognizing and avoiding .improper ex parte communi-
cations and (2) in taking remedial steps if an Improper ex parte
communication occurs.  Sections I-III of this memorandum define ex
parte contacts and describe the rules governing them.  Section
IV describes measures for minimizing the adverse legal impact of
such communications when they occur.

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                               -  2  -


1  *•   Why do we  have  rules  about  ex parte  coi.tacts, and to what
      do  they apply?                           ~~~             ~"

      The Agency conducts formal  adjudicatory  hearings in a number
of areas/  including:

         0   Hearings  to  decide  whether pesticide registrations
            should  be  denied/ cancelled, suspended/ or modified,
            under Section 6 of  the  Federal Insecticide/ Fungicide/
            and  Rodenticide Act/  as amended (7 U.S.C. S136d).

         *   Hearings  to  decide  whether to  assess any civil penalty
            under Section 14(a) of  the Federal Insecticide/ Fungicide,
            and  Rodenticide Act/  as amended (7 U.S.C. Sl361(a)).

         0   Hearings  to  decide  whether to  assess any civil penalty
            under Section 211 of  the  Clean Air Act/ as amended (42
            U.S.C.  §7545).

         *   Hearings  to  decide  whether to  assess any civil penalty
            or to revoke or suspend any permit issued under Section
            105  (a) and  (f) of  the  Marine  Protection, Research,
            and  Sanctuaries Act,  as amended (33 U.S.Co §1418(c))

         0   Hearings  on  the issuance  of a  compliance order or the
            assessment of any civil penalty conducted under Section
            3008 of the  Solid Waste Disposal Act,  as emended  (42
            U.S.C.  $6928).

         6   Hearings  to  decide  whether to  assess any civil penalty
            under Section 16(a) of  the Toxic Substances Control Act
            (15  U.S.C. 52615(a)).

         9   Hearings  conducted  in connection with  the termination
            of a hazardous  waste  permit under  the  Resource Conser-
            vation  Recovery Act.  (42  U.S.C. $6928(b)).

         0   Hearings  to  challenge the issuance of  any individual
            National  Pollutant  Discharge Elimination System permit
            for  a point  source  discharge under Section 402 of the
            Clean Water  Act. (33  U.S.C. $1342).

         •   Hearinos  to  determine data compensation amount.* under
            the  Federal  Insecticide,  Fungicide, and Rodenticide Act,
            as amended.   (7 U.S.C.  $136(d)).

      Under the  Administrative  Procedure Act (APA),  (5 U.S.C. §551 et
seg.), the decisions  which result  from these  adjudicatory hearings

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                               -3-

       *
must be based solely on the formal record compiled during the
proceeding, i.e., the pleadings, transcripts, exhibits, and
briefs.  In order to safeguard the integrity of the adjudicatory
process, the Administrative Procedure Act prohibits all extra-
record communications relevant to the merits of an adjudicatory
proceeding between Agency decision-makers and interested persons
inside or outside the Agency.  5 D.S.C. 554(d), 557(d)(l).  A
decision made in a formal adjudication may also be subject to legal
challenge if there is reason to think that it was based on any
material fact which is not a part of the formal record.  5 D.S.C.
554(d)(l), 556(e).  In recognition of these statutory provisions,
the various Agency regulations concerning hearing procedures
(see 40 CFR SS22.01, 124.78 and 164.7) and pertinent judicial
precedent establish rules dealing with "ex parte* communications
made to or by persons responsible for malting decisions in adjudi-
catory hearings.  The remainder of this memorandum will discuss
what "ex parte" communications are, and the rules that apply to
them.

II.  What is an ex parte communication?

     One definition appears in the APA, 5 U.S.C. $551(14):

                "Ex parte communications means an oral
           or written communication not on the public
           record with respect to which reasonably prior
           notice to all. parties is not given, but it
           shall not include requests for status
           reports. ..."

This definition is somewhat cryptic and incomplete, however.  A
more useful working definition is:

               "Ex parte communication" means any
          communication (written or oral) concerning the
          merits of an ongoing formal adjudicatory pro-
          ceeding, between any decision-maker and either
          (A) any interested person outside the Agency,
          or (B) any member of the Agency trial staff,
          If any of the parties to the hearing did not
          receive prior written notice that the communi-
          cation would be made or were not invited to be
          present and participate in  the communication.!/

An e_x  parte comrcur.ication could take  the form of a lette., telephone
conversation, meeting, or other informal discussion.   (Of course,

ITThis definition is in large part  a paraphrase of the definition
In 40  CFR 5124.78.

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                               -4-
pleading;;, testimony, and the like presented or filed according to  {
the hearing rules are not covered.)

III. What: are the rules governing ex parte communications?

     In brief, the APA and related EPA regulations state that jex /
parte communications concerning the merits of a proceeding are
improper but also recognize that they nay nonetheless occur and  •
provide mechanisms designed to counteract their possible influence
on decision-making.

          A.  What kinds of communications concern
              "the merits" of a hearing?

     As indicated above, ''the prohibition against ex parte contacts
covers communications regarding the merits of an ongoing adjudi-
catory proceeding.  This restriction is to be construed brcadly
and covers not just communications regarding facts in issue, but
any statement whic!" could affect the Agency's decision on *-.he
merits.  Inquiries aoout scheduling and other procedural .r.af.ters
(such as requests for status reports) may properly be made ex
parte.  (The Administrator has traditionally referred such Inquiries
to the appropriate trial staff for a response.)  In doubtful cases,
the prudent course is for the Agency decision-maker to treat the
communication as one which may concern the case's merits.

          B.  What communications within the Agency are prohibited?

     In almost every formal adjudication conducted by EPA,2/
one of the parties is the Agency trial staff.  Typically, the
order by which the Administrator (or his delegate) initiates the
hearing contains a designation of the Agency personnel who will
make up the Agency trial staff.  That order often also designates
those persons who '/ill serve as adjudicators in the proceeding
(typically the Administrator or the Regional Administrator, the
Judicial Officer, an Administrative Law Judge, and sometimes
others.)

     Members of the Agency trial staff are forbidden from
communicating with the Administrator tor other designated adjudi-
cators) on an ex parte basis concerning the merits of the proceeding.
Although the A3ministrator theoretically can consult with other
77There is one exception:hearings under FIFRA $3(c)(l)(D) to
determine data compensation payment amounts are disputes between
private parties which are decided by EPA.  The Agency is not a
party in these cases.

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                               -5-

     *»
Agency personnel who are not (and have not been) involved in
trial staff functions (and who do not represent other interested
persons), no substantive consultation which may concern facts at
issue should occur unless all parties are notified and given an
opportunity to participate.  Otherwise, there exists a substantial
risk that the Administrator's decision might be based on evidence
that has not properly been made a part of the record of the
proceeding.

          C.  What communications with persons outside the Agency
              are prohibited?

     The APA also prohibits e_x parte communications between the
Agency adjudicators and "interested persons" outside the Agency.
The legislative history says that the tern

           "is intended to be a wide, inclusive term. . . .
           The interest need not be monetary, nor need a
           person be a party to, or intervenor in, the
           agency proceeding to come under this section.
           The tcr.. includes, but is not limited to,
           parties, competitors, public officials, and
           non-profit or public interest organizations
           and associations with a special interest in
           the matter regulated.*

Government in the Sunshine Act, Committee on Goverment Operations,
H.R. REP No. 94-880, 94th Cong., 2d Sess. (1976), at 19-20,
Source Book: Legislative History, Texts, and other Documents,
Committees on Government Operations, U.S. Senate and Bouse of
Representatives, 530-531.  With certain exceptions,3/ it seems
logical to treat the very fact of a communication concerning the
merits of an adjudicatory proceeding as evidence that the person
making it is "interested."  Certainly anyone whose communication
seems designed to influence the outcome of the case (or the
timing of rulings) should be treated as an interested person.
Again, where there is doubt about a communication's status, it
should be treated as one by an interested person.

     As noted earlier, the ex parte rules prohibit not only
communications by interestecFpersons to Agency adjudicators, but
also communications by Agency adjudicators to interested persons.
This could present problems in situations wKere the adjudicator
does not know whether the persons to whom he or she is speaking
2/ Routine inquiries from the news media, or from persons whose
Interest in the case is purely academic, normally would fall
outside the rule's coverage.

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                               -6-


are "interested."  Moreover, as in the case of communications
with non-interested Agency personnel, the adjudicator should
avoid substantive communications with any person outside the
Agency (whether interested or not) concerning facts at issue
in the proceeding, unless all parties are notified and given an
opportunity to participate.  Finally, discussion by the adjudi-
cator of the merits of an ongoing proceeding may lead people to
assume the matter has been pre-judged even if technically there
is no violation of the ex parte rules.

IV.  How can ex parte communications be minimized, and what
     should be done if they occur?

     It is probably impossible to prevent entirely the occurrence
of improper ex parte communications.  In a discussion of general
matters between industry representatives and the Administrator,
for instance, the conversation may inadvertently move to a matter
which is involved in an adjudication.  The Administrator must deal
with a wide variety of topics, most of which are not covered by
the ex. parte rules, and should not feel constrained to avoid
discussions with persons who are regulated by EPA merely because
those persons also may be involved in some formal adjudication.
But the ex parte doctrines must be kept in mind if such discussions
are to be held.

     There are two kinds of measures ~ preventive and curative —
that should be taken by your office to lessen the likelihood of
problems.  Preventive measures should include:

     (1)  An awareness on the part of the Administrator and her
          immediate staff of the importance of the principles
          discussed in this memorandum;

     (2)  A system designed to keep the staff aware of the
          adjudicatory proceedings that are in process, and the
          parties to and issues in those proceedings;

     (3)  Attention to potential ex parte problems when scheduling
          meetings, drafting speeches, and screening telephone
          calls, and reminders by the staff of topics that should
          be avoided; and

     (4)  Similar attention to the problem by those who handle
          incoming and outgoing written correspondence; and

     (5)  For "ex parte" purposes, members of the Administrator's
          personal staff should consider themselves to be part
          of the decision-making team headed by the Administrator.
          Otherwise, serious practical and legal problems could

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                               -7-
          arise in insulating decision-makers from staff members
          who have received or initiated ex parte communications.

     The principal curative measure, once an improper ex parte
communication has occurred and has been recognized as such, is to
make the content and circumstances of the communication a part of
the official record of the proceeding and afford the parties a
chance to respond on the record.  (If the communication was oral,
a written memorandum of it must be prepared.)  The written communi-
cation (or the memorandum summarizing the oral communication)
must be forwarded to the Office of the Hearing Clerk, A-110, with
a request that copies of it be furnished to all parties.  This
procedure is designed to nullify the "secret* nature of the
communication and thereby preserve the fairness and integrity
of the decision-making process.

     In cases where.an interested party outside the Agency has
knowingly and egregiously violated the ex parte rules, the APA
permits the Administrator or other adjudicator to render a deci-
sion adverse to that person.

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GM-8

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        UNITED STATES ENVIRCN'.'.t.v. Al PROTECTION AGSNCY
                      WASHINGTi •>. SC :i4«0
                                                   AND CN'OBCCMCNT COUNtCt.
MEMORANDUM
SUBJECT:  Draft DOJ/EPA Litiqation Procedures
PROM:     Robert M. Perry
          Associate Administrator for Legal %nd Enforcement
            Counsel and General Counsel

TO:       Associate Administrator
          Assistant Administrators
          Regional Administrators
          Qffice Directors
          Regional Counsels


     In furtherance of the Administrator's policy to strengthen
and improve this Agency's enforcement capability, particularly
with regard to litigation, a meeting with the Department of
Justice to discuss these matters occurred yesterday at Quantico,
Virginia.  I am pleased to report tha'c it was highly productive
and successful.  Attached is a sumary of the matters discussed,
the recommendations produced and a process that will strengthen
our enforcement efforts.  Each of ycu has a critical role to
insure the success of this vital endeavor, and I lock forward
to discussing it with you ahd receiving any comments you may
have.
Attachment

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         ZS70P.CSM2XT GOALS ASD OBJECTIVES
                        of
       mcr C7 113AL A:TD ZS?C?.CSMZ::T cou::s:
       0. S. ZKVIRONMZNTAL PROTECTION AGE:;C*
1.  The role of enforcement is to support and advance
    the regulatory policies of EPA through use of all
    available enforcement means; to insure compliance
    with applicable laws and regulations; to deter
    unlawful conduct and to remove any incentive to
    non-compliance.

2.  The regulated community is entitled to fair notice
    of EPA's policies and the requirements they impose
    on the regulated community.  All members of the
    regulated community should expect that they will be
    treated in a consistent, fair manner which              •
--  removes any- competitive—*dvantage-gain«d-by-noa--	±	
    compliance.

3.  EPA is responsible for establishing regulatory policies
    and enforcement goals, priorities and procedures to
    effectuate its policy initiatives.  These policias
    and priorities are what guide the Department of Justice
    in its role as EPA's litigation counsel.  This litiga-
    tion will be conducted pursuant to tha Qurr.tico Guide-
    lines for Enforcement Litigation developed between
    the Environmental Protection Agency and the Department
    of Justice.

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       r-'AMTICO GVIDE1INES FCP. SNFOP.CEMEN'T LITIGATION
1.  GOALS AXD PU5PCSSS
          "or S?A
               To achieve compliance with applicable law
          through effective enforcement.
               To inform the regulated communities, Congress
          and the public that EPA will enforce the statutues
          it administers in a prompt, fair and even-handed manner,
          For DOJ
               To provide the litigation support necessary to
          aid EPA in the accomplishment of these goals.
2.  GENERAL OBSERVATIONS
          A.  ETnphasis will be placed on bringing meaningful
          enforcement cases, particularly hazardous waste cases,
          criminal cases and enforcement of existing consent
          decrees;
          B.  Especially with regard to recently-enacted
          statutes, DOJ needs policy guidance from EPA to
          give direction on enforcement activity and to main-
          tain consistency;
          C.  Regional offices of EPA will be the lynch-
          pin of the agency fcr identifying and developing
          enforcement matters;
          trators pJ.ay xey rcies in we enxorcement
          which are being clarified;

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                                 -  2 -

           E.   • States,  where possible,  should be  giv-.«n  the
           opportunism and incentive to  initiate enfovce-
           nent cases*  Effectiveness of state enforcement
           actions  will be considered;
           F.    While national enforcement  priorities Are
           necessary, flexibility is desirable for region-
           by-region determinations;
           G.    Criminal enforcement priorities and
           processes are being developed separately from
           civil matters;
           U.    United States Attorneys  play a critical
           role and should be involved wherever possible;
	I..	Betwejen EPA Headquarters and the regions,
           areas of responsibility  will  be  identifier
           to  allow regional flexibility.
           J.    Focused use of administrative discovery
           powers is necessary for  effective investigation
           of  the factual/technical basis for cases.

3.   RESPECTIVE COMMITMENTS
           A.    On  enforcement policy formulation, EPA
           will seek,  where appropriate, to confer end
           coordinate with DOJ concerning potential in-
           pacts on litigation;
           3.    Policy guidance given to R.A.'s ar.d K.C.'s
           v< i! *lso be provided to DOJ;

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                      - 3 -

C.   Informal working groups in all media
will continue (or be established) to pro-
vide DOJ/EPA-OGC input to address legal issues;
D.   Associate Adainistrator Ferry and Assistant
Attorney General Carol t. Dinkins .ill be available
to discuss sew enforcement guidance with K.A.'s
and K.C.'i in U.C.  To be discussed will be R.A.
accountability and commitment to a sustained,
orderly enforcement program that includes litiga-
tion as a desirable component;
£.   Associate Administrator Ferry will meet with
Assistant Administrators on enforcement policy,
to clarify roles and secure commitments from
program side for sufficient technical support;
F.   Assistant Attorney General Dinkins will
make similar presentations to United States
Attorneys on policies, processes and roles;
G.   Violations vill be discovered through
self-reporting, regular inspections, citizen
complaints, administrative discovery and
trained criminal investigators;
a.   Administrative powers, to be used for
investigatory purposes, should be delegated
to regions by eliminating need for Head-
quarter's concurrence;

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                          - 4 -

    I.   Once a case is referred,  Che government
    will regain open to negotiation but will con-
    tinue to move the case to trial.
k / V* 4« M
    A.   DOJ Attorneys assigned on a regional basis
    to handle all nedia;
    B.   EPA regional enforcement attorneys  are aedia-
    •pecific;  •"•%'
    C.   A lead agency attorney (generally an attorney
    from the region) will be designated to manage the
    case for the agency and coordinate with  DOJ;
    D.   Regular, monthly meetings will be held in
    the regions,  attended by DOJ and EPA attorneys,
    with technical staff present and AUSA's  inviced
    to discuss:
         1.   general enforcement actions,  in-
         cluding EPA administrative processes
         and investigations exclusive of criminal
         matters;
         2.   eases targeted by EPA as likely
         candidates for litigation, to deterine
             a.  whether DOJ assistance prior
             to referral would be helpful; and
             b.  adequacy of agency de-
             velopment of case;

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                      - 5 -

     3,  cases previously discussed as
     riitters to be identified for case
     development to DCJ;
     4.  separate meetings will be
     held ir. Che regions with prograa
     hsads co discuss program enforce-'
     Bent priorities and concerns;
£.   Following discussions at nonthly aeecings
regarding potential matters for case develop-
ment, when region determines chat matter is a
potential civil enforcement case, R.C. requests
DOJ assistance for case development
     1.  ce&u is formalized at this point,
     in anticipation of litigation;
     2.  technical support is committed;
     3.  goal is resolution through nego-
     tiated settlement or final Judgment;
F.   When a case hasCjgatured. £he regional
administrator requests Che Associate Admin-
is tator Co refer che case co UOJ for litiga-
tion;
G.   Some cases will be referred directly Co
DOJ without forcing a case, development teas.
U.   Tor true emergencies, telephonic authori-
zaricr to file vill suffiia;

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                      - 6 -

I.   A new refarral packa^s foraat,  mor..
streaa-lined and appropriaiu Co the case
development process identified above will
be produced;
J.   Tor cases refsrrsd before acnthly
meetings begin, DOJ and EPA will confer
informally prior to referral;
K.   Associate Administrator Perry and
Assistant Attorney General Dinkins are
available for dispute resolution if
difficulties or disputes cannot be
handled at intermediate levels;
L.   Coordination for all of these efforts
                              %
will include
     1.  Perry and Dinkins visits to
     regions;
     2.  Perry and Dinkin? bi-weekly
     meetings with staff;
     3.  Perry and Dinkins monthly
     meetings without staff:
     4.  regular monthly meetings at
                         »
     staff level in regions;
     5.  working groups in D.C. on
     DOJ input into policy foraulation
     rs litigation impact;

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               6.  Basic understanding by both
               agency and DCJ lawyers of their
               respective roles and the need
               fsr a cooperative spirit.
5.  SPECIFIC ISSUES DISCUSSED
          A.  EPA is establishing guidelines for
          Superfund national strategy including
          especially criteria for which injunctions
          are appropriate and whether the regions
          or headquarters has the initiative for
          Superfund enforcement;
          B.  Existing Consent Decrees
               1.  collection and analysis of
               compliance status of all existing
               consent decrees tc be accelerated;
               2.  uniform policy to be adopted
               en modification of existing decrees
               through judicial action;
               3.  violations of existing consent
               decrees are a top priority for
               enforcement;
               4.  collect:." cf s-ipuiatec penalci

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GM-9

-------
 .y*° n'>*
fcfej
         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                      WASHINGTON. DC 10««0
                      30 APR 1982
                                                         : or
                                                  , ANB INPOHCIMinT COUMMh.
MEMORANDUM


SUBJECT:  Agency Guidelines for Participation in
          Grand Jury Investigations
FROM:    •Robert M. Perry/Associate Administrator
            for Legal ana Enforcement  Counsel

TO:       Associate Adminstrators
          Regional Administrators,  Regions  I-X
          Regional Counsels,  Regions I-X
          Director, National  Enforcement Investigations Center


     Federal grand juries are almost always used to develop
EPA's criminal cases following referral  to  the Justice Depart-
ment.  Frequently, EPA employees—including investigators,
lawyers and technical personnel—assist  in  these grand jury
investigations under the supervision of  the Justice Department.
The conduct of Agency employees involved in grand jury investi-
gations is frequently subjected to close judicial scrutiny,
since defense counsel routinely challenge aspects the grand jury
presentation during post-indictment motions. Accordingly,
Agency employees who assist the Justice  Department during
grand jury investigations must be familiar  with, and abide
by, the rules of conduct established  for this institution
by case law and the Federal Rules of Criminal Procedure.

     The attached "Agency Guidelines  for Participation in Grand
Jury Investigations" have been drafted to provide Agency employees
with a general knowledge of the most  important  rules surrounding
grand jury investigations.  Please take  immediate steps to insure,
that personnel working within your offices  who  are assigned to
assist in grand jury investigations are  completely familiar with
the details of this guidance document.

     Questions on any matter raised in this document should be
directed to Peter Beeson, Acting Director,  Office of Criminal
Enforcement (FTS 382-4543).

Attachment

cc:  Carol Dinkins
     Assistant Attorney General
     Land and Natural Resources Division

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    AGENCY GUIDELINES

           FOR

      PARTICIPATION

           IN

GRAND JURY INVESTIGATIONS
        United States Environmental
             Protection Agency
       Effective Date:
                          APR 30B82

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                 TABLE OF CONTENTS




INTRODUCTION	1

I.  BACKGROUND: THE ROLE OF THE GRAND JURY	2

II.  THE OPERATION OF THE GRAND JURY	3

     Authorized Persons Before the Grand Jury	4

     The Statutory Recording Requirement	5

     The Indictment Process	5

III.  GRAND JURY SECRECY	6

     The Rule and its Exceptions	6

     Disclosure of Grand Jury Materials to
          Agency Supervisors	9

     Disclosure of Grand Jury Materials in
          Parallel or Subsequent Civil/
          Regulatory Proceedings	 .10

     Media Inquiries Concerning Grand Jury
          Proceedings	,	12

IV.  CARE AND CUSTODY OF GRAND JURY MATERIALS	12

V.  COBCLUSION	,	13

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  AGENCY GUIDELINES FOR PARTICIPATION' IN GRAND JURY
                  INVESTIGATIONS
                  INTRODUCTION

     In the past, EPA has relied extensively on the grand
jury to develop its criminal referrals.  With the projected
hiring of criminal investigators who will be capable of
more complete, pre-referral case development, this reliance
may decrease somewhat.  Given the nature of EPA's criminal
jurisdiction, however, the drand jury will always be a
significant component of the criminal case development
process.

      This guidance document is written to provide a
general understanding of the grand jury process,  and of
the particular responsibilities born by EPA employees
involved in grand jury investigations.  In drafting
this document, the Agency has coordinated closely with
the Department of Justice, since its participation in
grand jury investigations will occur only in partnership
with attorneys of the Justice Department and the offices
of its local United States Attorneys.  In addition,
the views of rr; onal offices were solicited on one
issue of particular sensitivity: the need for access
to confidential grand jury materials by EPA managers.

     The guidance contained within is not intended to
supplant rules of procedure for the conduct of grand
jury investigations contained in the United States Attorneys'
Manual, or developed by the specific United States Attorneys.
It will, however, provide internal guidelines for EPA
employees where no specific Justice Department rules
exist.  This document will replace any previous Agency
guidance on this subject.

     Finally, this guidance is strictly advisory in
nature, and is not intended to create or confer any rights,
privileges or benefits on prospective witnesses or defen-
dants.  It is not intended to, does not, and may not be
relied upon to create any rights, substantive or proce-
dural, enforceable at law by any party in any matter,
civil or criminal.  Any attempt to-litigate any portion
of this guidance should be brought directly to the
attention of the Office of Criminal Enforcement, EPA
Headquarters.

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 I.  BACKGROUND;  THE ROLE OF THE GRAND JURY

     The grand  jury verves two basic functions! investi-
 gative and protective.  In cases where traditional field
 investigation techniques have failed to produce adequate
 evidence to support a criminal prosecution, the grand
 jury'» compulsory process, in conjunction with statutory
 immunity grants, can be used to compel testimony and the
 production of documents.  This is particularly important
 in white collar crime cases, in which the loyalty of the
 investigative targets, together with the private—often
 inaceossible—settings of the suspect activity, often
 frustrate more traditional field investigative methods.

     The grand jury also acts as a check on independent
 and overzealous prosecutorial decision-making.  The Fifth
 Amendment to the United States Constitution guarantees
 that Federal felonies^/ will be charged by grand jury
 indictment.  Misdemeanors can and often will be charged
 by indictment.  This is not a constitutional requirement,
 however, and they are sometimes charged in an "information"
 filed independently by the prosecutor without prior
 consideration of the underlying evidence by a grand jury.
 It is the function of the grand jury to determine whether
 there is probable cause to believe that a Federal offense
 has been committed by the defendant(s) named in the proposed
 indictment.

     The Supreme Court has described the dual functions
 of the grand jury as "both the determination whether
 there is probable cause to believe a crime has been
 committed and the protection of citizens against unfounded
 criminal prosecutions."  United States v. Calandre, 414
U.S. 338, 343 (1974).  Stated alternatively, the purpose
of the grand jury is "to provide a fair method for
 instituting criminal proceedings" by a body that is
 "independent and informed."  Costello v. United States,
 350 UoS. 359, 362 (1956).                            "
\/  A felony is defined at 18 U.S.C. ll as "any offense
punishable by death or imprisonment for a term exceeding
one y
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                       -3-
     "in Berger v. United States, 295 U.S. 78, 88 (1935),
the  Court described the responsibilities of a prosecutor
appearing before a grand jury:

          (A)  prosecutor who presents a case to a grand
          jury has the obligation of preserving the fairness,
          impartiality, and lack of bias of this important
          governmental investigative body.  He can not
          inflame or otherwise improperly influence
          grand jurors against any person...; and he
          must always remember that he is _ representative
          not of an ordinary party to a controversy but
          of a sovereignty whose obligation to govern
          impartially is as compelling as its obligation
          to govern at all....

     The obligation placed on the prosecutor is shared by
all  government personnel assigned to the investigation.

II.  THE OPERATION OF THE GRAND JURY

Background;  Regular grand juries can be empanelled for
up to 18 months, see Rule 6(g), Federal Rules of Criminal
Procedure (FRCP).  In many districts, terms of regular
grand juries are far shorter.  "Special" grand juries—
normally empanelled to hear a particularly complex and.
lengthy investigation—sit for a term of 18 months and
may  be extended for an additional 18 months.  18 U.S.C.
§3331.

     Federal grand juries consist of not less than sixteen
nor more than twenty-three members.  Rule 6(a), FRCP.  The
grand juries are empanelled before tv• district court,
who will then appoint one member to be Foreman, and one
to be Deputy Foreman.  The Foreman has the power tt. .. ...-.inister
oaths to all witnesses, and signs all indictments.  Rule
6(c), FRCP.  An indictment may b« found with the concurrence
of twelve or more jurors.  Rule 6(f), FRCP.  Sixteen
or more jurors must be present for the grand jury to
conduct business.  Thus, before beginning any session
the  prosecutor will insure that at least sixteen grand
jurors are present.

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                      -4-
Authorized Persons Before the Grand Jury?  The only
persons allowed to be present at a cession of the grand
jury are "attorney (s) for the government"; the witness
under examination; an interpreter if necessary; a
stenographer or operator of a recording device; and
the grand jurors.  Rule 6(d), FRCP.  The presence
of unauthorized persons before the grand jury is a per se
basis for dismissal of an indictment, without a demon-
stration of prejudice.  United States v. Phillips Petro-
leum, 435 P. Supp. 610 (D. 0X1. 1977); United States v.
Braniff Airways, Inc., 428 F. Supp. 579 (D. Tex. 1977);
United States v. Echols, 413 F. Supp. 6 (D. La. 1975).
Adherence to the terms of Rule 6(d) is mandatory.
                      ' i f
     In the context of Rule 6(d), the phrase "attorney
for the government" does not include EPA or other Federal
agency attorneys.  See Rule 54(c), FRCP. 2/  See also.
In rg Grand Jury Proceedings, 359 F. 2d 4

     ...the Attorney General, an authorized assistant
     of the Attorney General, a United States Attorney,
     an authorized assistant of the United States Attorney..

2/  In those cases in which the particular expertise and
Experience of an EPA attorney is considered necessary
to the successful investigation and prosecution of a
criminal case, that attorney can be appointed an authorized
assistant of the Attorney General pursuant to 28 U.S.C.
§515 (a), or of the United States Attorney pursuant to
28 U.S.C. 1543.  In either case, the EPA attorney would
meet the definition of "attorney for the government"
found «t Rule 54(c), FRCP.  Such appoirtrents may only
be mad« at the request of the Justice Department attorney
overseeing the investigation.

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                     -5-
     'At least two courts have held that a prosecutor
presenting evidence to a grand jury who also testifies
as a witness before that grand jury is an "unauthorized
person in the grand jury room" in violation of Rule
6(d).  United States v. Gold, 470 F. Supp. 1336,  1351
(N.D. 111. 1979); United States v. Treadway. 445  F.
Supp. 959 (N.D. Tex. 1978).In addition, this conduct
has been found to violate the ABA's Code of Professional
Responsibility.  United States v. Birdman, 602 F.2d '547,
551-555 (3d. Cir. 1979).Under no circumstances  should
an EPA attorney appointed to act as a Special Assistant
United States Attorney testify before a grand jury to which
that attorney is also presenting evidence as a prosecutor.

The Statutory Recording Requirement;  As of August 1,
1979,"all proceedings (before a grand jury), except
when the grand jury is deliberating or voting" must
be recorded.  Rule 6(e)(l), FRCP.

     The precise meaning of this mandate has not  been
clarified by case law; nor do we )cnow--es yet—what
sanctions will flow from violations of this requirement.
In the absence of decided case law to the contrary, this
rule should be interpreted strictly.  Beyond the
exchange of pleasantries—i.e., personal greetings,
observations on the weather, etc.—-EPA employees should
not engage in conversations with grand jurors unless
that coversation is being recorded as part of a formal
grand jury session.  If a grand juror asks a question
prior to or after a formal session, you should politely
advise the grand juror that it is not proper to respond
at that time, and request that the question be raised
again after a recorded session begins.

     In the case of an inadvertent breach of this rule,
you should immediately notify the prosecutor supervising
the investigation, who may in turn wish to ask that the
conversation be repeated on the record before the entire
grand jury.

The Indictment Process>  At the end -of an investigation,
the prosecutor will ask a grand jury to vote on a re-
commended indictment.  The indictment itself will have been
drawn up in advance, and will be presented unsigned to
the grand jury for consideration.  Procedures on the

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                      -6-
manrer of presentation will vary by district and the
nature of the case.  The recommended indictment will
normally be marfced and introduced as a grand jury exhibit,
and the grand jury will be informed that all documents,
records and witness transcripts are available for review
if necessary.  The deliberations of the grand jury are
not recorded; in addition, no one is present during deliber-
ations except members of the grand jury itself.  If the
grand jury votes to indict, the indictment is signed
by the Foreman, as well as the United States Attorney,
and is returned to a judge in open court. 4/

III.  GRAND JURY SECRJECY

     Confidentiality is often crucial to the success of
a criminal investigation.  In addition, the Agency has a
responsibility to protect the targets of criminal investi-
gations from the adverse publicity that can result from the
premature disclosure of a criminal inquiry.  UNDER NO
CIRCUMSTANCES SHOULD AGENCY OFFICIALS DISCUSS THE EXISTENCE
OF A CRIMINAL INVESTIGATION, EITHER WITHIN OR OUTSIDE
THE AGENCY, EXCEPT ON A NEED-TO-KNOW BASIS.  This rule
applies with ec-;il force during EPA's dealings with
Federal, State and local officials.

     Given the provisions of Rule 6, FRCP, confidentiality
is particularly important during grand jury investigations.

The Rule and its Exceptions;  Rule 6(e)(2) of the Federal
Rules of Criminal Procedure establishes ah overall bar to
the disclosure of "matters occurring before the grand
jury" except as in compliance with the terms of Rule
6(e).  Grand jury secrecy is of crucial importance to
the preservation of the grand jury as an investigative
agency.  Grand jury secrecy exists to encourage complete and
willing testimony by witnesses; to minimize the risX of
flight by prospective defendants; to safeguard the grand
jury from extraneous pressures and influences; and to avoid
prejudicial disclosures concerning investigative targets.
See United States v. Proctor and Gamble, 356 U.S. 677
(1958J.A breach of grand jury secrecy is punishable by
contempt of court.

     Rule 6(e) of the Federal Rules of Criminal Procedure
establishes strict procedures to ensure the secrecy of
grand jury proceedings.  For purposes of this document,
we arci concerned with the following portions of Rule
6(e):
4/  In appropriate circumstances the indictment can be
"""sealed", i.e., kept secret, until some future date.  This
procedure is often used when the defendant is not in
custody and may flee.

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                       -7-

          (2) General Rule of Secrecy - A grand  juror,
          an interpreter,  a stenographer,  an operator
          of a recording device,  a typist who transcribes
          recorded testimony, an attorney for the  govern-
          ment, or any person to whom disclosure is made
          under paragraph (3)(A)(ii)  of this subdivision
          shall not disclose matters  occurring before  the
          grand jury, except in accordance with  this
          rule.  A knowing violation  of Rule 6 may be
          punished as a contempt of court.

          (3)  Exceptions.

          (A)  Disclosure otherwise prohibited by  this
          rule of matters occurring before the grand
          jury, other than its deliberations and the
          vote of any grand juror, may be made to—

               (i)  an attorney for the government for
               use in the performance of such attorney's
               duty; and

               (ii)  such government  personnel as  are
               deemed necessary by an attorney for the
               government to assist an attorney  for  the
               government in the performance of  such
               attorney's duty to enforce Federal  criminal
               law.

          (B)  Any person to whom matters are disclosed
          under subparagraph (A)(ii)  of this paragraph
          shall not utilize that grand jury material for
          any purpose other than assisting the attorney
          for the government in the performance  of such
          attorney's duty to enforce  Federal criminal
          law.  An attorney for the government shall
          promptly provide the district court, before
          which was empanelled the grand jury whose
          material has been so disclosed, with the names
          of the persons to whom such disclosure has been
          made.
(Emphasis supplied)
     In DOB, the general rule of secrecy established
in Rule 6(«) has two exceptions of particular interest
to EPA personnel involved in grand jury investigations:
(1) disclosure to an "attorney for the government" (which
requires no judicial authorization) and (2) disclosure
to government personnel assisting the attorney for the
government in the enforcement of Federal criminal law
(which requires timely notification to the district
court supervising the grand jury investigation).

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                     -8-
     As was indicated earlier, EPA attorneys do not
fall automatically within the category of "attorney(s)
for the government."  Rule 54(c), FRCP.  Thug,  except in
those cases in which the Agency attorney is appointed
an authorized assistant of a Justice Department prosecutor
under 28 U.S.C. §§515(a) or 543, the first exception
is inapplicable to EPA employees.

     Of far greater significance within EPA's context
is Rule 6(e)(3)(A)(ii), which authorizes disclosure
to government personnel assisting an attorney for the
government in the enforcement of Federal criminal law.
For example, EPA technical personnel will frequently
be asked to review scientific documents received pursuant
to grand jury subpoena and to analyze them for the grand
jury.  Similarly, EPA attorneys familiar with Agency
regulations may be asked to determine whether the facts
developed in a grand jury inquiry constitute violations
of specific regulatory programs.  Finally, EPA's criminal
investigators will normally be made agents of the grand
jury to serve subpoenas, receive and review grand jury
materials, and interview subpoenaed witnesses prior
to testimony.

     Decisions on the scope of disclosure to government
personnel under this exception are vested, under Rule
6(e), with the prosecutor supervising the grand jury
investigation.  The identity of these government personnel
must be disclosed to the court that empanelled the grand
jury.  There is no statutory obligrt:.:r, to give the
court prior notice of such disclosure, see In re Or.?—1
Jury Proceedings (Larry Smith), 578 F. 2d 836 (3d. "c-r.
I978); however, prior notification is the preferable
practice where feasible.  Finely  the purpose of the
disclosure must be to assist in the enforcement of Federal
criminal law.  Rule 6(e)(3)(A)(ii).

     Rule 6(e)(3)(A)(ii) disclosures will be used with
restraint and will be limited to situations in which
the;- are necessary for the furtherance of the criminal
irv:-:,:gation.  Under no circumstances can information
disclosed under this provision be communicated—-in any
fotm--to any Agency employee not specifically authorized
to receive this information under the provisions of Rule
6(e).  This would include, for example, even members
of EPA's Office of Criminal Enforcement and criminal
investigators hired in our field offices.  It would also

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                      -9-


include, of course, Congressional, State or local
officials interested in the matter under investigation.
The bar imposed by Rule 6(e) is total.

Disclosure of Grand Jury Materials to Agency Supervisors

     In the past, the question has arisen whether an
Agency employee assigned to a grand jury investigation
and authorized to review grand jury materials must there-
after cease all discussions of his or her work with
supervisory personnel.

      Strict confidentiality is required for "matters
occurring before the grand jury."  This phrase should
be read to include, at a minimum, the substance of grand
jury testimony and any transcripts or memoranda reflecting
that testimony; the substance of documents subpoenaed
by the grand jury; the identities of witnesses appearing
before the grand jury; and the identity of investigative
targets, corporate or individual, developed during the
grand jury investigation.

     On the other hand, grand jury secrecy does not
preclude.necessary discussion within the Agency of
publicly-filed motions relating to the grand jury investigation
(i.e., motions to quash grand jury subpoenas); or the
discussion of legal issues arising during grand jury investigations,
if they can be discussed in the abstract, without reference
to evidence developed before the grand jury.  Of course,
where there is doubt about whether a matter is protected
by grand jury secrecy, the question should always be raised
with the "attorney for the government" overseeing the
investigation prior to disclosure.

     On occasion, when unexpected and significant Agency
resource commitments are required during the course of
a grand jury investigation, limited disclosure of grand jury
materials to EPA managers not actively involved in the case
may be appropriate.  However, such disclosure will be made
by, and with the prior approval of, the Justice Department

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                     -10-
attorney supervising the investigation? further, it will be
limited to the facts necessary for the supervisor to make an
intelligent decision on the use of his or her resources.
In addition, care must be taken to ensure that the manager
receiving this information is not supervising a simul-
taneous civil, administrative or regulatory proceeding
involving any of the investigative targets.  Of course,
appropriate notification to the Court under Rule 6(e) must
occur at the time of the disclosure.

Disclosure of Grand Jury Materials in Parallel or Sub-
sequent* Civil/Regulatory Proceedings;The grand jury's
sole .Legitimate investigative purpose is to determine
whether probable cause exists to believe that Federal
criminal law has been violated.  Thus, it has been held
that ;it is an abuse of the grand jury to continue presenting
evidence once a decision has been made not to seek an
indidunent.  United States v. Proctor and Gamble Co.,
175 F., Supp. 198, 199 (D.N.J. 1959).  In a variation
of the; sane theme, the District Court for the Southern
District of New York has held that, the government may not.
use the grand jury to inquire into civil as well as
criminal liability:

          The grand jury's role is properly confined,
          and amply respected, when it is held empowered
          to conduct investigations that are in their
          inception exclusively criminal.  To hold other-
          wise—to confer court approval upon the kind
          of concurrent criminal and civil inquiries
          projected by the instant application— would
          expand the already awesome powers of the grand
          jury beyond tolerable limits.

United States v. Doe. 341 F. Supp. 1350, 1352 (S.N.D.Y.
1972) (emphasis supplied).

     Th«s« holdings do not mean that evidence acquired
by th« grand jury in a good faith criminal investigation
can not subsequently be use'd in a civil action.  Rule
6(e)(3HC)(i) establishes that disclosure! of matters
before the grand jury may also be autnonzed by court order
when that disclosure is "preliminary to or in connection

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                       -11-


with a  judicial proceeding." 5_/

     Courts are split on the scope of this exception,
and disclosure will not, by any means, follow automati-
cally on the heels of a motion.  The government must
demonstrate three things to be entitled to a disclosure
motion:  First, that the grand jury investigation was
conducted to ascertain whether or not violations of
criminal law had occurred, and not as a subterfuge to
obtain  grand jury records for a civil investigation
or proceedings, In re Grand Jury Subpoenas, April 197B,
581 F.  2d 1103, 1110 (4th Cir. 1978); second/that dis-
closure of grand jury records would be preliminary to a
judicial proceeding, Rule 6(e)(3)(i), FRCP; and third,
that there is either a "particularized need" for the
records, In re Grand Jury Investigation, Sells Engineering
Inc., 642 F.2d 1184 (6th Cir. 1961) or that the records
are "rationally related" to the civil proceedings, In re
Grand Jury Subpoenas (Baltimore), 581 F.2d. 1103, lllo
(4th Cir. 1978); In re Grand Jury Proceedings (LTV) 583
F.2d 128 (5th Cir. 1978).

     Rule 6(e) motions will be made only with the author-
ization and assistance of the prosecutor who supervised
the grand jury investigation.

     To avoid both the appearance, as well as the potential,
that a  grand jury investigation will be misused to accumulate
evidence for a noncriminal purpose, employees assigned to
work on or review materials accumulated in grand jury
investigations should have no responsibilities, either
staff or supervisory, on other simultaneous or subsequent
civil or regulatory proceedings involving the subject(s)
5/  One court has observed, in this regard>

     Nothing said herein is meant to overlook the Supreme
     Court's realistic observation that evidence acquired
     in a legitimate grand jury inquiry may later be
     usable even though it has been .concluded that no
     indictment should issue.  See United States v. Proctor
     and" QMBfale, 356 U.S. 677, 684 (1958).  That is wholly
     different from the proposition that the inquiry may
     start out or continue with the explicit purpose of
     discovering evidence for civil claims.

    United States v. Doe, 341 F. Supp. 1350, 1352 (S.D.N.Y.
    1972).

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                       -12-
Of the' grand jury investigation.   Exceptions to this
general prophylactic rule may well be appropriate in
certain ca«es--as, for example, where the subject
matter of the grand jury investigation is unrelated
to the civil/regulatory natter.  However, exceptions
should not be made without prior discussions with the
Office of Criminal Enforcement, EPA Headquarters, and
the Justice Department prosecutor supervising the
investigation.

Media Inquiries Concerning Grand Jury Investigations:  EPA
personnel should never confirm the existence of an ongoing
grand jury investigation in response to press inquiries.
Zf prcsised, questions should be referred to the Justice
Department or local United States Attorney.

IV.  CARE AND CUSTODY OF GRAND JURY MATERIALS

     This final section recommends procedures to be
employed by EPA personnel granted access to and custody
of grand jury r..* trials during the course of a criminal
investigation--as, for example, when voluminous technical
documents are subpoenaed and transferred to EPA personnel
for review.  As a general rule, procedures for the care
and custody of these materials should first be discussed
with the Justice Department prosecutor.  If local rules
or procedures exist, they should be followed.  In the
absence of such specific local guidance, however, the
following procedures, if followed, will provide adequate
assurance against breaches of security and subsequent
allegations of grand jury abuse.

     1.  The identity of all Agency employees who will
     have access to grand jury materials should be included
     in a notice to the Court pursuant to Rule 6(e)(3)(B).
     If additional Agency personnel later prove necessary,
     these additional names should be provided to the
     Court in a timely fashion.

     2.  If grand jury materials are to  leave the Federal
     district in which they are subpoenaed  (for example,
     to be transported to a Regional office of review)
     consideration should be.given--along with the
     prosecutor—to seeking the prior approval of the
     grand jury.  The anticipated transportation of
     materials from the district might also be included
     in the 6(e)(3)(B) notice to the Court.

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                     -13-
     3.  Grand jury materials should be transported
     personally where feasible (rather than by mail).
     If the postal system is used, the materials should
     be sent by certified mail, return receipt requested.

     4.  Grand jury materials should be totally segregated
     from the regular files of the Agency.  Where possible,
     a separate room should be used, since this allows
     both control of access and a private working space
     for personnel authorized to review these materials.
     Finally, the materials should be clearly labelled
     to avoid inadvertant disclosures.

     5.  Grand jury materials, once segregated, should
     be secured, either in locked file cabinets, behind
     locked doors, or both.  Access to the materials
     should thereafter be limited solely to personnel
     on the 6(e) list.

     6.  A system of accountability for grand jury
     materials should be established.  The system should
     allow the government to demonstrate, if challenged,
     the materials that were received, and those that
     have been returned.  Any indexing system that is
     workable for the prosecutor is acceptable.  One
     traditional system uses the number of the grand jury
     subpoena, followed by sequential numbers for the
     documents or exhibits received in response to that
     subpoena.
          N.B.  This indexing should occur before the
     substantive review begins and documents are taken
     out of their original order.  If this is done, it
     will always be possible to identify the order and
     date on which documents were received, and the
     subpoenas to which they responded.  Zt will also
     facilitate response to subsequent allegations that
     documents have been lost.

V. CONCLUSION

     This document will assist Agency personnel to perform
effectively and responsibly in the context of grand jury
investigations.  Agency employees assigned to grand jury
investigations should be thoroughly familiar with its
contents before they begin their work.  Questions should
be directed to the Office of Criminal Enforcement (FTS 382-
4543).

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GM-10

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            Note on Pegional Organization Structure
            of -September 15, 1981
     Since the Agency issued this memorandum, the Regional
structure has changed such that the Regional Counsels report
to the Regional Administrators.  The Office of General Counsel
also retains some authority over the Regional Counsels.  (See
memorandum entitled "Regional Counsel Reporting Relationship"
of August 3, 1983, GM-16.)

     It should also be noted that although this memorandum
generally discusses the role of the Regional Counsel, the
specific legal authority of the Regional Counsel is often
covered in the Agency's delegations of authority.  In those
cases where the Regional Counsels' authority is covered in
a delegation, the delegation is determinative of the Regional
Counsels'  authority.

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GM-11

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                                                           / :  •      *

            UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                        WASHINGTON, O.C. 20460
                                                             of
                                                UQAk COUNStl AND INPOftCSMINT
MEMORANDUM
SUBJECT:  Reorganization of the Office* of Regional Counsel
FROM:     Robert M. Perry, Associate Administrator  for Legal and
          Enforcement Counsel and General Counsel

TO:       Regional Administrators I-X
          Regional Counsels I-X
   . INTRODUCTION.

Since September 15, 1981, when the Administrator authorized
the Regional reorganizations, nearly all Regions have  transferred
or detailed tl; ir enforcement attorneys and support  staffs to
the Offices of Regional Counsel.  In most eases, former organi-
zations and positions remain intact.

This memorandum contains guidance on completing the  reorganization
process.  The guidance allows flexibility so  that varying needs
among Regions may be met while at the same time providing for
basic organizational consistency.  Regional Counsels may choose
from among the four basic organizational structures  shown on
Tabs A, fi, C, and D.  I have also attached standard  position
descriptions for each of the new positions to be established
in the Offices of Regional Counsel.  These position  descriptions
are **taehed as Tabs E, F, G, E, I and J.

As soon as the permanent SES Regional Counsel is in  place,
the Region should begin the process of fully  implementing
this guidance.  Until then, other Regional Counsels  and
Acting Regional Counsels should take interim  steps which are
consistent with this guidance, provided that, in each  case, the
 •sncurrence of the Regional Administrator and my approval are
   ~t obtained.  Such interim steps should not unduly  limit
     jptions available to the permanent SES Regional  Counsel.

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                                                      -2-
 '.I.  THE ADMINISTRATOR'S OBJECTIVES FOR THE REGIONAL
AEORGAKI2ATIONS.    """"""

The Administrator's objectives for the Regional reorganizations
are reflected in this guidance.  These objectives are stated
in her memorandum of September 15, 1981 (a copy of which is
attached as Tab K).  The following excerpts from that memorandum
apply to the reorganization of the Regional legal officesi

     Reorganization Objectives.  Regional organization
     decisions include consideration of the following
     objectives:
                                               •

              - Clarifying accountability for regional
                program!.

             •'- Facilitating communication links between
                related Headquarters and regional components.

              • Improving regional policy and management
                decision-mafcing.

              - Placing functions in organizations where
                they can best be integrated with related
                activities.

              - Favoring fewer and larger organizations to
                avoid cubsequent further consolidation and
                reorganization in a tine of declining resources.
     . . .  Major features of the authorized organization Include
     the following:

          1.  Enforcement functions of permit issuance and
     related compliance monitoring are assigned to the appropriate
     program divisions.  This includes issuance of notices of
     violation and administrative orders, after consulting with
     the Office of Regional Counsel.  (Permit coordination
     functions and placement are optional.)
                                        »
          2.  Legal worfc associated with Enforcement litigation
     and current Regional Counsel functions will be performel
     in newly structured and expanded Offices of Regional
     Counsel reporting to the General Counsel with the following
     provisions:

              a.  Regional Counsels will provide the Regional
     Administrator with legal advice and assistance for all
     program areas in an attorney client relationship.

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                                                      -3-
               b.  The R«oional Administrator will con-
     tinue to initiate enforcement action*.  These
     actions will be based upon guidance from the
     Enforcement Counsel. Office of Legal and Enforcement
     Counsel* and with legal concurrence of the Regional
     Counsel.

               c.  As in the past the Regional Adminis-
     trator will participate in and concur with the
     General Counsel in selections, promotions, awards
     and disciplinary actions for Regional Counsels.
     Regional Administrators will be a party to perfor-
     mance agreements for and will participate in the
     performance ratings of Regional Counsels by the
     General Counsel.

               d.  The Regional Administrator will also
     continue to manage the resources of the Office of
     Regional Counsel and will provide certain administrative
     support such as space allocations, processing of
     personnel actions, and the management of travel
     and training accounts.

III.  BASIC PRINCIPLES *TR REORGANIZATION OF THE OFFICES
OF REGIONAL COUNSEL.

I have established the following basic principles for the
reorganization of the Offices of Regional Counsel:

     A.  Ali Attorneys in the Offices of Regional Counsel.
 .iere are to be no series 905 attorneys in any other offices in
the Regions without my concurrence.  This is to ensure that
the Agency speaks with one legal voice.

     B.  The Attorney-Client Relationship.  All attornev* --e
to serve program clients in the context of an attorney-c.^e.it
relationship.  This applies no matter what activities the
attorneys are performing.  Although '-: e.-neys are free to
offer program and policy advice when asked to do so, it should
be recognized that program and policy decisions (and the conse-
quences of those decisions) are the responsibility of Regional
program managers.  Where there is a mixture of legal and policy
issues, attorneys and program managers are expected to work
collaboratively, with each party recognising the professional
respons.iv1 'ties of the other in seeking a joint resolution
of those issues.

     C.  Organization Along Media Lines.  As shown on the four
organizational structure options  attached to this memorandum,
every Office of Regional Counsel should be organized along media
lines, as opposed to functional lines.  This means that the attorneys
are to be grouped according to the different media areas which

-------
they servo (air, water, hazardous waste, etc.) and are to perform
both general legal work and enforcement legal work.  The media
iplit» aro to follow roughly the same media lines as in the
Office of General Counsel and in the Regions.  With my concurrence,
a Region tiay elect to combine media areas in combinations
which ar« different from those found in the four options provided,
but in such a case the burden would be on the Region to show that
this would be consistent with the objectives of this memorandum.

IV.  HOW VHZ ORGANIZATIONAL STRUCTURE WOULD WORK.

     A.  'fhe Regional Counsel.  The Regional Counsel reports
directly to the Associate Administrator for Legal and Enforcement
Counsel and General Counsel.  Be serves as the principal legal
adviser to the Regional Administrator for all legal matters arising
within tho Region.  Be has; an attorney-client relationship with the
Regional Administrator and the Regional program managers.  The Office
of Legal iind Enforcement Counsel provides nationally uniform guidance
to the Rational Counsel on the legal aspects of enforcement natters.

     B.  Deputy Reeler.a 1 Counsel and Enforcement Coordinator.
In certairi cases, a Regional Counsel may establish a Deputy
Regional Counsel and Enforcement Coordinator position.  Generally,
this would be appropriate only in a Region with a large Office
of Regionul Counsel staff (such as where the Office contains
formal branches).  The Deputy would perform enforcement coordination
functions and, therefore, the Region would not have a Senior
Associate Regional Counsel for Enforcement Coordination.
The Deputy would not serve as a team leader. • He would have
 tnagenent functions in addition to enforcement coordination.
 ne organizational options available to a Region with a
Deputy arc the sane as Options A, 6, C and D, except that
the Senior Associate position would be deleted and a Deputy
position would be substituted.  A Regional Counsel considering
the establishment of a Deputy position should furnish justification
for the position in connection with his reorganization plan
to be submitted as provided in Section IX.  A position description
for the Deputy will be provided as soon as a request to
establish the position has been approved by me.  The grade
level of the Deputy position would be determined after an
analysis ef the position by the Regional position classification
specialist.

     C.  The Associate Regional Counsels.  The Office will be
grouped into teams which are to :handle all enforcement and
general legal matters arising within their assigned media
areas, ae shown on the attached options.  Each media team
will have a teaa leader who is to be called an "Associate Regional
Counsel."  This person will be the principal coordinator for
that media area and will be responsible for all matters arising
within that area.  This will ensure that Regional program managers
and others dealing with the Office of Regional Counsel will
know who is responsible for each legal matter in the Region.
The grade level of each Associate Regional Counsel will be

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                                                       -5-


deterained'after an analysis of his projected duties and respon-
sibilities, by the Regional position classification specialist.
See the position description attached as Tab H.

       !'•  Management of the Work of Staff Attorneys.  Each
Associate will be responsible for the work of the staff
attorneys working within his media area.  Under Options A and
B, each Associate will have a defined group of staff attorneys
assigned to work with hin.  Under Options C and 0, the Associate
w.'Jl draw upon a pool of staff attorneys.  Individual attorneys
in the pool could at any given tine be dividing their tine
between two different aedia.

       2.  Rotation of Associates.  The Associates will be expected
to rotate among media areas from tine to tine so as to broaden
their exposure and expertise.

       3.  Administrative Functions.  The Regional Counsel may
assign certain administrative functions to the Associate in
charge of grants, etc., as one of this Associate's "other duties,
as assigned."  Such functions could include:  administrative
management of the Office of Regional Counsel; preparation of
all documents needed for resource management within the Office,
Including the annual progran plans and budget submissions;
preparation and submisuio.i of required reports on Office
activities and accomplishments, including current information
for automated data systems (coordinating reports on enforce-
ment matters with the Deputy or the Senior Associate Regional
Counsel for Enforcement Coordination); oversight of the annual
performance evaluation process for all staff members and preparation
  ' documentation required for such process; responsibility for
  nagement of the physical properties of the Office, including
.pace procurement and recommendations for allocation of space;
management of the process for recruiting ar.i hiring attorneys,
interns and clerical personnel; and mana~.—nt of all timekeeping
systeas.     ,

       Since this Associate would normally handle aost legal
matters for the administrative offie:  .si. the Pegion (personnel,
financial management, etc.), assignment: of these functions
would ensure close coordination between the Office of Regional
Counsel and these offices.  This would ensure clear accountability
for these matters in a uniform manner throughout the Office of
Regional Counsel system and close coordination with the Grants,
Contracts and General Administration Division of the Office of
General T_ ..sel.

     D.  The"Senior Associate Regional Counsel for Enforcement
Coordination.  In those Regions where there is no Deputy, one
of the Associate Regional Counsels  (except, under Options
A and C, for the Associate in charge of grants, etc., who has
no enforcement responsibilities) will be designated the "Senior
Associate Regional Counsel for Enforcement Coordination."  Re
will be the enforcement coordinator for the Office and he will
also lead one of the media teams.  Several Regions suggested that
the Senior Associate should not lead a media team, but should only

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 have coopiinatiiig functions.  However, coordination function*
 •lone will not •u; sort a high grade level and assigning other
. enforcement functi ns simply in order to support the grade
 *ould be inconsistent with my objective of holding team leaders
 accountable for all enforcement activities in their respective
 media arens.  Therefore* Z have decided not to authorize the
 establishment of a "floating" Senior Associate, that is, a
 Senior Associate who is act also a aedia team leader.

      The grade level of the Senior Associate Regional Counsel
 for Enforcement Coordination will be determined after an analysis
 of his projected duties and responsibilities by the Regional
 position classification specialist.  For this reason, it may
 be desirable that the Senior Associate be assigned to lead the
 media tecun with the most complex, difficult and nationally
 significant workload in order to support a high grade level.
 However, it Senior Associate, may instead be assigned to lead a
 media te&in with a less heavy workload where it appears that
 this wouli! also sustain the grade of the position or where grade
 is not a controlling factor.  This decision should be based
 upon the balancing of all relevant factors including the extent of
 the actual workload Involved in coordinating enforcement functions.
 See the position d^-'iptions attached as Tabs Z and J.

        1.  The Reason for the "Senior Associate" Title.  Zn those
 Regions w:lth a Senior Associate, the title "Senior Associate
 Regional Counsel for Enforcement Coordination" is preferable to the
 title "Deputy Regional Counsel for Enforcement Coordination."  Since
 the Senior Associate would be in charge of only one of the media
 teams, it would be confusing to persons dealing with the Office
  ? he vero called a "Deputy," since the commonly-understood
  otion of a "deputy" is that he is a supervisor at a level
 which is between the senior manager and the operating staff.
 Regional Counsels in those Regions would have a closer working
 familiarity with the work of their Offices and not be cut off
 by a separate organizational layer.

        2.  Enforcemert Responsibilities of the Senior Associate.
 The Senior Associate Regional Counsel for Enforcement Coordination
 will be responsible for coordinating all enforcement activity
 within tho Office of Regional Counsel.  Zn addition to carrying
 his own load of enforcement work, he will ensure that all enforce-
 ment policy guidance from the Office of Legal and Enforcement Counsel
 is receivod and distributed to the other attorneys and the program
 offices, t.hat the reporting system is kept current with accurate
 data,  that; enforcement cases are assigned to the appropriate media
 attrrneya (and lead roles assigned where more than one medium
 is involvod),  that Regional policy determinations are properly
 staffed from a legal standpoint, and that the Office is generally
 responsive to the enforcement needs of the Office of Legal and
 Enforcement Counsel.   These enforcement responsibilities are
 spelled out in the position descriptions attached as Tabs Z
 and J.

        3.  Acting as Regional Counsel.  The Senior Associate will
   •*. as tho Regional Counsel in the absence of the Regional Counsel.

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                                                      -7-


     £.  Staff Attorney Petitions.  Staff attorneys at the
GS-ll Itfvei will be called "General Attorneys.'  Staff
attorneys at the GS-12 and GM-13 levels will be called
"Assistant Regional Counsels."

       1.  Grouping Staff Attorney in a Media Unit Arrangement.
Options A and fi provide thatthe staff attorneys will be grouped
in media units, each to be led by an Associate Regional Counsel
(except that one aedia unit will be led by the Senior Associate
Regional Counsel for Enforcement Coordination).  Although a staff
attorney will generally work only in the media area for which hij
unit is responsible, he can, as needed, be assigned as lead
attorney in a natter involving two or more aedia in which he
has expertise.  For exaaple. he can take the .lead on a case
which has both hazardous materials and air quality aspects.
Be will also rotate among media units, as discussed below.

       2.  Grouping Staff Attorneys in a Pool Arrangement.
Options C and D provide that a staff attorney will not be assigned
to a single media area, but will be permitted and encouraged
to divide his tine between two different media at one time.
His work will be coordinated and directed by the Associates
(or Senior Associate) with responsibility for the given
media areas.  As a staff attorney develops expertise in one
media area, he can expand the scope of his workload to include
matters from a second media area.  Then, over time, he can
rotate into a third media area while dropping out of one of
the original areas.  Several Regional Counsels have already
tried this pool concept and have reported that it works well
and is highly favored by both supervisors and staff attorneys.

       3.  Multi-media Rotation Policy.  I want each Regional
Counsel to follow a policy of rotating all staff attorneys
through each of the different media areas.  Staff attorneys in
the unit arrangement will be encouraged to move from media
unit to media unit as needs of the Office and preferences of
the attorneys permit.  Staff attorneys in the pool arrangement
will obtain multi-media exposure as described above.  Associates
will be required to maintain careful records of media assignments
so as to ensure that no one is on the same track for too long.
The form of Attorney Rotation Record to be used for this purpose
is attached as Tab L.  I believe that this policy will, over
time, provide all of our Regional attorneys with a broadly
based experience, thereby improving the quality of their legal
advice.

V.  THE BENEFITS OF THE MEDIA-ORIENTED LEGAL OFFICE.

The principal benefits which I expect to accrue from organizing
the Offices of Regional Counsel along media lines aret

     A.  One Source of Legal Advice;  One Legal Opinion.
There will no longer be two sets of attorneys involved in
and giving legal and other advice on different aspects of

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                                                         -fi-


  the same' situation, a practice which has  sometimes  led to
  confusion within the Agency and caused diffiei Ity for  regulated
- parties and others in dealing with EPA.

       B.  Acting as "Counsel to the Situation."  Instead of
  approaching a problem with an "enforcement" perspective or
  a  "general legal" perspective/ attorneys  will be able  to  act as
  •counsel to the situation.*  This will encourage an attorney
  to develop and apply a broadened perspective And thus  improve
  the quality of his overall legal Advice.

       C.  Setter Coordination of Litigation.  Where an  enforcement
  action spawns a counter-suit, counterclaim, or an appeal  to
  a Court of Appeals, thereby causing an enforcement case
  to involve or become a defensive ease, the sane attorneys will
  handle the natter as a "situation," thereby ensuring a proper
  coordination of strategy and a balanced assessment of  all legal
  implications.

       D.  Better Teamwork With Regional Program Staffs  and
  Headquarters Attorneys.  The Regional program offices  having
  enforcement functions, the Office of General Counsel and  the
  Office of Enforcement Cs-insel are each organized along media
  lines; it is clear that a media-oriented  Office of Regional
  Counsel will improve professional ties and working relationships
  with all of these groups.  Program personnel will always  know
  who their lawyers are.  Attorneys are likely to.develop closer
  working relationships with program staffs when the groups are
  working together on many issues at the same time as part  of a
  'earn.  The same can be said of professional relationships with
   *adquart*rs lawyers, who will get to know the Regional attorneys
  Better by sharing more working experiences with them.   Regional
  attorneys will be available to assist p;-::.am personnel in
  developing the factual basis for enforcement actions,  inri
  actual field work such as sampling, inspections, and otner
 • types of compliance activities.  This will foster a better
  understanding by the attorneys of tv- rcles of their program
  counterparts, thereby promoting closer teamwork.

       E.  Improved Legal Expertise of Attorneys.  In a  functional
  division,' at any given time an attorney must spend his  time
  trying to keep up with a large number of  different statutes
  and regulations governing all the media served by that function.
  In a m*c*i--sriented Office, the attorneys will be allowed to
  concentrate on keeping up with legal developments in one  or
  at most tvo media areas at a tine.  Attorneys become better
  experts in an area when they are allowed  to specialise  in
  that area and keep current on legal developments.  The  need
  for Agency attorneys to attain the greatest level of expertise
  possible is incontrovertible.

       F.  letter Accountability for Legal Advice.  Under the
  proposed system, it will be clear who is  responsible
  for all of- the legal advice in any given  situation.

       G.  No Distinctions Anonc Groups of  Attorneys.  I  an
     .d that' there are some Regional attorneys who have the

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                                                      -9-
p«rception that, in the past, one group of attorneys may have
seen more highly regarded and/or better treated than another.
I do not know whether there is any basis for this perception,
but any alleged problem will be eliminated by implementing
this guidanee>

     H.  Maximum Utilization of Attorney Resources.  Staff
attorneys can easily b« shifted from one type of work to
another as workload and priorities change.  This is particularly
true under the pool arrangement.  Further, the new system
eliminates redundancy and duplication of effort which
existed under the past system; no longer will two sets of
attorneys be required to review matters, and the time and
energy previously needed to coordinate among different sets
of attorneys will now be available for additional legal
work.  Here are two major examples of how the new arrangement
will improve efficiency and coordination:

       1.  Superfund Site Issues.  One attorney should be given
the legal lead for each Superfund site.  This attorney will
be responsible for providing legal advice to the program managers
on all alternative legal strategies for handling that site
so that all of the issues involved in deciding which course
of action (enforcement, cooperative agreement, state action,
etc.} will be given a consistent legal analysis.  If enforcement
actions are initiated, the same attorney will handle them.
Conversely, if federal and state funds are to.be used, the
Attorney will advise on the cooperative agreements.  The lead
 :torney will be supported by the specialists in the various
~iedia teams where additional skills are needed.

       2.  Eliminating Duplieative Review of SIP Revisions,
Delegation Packages and OtherMatters.  Whereas, in the past,
two sets of attorneys would review SIP revisions, program
delegations, etc., each for different reasons, the new role
of the staff attorney will be to review a state statute,
regulation, etc., both from the point of view of its general
compliance with EPA requirements as well as for its "enforce-
ability."  This should save a considerable amount of attorney
time otherwise spent on duplicative reviews and coordination
among reviewers.

VI.  PROBLEMS WITH SEPARATION OF FUNCTIONS.

In those rare instar.r :i when the Office of Regional Counsel
might be called upon to advise a decision-maker on a p.'-.tlem
when it is-also involved as an advocate for the Agency's official
position, such as in an adjudicator/ hearing on a permit
appeal, it may be necessary for the the Regional Counsel,
after consultation with the Office of General Counsel, to
make arrangements for separate attorney representation of
the different interests.

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                                                       -10-
vii.
     A.  Top Priority to Enforcement Work.  The  Office  of
Regional Counsel is expected to givt top  priority  to  enforcement
work, whiile at the same time carrying out its  general legal
duties .

     B.  Establishing Lead Attorney Roles in Enforcement
Matters .  Whenever both the Office of Region a: Counsel  and
the Officit of Enforcement Counsel Are to  become  involved in
a particular enforcement litigation matter, a  lead attorney
shall be assigned to aanage and coordinate the litigation
activities according to the following principles:
                                               »
       1. Lead Attorney Rp.le Defined.  Having  the  lead  attorney
role aeans that the lead attorney shall generally  manage the
Agency's participation in the conduct of  the matter.  In
particular* he shall: (a) act as the liaison with  the Department
of Jus tie* and/or the U.S. Attorney on the matter? (b)  coordinate
the development of the enforcement strategy and  the preparation
of all documents; and (c) take the lead in negotiations with
opposing parties.

       2.  Basis for Assignments.  The lead attorney  role
shall be assigned on the following basis:

         fa).  Regional Matters.  Normally, the  Office  of
Regional Counsel shall take the lead on matters  arising in
 he Regions, except where the Regional Counsel and the
 .he appropriate supervisor within the Office of  Enforcement
Counsel agree, after conferring at an early point  in  the develop*
sent of the matter, that the matter is c. overriding  national
significance and that the lead role should be  assigned  tr-
an attorney in the Office Of Enforcement  Counsel*  In cases
where the Regional Counsel and the supervisor  within  the
Office of Enforcement Counsel are u.i«tl«  to agree  as  to
which level should be assigned the lead role,  the  matter
will be resolved by the Associate Administrator  for Legal
and Enforcement Counsel and General Counsel.

         (b).  Enforcement /Defensive Matters:  Appeals.  In
instances where enforcement litigation and defensive  litigation
arise i-.-o.-ving essentially the same parties and the  same set
of circumstances, the Associate -.Administrator  for  Legal and
Enforcement Counsel and General Counsel sh-11  determine the
allocation of roles (including, where deemed necessary, the
establishment of a lead attorney for the  entire  matter) so
as to ensure that both aspects of the matter are properly
represented and that the positions of the respective  Offices
are well-coordinated.  Generally, the Office of  General
Counsel (or the appropriate Office of Regional Counsel)
shall have the lead on all matters before Courts of Appeals,
     even though the lead on the matter vos previously taken by

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                                                      -li-
the Office of Enforcement Counsel.  The Associate Administrator
for Legal and Enforcement Counsel and General Counsel may
make exceptions to- this rule in the case of individual enforcement
programs.

       3.  Obligations to Other Attorneys.  The lead attorney
shall provide other Agency attorneys assigned to the matter with
adequate opportunities to contribute to the litigation effort,
including participation as supporting counsel in the development
of the litigation strategy, the preparation of legal documents,
and the conduct of negotiations with opposing parties.

VIII.  GENERAL LEGAL MATTERS? RELATIONSHIPS VITH OCC..

The reorganisation will not change the working relationships
between the Office of General Counsel and the Offices of
Regional Counsel.  All existing lines of communication and
all existing procedures should continue to be used until
further notice.

IX.  STEPS TO TAKE IS IMPLEMEOTING THIS GUIDANCE.          . .

     A.  Interim Steps.  As stated above, a Region should
take interim steps towards the final reorganization of the
Office of Regional Counsel before the new SES Regional Counsel
is in place.  Such steps may include such matters as selecting
the organizational option, making tentative media team leader
selections, and moving attorneys into media teams.  Specific
•equests should be directed to me in writing by the incumbent
 egional Counsel or Acting Regional Counsel, together with a
arief explanation for the proposal.
  •
     B.  Reorganization Plans.  When the permanent SES Regional
Counsel is in'place, he should begin at once to prepare a
reorganization plan for the final implementation of this
guidance.  The plan must have the written concurrence of
the Regional Administrator.  It should include at least the
following:

       1.  An organization chart showing the structure of the
Office, based upon one of the four options attached to this
memorandum.  Larger Regions may establish sub-units within media
groups.  If official branches or sections are to be established,
they should be indicated on the chart.  *

       2.  A list of the personnel of the Office*, showing their
current grade levels, titles and areas of responsibility.

       3.  A list of the new positions to be established,
together with a list of changes, if any, to be made in the
attached standard position descriptions.  The position
descriptions may be altered to fit unusual situations, but
no such alteration may be made without my concurrence and

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                                                      -12-
consultation with the Headquarters Personnel Office.  Proposed
changes in the position descriptions should be stated in the
reorganization plan and my approval of the plan will be my
concurrence with t>sse changes.

       4.  A brief description of the procedures to be
followed la selecting personnel to fill the newly-created
positions.
                                                                9
       5.  A plan for meeting the needs of any personnel whose
existing grade levels and/or skills do not fit into the organi-
zational structure to be established under the reorganization.
Individual cases should be discussed with me during th« preparation
of the reorganization plan.

       6.  A tinetable for implementing the plan.
             . «        *                                 *
     C.  Submission of Reorganization Plans and Proposals for
Interim Steps.  Eac'i SES Regional Counsel should submit a final
reorganization plan for my approval within three weeks after
the date of this memorandum or three weeks after the date
that he begins work in his new position, whichever is later.
In Regions where an SES Regional Counsel is not expected to
be in place by June I, 1982, requests for approval of interim
steps should be submitted by that date.

     D.  Approval of Reorganization Plans and Proposals for
'•nterim Stcjps.  I must approve reorganization plans and
proposals tor interim steps before they are implemented. This
means that no new positions may be established or personnel
selections nade prior to approval.
Questions er this guidance may be referred  to Robert C. Thompson,
Associate General Counsel for Regional Coordination, at 382-4148.
For information and guidance on the  legal issues arising out of
proposed personnel changes, contact  Gerald  E. Yamada at 755-0768.

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/82
                                                                               A;
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-------
                                 GENERAL COttEEL
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-------
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-------
                                 GENERAL
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       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                 OFFICE OF GENERAL COUNSEL

                OFFICES OF REGIONAL COUNSEL
               BENCHMARK POSITION DESCRIPTION

                   GS-11 General Attorney
                     (General Attorney)
NOTE: ' This position description has been reviewed by the
       Headquarters Office of Personnel and has been
       approved for use in the Offices of Regional
       Counsel.  In cases where the duties of the
       incumbent would not be sufficiently described
       in this benchmark position description, the
       Regional Classification Specialist is authorized
       to make appropriate changes, after conferring
       the the Headquarters Office of Personnel and
       with the concurrence of the General Counsel.

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            1 / «• " i
                       General Attorney
                          CS-905-11
Z. Introduction,
     Serves as a General Attorney in the Office of Regional
Counsel.  Provides legal advice and assistance on legal
•attersi including enforcement natters, arising in the Region.
Advicei assistance and recommendations are provided to the
Regional Counsel* senior attorneys and Regional program
managers.  Has an attorney-client relationship with all
Regional program nanagers for whom work is performed and
with the Office of Enforcement Counsel in Headquarters.

XI •  Major Duties and Responsibilities.

     At this level, the General Attorney will be assigned to work
on the least complex and routine matters which can be resolved
with standard research and analysis, and with a moderate
degree of expertise.  Examples of this includes  the review
of routine revisions on state implementation plans under the
Clean Air Act, participation in preparation of the less complex
notices of violation and administrative orders,- conduct of the
less complex administrative and judicial litigation, and
preparation of advice on routine and less complex legal
issues.

     A. Legal Research and Problem Resolution.  Researches
     the legal questions which arise under regulations,
     lawsuits, enforcement actions, executive orders and
     ether administrative actions involving major Federal
     statutes affecting the Agency's programs, which may
     include such statutes as the Clean Water Act, the Clean
     Air Act, the Toxic Substances Control Act, the Safe
    . Drinking Water Act, the Resource Conservation and
     Recovery Act, the National Environmental Policy Act,
     the Comprehensive Environmental Response, Compensation
     and Liability Act and the Federal Insecticide, Fungicide
     and Rodenticide Act (in each case as from time to time
     amended).

     B.  General Legal Advice.  Acting through the Regional
     Counsel or an Associate Regional Counsel, provides the
     Regional Administrator, Deputy Regional Administrator
     and the Regional Divisions and Offices with general
     legal advice concerning those Regional matters which
     have been assigned.

     C.  Legal Advice on Enforcement Matters.  Provides
     legal advice on Regional enforcement matters.  Assists
     in the preparation of legal correspondence, notices
     of violation, administrative orders, litigation

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                  General
                     CS-905-li

referrals and other enforcement documents And reviews
such documents for legal sufficiency and conoistency with
-Agency legal interpretations and policy guidance.  Conducts
investigations into criminal natters in conjunction
with Agency criminal investigatory personnel and law
enforcement agencies.

B.  Legal Advice to Grant Programs.  Provides legal
advice to managers of EPA grant programs, including the
construction grants program administered under Title XX
of the Clean Water Act.  Advises en the eligibility for
Agency funding ef cost items under Agency grants* including
cost overruns by contractors en Agency-funded projects.
Works closely with the Agency's Office of Inspector
General in resolving problems arising under audit activities
and investigations.  Drafts special grant conditions to
cover unusual or unique situations.  Assists state
attorneys in interpreting statutes and regulations
administered by the Agency, advising on the handling ef
claims matters and generally serving the needs ef programs
which have been delegated by the Agency to state agencies.
Prepares final Agency decisions on bid protests arising
under gran-** procurement.  Conducts the Region's participa-
tion in grant appeal proceedings.

E.  Drafting of Determinations, Regulations, Notices, etc.
Drafts and reviews final Agency determinations, proposed
and final regulations, notices and other documents to
be published in the Federal Register, including Agency
actions on state air pollution laws, designations of
ecle source aquifers under the Safe Drinking Water Act,
approvals and authorizations of state programs under
the Clean Water Act, the Clean Air Act, the Resource
Conservation and Recovery Act, the Federal Insecticide,
Fungicide and Rodenticide Act and ether Federal environ-
mental statutes.

F,  Litigation Matters.  Coordinates defensive and enforce-
ment litigation in connection with specific Regional
matters arising under the statutes referred to above.
Assists in the conduct of discovery and prepares drafts
oi: motions, briefs, interrogatories, and other documents
;in connection with cases in litigation.  Works closely
with attorneys in the Offices of General Counsel and
Enforcement Counsel at Headquarters and the Department
el Justice or U.S.  Attorneys.  Assists U.S. Attorneys
in seeXi.t, indictments in criminal matters and in prosecuting
aueh matters.  Coordinates with state attorneys general.
Represents the Region in administrative proceedings of
21?A and other agencies.

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                       General Attorney
                          GS-905-il


     G.  Negotiation and  Informal Dispute Resolution.  Represent!
     •the Region  in  its dealings with outside partiest including
     negotiation of bilateral agreements, consent orders and
     judgements, and aeraoranda of understanding.  Represents
     the Region  in negotiating the settlement of disputed matters
     In many eases, this  avoids protracted and expensive
     litigation  and facilitates expeditious administration
     of Agency programs.  •

     H.  Liaison with Offices of General Counsel and Enforcement
     Counsel*  Serves as  liaison between the Region and the  .
     Office* of  General Counsel and Enforcement Counsel to
     provide an  effective channel of communication in order
     to assure that the Region obtains legal judgments from
     the Office  of General Counsel and policy advice from
     the Office  of Enforcement Counsel and also to assure
     that .such Offices are able to base such judgments and
     such advice upon accurate perceptions of the pertinent
     facts and Regional program objectives.

     Z.  Other Duties.  Performs other duties as assigned.

III.'  Supervisory Controls.

     The General Attorney reports to the Regional Counsel.
The General Attorney has an attorney-client relationship
with Regional program managers and the Office of Enforcement
Counsel in Headquarters.  Areas of responsibility are assigned
by the Regional  Counsel.  Work assignments are Bade by the
Regional Counsel or by senior attorneys who will direct and
coordinate the General Attorney's work in specific subject
Batter areas.  Zn some cases, work    performed at the request
of Regional program managers.  The work of the General Attorney  '
is closely supervised by senior attorneys on a ctj. jy-case
basis to assure  that a correct approach is made to research,
analysis and formulation of 1^..^. advice.  Finished work is
carefully reviewed in almost ail cases to assure consistency
with Agency policy, precedential effect and overall quality.

ZV.  Qualifications.

     The General Attorney Bust have the equivalent of a JD
or LLB degree from an accredited law school and Bust be a
aember of the bar.  Other qualification requirements Bay be
established by the Regional Counsel depending upon the needs
of the Office.

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       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                 OFFICE OF GENERAL COUNSEL

                OFFICES OF REGIONAL COUNSEL
               BENCHMARK POSITION DESCRIPTION

                   CS-12 General Attorney
                (Assistant Regional Counsel)
NOTE:  This position description has been reviewed by the
       Headquarters Office of Personnel and has been
       approved for use in the Offices of Regional
       Counsel.  In cases where the duties of the
      • incumbent would not be sufficiently described
       in this benchmark position description, the
       Regional Classification Specialist is authorized
       to make appropriate changes, after conferring
       the the Headquarters Office of Personnel and
       with the concurrence of the General Counsel.

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Version of 3/18/82
                       General Attorney
                          GS-905-12
I.  Introduction.
     Serves as an Assistant Regional Counsel in the Office of
Regional Counsel.  Provides legal advice and assistance and
policy recommendations on legal matters, including enforcement
natters, arising in the Region.  Advice, assistance and
recommendations are provided to the Regional Counsel, senior
attorneys and Regional program managers.  Bas an attorney-client
relationship with all Regional program managers for whom
work is performed and with the Office of Enforcement Counsel
in Headquarters.

XZ.  Major Duties and Responsibilities.

     At this level, the Assistant will be assigned to work on
a broad range of legal problems and issues affecting the Agency's
programs.  These matters require a thorough knowledge of appli-
cable laws and regulations, and may require extensive legal
research and analysis, and consideration of complicated
factual and policy issues.  Examples of these include:  the
review of a broad range of revisions of state implementation
plans under the Clean Air Act, preparation of notices of
violation and administrative orders which affect large amounts
of money, or involve a broad range of issues, and the conduct of
complicated administrative and judicial litigation.

     A. Legal Research and Problem Resolution.  Researches
     the legal questions which arise under regulations,
     lawsuits, enforcement actions, executive orders and
     other administrative actions involving major Federal
     statutes affecting the Agency's programs, which nay
     include such statutes as the Clean Water Act, the Clean
     Air Act, the Toxic Substances Control Act, the Safe
     Drinking Water Act, the Resource Conservation and
     Recovery Act, the National Environmental Policy Act,
     the Comprehensive Environmental Response, Compensation
     and Liability Act and the Federal Insecticide, Fungicide
     and Rodenticide Act (in each case as from time to time
     amended).

     B.  General Legal Advice and Policy Recommendations.
     Acting through the Regional Counsel or an Associate
     Regional Ccj.-.sel, provides the Regional Administ»tor.
     Deputy Regional Administrator and the Region 1 Divisions
     and Offices with general legal advice and policy recom-
     mendations concerning those Regional matters which have
     been assigned.

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                                General Attorney
                                   GS-905-12

             . P«   Legal Advice and Policy Recommendations on Enforcement
              Matters*Provides legal advice and policy recommendations
              on Regional enforcement matters.  Assists in the preparation
              of major legal correspondence, notices of violation*
              administrative orders, litigation referrals and other '
              enforcement documents and reviews such documents for legal
              sufficiency and consistency with Agency legal interpretations
              and policy guidance.  Conducts investigations into criminal
2              Batters in conjunction with Agency criminal investigatory
i              personnel and lav enforcement agencies.

              D.  Legal Advice and Policy Recommendations to Grant
              Programs.Provides legal advice and policy recommendations
              to managers of EPA grant programs, including the construction
'              grants program administered under Title II of the Clean
              Water Act.  Advises on the eligibility for Agency funding
              of cost items unde'r Agency grants, including cost overruns
              by contractors on Agency-funded projects.  Works closely
              with the Agency's Office of Inspector General in resolving
              problems arising under audit activities and investigations.
              Drafts special grant conditions to cover unusual or
I              unique situations.  Assists state attorneys in inter-
              preting statute and regulations administered by the
              Agency, advising on the handling of claims matters and
:              generally serving the needs of programs which have been
              delegated by the Agency to state agencies.  Prepares
              final Agency decisions on bid protests arising under
              grantee procurement.  Conducts the Region's participation
              in grant appeal proceedings.

              E.  Drafting of Determinations, Regulations, Notices, etc.
              Drafts and reviews final Agency determinations, proposed
              and final regulations, noticer ird other documents to
              be published in the Federal Register, including Agency
              actions on state air pollution laws, designation* of
              sole source aquifers under the Safe Drinking Water Act,
              approvals and authorizations cf state programs under
              the Clean Water Act, the Clean Air Act, the Resource
              Conservation and Recovery Act, the Federal Insecticide,
              Fungicide and Rodenticide Act and other Federal environ*
              mental statutes.

              F,  Litigation Matters.  Coordinates defensive and enforce-
              ment litigation in connection'with specific Regional
              matters arising under'the statutes referred to above.
              Conducts discovery and prepares »uwt*ons, briefs and
              other litigation documents.  Appears before Federal
              courts from time to time to conduct trials, bearings
              and oral arguments.  Works closely with attorneys in the
              Offices of General Counsel and Enforcement Counsel at
              Headquarters and the Department of Justice or U.S.
              Attorneys.  Assists D.S. Attorneys in seeking indictments

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                   General Attorney
                      GS-905-12
 *                                        •
 in criminal matters and in prosecuting such matters.
 Coordinates with state attorneys general.   Represents
 the Region in administrative proceedings of EPA and
 other agencies.

 G.  Negotiation  and Informal Dispute Resolution.
 Represents the Region in its dealings with outside
 parties, including negotiation of bilateral agreements,
 consent orders and judgements, and memoranda of understanding.
 Represents the Region in negotiating the settlement of
 disputed matters.  In many cases, this avoids protracted
 and expensive litigation and facilitates expeditious
 administration of Agency programs.

 H.  Representation of the Region.  Represents the  Region
 at conferences and meetings held with other Federal
 departments and  agencies, Congressional committees and
.individual congressmen and senators, the General Accounting
 Office, governors of states and staff offices of governors,
 state and local  officials, representatives of private
 industry »<.. farm groups, etc. and in this .capaciv  «s
 required to give expert legal advice with  respect  to
 many novel legal situations and problems arising from
 the administration of Regional programs.  Prepares and
 delivers testimony to state legislative bodies in  connection
 with their deliberations on assumption of  responsibilities   *
 for programs to  be delegated by the Agency.            .   -   '

 !•  Liaison with Officesof General Counsel and Enforcement
 Counsel.Serves as liaison between the Region and the
 Offices of General Counsel and Enforcement Counsel to
 provide an effective channel of communication in order
 to assure that the Region obtains legal judgments  from
 the Office of General Counsel and policy advice from
 the Office ~f Enforcement Counsel and also to assure
 that such Offices are able to base such judgments  and
 such advice upon accurate perceptions of the pertinent
 facts and Regional' program objectives.

 J.  Lead Region  Matters.   Serves as a coordinator  of
 one or more subject matter areas of interest to the
 Offices of Regional Counsel. -Maintains specialized
 expertise in such area Is] and serves as a  consultant to
 other attorneys  in the Agency.  May manage a task  force
 of Regional attorneys in seeking solutions to common
 legal problems or in preparing guidance documents,
 model agreements, regulations, pleadings,  etc.   In this
 capacity, serves as the liaison between the Office of
 General Counsel  and the Offices of Regional Counsel.
 Arranges conference calls, meetings and other means of
 exchanging information among Regional attorneys.

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                       General Attorney
                          65-905-12
     K.  Coordination of Work of Junior Attorneys*  Where the
     Assistant is responsible for coordinating the work of
     junior attorney-advisors, the Assistant reviews all
     major efforts to assure that written material is clear,
     precise and of high quality, that work is completed on
     tia«, and that oral presentations, whether before courts
     or other public bodies, are of high quality.

     L.  Other Duties*  Performs ether duties as assigned.

XII.  Supervisory Controls.

     The Assistant Regional Counsel reports to the Regional
Counsel.  The Assistant has an attorney-client relationship
with Regional program managers and the Office of Enforcement
Counsel in Headquarters.  Areas^of responsibility are assigned
by the Regional Counsel.  Work assignments are made by the
Regional Counsel or by senior attorneys who will direct and
coordinate the Assistant's work in specific subject matter
areas.  In some eases, work is performed at the request of
Regional program managers. Work will be discussed generally
with senior attorneys while in process and finished work
will generally be reviewed by senior attorneys to assure
consistency with Agency policy, precedential effect and
overall quality.

IV.  Qualifications.

     The Assistant must have the equivalent of a JD or
LLB degree from an accredited law school and must be a member
of the bar.  Other qualification requirements may be established
by the Regional Counsel depending upon the needs of the Office.

-------
       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                 OFFICE OF GENERAL COUNSEL

                OFFICES OF .REGIONAL COUNSEL
               BENCHMARK POSITION DESCRIPTION

                   GM-13 Central Attorney
                (Assistant Regional Counsel)
NOTEi  This position description has been reviewed by the
       Headquarters Office of Personnel and has been
       approved for use in the Offices of Regional
       Counsel.  In cases where the duties of the
       incumbent would not be sufficiently described
       in this benchmark position description, the
       Regional Classification Specialist is authorized
       to make appropriate changes, after conferring
       the the Headquarters Office of Personnel and
       with the concurrence of the General Counsel.

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Version of 3/18/82
                       General Attorney
                          GM-905-13
I.  Introduction.
    Serves as an Assistant Regional Counsel in the Office of
Regional Counsel.  Provides legal advice and assistance and
policy recommendations on legal matters, including enforcement
matters, arising in the Region.  Advice, assistance and
recommendations are provided to the Regional Counsel, senior
attorneys and Regional program managers.  Has an attorney-client
relationship with all Regional program managers for whom
work is performed and with the Office of Enforcement Counsel
in Headquarters.

XI.  Major Duties and Responsibilities.

     At this level, the Assistant will be assigned to work on
highly complex and unusual matters.  These matters require a
very high degree of expertise on the part of the Assistant and
may require extensive legal research, by more than one attorney
and on a number of subjects, and analysis of a wide variety
of issues, together with consideration of highly complicated
factual and policy issues in response to the specialized
needs of program clients.  Examples of these includet  the
review of highly complex and extremely unusual revisions of
state implementation plans under the Clean Air Act, participation*
in the preparation of highly complex and unusual notices of
violation and administrative orders, and the conduct of
highly complex administrative and judicial litigation.

     A. Legal Research and Problem Resolution.  Researches
     the legal questions which arise under regulations,
     lawsuits, enforcement actions, executive orders and
     other administrative actions involving major Federal
     statutes affecting the Agency's programs, which may .
     include such statutes as the Clean Water Act, the Clean
     Air Act, the Toxic Substances Control Act, the Safe
     Drinking Water Act, the Resource Conservation and
     Recovery Act, the National Environmental Policy Act,
     the Comprehensive Environmental Response, Compensation
     and Liability Act and the Federal Insecticide, Fungicide
     and Rodenticide Act (in each case as from time to time
     amended).

     B.  General Legal Advice and Policy Recommendations.
     Acting through the Regional Counsel or an.Associate
     Regional Counsel, provides the Regional Administrator,
     Deputy Regional Administrator and the Regional Divisions
     and Offices with general legal advice and policy recom-
     mendations concerning those Regional matters which have
     been assigned.

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                  General Attorney
                     01-905-13
C.  Legal Advice and Policy Recommendations on Enforcement
Matters*Provides legal advice and policy recommendations
on Regional enforcement natters.  Assists in the preparation
of major legal correspondence, notices of violation,
administrative orders, litigation referral! and other
enforcement documents and reviews such documents for
legal sufficiency and consistency with Agency legal
interpretations and policy guidance.  Conducts investi-
gations into criminal matters in conjunction with Agency
criminal investigatory personnel and law enforcement
agencies*
                                           •
D.  Legal Advice and Policy Recommendations to Grant
Programs.  Provides legal advice and policy recommendations to
managers of EPA grant programs, including the construction
grunts program administered under Title XI of the Clean
Water Act.  Advises on the eligibility for Agency funding
of cost items under Agency grants, including cost overruns
by contractors on Agency-funded projects.  Works closely
with the Agency's Office of Inspector General in resolving
problems arising under audit activities and investigations.
Drafts special grant conditions to cover unusual or
un;lque situations.  Assists state attorneys in inter-
preting statutes and regulations administered by the
Agency, advising on the handling of claims matters and
generally serving the needs of programs which have been
delegated by the Agency to state agencies.  Prepares
final Agency decisions on bid protests arising under
gruntee procurement.  Conducts the Region's participation
in grant appeal proceedings.

E.  Drafting of Determinations, Regulations, Notices, etc.
Driifts and reviews final Agency determinations, proposed
and final regulations, notices and other documents to
be published in the Fedei^'. Register, including Agency
actions on state air pollution laws, designations of
sole source aquifers under the Safe Drinking Water Act,
approvals and authorizations of state programs under
the; Clean Water Act, the Clean Air Act, the Resource
Conservation and Recovery Act, the Federal Insecticide,
t urtgicide and Rodenticide Act and other Federal environ-
mental statutes.

Fo  Litigation Matters.  Coordinates defensive and enforce-
ment litigation in connection with specific Regional
matters arising under the statutes referred to above.
Conducts discovery and prepares motions, briefs and
other litigation documents.  Appears before Federal
courts from time to time to conduct trials, hearings

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                  General Attorney
                     GM-905-13
and oral arguments.  Works closely with attorneys in the
Offices of General Counsel and Enforcement Counsel at
Headquarters and the Department of Justice or U.S.
Attorneys.  Assists U.S. Attorneys in seeking indictments
'in criminal natters and in prosecuting such matters.
Coordinates with state attorneys general.  Represents
the Region in administrative proceedings of EPA and
other agencies.

G.  Negotiation and Informal Dispute Resolution.
Represents the Region in its dealings" with outside
parties, including negotiation of bilateral agreements,
consent orders and judgements, and memoranda of understanding.
Represents the Region in negotiating the settlement of
disputed matters.  In many cases, this avoids protracted
and expensive litigation and facilitates expeditious
administration of Agency programs.

B.  Hearing Officer Duties.  Serves as hearing officer
in hearing and deciding matters brought before the
Agency and assists the Regional Administrator in preparing
formal administrative decisions.  Some of these decisions
(e.g. bid protest decisions arising under the construction
grants program) are final Agency action subject to
direct review in the Federal courts.  At the request of
the Regional Counsel, performs responsibilities which
the Administrator has delegated to the Regional Counsel,  *•
such as rendering decisions on confidentiality of business
information under 40 C.F.R. Part 2, which decisions
also become final Agency action.

I.  Representation of the Regi?"-  Represents the Region
at conferences and meetings held with other Federal
departments and agencies, Congressional comr.it. ejs and
individual congressmen and senators, the General Accounting
Office, governors of stat^u ir.d staff offices of governors,
state and local officials, representatives of private
industry and farm groups, etc. and in this capacity is
required to give expert legal advice with respect to
many novel legal situations and problems arising from
the administration of Regional programs.  Prepares and
delivers testimony to state legislative bodies in connection
with their deliberations on assumption of responsibilities
for programs to be delegated by the Agency.

J.  Liaison with Offices of General Counsel and Enforcement
Counsel.  Serves as liaison between the Region and the Offices
of General Counsel and Enforcement Counsel to provide an
effective channel of communication in order to assure that
the Region obtains legal judgments from the Office of General

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                       General Attorney
                          CM-905-13

     Counsel and policy advice from the Office of Enforcement
     'Counsel and also to assure that such Offices are able to
     base such judgments and such advice upon accurate perceptions
     of the pertinent facts and Regional program objectives.

     K.  Lead Region Matters.  Serves as a coordinator of one
     or acre subject matter areas of interest to the Offices of
     Regional Counsel.  Maintains specialized expertise in
     such areafs] and serves as a consultant to other attorneys
     in the Agency.  May manage a task force of Regional attorneys
     in seeking solutions to common legal problems or in preparing
     guidance documents, model agreements, regulations, pleadings,
     etc.  In this capacity, serves as the liaison between the
     Office of General Counsel and the Offices of Regional
     Counsel.  Arranges conference calls, meetings and other
     means of exchanging information among Regional attorneys.
                     ' -,'
     L.  Coordination of Work of Junior Attorneys.  Where the
     Asuistant is responsible for coordinating the work of
     junior attorney-advisors, the Assistant reviews All
     ma;jor efforts to assure that written material is clear,
     precise and of high quality, that work is completed on
     tine, and that oral presentations, whether before courts
     or other public bodies, are of high quality.

     MO  Other Duties.  Performs other duties as assigned.

III.  Supervisory Controls.

     The Assistant Regional Counsel reports to the Regional
Counsel.  The Assistant has an attorney-client relationship
with Regional program managers and the Office of Enforcement
Counsel in Headquarters.  Areas of responsibility are assigned
by the Regional Counsel.  Work assignments are made by the
Regional Counsel or by senior attorneys who will direct and
coordinate the Assistant's work in specific subject matter
areas.  In some cases, work is performed at the request of
Regional program managers.  Completed work is normally assumed
to be accurate with respect to legal citations, treatment of
facts, and other aspects of technical treatment.  However, all
written work is subject to review for soundness of approach and
argument, application of legal principles, and consistency
with governing policies, procedures, and regulations of the
Agency.

IV.  Qualifications.

     The Assistant must have the equivalent of a JD or LLB
degree from an accredited law school and must be a member of
the bar.  Other qualification requirements may be established
by the Regional Counsel depending upon the needs of the Office.

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                                                            TAB ti
        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                  OFFICE OF GENERAL COUNSEL

                 OFFICES OF REGIONAL COUNSEL
                BENCHMARK POSITION DESCRIPTION

                    GM-14 General Attorney*
                 (Associate Regional Counsel)
 ROTE:  This position description has been reviewed by the
        Headquarters Office of Personnel and has been approved
        for use in the Offices of Regional Counsel.  In
        cases where the duties of the incumbent would not be
        sufficiently described in this benchmark position
        description, the Regional Classification Specialist
        is authorized to make appropriate changes,  after
        conferring the the Headquarters Office of Personnel
        and with the concurrence of the General Counsel.

        Attached to this position description are two cover sheets.
        The cover sheet indicating that the position will be
        filled by a GM-13 is intended for use in those situations
        where the incumbent is not yet entitled to assume a
        CM-14 position due to inadequate time in grade.  When
        the time in grade requirements have been fulfilled,
        the incumbent will be eligible for promotion to the
        GM-14 level.  The second cover sheet nay be used at
        that point.
•Depending upon the organizational structure of the Office of
Regional Counsel, this position could be classified as that
of a Supervisory General Attorney.

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            POSITION 0ESCRIPTION
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                                                                        905
                                            13
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-------
             POSITION DESCRIPTION
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                                                                            905   14    '>/
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                      General Attorney*
                          GM-905-14
X.  Introduction.
     Serves as an Associate Regional Counsel in the Office of
Regional Counsel.  The Associate has responsibility for
providing legal advice and assistance and policy recommendations
to the Regional Counsel and Regional program managers in
major areas of responsibility.  The Associate coordinates
and directs the entire workload of the Office in assigned
areas of responsibility, and is responsible for the work of
ether attorneys in the Office who are assigned to work en
matters within such areas of responsibility.

XI.  Major Duties and Responsibilities.

     At this level, the Associate will be responsible for all
legal aspects of an entire media area within the Region.  These
matters will involve a wide variety of highly complex and
unusual matters requiring extensive knowledge and a very
high degree of expertise as well as extensive legal research
and analysis, together with consideration of highly complicated
factual and policy issues.  The Associate will be the principal
attorney in tht .-.sgion for interpreting for the Region*1
Administrator and the Regional program managers a substantial
body of Agency regulations and defending these regulations
and Agency actions before Federal trial and appellate courts.
Matters assigned may have precedential effects, may have the  .
effect of substantially broadening or restricting the Agency's.
activities and may have an important impact on major industries
in the Region.  These matters often involve substantial sums
of money and often are rigorously contested by some of the
nation's most distinguished, capable and highly paid attorneys.
The Associate will direct and coordinate the activities of junior
attorneys assigned to help carry out the specific elements of
the Associates duties and responsibilities.

     A. Legal Research and Problem Resolution.  Researches
     and resolves the legal questions which arise under all
     regulations, lawsuits, enforcement actions, executive
     orders and other administrative actions involving major
     Federal statutes affecting the Agency's programs, which
     may include (depending upon the specific areas assigned
     by the Regional Counsel) such statutes as the Clean
     Hater Act, the Clean Air Act,- the Toxic Substances
     Control Act, the Safe Drinking Water Act, the Resource
     Conservation and Recovery Act, the National Environmental
     Policy Act, the Comprehensive Environmental Response,
     Compensation and Liability Act and the Federal insecticide,
     Fungicide and Rodenticide Act (in each case as from
     time to time amended).  In areas assigned by the Regional
     Counsel, is the focal point within the Region for resolution
*  May be Supervisory General Attorney if appropriate.

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                  General Attorney
                     CM-905-14
of legal issues arising under such statutes (except for
Batters of national importance which require consultation
with the Offices of General Counsel or Enforcement
Counsel).

B.  General Legal Advice and Policy Recommendations*
Eit.her acting directly or through the Regional Counse 1 /
directly, provides the Regional Administrator, Deputy
Regional Administrator and the Regional Divisions and
Offices with general legal advice and (upon request)
poMcy recommendations concerning those Regional programs,
operations and activities in areas assigned.by the
Regional Counsel so that their major decisions are Bade
with applicable legal considerations in mind.

C.  Legal Advice and Policy Recommendations on Enforcement
Hatters.Provides legal advice and policy recommendations
to the Regional program managers responsible for enforcement
natters.  Assists in the preparation of major legal
correspondence, notices of violation, administrative
orders, litigation referrals and other enforcement
documents and reviews such documents for legal sufficiency
ancl consistency with Agency legal interpretations and
policy guidance.  Is responsible for assuring that the
Agency's centralized data reporting systems are kept
current with information on Regional enforcement natters.*
Conducts investigations into criminal matters in conjunction
with agency criminal investigatory personnel and law
enforcement agencies.

D. Legal*Advice and Policy Recommendations to Grant
Programs.   Provides legal advice and policy recommendations
to managers of Agency grant programs, including the
construction grants program administered under Title II
of the Clean Water Act.  Advises on the eligibility for
Agency funding of cost items under Agency grants? including
cesit overruns by contractors on Agency-funded projects.
Works closely with the Agency's Office of Inspector
General in resolving problems arising under audit activities
and investigations.  Drafts special grant conditions to
cover unusual or unique situations.  Assists state
attorneys in interpreting statutes and regulations
administered by the Agency, advising on the handling of
claims matters and generally serving the needs of programs
which have been delegated by the Agency to state agencies.
Prepares final Agency decisions on bid protests arising
under grantee procurement.  Conducts the Region's partici-
pation in grant appeal proceedings.

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                  General Attorney
                     GM-905-14

E.  Drafting of Determinations, Regulations, Notices, etc.
Drafts and reviews final Agency determinations, proposed
and final regulations, notices and such other documents
to be published in the Federal Register, including
Agency actions on state air pollution plans, designations
of sole source aquifers under the Safe Drinking Water
Act, approvals and authorizations of state programs under
the Clean Hater Act, the Clean Air Act, the Resource
Conservation and Recovery Act, the Federal Insecticide, .
Fungicide and Rodenticide Act and other Federal environ-
mental statutes.

F. Litigation Matters.  Manages and coordinates defensive
and enforcement litigation resulting from the Region's
activities under the statutes referred to above.  Conducts
discovery and prepares motions, briefs and other litigation
documents.  Appears before courts from time to time to
conduct trials, hearings and oral arguments.  Works
closely with the Offices of Enforcement Counsel and
General Counsel at Headquarters and the Department of
Justice or U.S.  Attorneys.  Assists U.S. Attorneys in
seeking indictments in criminal matters and in prosecuting
such matters.  Coordinates with state attorneys general.
Represents the Region in administrative proceedings of
EPA and other agencies.

G.  Negotiation and Informal Dispute Resolution.  Represents
the Region in its dealings with outside parties, including
negotiation of bilateral agreements, consent orders and
judgments, and memoranda of understanding.  Represents
the Region in negotiating the settlement of disputed
matters so as to avoid protracted and expensive litigation
and facilitate expeditious administration of Agency
programs.

H.  Hearing Officer Duties.  Serves as hearing officer
in hearing and deciding matters brought before the
Agency and assists the Regional Administrator in preparing
formal administrative decisions.  Some of these decisions
(e.g. bid protest decisions arising under the construction
grants program) are final Agency action subject to
direct review in the Federal 'courts.  At the request of
the Regional Counsel,- performs responsibilities which
the Administrator has delegated to the Regional Counsel,
such as rendering decisions on confidentiality of business
information under 40 C.F.R. Part 2, which decisions
also become final Agency action.

I.  Representation of the Region.  Represents the Region
at conferences and meetings held with other Federal
departments and agencies, Congressional committees and

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                                       •*-

                               General Attorney
                                  GW-905-14

             Individual congressmen and senators, the General Accounting
             Office, governors of states and staff offices of governors,
             state and local officials, representatives of private^
             industry and farm groups, etc. and in this capacity is
             required to give expert legal advice with respect to
             many novel legal situations and problems arising from
             the administration of Regional programs.  Prepares and
i             delivers advice and testimony to state legislative bodies
I             in connection with their deliberations on assumption of
j             responsibilities for programs to be delegated by the
             Agency.

             J.  Liaison with Offices of General Counsel and Enforcement
             Counsel.Serves as liaison between the Region and the
             Offices of General Counsel and Enforcement Counsel to
             provide an effective channel of communication in order
             to dssure that the Region obtains legal judgments from
             the Office of General Counsel and policy advice from
             the Office of Enforcement Counsel and also to assure
             that such Offices are able to base such judgments and
             such advice upon accurate perceptions of the pertinent
             faefts and Regional program objectives.

             K.  Coordinating and Directing Legal Work.  Coordinates
             and directs the work of one or more junior attorney-
             advisors.  Makes day-to-day work assignments and reviews
             all major efforts of such attorney-advisors.  The review
             functions include ensuring that (1) written material is
             clezir, precise, and of high quality, (2) work is completed
             on time, (3) prompt advice is provided to the Regional
             managers of programs within assigned areas, and
             (4) oral presentations, whether before courts or ether
             public bodies, are of high quality.  Participates in
             the recruiting and hiring of attorneys, and p-iv.des
             attorney-advisors under supervision with opportunities
             for professional growth t.*—vgh work experience and
             training.  Assists the Regional Counsel in conducting
             performance evaluations of junior attorney-advisors.

             L.  Lead Region Matters.  Serves as a national legal
             expert in one or more subject matter areas of interest
             to the Offices of Regional Counsel.  Maintains specialized
             expertise in such area Is] and-serves as a consultant to
             other attorneys in the. Agency.  May. manage a task force
             of Regional attorneys in seeking solutions to common
             legal problems or in preparing guidance documents,
             model agreements, regulations, pleadings, etc.  In this
             capacity, serves as the liaison between the Office of
             General Counsel and the Offices of Regional Counsel.
             Arranges conference calls, meetings and other means of
             exchanging information among Regional attorneys.

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                       General Attorney
                          GM-905-14
     M.  Other Duties.  Performs other duties as assigned.

III.  Supervisory Controls.

     The Associate reports to the Regional Counsel and
has an attorney-client relationship with all Regional program
managers for whore work is performed and with the Office of
Enforcement at Eeadguarters.  Areas of responsibility are
assigned by the Regional Counsel, and within those areas of
responsibility the Associate has wide latitude in prioritizing
workload, directing and coordinating the efforts of staff
members, conducting research, preparing documents and exercising
judgment and initiative in completing assignments and making
legal judgments and policy recommendations.  Legal advice,
policy recommendations and advocacy during adversarial pro-
ceedings are normally considered expert.  Within assigned
areas of responsibility, the Associate accepts work requests
directly from Regional program managers.  The Associate is
expected to represent the Regional Counsel from time to time
in areas of assigned responsibility, although consultation
and discussion with the Regional Counsel is required when
necessary in connection with major legal judgments or policy
recommendations.  Completed work is revievable for consistency
with Agency policy, precedential effect and overall quality.
The Associate is expected to rotate areas of assigned, responsi-
bility with other Associates within the Office of Regional
Counsel from time to time.  The Regional Counsel is to be       .
consulted generally on matters arising in the course of
coordinating and directing the work of junior attorneys who
work in the assigned areas of responsibility.

IV.  Qualifications.

     The Associate must have th» equivalent of a JD or LLB
degree from an accredited law school and be a member of the
bar.  Other qualifications requirements may be established
by the Regional Counsel, depending upon the needs of the
Office.

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                                                             TAB I
        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                  OFFICE OF GENERAL COUNSEL

                 OFFICES OF REGIONAL COUNSEL
                BENCHMARK POSITION DESCRIPTION
                •^••^^^•^••••••••••^•^•••^^^^••••^•^^•^••^•^^•^^••••••••••^ /

                    CM-14 General Attorney*
        (Senior Associate Regional Counsel for Enforcement)
 NOTE:  This position description has been reviewed by the
        Headquarters Office of Personnel and has been approved
        for use in the Offices of Regional Counsel.  In
        cases where the duties of the incumbent would not be
        sufficiently described in this benchmark position
        description, the Regional Classification Specialist
        is authorized to naXe appropriate changes, after
        conferring the the Headquarters Office of Personnel
        and with the concurrence of the General Counsel.

        Attached to this position description are two cover sheets,
        The cover sheet indicating that the position will be
        filled by a GM-13 is intended for use in those situations
        where the incumbent is not yet entitled to assume a
        GM-14 position due to inadequate tine in grade.  When
        the tine in grade requirements have been fulfilled,
        the incumbent will be eligible for promotion to i-he
        GM-14 level.  The second cover sheet nay t? vsed at
        that point.

•Depending upon the organizational structure of the Office of
Regional Counsel, this position could be classified as that
of a Supervisory General Attorney.

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version or
                      General Attorney*
                          GM-905-14
I.  Introduction.
     Serves as the Senior Associate Regional Counsel for En-
forcement in the Office of Regional Counsel.  The Senior
Associate has responsibility for providing legal advice and «
assistance and policy recommendations to the Regional Counsel
and Regional program managers in major areas of responsibility,
including coordination of all enforcement activities within
the Office.  The Senior Associate coordinates and directs
the entire workload of the Office in assigned areas of respon-
sibility and is responsible for the work of other attorneys
in the Office who are assigned to work on matters within
such areas of responsibility.  The Senior Associate acts as
the Regional Counsel when the Regional Counsel is out of the
office.
          • •        •
IX.  Major Duties and Responsibilities.

     At this level,  the Senior Associate will be responsible
for all legal aspects of an entire media area within the
Region, together with coordination of all enforcement activities
of the Office.  These matters will involve a wide variety of
highly complex and unusual matters requiring extensive knowledge
and a very high degree of expertise as well as extensive
legal research and analysis, together with consideration of
highly complicated factual and policy issues.  The Senior
Associate will be the principal attorney in the Region for
interpreting for the Regional Administrator and the Regional
program managers a substantial body of Agency regulations
and defending these  regulations and Agency actions before
Federal trial and appellate courts.  Hatters assigned may
have precedential effects, may have the effect of substantially
broadening or restricting the Agency's activities and may
have an important impact on major industries in the Region.
These matters often involve substantial sums of money and
often are rigorously contested by some of the nation's most
distinguished, capable and highly paid attorneys.  The Senior
Associate will direct and coordinate the activities of junior
attorneys assigned to help carry out the specific elements of
the Senior Associates duties and responsibilities.
                                  »
     A.  Coordination of Enforcement Matters.

          1.  Expertise in Enforcement Matters.  Develops and
          maintains  expertise in all Agency enforcement
          policies,  including guidance on prioritization of
          enforcement actions, development of enforcement
          cases, preparation of administrative letters and
          orders, preparation of litigation referral packages,
          management of litigation matters, negotiation and
*  May be Supervisory General Attorney if appropriate.

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                                      -2-


                               Ceneral Attorney
                                   GM-905-14


                   settlement  of  case, etc.

                   2.   Liaison with the Office  of  Enforcement  Counsel*
                   Acts as  the Region's principal  liaison attorney
                   with the Office  of  Enforcement  Counsel.  Receives
.'                   guidance from  the Office of  Enforcement Counsel
1                   and  transmits  it to the other attorneys in  the
?                   Office of Regional  Counsel.  Keeps  the Office of
                   Enforcement Counsel informed on Regional matters,
                   as needed.   Attends briefings and training  sessions
                   as needed.

                   3.   Liaison with other Legal Offices.  Acts as
                   the  liaison with other Offices  of Regional  Counsel
                   on the development  of enforcement policies  and
                   procedures  in  connection with lead  Region efforts.
                   Acts as  liaison  with the Department of Justice,
                   the  affected U.S.   Attorneys and the Attorneys
,                   General  of  states within the Region on overall
                   enforcement policy  and procedural matters.
i

                   4.   Development  of  Regional  Enforcement Policies
                   and  Procedures.   Assists Regional program managers
                   in developing  Regional enforcement  policies and
                   procedures  and reviews such  policies and procedures
                   for  consistency  with national policies and  procedures.
                   This work is done in coordination with the  Associate
                   Regional Counsels for the other major areas of
                   responsibility within the Office of Regional Counsel.

                   5.   Coordination of Enforcement Matters in  Office
                   of Regional  Counsel.Is responsible for informing
                   the  other Associate Regional Counsels of developments
                   in enforcement policy.  Coordinates legal work
                   on enforcement matters being handled by the Office
                   of Regional  Counsel so as to assure that all
                   enforcement  activities are consistent with  national
                   policies and procedures.  Maintains files on
                   current  enforcement policies.

                   6.   Multi-media  Enforcement  Case Assignments.
                   Reviews  enforcement matters  involving more  than
                   one  major area of responsibility and makes
                   nendations  to  the Regional Counsel  as -c
                   Associate Regional  Counsel should be given  the
                   lead responsibility for handling the matter.
                   Reviews  the  handling  of multi-media enforcement
                   matters  so as  to assure adequate coordination
                   within the Office.

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                        -3-
                 General Attorney
                     GM-905-14
      7.  Review of Resources Available for Enforcement
      Legal Services*Periodically reviews the allocation
      of resources for enforcement natters within the
      Office of Regional Counsel and makes recommendations
      to the Regional Counsel for obtaining adequate
      resources to neet the requirements of the Region's
      enforcement efforts.

      8»  Coordination of Criminal Investigators.  Coordinates
      the work of any criminal investigatory personnel who
      are assigned to the Office.  Ensures that such personnel
      attend to the highest priority natters in the Region,
      that they are assigned staff attorneys to work with
      them to assist in proper case development, and that
      they properly coordinate their activities with the
      Office of Inspector General.

B.  Acting Regional Counsel Duties.  Acts as the Regional
Counsel when the Regional Counsel is out of the Office.

C. Legal Research and Problem Resolution.  Researches
and resolves the legal questions which arise under all
regulations, lawsuits, enforcement actions, executive
orders and other administrative actions involving major
Federal statutes affecting the Agency's programs, which
may include '(depending upon the specific areas assigned
by the Regional Counsel) such statutes as the Clean
Water Act, the Clean Air Act, the Toxic Substances
Control Act, the Safe Drinking Water Act, the Resource
Conservation and Recovery Act, the National Environmental
Policy Act, the Comprehensive Environmental Pe<:-onse,
Compensation and Liability Act and the Federal Insecticide,
Fungicide and Rodenticide &ct (in each ease as from
time to time amended).  In areas assigned by the Regional
Counsel, is the focal point within the Region for resolution
of legal issues arising under such statutes (except for
matters of national importance which require consultation
with the Offices of General Counsel or Enforcement
Counsel).
                             >
D.  General Legal Adyjce and Policy Recommendations.
Either acting directly or through the Regional Counsel,
directly, provides the Regional Administrator, Deputy
Regional Administrator and the Regional Divisions and
Offices with general legal advice and (upon request)
policy recommendations concerning those Regional programs,
operations and activities in areas assigned by the
Regional Counsel so that their major decisions are made
with applicable legal considerations in mind.

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                                      -4-  '	.  ' • "  	 '  -•  -  -.--..


                                General Attorney
                                   GM-905-14


              E.   Legal  Advice  and Policy Recommendations  on  Enforcement
              Matters*Provides legal advice  and  policy recommendations
              to  the  Regional program managers responsible for enforcement
              matters.   Assists in the preparation of  major legal
              correspondence, notices of violation, administrative
j              orders, litigation referrals and other enforcement
:              documents  and  reviews such documents for legal  •ufficiency
              and consistency with Agency legal interpretations and
              policy  guidance.   Is responsible for assuring that the
              Agency's centralized data reporting  systems  are kept
              current with information on Regional enforcement matters.
              Conducts investigations Into criminal matters in conjunction
              with agency criminal investigatory personnel and law
              enforcement agencies.

              F.  Legal Advice and Policy Recommendations to Grant
              Programs^Provides legal advice and policy  recommendations
              to  managers of Agency grant programs, including the
              constructor: grants program administered under  Titl* II
1              of  the  Clean Water Act.  Advises on  the  eligibility for
              Agency  funding of cost items under Agency  grants,  including
              cost overruns  by  contractors on  Agency-funded projects.
              Works closely  with the Agency's  Office of  Inspector
              General in resolving problems arising under  audit activities
              and investigations.   Drafts special  grant  conditions to
              cover unusual  or  unique situations.   Assists state
              attorneys  in interpreting statutes and regulations
              administered by the Agency, advising on  the  handling of
              claims  matters and generally serving the needs  of programs
              which have been delegated by the Agency  to state agencies.
              Prepares final Agency decisions  on bid protests arising
              under grantee  procurement.   Conducts the Region's partici-
              pation  in  grant appeal proceedings.

              G.   Drafting of Determinations;  Regulations, Notices, etc.
              Drafts  and reviews final Agency  determinations,  proposed
              and final  regulations,  notices and such  other documents
              to  be published in the Federal Register, including
              Ageincy  actions on state air pollution plans, designations
              of  dole source aquifers under the Safe Drinking Water
              Act,  approvals and authorizations of state programs under
              the Clean  Water Act,  the Clean Air Act,  the  Resource
              Conservation and  Recovery Act, the Federal Insecticide,
              Fungicide  and  Rodenticide Act and other  Federal environ-
              mental  statutes.

              H.  Litigation  Matters.   Manages  and  coordinates defensive
              and" enforcement litigation resulting from  the Region's
              activities under  the  statutes referred to  above.   Conducts
              discovery  and  prepares motions,  briefs and other litigation
              documents.  Appears  before  courts from time  to  time to

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                        -5-
                  General Attorney
                     GM-905-14
conduct trials, hearings and oral arguments.  Works
closely with the Offices of Enforcement Counsel and
General Counsel at Headquarters and the Department of
Justice or O.S.  Attorneys.  Assists U.S. Attorneys in
seeking indictments in criminal natters and in prosecuting
such matters.  Coordinates with state attorneys general.
Represents the Region in administrative proceedings of
EPA and other agencies.

I.  Negotiation and Informal Dispute Resolution.  Represents
the Region in its dealings with outside parties, including
negotiation of bilateral agreements, consent orders and
judgments, and memoranda of understanding.  Represents
the Region in negotiating the settlement of disputed
matters so as to avoid protracted and expensive litigation
and facilitate expeditious administration of Agency
programs.

J.  Bearing Officer Duties.  Serves as hearing officer
in hearing and deciding matters brought before the
Agency and assists the Regional Administrator in preparing
formal administrative decisions.  Some of these decisions
(e.g. bid protest decisions arising under the construction
grants program) are final Agency action subject to
direct review in the Federal courts.  At the request of
the Regional Counsel, performs responsibilities which •
the Administrator has delegated to the Regional Counsel,
such as rendering decisions on confidentiality of business
information under 40 C.F.R. Part 2, which decisions
also become final Agency action.

K.  Representation of the Region.  Represents the Region
at conferences and meetings held with other Federal
departments and agencies, Congressional committees and
individual congressmen and senators, the General Accounting
Office, governors of states and staff offices of governors,
state and local officials, representatives of private
industry and farm groups, etc. and in this capacity is
required to give expert legal advice with respect to
many novel legal situations and problems arising from
the administration of Regional programs.  Prepares and
delivers advice and testimony to state legislative bodies
in connection with their deliberations on assumption of
responsibilities for programs to ue delegated by the
Agency.

L.  Liaison with Offices of General Counsel and Enforcement
Counsel.Serves as liaison between the Region and the
Offices of General Counsel and Enforcement Counsel to
provide an effective channel of communication in order
to assure that the Region obtains legal judgments from

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                             -6-
                       General Attorney
                          GM-905-14
     the Office of General Counsel and policy advice from
     the Office of Enforcement Counsel and also to assure
     that such Offices ire able to base such judgments and
     such advice upon accurate perceptions of the pertinent
     facts and Regional program objectives.

     H.  Coordinating and Directing Legal »ork.  Coordinates
     and directs the work of one or more junior attorney-
     advisors.  Hakes day-to-day work assignments and reviews
     all major efforts of such attorney-advisors.  The review
     functions include ensuring that (1) written aaterial is
     clear, precise, and of high quality, (2) work is completed
     on time, (3) prompt advice is provided to the Regional
     managers of programs within assigned areas, and
     (4) oral presentations, whether before courts or other
     public bodies, are of high quality.  Participates in
     the recruiting and hiring of attorneys, and provides
     attorney-advisors under supervision with opportunities
     for professional growth through work experience and
     training.  Assists the Regional Counsel in conducting
     performance evaluations of junior attorney-advisors.

     N.  Lead Region Matters*  Serves as a national legal
     expert in one or more subject matter areas of interest
     to the Offices of Regional Counsel.  Maintains specialized
     expertise in such area Is] and serves as a consultant to
     other attorneys in the Agency.  May. manage a task force
     of Regional attorneys in seeking solutions to common
     legal problems or in preparing guidance documents,
     model agreements, regulations, pleadings, etc.  In this
     capacity, serves as the liaison between the Office of
     General Counsel and the Offices of Regional Counsel.
     Arranges conferenre calls, meetings and other means of
     exchanging information among Regional attorneys.

     0.  Other Duties.  Performs other duties as assigned.

III.  Supervisory Controls.

     The Senior Associate reports to the Regional Counsel and
has an attorney-client relationship with all Regional program
managers for whom work is performed and with the Office of
Enforcement at Headquarters.   Areas of responsibility are
assigned by the Regional Counsel, and within those areas of
responsibility the Senior Associate has wide latitude in prior-
itizing workload, directing and coordinating the efforts of
staff members, conducting research, preparing documents and
exercising judgment and initiative in completing assignments
and making legal judgments and policy recommendations.
Legal advice, policy recommendations and advocacy during
adversarial proceedings are nonnally considered expert.

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                             -7-
                       General Attorney
                          GM-905-14
Within assigned areas of responsibility, the Senior Associate
accepts work requests directly from Regional program managers.
The Senior Associate is expected to act as the Regional Counsel
when the Regional Counsel is out of the office.  The Senior
Associate is also expected to represent the Regional Counsel
from time to time in areas of assigned responsibility, although
consultation and discussion with the Regional Counsel is
required when necessary in connection with major legal judgments
or policy recommendations.  Completed work is revicwable for
consistency with Agency policy, precedential effect and
overall quality.  The Senior Associate is expected to rotate
areas of assigned responsibility with other Senior Associates
within the Office of Regional Counsel from time to tine.
The Regional Counsel is to be consulted generally on matters
arising in the course of coordinating and directing the work
of junior attorneys who work in the assigned areas of respon-
sibility.

IV.  Qualifications.

     The Senior Associate must have the equivalent of a JD or LLB
degree from an accredited law school and be a member of the
bar.  Other qualifications requirements may be established
by the Regional Counsel, depending upon the needs of the
Office.

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                                                            TAB J
        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                  OFFICE OF GENERAL COUNSEL

                 OFFICES OF REGIONAL COUNSEL
                BENCHMARK POSITION DESCRIPTION

                    CM-15 General Attorney*
     (Senior Associate Regional Counsel for Enforcement)
 NOTE:  This position description has been reviewed by the
        Headquarters Office of Personnel and has been approved
        for use in the Offices of Regional Counsel.  In
        cases where the duties of the incumbent would not be
        sufficiently described in this benchmark position
        description, the Regional Classification Specialist
        is authorited to make appropriate changes,  after
        conferring the the Headquarters Office of Personnel
        and with the concurrence of the General Counsel.

        Attached to this position description are two cover sheets.
        The cover sheet indicating that the position will be
        filled by a CM-14 is intended for use in those situations
        where the incumbent is not yet entitled to assume a
        GM-14 position due to inadequate time in grade.  When
        the time in grade requirements have been fulfilled,
        the incumbent will be eligible for promotion to the
        GM-15 level.  The second cover sheet nay be used at
        that point.
•Depending upon the organizational structure of the Office of
Regional Counsel, this position could be classified as that
of a Supervisory General Attorney.  	

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Version of 3/18/82
                       General Attorney*
                          CM-905-15
I.  Introduction.
     Serves as the Senior Associate Regional Counsel for Enforce*
•ent in the Office of Regional Counsel.  The Senior Associate
has responsibility for providing legal advice and assistance
and policy recommendations to the Regional Counsel and
Regional program managers in major areas of responsibility*
including one or more major areas of national lead region
responsibility and coordination of all enforcement activities
within the Office.  The Senior Associate coordinates and
directs the entire workload of the Office in assigned areas
of responsibility, and is responsible for the work of other
attorneys in the Office who are assigned to work on matters
within such' areas of responsibility.  The Senior Associate
acts as the Regional Counsel when the Regional Counsel is
out of the Office.

ZI.  Major Duties and Responsibilities.

     The Senior Associate will be responsible for all legal
aspects of an entire media area within the Region, together with
one or more major national lead region responsibilities and
coordination of all enforcement activities of the Office.
The Senior Associate's responsibilities include the most
complex, difficult, and important matters to be handled by
the Office, requiring extensive knowledge and a very high
degree of expertise.  These matters often require extensive
legal research.and analysis, together "ith consideration of
highly complicated factual and policy issues.  The Senior
Associate will be the principal attorney in the Re^i-:/ for
interpreting for the Regional Administrator and the Regional
program managers a substantial t~/£y of Agency regulations
and defending these regulations and Agency actions before
Federal trial and appellate courts.  Matters assigned may
have precedential effects, may have the effect of substantially
broadening or restricting the Agency's activities and may
have an important impact on major industries in the Region.
There r..alters often involve substantial sums of money and
often are rigorously contested by some of the nation's most
distinguished, capable and highly paid attorneys.  The Senior
Associate will direct and coordinate the activities of junior
attorneys assigned to help carry out the specific elements
of the Senior Associate's duties and responsibilities.

     A.  Major Lead Region Matters.  Serves as a national
     legal expert in one or more major subject matter areas.
     These areas involve highly complex matters relating to
   May be Supervisory General Attorney if appropriate

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                               General Attorney
                                  GM-905-15
              *
             significant aspects of the Agency's policies and
             programs and require a very high degree of expertise.
             Maintains specialized expertise in such area[s] and
             serves as a consultant to other attorneys in the
             Agency.  May manage a task force of Regional attorneys
             in seeking solutions to common legal problems or in
I             preparing guidance documents, model agreements, regulations,
i             pleadingsi etc*  In this capacity, serves as the
i             liaison between the Office of General Counsel and the
1             Offices of Regional Counsel.  Arranges conference
             calls, meetings and other Beans of exchanging information
             among Regional attorneys.

             B.  Coordination of Enforcement Matters.
                               * • f
                  1.  Expertise in Enforcement Matters.  Develops and
                  maintains expertise in all Agency enforcement
                  policies, including guidance on prioritization of
                  enforcement actions, development of enforcement
                  cases, rreparation of administrative letters and
                  orders, preparation of litigation referral pa_K3yes,
                  management of litigation matters, negotiation and
                  settlement of cases, etc.

                  2.  Liaison vith the Office of Enforcement Counsel.
                  Acts as the Region's principal liaison attorney
                  vith the Office of Enforcement Counsel.  Receives
                  guidance from the Office of Enforcement Counsel
                  and transmits it to the other attorneys in the
                  Office of Regional Counsel.  Keeps the Office of
                  Enforcement Counsel informed on Regional matters,
                  as needed.  Attends briefings and training sessions
                  as needed.

                  3.  Liaison vith other Legal Offices.  Acts as
                  the liaison vith other Offices of Regional Counsel
                  on the development of enforcement policies and
                  procedures in connection vith lead Region efforts.
                  Acts as liaison vith the Department of Justice,
                  the affected U.S.  Attorneys and the Attorneys
                  General of states within the Region on overall
                  enforcement policy and procedural matters.

                  4.  Development of Regional Enforcement Policies
                  and Procedures.  Assists Regional program managers
                  in developing Regional enforcement policies and
                  procedures and reviews such policies and procedures
                  for consistency vith national policies and procedures.
                  This vorX is done in coordination vith the Associate
                  Regional Counsels for the other major areas of
                  responsibility within the Office of Regional Counsel.

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                        -3-

                  General Attorney
                     GM-905-15
     5.  Coordination of Enforcement Matters in Office
     of Regional Counsel.Is responsible for informing
     the other Associate Regional Counsels of developments
     in enforcement policy.  Coordinates legal work
     on enforcement matters being bandied by the Office
     of Regional Counsel so as to assure that all
     enforcement activities are consistent with national
     policies and procedures.  Maintains files on
     current enforcement policies.

     6.  Multi-media Enforcement Case Assignments.
     Reviews enforcement natters involving .more than
     one major area of responsibility and makes recom-
     mendations to the Regional Counsel as to which
     Associate Regional Counsel should be given the
     lead responsibility for handling the matter.
     Reviews the handling of multi-media enforcement
     matters so as to assure adequate coordination
     within the Office.
                                          *

     7.  Review of Resources Available for Enforcement
     Legal Services.Periodically reviews the allocation
     of resources for enforcement matters within the
     Office of Regional Counsel and makes recommendations
     to the Regional Counsel for obtaining adequate
     resources to meet the requirements of the Region's  :
     enforcement efforts.

     8.  Coordination of Criminal Investigators.  Coordinates
     the work of any criminal investigatory personnel who
     are assigned to the Office.  Ensures that such personnel
     attend to the highest priority matters in the Region,
     that they are assigned staff attorneys to work with
     them to assist in proper case development, and that
     they properly coordinate their activities with the
     Office of Inspector General.
                                                            «
C.  Acting Regional Counsel Duties.  Acts as the Regional
Counsel when the Regional Counsel is out of the Office.

D. Legal Research and Problem'Resolution.  Researches
and resolves the legal questions which arise under all
regulations, lawsuits, enforcement actions, executive
orders and other administrative actions involving major
Federal statutes affecting the Agency's programs, which
may include (depending upon the specific areas assigned
by the Regional Counsel) such statutes as the Clean
Water Act, the Clean Air Act, the Toxic Substances

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                  General Attorney
                     GM-905-15
 4
 t
'Control Act, the Safe Drinking Hater Act, the Resource
 Conservation and Recovery Act, the National Environmental
 Policy Act, the Comprehensive Environmental Response, .
 Conpensation and Liability Act and the Federal Insecticide,
 Fungicide and Rodenticide Act (in each ease as from
 time to time amended).  Zn areas assigned by the Regional
 Counselr is the focal point within the Region for resolution
 of legal issues arising under such statutes (except for
 natters of unusual national importance which require
 consultation with the Offices of General Counsel or
 Enforcement Counsel).

 E.  General Legal Advice and Policy Recommendations*
 Either acting through the Regional Counsel, or, at the
 direction of the Regional Counsel, directly, provides
 the Regional Administrator, Deputy Regional Administrator
 and the Regional Divisions and Offices with general
 legal advice and (upon request) policy recommendations
 concerning those Regional programs, operations and
 activities in areas assigned by the Regional Counsel so
 that their major decisions are made with applicable
 legal considerations in mind.

 F.  Legal Advice and Policy Recommendations on Enforcement
 Matters*  Provides legal advice and policy recommendations
 to the Regional program managers responsible for enforcement *,
 matters.  Assists in the preparation of major legal
 correspondence, notices of violation, administrative
 orders, litigation referrals and other enforcement
 documents and reviews such documents for legal sufficiency
 and consistency with Agency legal interpretations and
 policy guidance.  In assigned areas, is responsible for
 assuring that the Agency's centralized data reporting
 systems are Kept current with information on Regional
 enforcement matters.  Conducts investigations into  .
 criminal matters in conjunction with Agency investigatory
 personnel and lav enforcement agencies.
                                                            m.
 G. Legal Advice and Policy Recommendations to Grant Programs."
 Provides legal advice and policy recommendations to
 managers of Agency grant programs, including the construction
 grants program administered under Title II of the Clean
 Water Act.  Advises on the eligibility for Agency funding
 of cost items under Agency grants, including cost overruns
 by contractors on Agency-funded projects.  Works closely
 with the Agency's Office of Inspector General in resolving
 problems arising under audit activities and investigations.
 Drafts special grant conditions to cover unusual or
 unique situations.  Assists state attorneys in interpreting
 statutes and regulations administered by the Agency,

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                  General Attorney
                     GM-905-15
4
advising on the handling of claims matters and generally
serving the needs of programs which have been delegated
by the Agency to state agencies.  Prepares final Agency
decisions on bid protests arising under grantee procurement.
Conducts the Region's participation in grant appeal
proceedings.

B.  Drafting of Determinations, Regulations, Notices, etc.
Drafts and reviews final Agency determinations, proposed
and final regulations, notices and such other documents
to be published in the Federal Register, including
Agency actions on state air pollution plans, designations
of sole source aquifers under the Safe Drinking Water
Act, approvals and authorizations of state programs under
the Clean Water Act, the Clean Air Act, the Resource
Conservation and Recovery Act, the Federal Insecticide*
Fungicide and Rodenticide Act and other Federal environmental
statutes.

X.  Litigation Matters.  Manages and coordinates the
Region's participation in defensive and enforcement
litigation resulting from the Region's activities
under the statutes referred to above.  Conducts discovery
and prepares motions, briefs and other litigation documents*
Appears before courts from time to time to conduct           •
trials, hearings and oral arguments.  Works closely          '
with the Offices of Enforcement Counsel and General
Counsel at Headquarters and the Department of Justice
or U.S. Attorneys.  Assists U.S. Attorneys in seeking
indictments in criminal matters and in prosecuting such
matters.  Coordinates with state attorneys general.
Represents the Region in administrative proceedings of
EPA and other agencies.

J.  Negotiation and Informal Dispute Resolution.  Represents
the Region in its dealings with outside parties, including
negotiation of bilateral agreements, consent orders and
judgments, and memoranda of understanding.  Represents      t
the Region in negotiating the settlement of disputed
matters so as to avoid protracted and expensive litigation
and facilitate expeditious administration of Agency
programs.

K.  Bearing Officer Duties.  Serves as hearing officer
in hearing and deciding matters brought before the
Agency and assists the Regional Administrates in preparing
formal administrative decisions.  Some such decisions
(e.g. bid protest decisions arising under the construction
grants program) are final Agency action subject to
direct review in the Federal courts.  At the request of
the Regional Counsel, performs responsibilities which

-------
                  General Attorney
                     GM-905-15

the Administrator has delegated to the Regional Counsel,
such as rendering decisions on confidentiality of business
information under 40 C.F.R. Part 2, which decisions
also become final Agency action.

L.  Representation of the Region*  Represents the Region
at conferences and meetings held with other Federal
departments and agencies, Congressional committees and
individual congressmen and senators, the General Accounting
Office, governors of states and staff offices of governors,
state and local officials, representatives of private
industry and farm groups, etc. and in this capacity is
required to give expert legal advice with respect to
many novel legal situations and problems arising from
the administration of Regional programs.  Prepares and
delivers advice and testimony to state legislative bodies
in connection with'their deliberations on assumption of
responsibilities for programs to be delegated by the
Agency.

M.  Liaison with Offices of General Counsel and Enforcement
Counsel.Serves as liaison between the Region and the
Offices of General Counsel and Enforcement Counsel to
provide an effective channel of communication in order
to assure that the Region obtains legal judgments from
the Office of General Counsel and policy advice from
the Office of Enforcement Counsel and also to assure
that such Offices are able to base such judgments and
such advice upon accurate perceptions of the pertinent
facts and Regional program objectives.

N.  Coordinating and Directing Legal Work.  Coordinates
and directs the work of one or ,..c.e attorneys.  Makes
day-to-day work assignments and reviews all major efforts
of such attorneys.  The review functions induce ensuring
that (1) written material is clear, precise, and of
high quality, (2) work is compacted on time, (35 prompt
advice is provided to the Regional managers of programs,
and (4) oral presentations, whether before courts or
other public bodies, are of high quality.  Participates
in the recruiting and hiring of attorneys, an<3 provides
attorneys under supervision with opportunities for
professional growth through work experience and training.
Assists the Regional Counsel in conducting performance
evaluations of junior attorneys.

0.  Other Duties.  Performs other duties as assigned.

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                       General Attorney
                          GM-905-15
      t
III.  Supervisory Controls.

      The Senior Associate reports to the Regional Counsel and
has en attorney-client relationship with all Regional program
managers for whom work is performed and with the Office of
Enforcement at Headquarters.  Areas of responsibility are
assigned by the Regional Counsel, and within those areas of
responsibility the Senior Associate has wide latitude in
prioritizing workload, directing and coordinating the efforts
of staff members, conducting research, preparing documents
and exercising judgment and initiative in completing assignments
and making legal judgments and policy recommendations.  Legal
advice, policy recommendations and advocacy during adversarial
proceedings are normally considered expert.  Within assigned
areas of responsibility, the Senior Associate accepts work
requests directly from Regional program managers.  The Senior
Associate .is expected to act as the Regional Counsel when
the Regional Counsel is out of the Office.  The Senior Associate
is also expected to represent the Regional Counsel from time
to time in areas of assigned responsibility, although consultation
and discussion "-th the Regional Counsel are required when
necessary in connection with major legal judgments or obi icy
recommendations.  Completed work is reviewable for consistency
with Agency policy, precedential effect and overall effectiveness.
The Senior Associate is expected to rotate areas of assigned
responsibility with other Associates within the Office of
Regional Counsel from time to time.

IV.  Qualifications.

     The Senior Associate must have the equivalent of a JD or
LLB degree and be a member of the bar.  Other qualifications
requirements may be established by the Regional Counsel,
depending upon the needs of the Office.

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                                                      -10-
      ,'2.  Bails for Assignment!.  The lead attorneys role
^hall be Assigned on the following basis:

         (a).  Regional Matters.  Normally, the Office of
Regional Counsel shall take the lead on natters arising in
the Regions* except where the Regional Counsel and the
the appropriate supervisor within the Office of Enforcement
Counsel agree, after conferring at an early point in the develop-
ment of the matter, that the Batter is of overriding national
significance and that the lead role should be assigned to
an attorney in the Office of Enforcement Counsel.  Zn eases
Where the Regional Counsel and the supervisor within the
Office of Enforcement Counsel are unable to agree as to
which level should be assigned the lead role, the matter
will be resolved by the Associate Administrator for Legal
and Enforcement Counsel.

         (b)»  Enforcement/Defensive Matters: Appeals.  Zn
instances where enforcement litigation and defensive litigation
arise involving essentially the same parties and the same set
of circumstances, the Associate Administrator for Legal and
Enforcement Counsel shall determine the allocation of roles
(including, where deemed necessary, the establishment of a
lead attorney for the entire matter) so as to ensure that
both aspects of the matter are properly represented and that
the positions of the respective Offices are well-coordinated.
The Office of General Counsel (or the appropriate Office of
Regional Counsel) shall have the lead on all matters before
Courts of Appeals, even though the lead on the matter was
previously taken by the Office of Enforcement Counsel.

       3.  Obligations to Other Attorneys.  The lead attorney
shall provide other Agency attorneys assigned to the matter with
adequate opportunities to contribute to the litigation effort,
including participation as supporting counsel in the development
of the litigation strategy, the preparation of legal documents,
and the conduct of negotiations with opposing parties.

VIII.  GENERAL LEGAL MATTERS? RELATIONSHIPS VITH OGC.

The reorganization will not change the working relationships
between the Office of General Counsel and the Offices of
Regional Counsel.  All existing lines of communication and
all existing procedures should continue to be used until
further notice.
                                                 V
IX.  STEPS TO TAKE IN IMPLEMENTING THIS GUIDANCE.

     A.  Completion of Interim Reorganization.  A Region which
has not yet made arrangements for its enforcement attorneys
to report to the Regional Counsel should do so without delay,
regardless of the status of its overall reorganization.

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         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                        WASHINGTON.-D..C- tOU3
                                              +*t AOMINIST*ATO«

                                              15Stf tool
ttTMOKAKPUM

      '                     •
SUBJECTi   Regional Organisation Structure

TOi        Afsocial* Adminiitraters
           Assistant Administrators
           Regional Administrators
           Staff Office Pirectors


     This  memorandum provides guidance for regional organisation
And will subatquantly b« incorporated into the Agency Organisation
and Functions Manual.
He&rganisation Objectives*  Regional organisation decisions include
consideration of the following objectives:

         • Clarifying accountability for regional programs.

         • Facilitating communication linXs between related
           Headquarters and- regional components*       '

         • Improving regional policy and management decision-
           •aXiog processes*

         • Fleeing functions in organisations where they
           can best be integrated with related activities.

        . - Favoring fewer and larger organisations to avoid
         • subsequent further consolidation and reorganisation
           in a time of declining resources.
       *

Sn organising to carry out these objectives* regions vill aeleet
one of the two organisation patterns described below.

HeeeiTCTenJed Organisation.  Regional Administrators are authorised
to establish a regional structure and organisation of functions as
outlined in Attachment 1.  Kajor features of the  authorised organi-
sation include the followingt

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                             - 2 -
      1. llnforctaent functions ef pentit issuance  and  related
 compliance monitoring trc assigned to the appropriate prograa  ..,
 diviiioni.  This includes issuance of notices  of  violation     *••
 and administrative orders, after consulting  with  the  Office ef
 Regional Counsel*  (Permit coordination functions and placement
 are optional.)
                          ..
      2.  Legal work associated with Enforcement litigation and
 current regional Counsel functions will be performed  in newly
 atructurtfd and expanded offices of Regional  Counsel reporting  to
 the General Counsel with the following provisional
                        t
          a.  Regional Counsels will provide  the Regional  •
 Administrator with legal advice and assistance for all prograa
 areas in an attorney client relationship*
•
        •    *
          b*  The Regional Administrator will continue to initiatt
 enforcement actions.  These actions will be  based upon guidance
 from the Enforcement Counsel, Office ef Legal and Enforcement
 Counsel, and with legal concurrence ef the Regional Counsel*

          c.  As in the past the Regional Administrator will
 participate in and concur with the General Counsel in selections,
 promotions, awards and disciplinary actions  for Regional Counsels*
 Regional Administrators will be a party to performance agreements
 for arid will participate  in the performance  ratings ef Regional  '
 Counsels by the General Counsel.             '        „„          •
                                               . .      •. •  .

          (fi.  The Regional Administrator will also continue to
 manage  the resources ef the Office ef Regional Counsel and will
 provide certain administrative support aueh  as apace allocations,
 processing ef personnel actions,  and the management of travel and
 training accounts.

      3.   Two staff offices are authorised — an Office ef
 Congressional and Intergovernmental Liaison  and an Office of
 Public  Affairs.

      4*   'The preferred option for policy and management functions
 is  to establish an Office ef Assistant Regional Administrator for
Policy  am! Management.  The Assistant Regional Administrator will
 function. AS a key member  of the regional management team by guiding
 the internal decision-making processes,  including th« inelysis and
evaluation of issues requiring policy or management cecisions by
 the Regional Administrator.   The  ether option is  to structure with
a Management Division as  discussed later*

           a.   The management systems  and analysis function will
 include  the development of program strategies, including State/EPA
Agreements, program evaluations,  and  analytic studies.

-------
         b.   Internal  tqual  employment  opportunity function! will
 be  itrengthened by being inttgratffd  as  part of  the personnel Btnagt*
 •ent program with oversight  and  assistance  from an I.B.O. Officer  '
 in  the Office of the Assistant Regional Administrator.         ./,

         c.   As currently operating  in  tome regions, all frants  .
 administration functions, including  those for'construction grants,
 will be consolidated in  this office.
                          •                      .
         d.   Environmental* Assessment (EXS)  functions will be
 carried out  ander direction  of the Assistant Regional Administrator*

      S. Three programmatic  divisions are authorised!  Water
 Management}  Air and Waste Management} and Environmental Services.
 Vritten requests to establish  separate divisions for Air Ktnagtment
 and for Watte Management  will  be considered, primarily for larger
 regions.  Approval by  the Assistant Administrator for Administration
 will be based en the overall rationale for  the request Measured
 against the  objective  of  achieving organisational afficiency and
 economy. ..

      C. External civil rights compliance and minority business
 enterprise functions are  assigned to the Water Management Division
 to  be integrated with  the construction grants program.

      7. Comprehensive Environmental Response, Compensstion'and
 liability  Act of 1960  (Superfund) coordination and remedial action
 functions  are assigned to the  Air and Waste Management Division..
 Superfund  and CWA Section 311 emergency response activities will'.
 be  performed by the Environmental Services Division.

      I.  Toxics  and Pesticides program activities are assigned to
 the Air and  Waste  Management Division.  The Pesticide sampling
 function is  to be  integrated with ether field activities in the
 Environmental Services Division.

 Optional Organisation.  Regional Administrators *.:y elect/ with
 approval from the  Assistant Administrator for Administration,  to  •
 adopt the  alternative  regiont! organization reflected in Attach-
sient  2.  Selection of  this structure should depend on the Regional,*-
Administrator's  management style and other management considers-; ' -'"
 tions.  This  option reflects a regional Management Division concept
with  less  responsibility  in  the policy and decision-making process
 than  th'a.t  assigned to an  Assistant Regional Administrator.  Dnder
 thlt  alternative, placement of the Environmental Assessment and
 State/EPA  agreement functions is optional.  Tho tame flexibility
txists  to  request  separate Air Management and Waste Management
Divisions.
    •
 State Liaison.  The extent and kind of liaison that Regional Offices
develop and maintain with each State is left to the discretion of  .
 the  Regional  Administrator.  ZPA assignments may be a viable option.
 Consideration of en-site  State Offices (ranging from one employee

-------
 to a  full operating contingency), is encouraged vhert such Offices
 ciu contribute tffectively  to enhancing our relationship with
 the 'States  and to  improving IPX's efforts to delegate its
Boveverf a nunber ef factors Bust be weighed before deciding to'*'
establish a  State Office.  Criteria for use in aaXing these
decisions are  included in Attachment 3*   Xf State Offices
with  substantial programmatic functions are established their
placement may  vary iron the approved organisational alignaents

Achieving Efficiency and Economy,  tstablishment ef fubordinate
organization structures and positions within them below the
Division and Office level is at the Regional Administrator's
discretion.  However, this ahall be accomplished observing sound
Organizational judgment and position Banagement principles
contained in EPA guidance. documents.  Grade levels ef positions
Bust  be supportable by appropriate position classification
standards.   This guidance is reflective ef the management
philosophy ef  this Administration.  To achieve and maintain an
acceptable management posture within aach region, Regional
Administrators are expected to tstablish a viable personnel
management function in the region at a level consistent with its
importance to  our Banagement objectives and to consult with the
Personnel 0£*.-.r regarding Banagement issues' on a regular basis*

Implementation,  Hew Regional Administrators are authorised 'to
implement the  recommended organisation structure as early as
possible, consistent with management's responsibilities to
employees and  employee unions.  Acting Regional Administrators ;
should consult with Clif Killer (PIS 755-0442) or Seth Hunt-(FTS
327-3895), Special Assistants to the Administrator, prior to
implementation of any reorganisation.

     The vain purpose ef regional reorganization is to provide
a more effective structure which is closely aligned to the
Headquarters organization.  Our experience to date with the
Headquarters organization has been gratifying in that it provides
for stronger and more consistent management and has received
widespread favorable reaction.  In this* as in any organisation*
its effectiveness will depend en its people.  X am confident
that EPA personnel will help make. EPA an effective, well managed1
entity*
                         Anne M. Corsuch

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-------
                    Criteria for Itatt Offices

                                                               :/ .
 2*   Type  ef Office  to be tstiblishcfl (eoerdination/liaiton,
 operations, nini»regions, tingle or gultl-proer.aas, etc.) and tht
 pro^raft.*  to be  represented—Are the proposed Junction* and
 activities  the  best way of. achitving tht Office.1* purpose, vhat
 priority  art tht pro?rams «ithin tht Regional Office, and art
 they the  entt with  which tht f tttt attds tht »ost assistance?
                           •   *
 2.   State and Regional Office purpose, goals, and objtetivtt»-
 Art  they  in concert and will the oftict iurthtr the gotlt and
 objective!  of tht Region and IPX?

 9.   Statut  ef ttate progr«Tcs/«ssumption of delegated authority*^
 Art  tht St*te prograns at the proper stage el development where a
 Ctatt Offlet could  sake a aignifieint inpact and will tht Office
 further tht foal ef delegating »ort responsibility to tht Statt?

 4«   >eeeptivity to  tPA preienee-»Ii there a genuine inttrtst in
 as well as  a need for an CPA Statt Offiet?

 5*   Cost  ef tttabliihing and operating the office and aoving
 people-^po  the  financial costs outweigh the anticipated benefit!?

 €.   Effect  on resources within tht Heolonal Offiec»-Will Statt '
 Offices, fragment and deplete the critical mass ol txpejtitt within
 the  Regional Office?  (This will vary depending on tht~aizt cf tht
 Regional  Offiet and tht number and aist of State Offiets.)

 7«  The quality of  employees available for the particular Offiee*»
Art  they  experienced and highly aotivattd?

 I.  Aceeisibility by public transportation—la tht location rtaott
 and difficult to reach ao that direct communications art Itss
 frequent?

f.  Past  and current relationship between top management and tht-<
 atafTTevels within the Regional Office and the State»»ls tnerT"a'
atrong commitnent and bacXing iron top vanagenent along with a
history of  trust and a good working relationship between tht ataffa?

-------
Version cf 3/5/82
                        OFFICE OF REGIONAL CCWGEL
                         ATTORNEY ROTATION RECORD
          Attorney


X.  Major Areas of Responsibility.
                                                           Dates Assigned
                                                           Fran       TO
1.  Air. .

2.  tfeter.
    a.  NPCE5.	. . . «
    b.  fon-flPDCS Clean Water Act.
    c.  Safe Erinfcing tteter Act. .
    d.  Other
          (1)  	
          C!)  	
3.  Ckants, Contracts &no General Administration ...
    a.  Construction grants. ........
    b.  Procram grants (including State/EPA
        Agreements)	
    C.  IIEPA	
    d.  FDXA ................
    e.  Personnel	
    f.  Conflict of interest ........
    g.  Other
          U)  __	
          tt)                            ""
4.  Hazardous Substances and Emergency Response.  .  .  .

    a.  RCRA Delegation Matters ............
    b.  Other RCRA Matters ..............
    c.  Superfund and Section 311 of Clean Water Act  .
    d.  TOSCA and FITRA ................
    e.  Other
          (1)                                .  .  .  .  .
5.  Lead Region
    b.
    c.
    d.
6.  Coordination of Enforcement Matters.

-------
GM - 11, coordination of Policy Development, is obsolete
and was deleted in November 1988.

-------
GM-12

-------
              Note on General Operating Procedures
              for the Civil Enforcement Program


     There have been many changes in the structure and function

of Agency's enforcement program, since the Agency issued this

memorandum.  OECM is currently preparing a summary of the

changes.  The summary should be ready the next time the Compen-

dium is updated.

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            UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                          WASHINGTON. DC IM«0
                           ju.  ese
                                                          •rrict •?
                                                         (NrOMCKMKMT C
MEMORANDUM
SUBJECT:  General Operating Procedures for the
            Civil Enforcement Program
FROM:     Robert M. Perry
          Associate Administrator for Legal and Enforcement
            Counsel and General Counsel

TO:       Associate Administrator for
            Policy and Resource Management
          Assistant Administrators
          Regional Administrators
          Staff Office Directors
I.   Introduction

     This memorandum provides general guidance regarding EPA's
enforcement process, consistent with new Regional and Headquarters
structures.  The memorandum describes the respective roles and
relationships of the various CPA offices which participate in
enforcement activities.

     I greatly appreciate tne contributions which you and yovr
respective staffs have Bade in participating in the *  jlopment
of this general guidance.  This guidance has reached the point
at which it has received the consensus support of all affected
Agency offices on virtually all matters which it addresses.
More detailed guidance on operating procedures for eac.v media-
specific program will be forthcoming from the responsible
Assistant Administrators and ayself.

     The guidance contained in this document on responsibilities
and wcr\:r.j relationships of all offices involved in the enforce-
ment process (which includes both enforcement compliance activities
and enforcement legal activities) has received a strong endorsement
from the Administrator.  The prescribed procedures provide explicit
guidance for implementing the Administrator's general policies on
these natters and are consistent with

     -  The Administrator's June 12, 1981 announcement of a new
        Headquarters structure;

-------
                             -2-
     -  The Administrator's September 15, 1981 memorandum regarding
        a new regional organization structure;

     -  My May 7, 1982 memorandum regarding the reorganization
        of the Offices of Regional Counsel;

     -  The June, 1977 Memorandum of Understanding between the
        Department of Justice and EPA.

     The operating procedures specified in this document are
designed to help accomplish the following objectives of the
Regional reorganizations stated in the Administrator's September
15, 1981 memorandum:             /

          •Reorganization Objectives.  Regional organization
     decisions include consideration of the following objectives:

          '•  Clarifying accountability for regional programs.

          -  Facilitating communication links between related
             Headquarters and regional components.

          -  Improving regional policy and management
             decision-making.

          -  Placing functions in organizations where they can
             best be integrated with related activities.

             Favoring fewer and larger organizations to avoid
             subsequent further consolidation and reorganization
             in a time of declining resources.

     ".  . . .  Major features of the authorized organization
     include the following:

         *1.  Enforcement functions of permit issuance and related
     compliance monitoring are assigned to the appropriate program
     divisions.  This includes issuance of notices of violation and
     adminititrative orders, after consulting with the Office of
     Region.il Counsel.  (Permit coordination functions and place-
     ment are optional.)

         •2.  Legal work associated with enforcement litigation and
     current: Regional Counsel functions will be performed in newly
     structured and expanded Offices of Regional Counsel reporting
     to the [Associate Administrator for Legal and Enforcement
     Counsel and] General Counsel with the following provisions:

              •a.  Regional Counsels will provide the Regional
     AdministratorfsJ with legal advice and assistance for all
     program areas in an attorney client relationship.

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                               -3-
              •b.  The Regional Administrator will continue to
     initiate enforcement actions.  These1 actions will be based
     upon guidance from the [Associate Administrator for Legal
     and Enforcement Counsel and General Counsel, through]
     the Enforcement Counsel .... and with legal concurrence
     of the Regional Counsel. _!/

              •c.  As in the past the Regional Administrators
     will participate in and concur with the [Associate Adminis-
     trator for Legal and Enforcement Counsel and) General Counsel
     in selections, promotions, awards and disciplinary actions
     for Regional Counsels.  Regional Administrators will be a
     party to performance agreements for and will participate in
     the performance ratings of Regional Counsels by the [Associate
     Administrator for Legal and Enforcement Counsel and) General
     Counsel.

              "d.  The Regional Administrator will also continue
     to manage the resources of the Office of Regional Counsel and
     will provide certain administrative support such as space
     allocations, processing of personnel actions, and the management
     of travel and training accounts."
I/  Note that the Regional Counsel's formal concurrence
responsibility for enforcement actions as referenced in paragraph
2(b) (when read in conjunction with paragraph 1 of this excerpt)
arises at the point at which the Regional Administrator is prepared
to initiate a case referral by forwarding a case to the Office
of Legal and Enforcement Counsel for subsequent referral to the
Department of Justice.  For further specifics on these procedures,
please see Section IX below.  Note also *hit enforcement actions
(i.e. actions responding to specific instances of detected
violations), and enforcement activities generally, also should
be consistent with relevant guidance from Headquarters program
offices.

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                             -4-


     The guidance in this memorandum on the enforcement process
applies to the internal Agency working relationships and
processes involved in identifying and resolving violations
using informal, administrative and judicial enforcement
activities.  It does not apply in any respect to the development
arc? referral of criminal cases, which is being addressed in
a separate imemo on general operating procedures for the criminal
enforcement program.  Moreover, any existing program-specific
guidance on enforcement operating procedures remains in
effect until it can be expressly superseded by new guidance
fhich is consistent with the policies and procedures articulated
;ln this document.                 /
                        .' 'i' ''
3!I.  Enforcement Objective's

     This guidance prescribes operating procedures which the
the Adminstrator has endorsed as vital to assist EPA in
discharging its responsibility to administer a strong,
aggressive, and fair enforcement program.  The procedures
described here also are designed to achieve the following
enforcement objectives along with the general objectives
associated with the Regional reorganizations:

     - Establishing an enforcement program which deters unlawful
       conduct and advances the regulatory policies of EPA through
       use of all available enforcement means.

     - Maintaining a credible enforcement program which encourages
       prompt, voluntary compliance, bj.  Jeals firmly with
       significant violations which cannot be resolved cooperatively
       and includes the use of litigation where appropriate.

     - Direct.ing all enforcement activities towards the achievement
       of maximum environmental benefits.

In order to help achieve these objectives, these procedures
emphasize:

     - C<">rt
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                               -5-


     -  Working closely with States as partners in the enforcement
        process. £/

III.  Roles and Relationships

     EPA's enforcement program is intended to induce regulated
parties to meet environmental requirements and to rectify instances
of noncompliance.  Zn order to accomplish these goals, EPA's
enforcement effort includes both compliance-oriented activities
and legal-oriented activities.  The compliance activities are
primarily the responsibility of EPA's program offices, while the
legal activities are primarily charged to OLEC (including the
Offices of Regional Counsel).

     While there are certain enforcement activities in which lead
responsibility is clear, there are other EPA activities which
include both compliance and legal elements.  Moreover, different
activities for which a given office has lead responsibility can call
for varying degrees of involvement with other EPA offices.  It is
crucial to the success of the Agency's enforcement program that
OLEC and the program offices work closely together in developing
policies, establishing coordination procedures and implementing
actions in areas where both elements are present.  Similarly, it
is important that both OLEC and the program offices diligently
coordinate activities in their respective areas of primary responsi-
bility to ensure that EPA appropriately focuses all phases of its
enforcement program on achieving common objectives.

     In the area of enforcement policy development, Assistant
Administrators have the lead in developing policies governing
compliance activities, while the Adminstrator has assigned me to
take the lead in developing policies governing legal matters.
OLEC and the Assistant Administrators are responsible for working
together in developing enforcement policy regardless of who has
the lead, and should jointly issue those policies which significantly
involve both of their respective areas of primary responsibility.
The Administrator has decided that I shall be responsible for
ensuring that all enforcement policies which EPA develops are
capable of being applied effectively and are consistent with the
goals of the Administrator under Federal law.  The Associate
Administrator for Policy and Resource Management is responsible
for overseeing the fcrmulation of all Agency policy.
£/  For a more specific discussion on coordinating enforcement
activity with States, see Section III(H) below.

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                               -6-


     Program offices in Headquarters and the Regions are responsible
for identifying and establishing priorities for handling instances
of noncompliance within their respective areas of authority/
evaluating the technical sufficiency of actions designed to remedy
violations,, identifying for formal action those cases which cannot
be resolved less formally, and providing the technical support
necessary for developing cases and conducting litigation.

     OLEC (including the Offices of Regional Counsel) serves
EPA's respective program offices in enforcement matters in an
attorney-client relationship.  This means that OLEC is respon-
sible as legal counsel for providing client program offices with
support for informal and formal administrative resolution of
violations, for the conduct of litigation (which includes
identifying evidence needed to support litigation)/ for interpreting
statutes, regulations and other legal precedent covering EPA's
activities, and for advising program managers on the legal
implication;; of alternative courses of action.

     Close cooperation among all parties (including DOJ) during
<:he case development process is critical to a successful and
legally supportable enforcement program.  Early and frequent
consultation of Regional Counsels by the Regional programs is
vital in case identification and development.  Moreover, a close
working relationship with program or technical staff is vital
to the Regional Counsels to ensure that the Regional Counsels
can serve the clients' interests.

     Regional Counsels are responsible for consulting with
the Associate Administrator for Legal and Enforcement Counsel and
General Counstel, through the Enforcement Counsel, and with
DOJ, where appropriate, to ensure that unresolved legal issues
do not subsequently become impediments to litigation.  Similarly,
Regional Administrators are responsible for consulting early
with Assistant Administrators on program policy matters to resolve
e>:peditiously any issues that may cause problems in developing a
cese for litigation.  Representatives of EPA and DOJ offices
with enforcement responsibilities will work as a case development
team on a particular matter to coordinate their efforts and to
minimize or eliminate all problems prior to the Regional Counsel's
concurrence in a civil referral.

     Finally, OLEC will develop management procedures to ensure
that Enforcement Counsel and General Counsel attorneys work
closely together to identify and resolve expeditiously any legal
issues pertaining to enforcement matters, and thus enable EPA to
sp
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                             -7-


     The following synopsis of -roles and relationships state in
more detail the respective organizational responsibilities regarding
enforcement matters:

     A.  Regional Administrators,  The Administrator's September
15, 1981 memorandum makes clear that Regional Administrators
have responsibility (consistent, as explained in Section IV
below, with applicable delegations of authority and concurrence
requirements) for enforcement compliance functions such as
issuing permits, monitoring compliance, collecting compliance
information according to Headquarters' guidance, and issuing
notices of violation and administrative orders.  They are also
responsible for initiating enforcement legal actions arising out
of these functions.  In executing these functions, the Regional
Administrator's responsibilities include building relationships
with State compliance programs, identifying violations of Federal
environmental laws, resolving those violations in a timely fashion
and a cooperative Banner whenever possible, handling administrative
enforcement actions  and referring cases to Headquarters *!,en
judicial action is necessary.  Because the Regional Administrators
are primarily responsible and accountable for the successful
operation of Regional enforcement programs, they are the principal
clients in enforcement matters.

     Notices of violation, administrative orders, administrative '
civil penalty complaints, and many intermediate decisions are
actions with legal consequences.  Since the Regional Administrators
must bear the responsibility for the legal sufficiency of their
actions, they should consult with their respective Offices of
Regional Counsel prior to taking these actions, as indicated in
the Administrator's September 15, 1981 memorandum.  In addition,
because the Regional Administrators also are responsible for the
technical sufficiency of their actions, they are further responsible
for budgeting and supplying the necessary technical resources
and support, or otherwise arranging for that support (e.g., from
a Headquarters program office or the National Enforcement
Investigation Center), to permit the Agency to develop and pursue
enforcement actions, including litigation where appropriate.
The Regional Administrators are also responsible for'obtaining
adequate Regional Counsel participation in preparing a case
(including final formal concurrence of the Regional Counsel)
prior to forwarding the case to Headquarters for formal referral
to DOJ.

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                               -8-


     The Regional Administrators will be responsible  for
ensuring that they follow all policy directives from  an Assistant
Administrator.  The Regional Administrators must ensure early in
the case development process that proposed enforcement actions
in response to specific instances of noncompliance are consistent
with national program policy directives established by the respon-
sible Assistant Administrator(s), and that Assistant  Administrators
have the opportunity to participate in and review case development
activity.  The Regional Administrators also must ensure that
they satisfy any national program review or concurrence require-
ments, consistent with Section IV below.  OLEC normally will not
take responsibility for those program concurrences or reviews,
although staff attorneys will be available to assist  throughout
the review process.     •-..;'

     Regional Administrators also are responsible for following
up on enforcement actions (including litigation) to ensure that
violations remain corrected and that regulated parties are complying
with the requirements which those enforcement actions impose.

     8.  The Assistant Administrators.  As the national program
managers, the Assistant Administrators are responsible for
establishing enforcement compliance priorities, providing overall
direction to and developing accountability measures for their
respective Regional enforcement compliance programs,  keeping
compliance statistics (based on input as necessary from Regional
offices), providing technical support (including appropriate
Headquarters technical support for litigation activity), providing
resources in Regional program budgets to support enforcement
activities, taking the lead role in preparing guidance and policy
decisions on enforcement compliance issues, and concurring as
necessary on enforcement actions at as early a stage  in the case
development process as possible.  In addition, Assistant Adminis-
trators may retain responsibility for issuing civil administrative
complaints and other administrative orders in cases of first
impression, overriding national significance, or violations by
any entity in more than one region.

     The Assistant Administrators are responsible for developing
am! implementing program policies, and should rely on OLEC to
help them put enforceable, defensible programs in place.  The
Assistant Administrikers also are responsible for participating
with OLEC in handling enforcement legal issues and icr preparing
joint guidance for areas in which compliance and legal issues
overlap.

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                             -9-


     OLEC acts as attorney to the Assistant Administrator and
the Headquarters program offices on enforcement matters.  OLEC
attorneys are available to consult with program staff during the
development of program regulations, policies and guidance in
order to ensure the legal sufficiency of decisions and documents
relating to enforcement natters.

     C.  OLEC; The Regional Counsel (Enforcement Functions).  In
accordance with the Administrator's September 15, 1981 memorandum
and the May 7, 1982 memorandum regarding reorganization of the
Offices of Regional Counsel, the Regional Counsels are to provide
the Regional Administrators and Regional program managers with
legal advice and assistance for all program areas in the attorney-
client relationship.' Thus, for example, in enforcement matters
the Regional Counsels are available to assist the Regional program
managers in drafting or reviewing the terms and conditions of
permits, notices of violation, administrative orders, or adminis-
trative complaints (particularly where new or unique matters
are involved).  Because the Regional Administrators .%•>£ Regional
program managers are responsible for ensuring the sr.fo^ceability
and defensibility of documents with legal effects, they should
not hesitate to seek to involve Regional Counsels in developing
these documents.
                                                               #
     The Regional Counsels also provide assistance throughout the
case development process, participate in litigation activities
under the EPA/DOJ Memorandum of Understanding, and formally
concur on civil referrals prior to signature by the Regional
Administrator.  Regional Counsels' formal concurrence ensures
that any legal issues associated with the referral have been
addressed appropriately and that these referrals are consistent
with OLEC guidance.  Regional Counsels also are available to
assist in negotiating enforcement matters and should be present
whenever outside parties are represented by counsel in those
negotiations.

     Regional Counsel attorneys normally serve as lead Agency
counsel in handling specific enforcement actions, consistent with
the discussion of that concept in Section VZI(B) of the May 7,
1982 memorandum on regional reorganization.  As lead Agency attorney,
the Regional attorney is responsible for managing an enforcement
case for EPA and for coordinating case development and litigation
activity with DOJ as discussed in Section VIII below.  The Regional
Counsels should establish practices to coordinate the participation

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                              -10-


of DOJ and Headquarters Enforcement Counsel attorneys so as to
resolve any potential legal problems for litigation as early in
the case development process as possible.  Regional Counsels
also provide legal representation for the Agency in administrative
hearings originating in the region/ including NPDCS evidentiary
hearings, and administrative appeals from those hearings.

     Let am emphasize that in all these matters the Regional
Counsels roust make every effort to ensure that they continue
to maintain the close working relationships with their counterparts
in the Regional program offices, and that they also maintain
clear and open lines of communication.

     D.  OI.ECt Enforcement Counsel Matters.  Consistent with
attorney-client relationships, the Associate Administrator for
Legal and Enforcement Counsel and General Counsel provides,
through the Enforcement Counsel, legal  advice regarding enforce-
ment matters to the Assistant Administrators to assist them in
performing their programmatic functions, including advice on
enforcement activities for which Headquarters program offices
are responsible.  The Associate Administrator for Legal and En-
forcement Counsel and General Counsel,  through the Enforcement
Counsel, also develops legal enforcement policies .and guidance; •
confers, where appropriate, with DOJ on the potential impact of
enforcement policy on litigation; and cooperates with the Assis-
tant Administrators in the development  of enforcement policies
which involve both enforcement compliance and enforcement legal
activities.

     The Enforcement Counsel checks both cases forwarded from
the Regions for referral to OOJ and consent decrees prior to
submitting (them for approval to the Associate Administrator for
Legal and Enforcement Counsel and General Counsel to ensure that
they are complete and that they identify and properly address
all precedential or nationally significant questions.  (See
Section X bo low.)  Enforcement Counsel  attorneys may be assigned
a more active role in case development  or litigation-related
activities iln a limited number of actions involving precedential
or overriding nationally significant .issues as described in
Section VIICB) in the May 7, 1982 OLEC  memorandum on regional
reorganization.  Otherwise, Regional Counsel attorneys will
assume the Agency lead, and Enforcement Counsel attorneys will
function in a supporting role by keeping apprised of the issues
from the start of the case development  process as OLEC's Headquar-
ters representatives and by coordinating legal activity and the
contribution of case information to the case development effort
from Headquarters and the Regions.

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                               -11-


     Th e National Enforcement Investigation Center (NEIC), which
reports to the Enforcement Counsel, is a national technical resource
with special expertise in matters asociated with investigations,
case development, litigation support, and evidence.  The Regional
Administrators and Assistant Administrators, in support of enforce-
ment compliance and case development activities, nay draw upon
the NEZC's resources as they deem necessary, consistent with
priorities which OLEC establishes regarding NEIC's availability.
Regional and Assistant Administrators should give closest
consideration to involving NEIC in cases which have precedential
implications, national significance, or are multi-Regional in
nature, as opposed to cases which 'involve more routine matters.

     E.  OLEC; General Counsel Matters.  Within the Agency,
tne Associate Administrator for Legal and Enforcement Counsel
and General Counsel, through the Deputy General Counsel, will
continue to be responsible for interpreting statutes and regula-
tions, reviewing proposed policy for consistency with national
law, providing national legal interpretations, and assisting in
resolving legal issues which arise in connection with policies
and regulations, in order to assure that the Agency speaks with
one legal voice.  Consistent with present practices and existing
guidance, the Associate Administrator for Legal and Enforcement
Counsel and General Counsel will manage, through the Deputy
General Counsel, all matters resulting from judicial appeals
(with either General Counsel attorneys or Regional attorneys
acting as lead Agency counsel, depending on the nature of the
matter).  The Regional Counsels will manage the Agency's legal
role in hearings and administrative appeals of actions origina-
ting in the Regions, including proceedings relating to permits
and administrative civil penalty actions.

     F.  The Department of Justice and the U.S. Attorneys' Offices.
The Agency's working relationship with the Department of Justice
and the U.S.  Attorneys continues to be governed by the June 1977
Memorandum of Understanding.  DOJ's and the U.S. Attorneys'
primary roles will normally be that of conducting judicial enforce-
ment matters and participating in case development activities as
described in Section VIII below.  OLEC's Headquarters and Regional
components are expected to use their best efforts to ensure that
they maintain constructive working relationships with DOJ in
these areas.

     G.  Policy Coordination.  As indicated above, the Assistant
Administrators and I should work closely together during the
formulation of all policies which affect enforcement to make
sure that the Agency conducts its enforcement activity in a
credible and legally supportable manner.  The Administrator has
affirmed my responsibility to take the lead in coordinating

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                               -12-


work on «;5tablishing systematic procedures for developing and
tracking Agency enforcement policy.  As part of this effort,  I
am planning to propose the joint development with each of the
Assistant Administrators of a comprehensive set of enforcement
operating procedures for each program, in order to provide
consistent: guidance for all stages of the case development
process.  Program guidance which is currently in effect remains
operative except to the extent it is inconsistent with the
operating procedures prescribed in this document and Is not
superseded; by future guidance.

     As policy or guidance documents affecting Regional enforce-
ment programs are developed, Regional offices should be consulted
or otherwise receive an opportunity to be involved at an early
:t:;c to wake sure that the final guidance documents can be
implemented effectively.

     H.  Coordination with States.  Coordination with States  is
normally The responsibility of the Regional Administrator, subject
to national guidance.  Because this responsibility encompasses
many areas in addition to enforcement, this memorandum does not
cover general issues associated with the Region-State relationship.

     Or, enforcement matters, however, Regional Administrators
should maintain close working relationships with appropriate
State program officials.  As part of enforcement planning activities
independent of the case development process. Regional offices (with
participation from Headquarters program offices and consistent
with national guidance) should consult with States to develop
general strategies for handling nonc^rp1 iance, for promoting
local resolution of noncompliance problems, and for facilitating
open lines of communication by

     • Consulting on which enforr'Tsr.t actions States should
       manage and which Regional Offices should manage.

     • Agreeing on appropriate time frames and parameters for case
       resolution.
             ng on circumstances under which EPA may assume the
       load on a case from the' State.

     • Coordinating activity on tracking the progress of enforcement
       actions.

     * Following up on the application of agreed-upon strategies to
       ensure their effectiveness.

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                               -13-


     On legal matters specifically, the Office of Regional Counsel
should develop a close working relationship with State Attorneys
General and/or other appropriate legal authorities in each State
in order to support the Regional Administrator in coordinating
activity with that State.  The Office of Regional Counsel is also
available to consult with the Regional program managers regarding
delegations, the legal sufficiency of State remedies, or other
legal aspects of State actions.

     National environmental laws do assign major roles to the
States for administering pollution control programs.   Those laws
also place ultimate responsibilities for effective enforcement
on the Federal Government.  The States' respective abilities to
enforce environmental' requirements can vary according to the
•Lalutory authorities/ personnel, or other resources available
to them.  Zt is the Administrator's policy to uphold the
environmental statutes which EPA administers, and the Regional
Administrators are responsible for complementing State efforts
with Federal action in order to achieve compliance with those
laws in a timely manner.

     I.  EPA's Accountability System.  EPA's accountability system,
overseen by the Associate Administrator for Policy and Resource
Management, monitors the performance of the Agency's entire enforce-
ment program, including both compliance and legal activities.
It is the Administrator's policy that pursuant to national program
direction from the Assistant Administrators, Regional Administrators
will establish specific measures of compliance and enforcement
performance for which they will be held accountable in the
accountability system.  As the Agency's "law firm11, OLEC will be
similarly accountable for providiug consistent legal advice,
decisions and policies; for expediting all referrals; and for
reducing backlogs of cases which have already been filed or
referred to the Department of Justice.

IV.  Delegations and Concurrence Requirements.

     The Administrator has endorsed an initiative to streamline
the enforcement process through a. high-priority review of both
existing delegations of authority and concurrence requirements
i.n^osed through those delegations or through other actions.
Each of the Assistant Administrators and OLEC should expeditiously
review all delegations and concurrence requirements relating to
enforcement activities in their respective areas of responsibility
to identify requirements which are unnecessary or inconsistent
with a streamlined approach to enforcement.  Until the Administra-
tor has an opportunity to act on the recommendations resulting from

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                             -14-


this review, existing delegations (with any conditions) remain
in effect and should be followed until appropriate changes are
approved to implement the guidance provided in this document.
The Assistant Administrators and I shall announce any changes
of specific enforcement concurrence requirements in our respec-
tive areas of responsibility.

V.  Reporting Requirements and OLEC Oversight

     OLEC's Enforcement Counsel will keep to a minimum requests
for case development records and reports from Regional or
program offices.  Enforcement Counsel staff will place priority
on direct access to files or tracking and reporting systems for
case information to minimize additional information collection
and reporting burdens.  I expect the Regional Counsels to continue
to update the automated enforcement docket for cases which will
be or which already have been referred from the Regional offices,
and to provide periodic updates on all cases as necessary.

     Consistent with historical practices, Regional Counsels must
keep complete records of recommendations, decisions and documents
relating to the legal aspects of all cases, including cases which
are in early stages of development.  This requirement .is intended
to ensure that an adequate legal record exists for each case that
the Agency ultimately refers for judicial action and to facilitate
evaluation;; of Regional Counsels' performance on enforcement
matters.

     The Regional Counsel should work closely with the Regional
Administrator to assist the Regional Administrator in following
similar recordkeeping practices to ensure that maintained files
are legally sufficient.

VI.  Reviewing Compliance and Determining Responses.

     The process of identifying violations and conducting Federal
compliance activities is the responsibility of the Regional
Administrator, consistent with national guidance and statutory
authorities and with applicable working agreements with States.
This process includes the following activities:

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                              -15-


     - Identifying noncomplying sources and potential enforcement
       targets.

     - Coordinating enforcement actions with States,  as appropriate.

     - Determining the appropriate Agency response to violations,
       including:

          • Requests for information (formal or informal).

          • Informal discussions with the source.
                                  /
          • Warning letters or notices of violation.

          • Administrative orders or administrative civil penalty
            complaints.

          • Referrals to Headquarters for civil judicial action.

     - Participating in a client's role in settlement discussions
       to resolve administrative or judicial proceedings.

     Throughout the process, the Regional Counsel  will act as
attorney to the Regional program client.  Since the Regional
Administrator must make decisions and take actions with legal
consequences, the Regional Administrator should ensure that the
Regional Counsel is consulted as appropriate throughout the process,
particularly with regard to the legal consequences of selecting
alternative enforcement tools.  Attorneys are available to
ensure that all enforcement documents, especially  administrative
orders and administrative civil penalty complaints, meet all
Agency legal requirements and are enforceable.  Regional program
officers should avail themselves of Regional Counsel  attorney
participation in discussions with an outside party who is represented
by counsel.

     As the likelihood increases that judicial remedies will
become necessary to resolve a case, the importance of attorney
involvement also increases.  This includes meaningful coordination
with DOJ attorneys at early stages of the case development process
consistent with the procedures specified in Section VIII below.
Rigorous standards of evidence and conduct will apply in any
adjudicative proceeding; thus, it is crucial that  cases be built  from
the outset in a legally supportable wa>.  This memorandum discusses
in more detail in subsequent sections the referral process and the
conduct of settlement negotiations.

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                              -16-


VII.  Escalation

     The Regional Administrator is responsible for the timeliness
of informal solutions to violations of environmental laws and
for initiating the case development process.  This concept is
central tc a credible enforcement program.  The Regional
Administrator (subject to Headquarters program office guidance)
and OLCC share responsibility for achieving timely resolution of
cases once the case development process begins.

     Responses to violations should be meticulously tracked within
each Region to make cure that each violation is responsibly resolved
as expeditiously as practicable.  Time deadlines or goals should
be established within each Region as optimum response times;  in
?™« areas, these deadlines or goals have already been established
in national guidance.

     The Administrator has given strong general support to the
use of reasonable 'deadline* dates in conducting negotiations to
ensure that, negotiations do not become a means for delay.  In
any particular case* the Regional Administrator (in consultation
with the Regional Counsel) should always be prepared to escalate
to the next-most-serious response, when necessary, to avoid pro-
tracted, negotiations resulting in unreasonably delayed remedial
action.

     It remains the Administrator's policy to take formal enforce-
ment action when negotiations or other efforts fail.  I shall
accept--and the Administrator will encourage--well-documented
civil judicial referrals from Regional Administrators whenever,
in their judgement, such action is necessary to ensure continued
progress toward compliance, even though active negotiations
still may b<> underway.

VI11.  The Case Development Process

     A group from OLEC (including Regional Counsel representatives)
has been conferring with DOJ for the purpose of, among other things,
formulating a process for developing.cases for civil litigation.
This process involves periodic meetings in the Regions, at which
ISPA attorneys and technical staff will meet with DOJ attorneys
[and invite Assistant U.S. Attorneys) to:

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                              -17-


     -- discuss approaches to developing cases targeted as likely
        candidates for litigation;

     — review appropriate ways to handle developments relating to
        cases discussed at prior meetings;

     — provide information on program enforcement issues and
        priorities;

     — refine procedures for handling enforcement actions generally}
        and

     — form litigation teams and assign case preparation and
        responsibilities where the Region has identified matters
        which require a litigation enforcement response.

     Once the Regional Administrator determines that a case has
a strong potential for referral, the Region will form a case
development team consisting of the lead Agency attorney and
representatives from the Regional program staff and DOJ. 3/ The
goal of this team is to reach a resolution of the enforcement
action, based on the technical support of the Regional Administrator,
through negotiated settlement or final judgement in litigation.

     For each case, EPA will designate a lead Agency attorney.
As stated in the May 7, 1982 memorandum regarding reorganization
of the Office of Regional Counsel, the lead Agency attorney will
normally be a Regional attorney, but may be a Headquarters attorney
under some circumstances.  Section VIX(B) of that memorandum
provides a more detailed discussion of circumstances in which a
Headquarters attorney might be assigned the Agency lead (for
example, in cases of overriding national significance or in some
cases in which the Agency is involved in enforcement and defensive
litigation).  The lead Agency attorney will coordinate case
development activities with DOJ.
3/  Headquarters program and Enforcement Counsel staff may participate
more actively in the case development process if precedential or
nationally significant issues are involved, especially under newly
developing programs.

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                              -18-
IX.  The Referral Process
     Consistent with the Administrator's September 15, 1981
memorandum, the Regional Administrator will initiate referrals
of enforcement cases in which settlement negotiations outside
the context of litigation either have been unsuccessful.or are
otherwise inappropriate due, e.g., to the need to halt the
violation Quickly.  The Regional Administrator initiates a
referral by forwarding a ease to me with a recommendation to
refer that case to DOJ for litigation.  The Regional Counsel's
formal concurrence shall ensure that the initiated referral is
legally sufficient and consistent 'with national guidance.  Early
involvement by appropriate EPA and DOJ staff, through the case
development procedures articulated in Section vill above, is
iin^uitant to the successful development of a judicial referral.
This <>arly involvement will reduce the need for development and
review of documents in a formal referral package late in the
case developrent process.  Regional Administrators are responsible
for supporting this practice within their programs.

     As the initiator of the referral, the Regional Administrator
is ultimately responsible for the completeness and quality of the
development of the forwarded case.  This includes conformance wit|
all applicable-national guidance and policies established by OLEC*
and by the appropriate program office.

     Inasmuch as a case developed for referral can require the
drafting of important legal documents (e.g.  complaint, consent
decree, memoranda on points of law), it is highly advisable that
the Regional Administrator assign the actual task of preparing
those documents in conjunction with DOJ to the lead Agency attorney
on the litigation team.  A case developed for referral will rely
upon technical information and support from the Regional program
office and, where appropriate, from the Headquarters program
office.  This method is likely to ensure the legal sufficiency
of the case when the Regional Administrator initiates the referral.
Every request for judicial action must have the formal concurrence
of the Regional Counsel before the Regional Administrator initiates
referral by forwarding the case to Headquarters.

     To support a referral', the Regional Administrator must be
in a position to identify all technical assistance needed to
bring the case to successful completion.  The act of forwarding
the case to Headquarters for referral constitutes the Regional
Administrator's commitment to ensure that this technical assistance
and technical support which may later be identified is available
when needed.

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                               -19-


X.  Headquarters Review of Case Development

     Under the June 1977 EPA/DOJ Memorandum of Understanding,
the Associate Administrator for Legal and Enforcement Counsel
is responsible for formally transmitting a civil referral to the
DOJ. 4/  Headquarters attorneys will conduct a limited final
legal~~review on my behalf of cases forwarded for referral from
the Regions primarily to ensure completeness, consistent applica-
tion of law and enforcement policy, and appropriate development
of legal precedent.  For some cases involving important precedent
or issues of overriding national significance, Headquarters
attorneys also may be assigned a more active role in the case
development process.              /

     Again, Regional Counsel lead attorneys must undertake
early consultation with Headquarters and DOJ attorneys through the
case development team format as cases are being prepared.  In
this manner, case development teams can identify precedential
or nationally significant issues early and can reduce the likeli-
hood that DOJ or the U.S. Attorney will raise concerns late in
the referral process regarding the advisability of pursuing
civil litigatic.;.
£/  The term "Assistant Administrator for Enforcement" in the
Memorandum was changed to "Associate Administrator for Legal
and Enforcement Counsel" by letter of the Administrator to the
Attorney General, in order to reflect the Agency's new organi-
zational structure.

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                             -20-


     Similarly, close coordination by the lead Agency attorney
with technical personnel in the Regional program office (who
in turn should work closely with the Headquarters program office)
and any NEIC participants is also essential in order to achieve
early agreement on appropriate remedies, schedules, and other
technical aspects of the case prior to referral.  Headquarters
program ire view of case development on behalf of Assistant
Administrators also will begin early in the process to identify
and resolve problems quickly and will focus on ensuring technical
completeness and appropriate application of program policy.  In
this areo as well. Headquarters program officials may be assigned
a more active role in cases involving important precedent, overrid-
ing national program significance, or activity in more than one
region.  Headquarters program officials must ensure that they
perform their review function in a manner that avoids impeding
the expeditious referral of cases to DOJ once the Regional
Administrators have forwarded those cases to Headquarters.

XI.  After EPA Refers a Case to DOJ

     Following the referral of a case to DOJ, the lead Agency
attorney on the case will be responsible for coordinating responses
to all requests for supplemental information by the Department
or by the U.S.  Attorney's Office.  Program office staff will be
responsible for providing needed technical support.  The lead
Agency attorney is responsible for keeping program officials and
other previously involved Agency attorneys apprised of case
developments after referrals.

XII.  Negotiations

     The Regional Administrators will normally be responsible for
ensuring a sound technical and scientific basis for resolutions of
identified violations.  Prior to EPA referring an enforcement case
to DOJ, the Regional Administrators normally will be responsible
for directing or conducting informal settlement negotiations (subject
to the program-specific guidance which will be forthcoming).  The
Regional Counsel should be present at discussions in which outside
parties aro represented by counsel.  Once the case has been referred,
DOJ normally is responsible for managing settlement discussions,
with the active participation of Regional personnel, in the context
of an attorney-client relationship.  Regional Counsels will make
«»very effort to identify resources needed for negotiations
in close consultation with program managers.

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                               -21-


     The Administrator has affirmed that I urge OLEC staff at
Headquarters and in the Regions to caution their 'client* program
offices and others within the Agency about the sensitivity of
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.  Care 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.  ,If 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 Administrator
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

     Generals-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 permit conditions
and administrative civil penalty decisions.  However, in accordance
with the OLEC memorandum of May 7, 1982, on regional reorganization,
when issue.s 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
flows 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 infor-
mation 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 w<-hin the Agency and in DOJ.


     The Regional Administrator and the Regional program managers
are responsible for commanicat in- 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
(iuch communications.

     Likewise, the Regional Administrator will normally be
responsible for handling any press inquiries or releases concerning
an enTwrjement 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 olffice should be consulted before interacting with the .
press.

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                                -23-
      In the event of inquiries from Congress, OLEC will work
 closely with the Regional Administrators,  the appropriate
 Assistant Administrator,  and the Congressional  Liaison Office
 prior to releasing any information or making any  public
 statements.

 XVI.  Reservation

      The policy and procedures set forth herein,  and  internal
 office procedures adopted pursuant hereto,  are  intended
 solely for the guidance of government personnel.  They are
 not intended to, do not,  and may hot be  relied  upon to create
 a right or benefit, substantive or procedural,  enforceable
 at law by a party to litigation with the United States
 Environmental Protection  Agency.   The Agency reserves the
 right to take any action  alleged to be at variance with
 these policies and procedures or not in  compliance with
 internal office procedures that may be adopted  pursuant to
 these materials.

 XVII.  Delegation of Authority

      Through a memorandum issued as a cover to  this document,
. t.w.o Administrator is delegating to me the authority to construe,
 interpret cr amend the guidance prescribed here.  She similarly
 has delegated to me the authority for issuing any follow-up
 guidance for implementing the general operating procedures
 prescribed here, unless the follow-up guidance  is limited to
 matters for which a single Assistant Administrator or Regional
 Administrator is solely responsible.  Of course,  I shall work
 closely with affected Assistant or Regional Administrators
 in deciding how to exercise these delgated authorities, and
 in appropriate cases shall issue national guidance jointly with
 the relevant national program managers.

 XVIII.   Superseded Policy

      These procedures supersede the policies and  procedures  issued
 by the Enforcement Counsel on February 26,  1982,  which are revoked
 in their entirety.

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GM-13

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           UNITED STATES ENVIRONMENTAL PROTECTION AGENCY          "^
                        WASHINGTON. DC 204tO
                          SEP  7682
                                                         or net or
                                                 LCOAL AND >MrOI*CKMKI*r COWWMCl
MEMORANDUM

SUBJECT:  Case  Referrals  for Civil-Litigation
FROM:     Michael A. .Brown
          Acting Enforcement'Counsel
            Deputy General Counsel

TO:       Regional Counsels
     A review of our  recent enforcement  referrals  for  proposed
civil litigation ^l/ and conferences with the Department of Justice.
have revealed that certain points  relating  to  case development
and litigation activities must again be  emphasized and some new
"ground rules" should be set  forth.  This memorandum is intended
to supplement the General Operating Procedures memorandum governing
EPA's enforcement activity which was issued on July 6, 19B2.

Quality of Referrals

     I want to stress that a  case  should not be  forwarded to
Headquarters for referral to  DOJ unless  you fully  intend that the
case should be filed.  Sending a case  forward  merely to get credit
for the case is a waste of your time and ours.   We want to
concentrate on properly developed  cases  that will  actually be
filed, not merely paper to be referred to DOJ  that results in no
action.  In addition, referrals to Headquarters  and DOJ for the
purpose of applying pressure  on a  party  to  settle  should not be
made unless the Regional Office is willing  to  carry the case
through a suit.

     My review of the past numbers of  referrals  by EPA to DOJ
compared to the actual number of cases that are  filed  reveals
that past practices resulted  in a  considerable disparity between
the two numbers.  You, and especially  the Regional Administrator,
should be prepared to support a case that is referred  to
Headquarters all the way through trial.
T7This memorandum applies only  to  referrals  for  civil  litigation.
     Guidance for referral of cases for  criminal  proceedings will
     be addressed in a subsequent  memorandum.

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                               -2-
Case Development Process

     We expect that DOJ and Headquarters' involvement in the case
development process will continue to be intensive in hazardous
waste and Superfund cases in the future.  This is because these
are ne<* areas of the law, without much precedent.  In the more
mature areas (air and water cases) we expect the case development
process to be more informal.  For example, in many cases the
coordination between Headquarters, DOJ attorneys and Regional
attorneys may be accomplished by infrequent meetings and telephone
contacts.

     The need for Headquarters Enforcement Counsel or DOJ
involvement in a case at an early stage depends upon sound
judgment.  If the case, even though in a mature program, presents
national issues, contains novel problems, requires extra support,
or has other areas in which you or your attorneys would like
support from or the views of Headquarters, the Department of
Justice or both, we will provide it.  However, we do not want
to make the case development process a burden on the Regions in
air and water cases which do not require it.

     It is essential that Regional attorneys apprise Headquarters
and DOJ counsel of new cases which are under development as soon
as sufficient information is acquired about the cases to enable a
determination to be made that they have potential for referral.
This is necessary in order that the Regions, Headquarters and DOJ
can plan resource needs, litigation support and budgetary requests,
we anticipate that increased use of our computer system by the
Regiona;, Offices will aid in the advance notification of emerging
cases.
Referra] Package

     As the case development process, including early DOJ
involvement, becomes widespread, we will be able to significantly
reduce the supporting paperwork you send to EPA Headquarters to
accompany a referred case. ' In order to achieve this result, it
is highly desirable for the Regional attorney to acquaint the
appropriate Her.c'^^arters and DOJ attorneys with developing cases
by telephone and at regional meetings at an earj.y stage.  In any
event, as described in the following paragraph, certain basic
information in the form of a referral memorandum should accompany
the litigation report at the time the case is formally referred'
to Headquarters, in addition to the more comprehensive litigation
report.

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                               -3-
     When a case is forwarded to Headquarters for referral to
DOJ, the referral memorandum, at a minimum, should include
identification of the potential defendants, a factual summary,
identification of issues, status of past Agency enforcement efforts,
and the names of Agency and DOJ attorneys who are involved in
the case, including the lead attorney.  This should be accompanied
by the litigation report, together with a copy of the relevant
papers in the case file and such other accompanying explanatory
memoranda or analyses as have been agreed to between the Regional
attorney, the Headquarters attorney and the DOJ attorney working
on the case.

     One particular need in a case referral is to identify the
problems that may exist with the case.  In the past many documents
forwarding cases to EPA Headquarters have been pure advocacy
documents.  By this I mean they stressed only the positive side
of a case.  However, once the case was referred to DOJ and work
began, problems that might complicate the prosecution of the case
would then be revealed.  In order to properly focus your resources
and ours, it is necessary that initial forwarding paperwork
include a description of all problems that may accompany the
prosecution of the case.  Further, if problems are identified
after the case has been forwarded to Headquarters, the referral
paperwork should be supplemented to include these problems.
Early involvement by Headquarters, and DOJ where appropriate,
should provide for early identification and.resolution of such
problems.  Your credibility with Headquarters and EPA's credibility
with DOJ are not aided by selling a'case that must be "unsold"
when reality sets in.


Lead Attorney

     The lead attorney responsibility establishes an accountable
party for the progress of the case.  It has become apparent that
many times the failure of a case to move forward is a direct
result of the lack of an identifiable lead attorney who bears
the responsibility for the progress of that case.  Responsibility
cannot be vaguely shared between two or three attorneys.  Someone
has to have the lead designation if for no other reason than to
act as a focal point, prescribe milestones, and make appropriate
reports.

     At such time as you begin the case development process there
should be a clear understanding between the Agency attorneys
about who will take the lead in the case development phase.
Ordinarily the lead attorney in the development phase will be a
Regional attorney.  However, in cases of national significance

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                               -4-
or cases without precedent, the lead attorney, even in the develop-
ment phase, may be an attorney from Headquarters or DOJ.  After
the case has been referred to DOJ, there should again be a conference
between the appropriate Regional, Headquarters and DOJ attorneys
to determine if the lead in the case should shift.  If so, the
new lead attorney should be designated and his/her identity
clearly understood by all parties to the case, including technical
support personnel.  When the case is filed, the lead responsibility
should again be agreed to by the attorneys and conveyed to all
other parties involved in prosecuting the case.  At all times,
the computer system should be kept current on the identity of
the lead attorney.

     Regardless.of who has the lead, the responsibility for the
initial documentation of statutory violations and development of
supporting data that justifies referral of a case to DOJ for
litigation always rests with EPA attorneys.  In addition, I expect
that EPA attorneys will be responsible for developing and
maintaining a ".."".orough understanding of the facts of. "h3 case,
the issues i,K.,.ved or which may be raised, Agency policies which
affect or may be affected by the case, and to serve as spokesperson
on the case development and litigation team for EPA's views.

    . When a case is referred to the Department•of Justice, the
Department will, in consultation with EPA, and in accordance with
the Memorandum of Understanding between the agencies, designate a
lead case attorney.  The DOJ lead attorney will be responsible
for and have authority to require development of case strategy
and tactics; evaluate the quality and quantity of evidence necessary
to prove the government's case; assign and coordinate responsibilities
to litigation team members, including technical personnel; and
insure that all necessary government personnel are fully informed  .
of case progress.  The lead attorney will also communicate as
the government's spokesperson with defendants; and undertake the
necessary case preparation to move the matter expeditiously to
trial.

     Generally, the lead attorney after referral of a case will
be from the Department of Justice-or United States Attorneys
Office.  This is consistent with the Attorney General's statutory
responsibility for litigation involving the United States and
its Agencies and the Memorandum of Understanding.  On a case by
case basis EPA attorneys may be assigned lead responsibility.
When this occurs, the EPA attorney assigned lead responsibility
will be supervised by the Chief of the Environmental Enforcement
Section of the DOJ with respect to litigation matters.

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                               -5-
     It is essential that all litigation team members understand
their respective responsibilities and cooperate in the litigation
effort.  Experience demonstrates that cases which are actively
moved to trial provide a full opportunity for each attorney to
gain meaningful experience in litigation.  Without this support
our litigation effort cannot succeed.

     The computer system should at all times reflect the identity
of the lead case attorney.  In each case, EPA will designate an
EPA attorney who will continue to be responsible for coordinating
agency input.

Further Clarification

     I realize that this guidance does not prescribe exact
procedures for every conceivable situation.  However, I am looking
to you as Regional Counsels to exercise your best professional
judgment in supervising your Regional attorneys.  Please let me
know in those instances where attorneys from Headquarters and the
Regional attorneys are unable to reach agreement on the handling
of cases.   Further, the Headquarters Associate Enforcement Counsel
and I stand ready to help you in any dealings with DOJ, if
recessary.


Goal

     I want to emphasize that the goal of EPA is for expeditious,
efficient, and successful prosecution of our enforcement cases.
It rtoes not natter who gets the credit or the lead; what does
matter is  whether the cases are worth the time of all the parties
involved,  are filed and prosecuted in a timely manner, and achieve
protection for the public and the environment.


cc: Robert M. Perry
    Steve Ramsey
    Associate Enforcement Counsels

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GM-14

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              Note on General Operating Procedures
              for the Criminal Enforcement Program
     This memorandum is no longer current.  OECM is in the pro-

cess of thoroughly revising this memorandum, and will issue a

new version of these procedures by the next time the Compendium

is updated.

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                                       i tLi ION AGENCY
                       WASHINGTON, DC I04«0
                     OCT 1 1 BB2
MEMORANDUM                                   .  «•••••—•«•—"•"-—-
                                             5
SUBJECT:  Criminal Enforcement Priorities for the
          Environmental Protection Agency
FROM:     Robert M. Perry     ^-^ *r .
          Associate Administrator
TO:       Regional Counsels, Regions I-X
     Criminal case development and referrals will constitute
an important component of EPA's overall enforcement effort.
The success of the criminal enforcement program will depend
on the Agency's ability to act with professionalism, and with
one mind, in identifying, investigating and referring cases
for criminal prosecution.

     To achieve this objective, our Criminal Enforcement
Division is currently recruiting a staff of 25 experienced
criminal investigators.  In addition, the Office of Legal
and Enforcement Counsel, working with the assistance and
guidance of EPA's media program offices, has developed the
attached "Criminal Enforcement Priorities" for the Agency.
These guidelines have been drafted so that the objectives
and interests of EPA's program offices are reflected in,
and furthered by, the Agency's criminal enforcement efforts.
In addition, the implementation of these guidelines will
guarantee that the legal and investigative resources of the
Office of Legal and Enforcement Counsel, and the technical
resources of EPA's program offices, are focussed on cases
of the most serious environmental misconduct.

     The attached Criminal Enforcement Priorities are effective
immediately, and replace any existing Agency guidance on this
subject.  Please ensure that these priorities are circulated
with the appropriate Regional program offices.  Any questions
on these priorities can be directed to Peter Bee son, Director,
Criminal Enforcement Division, Office of Legal and Enforcement
Counsel (FTS 382-4543).

Attachment    Jr
cc:  Assistant Administrators
     Regional Administrators, Regions I-X

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CRIMINAL ENFORCEMENT PRIORITIES
      United States Environmental
         Protection Agency
      Effective Date:

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                 TABLE OF CONTENTS
PART I:  THE DECISION TO PURSUE CRIMINAL
         SANCTIONS	1

     A.  The Scienter Requirement	1
     B.  The Nature and Seriousness
         of the Offense	2
     C.  The Need for Deterrence	3
     D.  Compliance History of the
         Subject (s)	3
     E*  The Need for Simultaneous
         Civil or Administrative
         Enforcement Action	3

PART II:  CRIMINAL ENFORCEMENT
          PRIORITIES	5
                     '.'
      A.  Investigative Priorities:
          Resource Conservation and Recovery Act
          (RCRA)	5
          1.  Knowing Endangerment	5
          2.  Illegal Transportation and
              Disposal of Hazardous Waste	6
          3.  Falsification of RCRA Records	6
          4.  Destruction, Concealment or
              Alteration of RCRA Records.	6
       B. Investigative Priorities:
          Comprehensive Environmental Response,
          Compensation and Liability Act
          (Superfund)	.6
          1.  Failure to Notify of a Release
              of a Hazardous Substance	6
          2.  Destruction or Falsification
              of Superfund Records	7
       C. Investigative Priorities:
          Clean Water Act (CWA)	7
          1.  Violations of the NPDES
              Permit Program	7
          2.  Falsification of CWA Records  *
              and Monitor Tampering	7
          3.  Unpermitted Discharges	8
       D. Investigative Priorities:
          The Clean Air Act (CAA)	6
          1.  Violations of State
              Implementation Plans	8
          2.  Violations of Hazardous
              Ail- Pollutant Standards	8
          3.  Falsification of CAA Records
              and Monitor Tampering	9

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E.  Investigative Priorities:
    The Toxic Substances Control
    Act (TSCA)	 9
    1.  Falsification of Data Required
        under a Testing Pule or the
        Premanufacture Notification
        Program	9
    2.  Failure to Report Substantial
        Risk Information	.9
    3.  Violation of PCS or Dioxin
        Regulations	 ..9

F.  Investigative Priorities:
    The Federal Insecticide, Fungicide
    and Rodenticide Act (FIFRA)	10
    1.  Failure to Report Information
        on the Unreasonable Adverse
        Effects of a Registered
        Pesticide	10
    2.  Falsification of FIFRA
        Records	.10
    3.  Violation of Suspension or
        Cancellation Orders	10
    4.  Violation of Stop Sale
        Orders	10
    5.  Unlawful Uses of Pesticides	11
    6.  Illegal Distribution of
        Unregistered Pesticides	c .11

G.  Investigative Priorities:
    The Marine Protection, Research,
    and Sanctuaries Act (MPRSA)	11

H.  Investigative Priorties:
    willful Contempt of Environmental
    Consent Decrees	•• .11

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                     PREFACE


     A broad range of potential overlap exists among
the.criminal, civil and administrative enforcement options
provided by roost environmental statutes.  Theoretically
at  least, the Agency is free to pursue criminal sanctions
in  every situation presenting evidence supporting the
requisite elements of proof.

     As a matter of enforcement policy and resource
allocation, such an unrestrained use of criminal sanctions
is  neither warranted nor practical.  The commitment of
investigative and technical resources necessary for the
successful prosecution of a criminal case is high.  More
importantly, a criminal referral for investigation or
prosecution can entail profound consequences for the subject
of  the referral, and should reflect a considered, institutional
judgment that fundamental interests of society require the
application of Federal criminal sanctions to a particular
set of facts.  Accordingly, criminal referrals will be
confined to situations that--when measured by the nature of
the conduct, the compliance history of the subject(s)
or  the gravity of the environmental consequences--
reflect the most serious cases of environmental misconduct.

     This memorandum provides guidelines for the use of
criminal sanctions under all environmental statutes.
It  is divided into two parts.  Part I sets out several
general factors that Agency personnel should consider
in  determining whether a criminal referral is warranted
in  a specific situation.  These factors will apply with
equal force to referral decisions under each of the Agency's
statutes, thereby ensuring cross-media consistency in
the use of this enforcement option.  Part I has also been
drafted so as to reflect guidelines for the exercise
of Federal prosecutorial discreti~>- "ound in the Justice
Department's Principles of Federal Prosecution.

     Following this general overview, Part II establishes
investigative priorities in e-s.h of the Agency's program
areas.  The purpose of this section is to focus the limited
criminal investigative resources of the Office of Legal and
Enforcement Counsel on the most serious cases of environmen-
tal misconduct.  These media-specific  priorities will be
fluid, and will be modified to reflect additional regulatory
programs in the Agency as they develop.  In addition, the
citation of investigative priorities does not preclude the
possibility of a criminal referral for conduct not falling
within these priorities.  Each case will be considered on an
individual basis.  Further—to emphasize the obvious--these
guidelines relate only to the use of criminal sanctions, and
do net reflect administrative or civil enforcement priorities.

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                       -2-
     "hese guidelines, and internal office procedures
adopted in accordance with these guidelines, 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 to litigation with the
United States.  Any attempt to litigate any aspect of
these guidelines should be brought immediately to the
attention of the Criminal Enforcement Division, Office
of Legal and Enforcement Counsel, EPA Headquarters.

     These guidelines are effective immediately, and
replace any existing guidance on criminal enforcement
priortles within the Agency.

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                       -1-
 PART  Ii  THE DECISION TO PURSUE CRIMINAL SANCTIONS

      This Agency'* choice among its varying enforcement
 options—civil, administrative and criminal—is, and must
 remain, a discretionary judgment that balances essentially
 subjective  considerations*  No litmus paper test exists
 that  will reliably distinguish cases falling into each
 category.   This section discusses the varying factors,
 or considerations, that should be addressed as EPA reaches
 an institutional decision on the appropriate enforcement
 option to employ in addressing a specific violation.
 In essence, it is a discussion of those factors that
 will  normally distinguish a criminal case from all the
 others.

 A.  The Scienter Requirement

      An individual who engages in conduct prohibited
 by statute  or regulation can be prosecuted civilly or
 administratively without regard to the mental state
 that  accompanied the conduct.  Criminal sanctions, on the
 other hand, will ordinarily be limited to cases in which
 the prohibited conduct is accompanied by evidence of
 "guilty knowledge" or intent on the part of the prospective
 defendant(s).  Referred to as the scienter requirement, this .
 element of  proof exists under virtually every environmental
 statute enforced by the Agency.!/  For example, falsification
 of records  under the Resource Conservation and Recovery Act
 must  be done "knowingly,"  (42 U.S.C. §6928(d)(3)); violation
 of hazardous air pollutant standards under the Clean Air Act
 must  be done "knowingly," (42 U.S.C. §7413(c)(1)(c)); and
 failure to  establish or maintain records required under the
 Toxic Substances Control Act must occur "knowingly or
willfully," 15 U.S.C. §2615(b).
I/  One exception to this general rule is the Refuse
Act, 33 U.S.C. §407, which has generally been interpreted
as a "strict liability" statute.  See, e.g. United States
v. White Fuel Corporation, 498 F.2d 619 (1st Cir. 1974).  In
addition, * prosecution for illegal discharges under the
Clean Water Act can be based on negligent or willful conduct,
33 U.S.C. B1319(c)(l).  "Negligence" is not, strictly
speaking, a form of scienter.

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                      -2-
     The requirement to prove a culpable mental state/
a's well as a prohibited act, IB certainly the clearest
distinction between criminal and civil enforcement actions.
Special care will be taken both in investigations,
and in drafting criminal referral packages, to assemble
and highlight evidence available to meet the specific
statutory scienter requirement.

6.  The Nature and Seriousness of the Offense

     Resources currently available to EPA for criminal
case development are limited.  In addition, this Agency
is only one of dozens that are making demands on the limited
prosecutorial staffs of the Justice Department.  As a
matter of resource allocation, therefore, as well as
enforcement philosophy, EPA will investigate and refer
only the most serious forms of environmental misconduct.

     Cf primary importance to this assessment is the extent
of environmental contamination or human health hazard
that resulted from, or was threatened by, the prohibited
conduct.  This determination depends in turn on consider-
ations such as the duration of the conduct; the toxicity
of the pollutants involved; the proximity of population
centers; the quality of the receiving land, air or water; the
amount of Federal, State or local cleanup expenditures; and
public sentiment supporting strong enforcement action
in response to a specific situation.

     Also of significance in assessing the seriousness
of the illegal conduct is the impacts-real or potential—on
EPA's regulatory functions.  This factor is of particular
importance in cases of the falsification or concealment
of records, reports or information.  For example, even  if a
technical falsification case can be made, criminal sanctions
may not be appropriate if the distortion of information'
could not reasonably have been expected to have a significant
impact on EPA's regulatory process or decision-making.
Where the materiality of the falsification is clear,
however* criminal sanctions should be pursued.  For example,
falsification activity wight cause EPA to register a pesticide
with demonstrated carcinogenic potential; to omit effluent
limitations for toxic pollutants in an NPOES permit; or to
postpone necessary regulatory action.  In such situations,
the need! for criminal sanctions should be considered.

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                        -3-
 C.  The Need  for Deterrence
   * ^^^••^""•••"—••^•^"^^"•"""""•'•""^•"^•""•'•••"^"'™'**1^^
   ' 4
     Deterrence of criminal  conduct by a specific individual
 (individual deterrence) or by the community at large
 (general  deterrence) has always been one of the primary
 goals of  the  criminal law.   Where the offense is deliberate
 and results in serious environmental contamination or
 human health  hazard, the need to achieve deterrence through
 the application of strong punitive sanctions will almost
 always exist.

     The  goal of deterrence  may, on occasion, justify a
 criminal  referral for an offense that appears relatively
 minor.  This  would be true,  for example, for offenses
 that—while of limited importance by themselves—would
 have a substantial cumulative impact if commonly committed.
 This might also be true when addressing violations by an
 individual with an extended  history of recalcitrance and
 noncompliance.

 D.  Compliance History of the Subjeet(s)

     The  compliance history  of the subject(s) of a potential
 criminal  referral is relevant, and should be considered in
 determining the appropriateness of criminal sanctions.  As a
 general rule  throughout Federal criminal enforcement, first
 offenders will be treated less severely than recidivists..
 Stated alternatively,  criminal sanctions become more
 appropriate as the incidents of noncompliance increase.  The
 occurrence of past enforcement actions against a company, or
 the failure of civil/administrative enforcement, is certainly
 not a prerequisite to a criminal referral.  However, a
history of environmental noncompliance will often indicate
 the need  for  criminal sanctions to achieve effective individual
deterrence.

E.  The Need  for Simultaneous Civilor Administrative
    Enforcement Action

     Simultaneous civil and  criminal enforcement proceedings
are legally permissible, United States v. Kordel, 397
U.S. 1, 11 (1970), and on occasion are clearly warranted.
However,  separate staffs will be appointed with the
 initiation of a grand jury investigation, if not before.
Further, the pursuit of simultaneous proceedings provides
 fertile grounds for legal challenges to one or both
proceedings thj-t, even if unsuccessful, will rei"ume
additional time and resources.  Thus, parallel proceedings
 should be avoided except where clearly justified.

     In this  regard, it should be noted that some of
the goals of'a criminal prosecution, including a degree

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                     -4-


of< ,dt»terrence and punishment, can be achieved through
a'civil action that secures substantial civil penalties
in addition to injunctive relief.  Moreover, recent exper-
ience indicates that while some cases may result in periods
of incarceration, criminal sentences will often be limited
to monetary fines and a probationary period.  In light of
this reality, the use of the additional time and resources
necessary to pursue a criminal investigation—as well as a
civil enforcement action—is often not justified.

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PART  Hi  CRIMINAL ENFORCEMENT PRIORITIES

      The previous section has discussed the general
considerations that will guide this Agency's decisions
on the investigation and referral of criminal cases.
Part  II details the substantive investigative priorities
that  will be pursued in the Office of Legal and Enforcement
Counsel's developing criminal enforcement program.  The
priorities are listed by statute.  The order of listing is
random, and is not intended to achieve further ranking
either within each statute or on a cross-media basis.
Unless otherwise stated below, all listed categories of
conduct are considered equally significant and worthy of
investigation within the constraints of our limited criminal
investigative resources.

      The criminal investigative staff of the Office of
Legal and Enforcement Counsel, acting in partnership
with  the legal and technical staffs of the Agency, will
focus criminal enforcement efforts in the future primarily
on cases falling within the categories listed below.  The
issuance of these priorities is not, however, intended to
preclude the possibility of a criminal referral in other
cases.2/  As was indicated previously, each case will be
considered o- its own merits.

A.  Investigative Priorities;  Resource Conservation
    and Recovery Act (RCRA)t

    1.  Knowing Endangerment

    Section 3008(e) of RCRA, 42 U.S.C. §6928(e), establishes
the crime of "knowing endangerment."  The provision carries
maximum penalties of up to five years of imprisonment
and a $1,000.,000.00 fine, and reflects a Congressional
mandate to pursue strong criminal sanctions for knowing,
life-threatening conduct that violates RCRA statutory
prohibitions or interim status standards and regulations.
RCRA  and its legislative history indicate that the "knowing
endangerment" provision is intended to apply only in
the most serious instances of environmental misconduct.
Where the elements of proof can be met, however, EPA
will  give a high priority to the investigation, referral and
prosecution of "knowing endangerment" cases.
2/  For example, because the enforcement provisions of the Safe
Drinking Wate^Act, 42 U.S.C. §§300f et. seq., contain compara-
tively mild monetary penalties--and no potential terns of
incarceration—the statute is not listed as a criminal enforcement
priority.  This does not, however, preclude the possibility of
a criminal referral under the Safe Drinking Water Act to address
aggravated cases of non-compliance.

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                        -6-
     2.  Illegal Transportation and Disposal of Hazardous
          Waste

     Section 3008(d)(l-2) of RCRA, 42 U.S.C. §6928(d)(1-2),
carries felony penalties of two years of imprisonment  and
a $50,000.00 fine for the knowing transportation of
hazardous wastes to an unpermitted facility (Section
3008(d)(l)) and the knowing disposal of hazardous wastes
without obtaining a permit (Section 3008(d)(2)).  Both
provisions are potentially applicable to midnight dumping
in its various forms, i.e., in abandoned sites, company
yard«, open fields or waterways, or unpermitted waste
disposal facilities.  A high investigative priority
will be placed on illegal transportation or disposal
activities that result in, or threaten, serious environ-
mental contamination or human health hazard.
                 ' '-I '
    3;  Falsification of RCRA Records

    Suction 3008(d)(3) of RCRA, 42 U.S.C. §6928(d}(3),
carries misdemeanor penalties of one year of imprisonment
and a $25,OOC 90 fine for the knowing falsificatior.
of material information in records "maintained or used
for purposes of compliance" with RCRA.   Emphasis will be
placed on falsification activity that has—or could reasonably
be expected to have—a significant impact on EPA's regulatory
process or decision-making.

    4.  Destruction, Concealment or Alteration of RCRA
        Records

    Section 3008(d)(4) of RCRA, 42 U.S.C. §6928(d)(4),
carries; misdemeanor penalties of one year of imprisonment
and a $25,000.00 fine for incidents of knowing destruction,
concealment or alteration of records maintained under
RCRA regulations.  As in falsification cases, emphasis
will be placeu on conduct that has—or could reasonably
be expected to have—a significant impact on EPA's
regulatory process or decision-making.

B.  Investigative Priorities;  Comprehensive Environmental
    Response, Compensation and Liability Act (SuperfundfT"

    1.  Failure to Notify of the Release of a Hazardous
        Substance

    Section 10J(b)(3) of Superfund, 42 U.S.C. §9603(b)(3),
carries misdemeanor penalties of one year of imprisonment

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                     -7-


arfd a $10,000.00 fine for failure to notify the appropriate
Federal agency of a release of a hazardous substance
in amounts equal to or greater than those determined
pursuant to Section 102 of Superfund.  The Agency will
place a high investigative priority on cases where the
"release" results in, or threatens, significant environmental
contamination or human health hazard.

    2.  Destruction or Falsification of Superfund Records

    Section 103(d)(2) of Superfund, 42 U.S.C. §9603(d)(2),
carries misdemeanor penalties of one year of imprisonment
and a $20,000.00 fine for the knowing destruction or falsi-
fication of specified Superfund records.  Investigative
priority should be placed on conduct that has—or could
reasonably be expected to have—a significant impact
on EPA's regulatory process or decision-making.

C.  Investigative Priorities;  Clean Water Act (CWA)i

    1.  Violations of the NPDES Permit Program

    Section 309(c)(l) of the CWA, 33 U.S.C. §1319(c)(l),
carries misdemeanor penalties of one year of imprisonment
and a $25,000.00 fine for the willful violation of conditions
or limitations in NPDES permits issued by the Administrator
or a State.  The NPDES permit program is a mature regulatory
scheme and the primary mechanism for monitoring and controlling
water pollution under the CWA.  The Agency will place a high
investigative priority on willful NPDES permit violations
that result in, or threaten, significant environmental
contamination or human health hazard.

    2.  Falsification of CWA Records and Monitor Tampering

    Section 309(c)(2) of the CWA, 33 U.S.C. £l319(c)(2),
establishes misdemeanor penalties of six months of imprison-
ment and a $10,000.00 fine for knowing falsification of
records and for tampering with monitoring devices "required
to be maintained" under the CWA.  Investigative priority
should be placed on cases in which the falsification
or tampering has--or could reasonably be expected to
have—a significant impact on EPA's regulatory process
or decision-making.

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                           -8-
    3.  Unpermitted Discharges

    Section 301 and 309(c)(l) of the CWA,  33 U.S.C.  §§1311,
1319(c)(l)), establish misdemeanor penalties of one  year of
imprisonment and a $25,000.00 fine for willful discharges
into navigable waters without an NPDES or "dredge and fill*
permit.V  A high investigative priority will be placed
on willful, unpermitted discharges that cause, or threaten,
significant environmental contamination or human health
hazard.

D.  Investigative Priorities;  The Clean Air Act (CAA)t

    1.  Violations of State Implementation Plans

    Section 113(c)jU)(A) of the CAA, 42 U.S.C. §7413
(c)(D(A), carries misdemeanor penalties of one year of
imprisonment and a $25,000.00 fine for knowing violations
of State implementation plans.  SIPs are the cornerstone
of a well-established and mature regulatory program  and
constitute the CAA1s primary mechanism for implementing
and enforcing air quality standards for criteria pollutants.
A high investigative priority will be placed on cases
of knowing violation of SIP limitations that result
in, or threaten, significant environmental contamination
or human health hazard.

     2.  Violations of Hazardous Air Pollutant Standards

     Section 113(c)(l)(C) of the CAA, 42 U.S.C. §7413
(c)(i;i(C), establishes misdemeanor penalties of one  year
of imprisonment and a $25,000.00 fine for knowing violations
of standards for hazardous air pollutants.  A high invest-
igative priority will be placed on knowing violations
of these standards that result in, or threaten, signi-
ficant environmental contamination or human health hazard.
3/  Aluo applicable are the provisions of the Refuse Act,
73 U.S»C. §407, which establish misdemeanor penalties of
one yeeir of imprisonment' (including a 30-day minimum sentence)
and a $2,500.00 fine.

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                        -9-
        Falsification of CAA Records and Monitor Tampering

    Section 113(c)(2) of the CAA, 42 U.S.C. §7413(c)(2),
establishes misdemeanor penalties of six months of imprison-
ment and a $10,000.00 fine for knowing falsification
of records and for tampering with monitoring devices
"required to be maintained" under the CAA.  A high investi-
gative priority will be placed on cases in which the
falsification or tampering has—or could reasonably
be expected to have—a significant impact on EPA's
regulatory process or decision-making.

E-  Investigative Priorities;  The Toxic Substances Control
Act (TSCA);—

     1.  Violations of Section 4 Testing Rules or the
Section 5(b) Premanufacture NotificationProgram

     Sections 15(1) and 16(b) of TSCA, 15 U.S.C. §§2614(1)
and 2615(b), establish misdemeanor penalties of one year of
imprisonment and a $25,000.00 fine for knowing or willful
violations of any rule promulgated under Section 4 or any
requirement prescribed by Section 5 of TSCA.  A high
investigative priority will be placed on violations
that have a significant impact on the Agency's ability to
act under Section 4(f)(l), 15 U.S.C. §2603(f)(l), and on
situations of falsified test data submitted pursuant to
Section 5(b), 15 U.S.C. §2604(b), and the premanufacture
notification program.

     2.  Failure to Report Substantial Risk Information

     Sections 8(e), 15(3)(B) and 16(b) of TSCA, 15 U.S.C. §§2607(e),
2614 (3 )(B) and 2615 (b), establish -..sdemeanor penalties of one
year of imprisonment and $25,000.00 fine for knowing or willful
failure to submit information to EPA which reasonasly supports
the conclusion that a chemical substance or mixture
manufactured, processed, or distributed in commerce presents
a substantial risk of injury to health or the environment.
A high investigative priority will be placed on all violations
of this reporting requirement.

     3.  Violation of PCB or Dioxin Regulations

     Sections 15(1)(C) and 16(b) of TSCA, 15 U.S.C. §§2614(1)(C)
and 2615(b), establish misdemeanor penalties of one year of
imprisonment ar>d a $25,000.00 fine for knowing or willful

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vioLstions of rules issued under Section € of TSCA.
The Agency has issued regulations governing polychlori-
nated biphenyle and the disposal of dioxin-contaminated
pe-sticide wastes.  A high investigative priority will
be placed on knowing or willful violations of these
regulations that result in, or threaten, significant
environmental contamination or human health hazard.

F.  Criminal Enforcement Priorities;  The Federal
    Insecticide, Fungicide and Rodenticide Act (FIFRA?*

     1.  Failure to Report Information on the Unreasonable
         Adverse Effects of a Registered Pesticide

     .'Section 14 (b) of FIFRA, 7 U.S.C. fl361(b),  establishes
misdemeanor penalties for the knowing violation of any
provision of the Act.  Section 12(a)(2)(N) provides that
it is unlawful to fail to submit information required by
Section 6(a)(2).  This section requires a registrant to
report -to EPA any information regarding unreasonable
adverse effects on the environment which the registrant
has after the time of registration.  A high investigative
priority will be placed on knowing violations of this
reporting requirement.

     2.  Falsification of FIFRA Records

     Suctions 12{a)(2)(M) and 14(b) of FIFRA, 7 U.S.C.
SSl36j(a)(2)(M) and 1361(b), establish misdemeanor penalties
for the knowing falsification of specified records maintained
or filod under FIFRA, including registration data.  A high
investigative priority will be placed on falsification
activity that has--or could reasonably be expected to
have—-a significant impact on EPA's regulatory process
or decision-making.

     3.  Violation of Suspension or Cancellation -rjers

     Sections 12(a)(2)(J), 12fi'(?)(K) and 14(b) of FIFRA,
7 U.S.C, iil36j(a)(2)(J), 136:(a)(2)(K) and 1361(b), establish
misdemeanor penalties for knowing violations of the terms
of cancellation and suspension orders issued under Section
6 of FIFRA.  A high investigative priority will be placed on knowing
violations that result in, or threaten, significant environmental
contamination or human health hazard.

     4.  Violation of Stop Sale Orders

     Sections UKa)(2)(I) and 14(b) of FIFRA, 7 U.S.C. §§136j
(a)(2)(I) and 1361(b), establish misdemeanor penalties for
knowing violations of the terms of stop sale orders under
Section 13(a).  A high investigative priority will be placed

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                       -11-
on;,knowing violations that result in, or threaten,
significant environmental contamination or human
health hazard.

     5.  Unlawful Uses of Pesticides

     Sections 12(a)(2)(G) and 14(b) of FIFRA, 7 U.S.C.
§§136j(a)(2)(G) and 1361(b), establish misdemeanor penalties
for the knowing use of a pesticide in a manner inconsistent
with its labelling.  Zf referred by a State with primary
use enforcement responsibilities, a high investigative
priority will be assigned to misuse cases that result
in, or threaten, significant environmental contamination
or human health hazard.

     6.  Illegal Distribution of Unregistered Pesticides

     Sections 12(a)(l)(A) and 14(b) of FIFRA, 7 U.S.C.
§§136j(a)(l)(A) and 1361(b), establish misdemeanor penalties
for the knowing distribution, receipt etc. of an unregistered
pesticide.  Vhe pesticide registration process outlined
in Section 3 rf FIFRA, 7 U.S.C. Section 136(a), is tat
cornerstone of EPA's program to monitor and regulate
the safety of pesticides.  A high investigative priority
will be placed on illegal transactions involving unregistered
pesticides that result in, or threaten, significant environ-
mental contamination or human health hazard.

G.  Investigative Priorities;  The Marine Protection,
    Research, and Sanctuaries Act (MPRSA)

     1.  Unauthorized Ocean-Dumping

     Section 105(b) of the MPRSA, 33 U.S.C. §1415(b),
establishes misdemeanor penalties of one year of imprisonment
and a $50,000.00 fine for the knowing violation of regula-
tions or permits issued under the ocean-dumping program.
The Agency will place a high investigative priority on
violations that result in, or threaten, significant environ-
mental contamination or human health hazard.

H.  Criminal Enforcement Priorities;  Willful Contempt
    of Environmental Consent Decrees

     18 U.S.C. §401(3} establishes criminal sanctions
for contempt o/ court resulting from "disobedience or
resistence to (the court's) lawful writ, process, order,

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                     -12-
rule, decree, or command."  The punishment,  which may
be by fine or imprisonment, is left to the discretion of
the court.  Historically, most of the EPA'§ civil litiga-
tion referrals have been settled in judicially-enforceable
consent decrees containing requirements for plant modifi-
cation, upgrading or installation of pollution control
equipment, and other forms of injunctive relief.   Insuring
compliance with the terms of these consent decrees will
be a significant element of this Agency's enforcement
program.  A high investigative priority will,  therefore,
be placed on incidents of willful or deliberate noncompliance
with the terms of environmental consent decrees that result
in, o;r threaten, significant environmental contamination
of hunan health hazard.

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              Note on General Operating Procedures
              for the Criminal Enforcement Program
     This memorandum is no longer current.  OECM is in the pro-

cess of thoroughly revising this memorandum, and will issue a

new version of these procedures by the next time the Compendium

is updated.

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GM-15

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/ 0  i
       I   UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                         WASHINGTON. D.C. 20460

                            OCT B 7 1982
                                               THE ADMINISTRATOR
    MEMORANDUM

    SUBJECT:  General Operating Procedures for the Criminal
              Enforcement Program

    TO:       Associate Administrators
              Assistant Administrators
              Regional Administrators
              Staff Office Directors
         EPA's criminal enforcement program  is of central
     importance to  the Agency's overall enforcement efforts.
     Most importantly, it has  the capacity  to achieve  substantial
     environmental  benefits  through the deterrence of  the most
     serious environmental misconduct.  In  addition, successful
     criminal prosecutions will convey a  strong message  to  the
     regulated community that  the Agency  will not hesitate  to
     pursue the strongest sanctions in appropriate cases.

         The need  for clear,  uniform, Agency-wide guidance is
     particularly strong in  the area of criminal enfo-nment.
     The criminal investigative process is  characterized by
     constitutional safeguards and pmcedural constraints not
     found in civil and administrative enforcement natters.
     The government's burden of proof at  trial—"beyond  a
     reasonable doubt"--is also appropriately demanding.

         Coinciding with the  recruitment of  GS-1811 criminal
     investigators  to assist in criminal  case development in
     every Region,  I have asked the Associate Administrator for
     Legal and Enforcement Counsel to take  the lead in preparing
     a document to  establish operating procedures, roles and
     responsibilities for EPA's various offices in administering
     the Agency's criminal enforcement program.

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                             -2-
     The attached guidance document sets forth the management
structure and operating procedures that will characterize EPA's
criminal enforcement program.  Decisions contained in this
document have been reached following extensive coordination by
the Associate Administrator for Legal and Enforcement Counsel
with the Assistant Administrators/ all Regional offices and
the Department of Justice.  They will result in the development
of a criminal enforcement program that is a credit to"the
Agency and a credible deterrent within the regulated community.
I strongly endorse the General Operating Procedures that the
Associate Administrator has formulated and I expect all EPA
offices with enforcement responsibilities to follow these
procedures in discharging those duties.

     I wish to underscore three points.  First/ this document
establishes procedures for ren-ralized management from EPA
Headquarters of many aspects of the criminal enforcement
program.  For example, criminal investigators hired under the
program wi*i be Headquarters employees; Area offices will have
inter-Regional investiga-. .x responsibilities; and the role
of Regional Administrators in criminal enforcement is limited.
These management decisions are necessary given the nature of
criminal enforcement generally and the Agency's relative lack
of experience in criminal case development.  It is reasonable
to anticipate a more "regionalized" management approach in the
future as the Agency gains increased familiarity with criminal
investigations and prosecutions.  During this initial development
stage, however/ I have instructed the Associate Administrator
to provide close, centralized supervision of case development
activities.  The management decisions contained in this
document reflect those instructions.

     Second, I wish to emphasize the importance of training
Agency staff who will be working with investigators in the
development of criminal cases.  The training provided EPA's
technical personnel through the Federal Law Enforcement
Center is excellent and provides a firm foundation in the
basics of criminal investigative work.  I strongly encourage
continued participation by the Regions and program offices
in this program.

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                             -3-
     Finally, as in civil enforcement, I am looking to the
Associate Administrator for Legal and Enforcement Counsel to
advise me on the development of policy in the criminal
enforcement program and to ensure that EPA's offices fully
and effectively implement my policy in this as in all
other areas of enforcement.  Moreover, I am specifically
authorizing the Associate Administrator to perform the
following duties (while working closely with other affected
offices):

           - construing, interpreting, or amending
             the guidance in this document,( and

           - issuing follow-up guidance for implementing
             these general operating procedures.

     With the implementation of this program, EPA is taking
a significant new enforcement initiative.  Implemented in
a professional and responsible manner this program has the
potential for substantial benefits to the environment*
It is important to recognize, however, that the Agency
is entering new and in many ways unfamiliar territory.
Care, attention and the highest degree of professionalism
must characterize our efforts in this specialized field.
I am asking for the full cooperation of all offices in the
implementation of this program pursuant to the attached
guidance.
                            Anne M. Gorsuch

Attachment

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        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                      WASHINGTON, DC 204«0
                       290CT1982
                                                      erricc or
                                              ClOAL AND IMreWCIMtNT COWNStC
MEMORANDUM
SUBJECT:  General Operating Procedures for the Criminal
          Enforcement Program
FROM:     Robert M. Perry
          Associate Administrator
            and General Counsel

TO:       Associate Administrator
          Assistant Administrators
          Regional Administrators
          Staff Office Directors
     As you are aware/ the Administrator has. asked this
office to take the lead in preparing General Operating
Procedures for EPA's various offices in administering
the Agency's criminal enforcement program.  This guidance
is attached.

     These procedures have been developed after extensive
coordination with the Assistant Administrators and the
Regional offices.  The assistance of these offices has been
highly valuable and has resulted in procedures that reflect
the interests of the various offices of the Agency while
simultaneously creating an effective and responsive
criminal enforcement capability.

     I look forward to working with your offices in the
implementation of this crucial enforcement effort.  Questions
on this document nay be directed to Peter Beeson, Associate
Enforcement Counsel for Criminal- Enforcement (FTS 382-4543).

Attachment

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 GENERAL  OPERATING


    PROCEDURES


 FOR THE  CRIMINAL


ENFORCEMENT PROGRAM
          United States Environmental
            Protection Agency
                          290CT1982
                    D.t.,

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                             -1-
I.   INTRODUCTION;  OBJECTIVES OF THE CRIMINAL ENFORCEMENT PROGRAM

     The guidelines, procedures and resource decisions contained
in this document reflect fundamental values and objectives
that must characterize EPA's criminal enforcement program.
A brief overview of these objectives will be helpful as
background to the policies and procedures that follow.

     The Agency's criminal enforcement program has been
designed based upon the following objectives:

     1.  Integrity in the Criminal Enforcement Process;
Criminal case development is one of the roost important—
and certainly the most sensitive—aspect of the Agency's
enforcement program.  As such, it is imperative that the
criminal investigative process be insulated from outside
influence or inquiries.  The criminal enforcement program
has been structured so as to ensure the absolute integrity
of the investigative process.

     2.  Confidentiality and Security in the Criminal
Investigative Process;  Almost as important as the
integrity of the investigative process is the security
and confidentiality surrounding criminal case development.
A breach in security can threaten the success of the
investigation and the safety of the investigator.
In addition, it can destroy EPA's credibility with other
law enforcement agencies.  Finally, premature disclosure
of a criminal- investigation can unfairly prejudice the
investigative target(s), since the public often perceives
the fact of an investigation as tantamount to guilt.  The
criminal enforcement program will be managed, therefore,
in a manner that will guarantee the security of the
investigative process.  This means, among other things,
that only people with a demonstrated "need to know" will
review the work product of the Agency's investigative staff.

     3.  Experienced Staff and Supervisory personnel;
Criminal enforcement can be no- more effective than the
people who participate in and supervise the process.
An important goal in structuring this program has been
to guarantee that the criminal investigative process
is managed and overseen by personnel experienced in the
criminal case development process—experienced criminal
investigators and experienced criminal prosecutors.

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                             -2-
     4.  Reliable Access to Technical Support;  Unlike the
more traditional areas of criminal enforcement, EPA's cases
are often technically sophisticated.  Proof of the identity
of pollutants is necessary in most prosecutions and technical
personnel are frequently involved—as team members—during
interviews, in conducting site inspections and record
searches, in the surveillance and documentation of illegal
discharges or emissions, and as experts before the grand
jury and at trial.

     Technical support for EPA's criminal cases will be the
primary responsibility of the Regional program offices.
However, substantial-technical assistance will also be
drawn from the National Enforcement Investigations Center
in Denver, Colorado.  In addition, in criminal investigations
stemming from Headquarters-managed programs (for example,
the premanufacture notification program under $5 of the
Toxic Substances Control Act) technical assistance will be
provided by the Headquarters staff of the appropriate
Assist.ant Administrator.

     5.  Close Coordination with the Justice Department,
Local United States Attorneys and Outside Law Enforcement
Agencies;  The effectiveness of EPA's criminal enforcement
program will depend on its ability to establish relationships
of mutual trust and respect with the Department of Justice
and the United States Attorneys (who will prosecute EPA's
referrals), and with outside law enforcement agencies such
as the FBI (who will provide investigative assistance and
law enforcement powers in specific investigations).  This
program has been designed, therefore, in a manner that will
facilitate the development of long-term relationships
between OLEC's investigative staff and outside offices
or agencies.

     6,  Consistent, Even-Handed Use of Criminal Sanctions;
Finally, an underlying objective of EPA's criminal enforcement
progran will be to achieve consistent, even-handed use of this
enforcement- option throughout the country.  While the subject
matter of criminal docket's may vary from Region to Region,
uniform proced' rzs and policies will be adopted that will
ensure a consistent exercise of the Agency's prccecutorial
discretion on criminal enforcement matters.

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                        -3-
II.  MANAGEMENT OF THE CRIMINAL ENFORCEMENT PROGRAM

     Historically, criminal sanctions have played only a
minor role in the Agency's overall enforcement program.
As a result/ our institutional experience in this specialized
form of case development is limited.

     The Administrator is committed to the development of a '
professional, in-house criminal enforcement capability.  It
is essential to the fulfillment of this Agency's obligation
to employ all available enforcement options in addressing
significant instances of environmental misconduct.
                    - -.t f
     The Administrator has delegated the responsibility
to the Associate Administrator for Legal and Enforcement
Counsel and General Counsel to implement and carry out this
program.  The Associate Administrator and General Counsel
will maintain operational control for this program through
the Office of Enforcement Counsel.

     One significant step toward the implementation of this
program will be the recruitment by the Associate Administrator
and General Counsel of experienced criminal investigators to
assist in Regional case development. I/ However, unlike
other aspects of the Agency's enforcement program, which
have been delegated in significant measure to the Regional
offices, management of this investigative staff, and of the
Agency's criminal enforcement program generally, will be
centralized at EPA Headquarters.  Regional legal and
technical staffs will remain, as in the past, indispensable
players in the overall criminal case development process.
However, the particular sensitivity of criminal
I/  The FY 1982 and FY 1983 budgets for the Agency set
aside positions for professional criminal investigators in
the Regional OLEC decision unit.  These investigators will
be 1811 series investigators whose exclusive function will
be the investigation of potential criminal activity.  They
will not, at present, have law enforcement powers, i.e., the
authority to md\e arrests or to carry weapons.  They will,
where circumstances warrant, be eligible for "annually
based" premium pay—authorized by 5 U.S.C. §5545(c)(2)—as
well as the special retirement benefits accorded to law
enforcement officers under 5 U.S.C. §8336(c)(l).

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                         -4-
enforcement generally/ combined with the limited historical
experience of the Agency, dictate a centralized management
approach during the developmental stages of this program.

The Area Office;  A central component of this management
approach will be the development of "Area Offices" to
house the majority of criminal investigators who are to
be supervised by the Associate Enforcement Counsel for
Criminal Enforcement, Office of Enforcement Counsel.

     Under the "Area Office" approach, criminal investigator
positions contained in the FY 1982 and FY 1983 budgets will
become Headquarters rather than Regional resources, and will
be part of the staff of the Criminal Enforcement Division.
Recruitment of these investigators shall be accomplirh*;3 as
expeditiously as possible.  Following selection by *>£
Associate Administrator and General Counsel, investigators
will be assigned to duty stations in four Area Offices in
host Regions in Philadelphia, Atlanta, Chicago and Seattle.

     These Area Offices will have inter-Regional investigative
responsibilities.  The. Philadelphia Area Office will cover
Regions I, II and III; Atlanta's Area Office will cover
Regions IV and VI; Chicago's Area Office will cover Regions
V and VII; and Seattle's Area Office will cover Regions
VIII, IX and X.

     Each Area Office will be supervised by a "Special-Agent-In-
Charge" (SAIC); at least three additional investigators
(Special Agents) will be assigned to each office.  Within
this staff, specific investigators will be assigned primary
responsibility for investigations in non-host Regions to
ensure an equitable distribution of investigative resources
among all Regions.  The SAIC will manage the day-to-day
investigative activity of the unit, and will maXe initial
decisions on investigative priorities among the potential
cases within the office's geographical area of responsibility.
The SAIC will also conduct the initial performance evaluations
of the Special Agents in the Area Office.

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                       -5-
     From EPA Headquarters, the Criminal Enforcement
Division will monitor the investigative activity in each of
the Area Offices.  The Associate Administrator and General
Counsel shall have operational control of the Area Office
investigative units and shall have the authority to allocate
EPA's limited investigative resources among the Regions.
.Further, while day-to-day investigative decisions will be
made in the Area Office under the supervision of an SAIC,
the Associate Enforcement Counsel for Criminal Enforcment
will have the right to direct the investigative activity of
any Area Office in cases of national significance or parti-
cular sensitivity.  The Associate Enforcement Counsel for
Criminal Enforcement will also review and concur in per-
formance evaluations of Area Office Special Agents and
conduct the initial performance evaluations of SAICs.

     A smaller criminal enforcement unit, also staffed by
experienced criminal investigators, will be located at the
National Enforce-ent Investigations Center in Denver,. .
Colorado.  The jurisdiction of this unit will, unlike Aiea
Offices, be nationwide in scope, focusing on cases that span
the jurisdiction of two or more Area Offices.  Investigators
assigned to this unit will also participate, where appropriate,
in investigations in which the NEIC is providing technical
support.  The NEIC unit—like the Area Offices--will be
managed on a day-to-day basis by an SAIC, who will report in
turn to the Criminal Enforcement Division at EPA Headquarters.

     An organizational chart reflecting the management of the
the investigative component of the criminal enforcement
program is included as Attachment A to this memorandum.

Advantages to the Area Office Management Approach;

     A centrally-controlled criminal enforcement program
structured around the "Area Office" concept presents several
decided advantages over other management options that have
been considered:

     - It provides excellent insulation of the criminal
investigative process, avoiding even the appearance of
vulnerability to outside influences or pressures.

     - It combines an adequate number of investigators
in one office to respond to significant criminal activity.

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                     -6-
     •• It places responsibility for first and second
level supervision of the investigative process—and for
performance evaluations of staff investigators--in the
hands of personnel with demonstrated, substantial experience
in criminal case development.

     -• It provides added flexibility in the shifting of
investigative resources between Regions to respond in
emergency situations.

     - It parallels the management and organizational
structures of criminal investigative units in other
Federal agencies, and.,will assist EPA in inspiring the
trust «ind confidence of outside law enforcement agencies—
such a.'» the FBI—that will play an important role in
EPA's developing criminal enforcement program.

     - It guarantees consistent treatment of administrative
matters, such as overtime pay, promotions and performance
evaluations, for all Agency investigators.

     In sum, the centrally-controlled, "Area Office"
approach will, I believe, provide a framework for the
development of a professional investigative component.

Support for the Field Investigative Units;  Basic admini-
strate vtr~an&^TogT^tI^al~TupporT~~ToF~t^\^~Krea. Offices
and the criminal enforcement unit at NEIC will be the
primary responsibility of the host Regions in Philadelphia,
Atlanta, Chicago and Seattle, and of the Director, NEIC.
More specifically, the host Regions and the NEIC will
provide the following day-to-day support functions:

     (1)  Processing and distribution of paychecks;
     (2)  Procurement requests;
     (3)  Time and attendance cards;
     (4)  Funds control;
     (5)  Property management;
     (6)  Secure office space with furniture;
     (7)  Utilities;
     (8)  Travel planning and voucher processing;
     (9)  Parking;
    (10)  Personnel processing.

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                        -7-
     The Associate Administrator and General Counsel
will have responsibility for the following functions:

     (1)  Recruitment;
     (2)  Supervision and program direction;
     (3)  Development of performance standards;
     (4)  Performance appraisals;
     (5)  Review and approval of promotions and bonuses;
     (6)  Budgeting; 2/
     (7)  Travel approval;
     (8)  Overtime and premium pay approval;
     (9)  Allocation of investigative resources.

III.  ROLES AND RELATIONSHIPS

     The resources necessary to support criminal case
development from the initiation of an investigation to
the completion of a criminal prosecution can be extensive *
In addition, criminal investigations and referrals must
be coordinated with related enforcement or regulatory
functions within the Agency.  This memorandum describes
the basic roles and relationships of key players in the
criminal enforcement process.  It will be followed by
additional procedures where necessary to ensure early,
effective coordination between the investigative staff and
the legal and technical staffs of the affected Regional or
Headquarters offices.

OLEC;  The Enforcement Counsel Matters

     The Associate Administrator and General Counsel will
review and approve criminal referrals to the Justice Depart-
ment.  Through the Enforcement Counsel, the Associate
Administrator and General Counsel will supervise and direct
the activities of the Criminal Enforcement Division, and
2/  Secretarial support for the Area Offices will be budgeted
for, and provided by, the Office of Legal and Enforcement
Counsel.  In addition, I have asked my staff to coordinate with
the Comptroller to analyze the resources necessary for
effective support of all Agency investigators in matters
such as travel and specialized investigative equipment.

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                          -8-
will also ensure consistent and complementary use of civil
and criminal enforcement options available to the Agency.
In this regard, Enforcement Counsel attorneys will coordinate
with the Criminal Enforcement Division during the review
of Regional civil referrals that they feel may be appropriate
for criminal sanctions.

OLECt  Criminal Enforcement Division

     The Associate Enforcement Counsel for Criminal Enforce-
ment, under the direction of the Enforcement Counsel, will
monitor and supervise the Area Offices and the NEIC investi-
gative unit in all investigative activity.   The Criminal
Enforcement Division will provide all legal support for
Headquarters-managed investigations; review all criminal
referreils to the Justice Department; expand Agency training
programs for investigative and technical personnel; coordi-
nate hazardous waste referrals to the Federal Bureau of
Investigation; provide regular liaison with the Land and
Natural Resources Division and local United States Attorneys;
and formulate procedural and substantive guidance for the
conduct of Agency investigations.

     The Associate Enforcement Counsel for Criminal Enforce-
ment will also assume primary responsibility'for recruitment
of the Agency's investigative staff; evaluation of the
performance of this staff; monitoring of the use of premium
pay (over-time pay) by Agency investigators; and recommend-
ing how investigative resources should be allocated among
the Regions.

OLEC;  The National Enforcement Investigations Center

     Historically, the National Enforcement Investigations
Center has provided strong technical support in a number of
EPA criminal cases.  In addition, NEIC has been a key player
in the coordination of the Agency's ongoing and highly-successful
training program for EPA technical personnel at the Federal
Law Enforcement Training Center at Glynco, Georgia.  Primary
responsibility for technical support of criminal case
development must be carried by the Regional program offices;
however, the National Enforcement Investigations Center will
continue to assume responsibility for technical support in
Agency criminal investigations that have inter-Regional
ramifications or that exceed the resources of the technical

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                        -9-
staffs of individual Regions.  Requests for this assistance
will be processed in the same manner as any other request
for the technical assistance of NEIC in an enforcement
matter.

OLEC;  General Counsel Matters

     In criminal enforcement matters, as in other areas
of Agency activity, the Associate Administrator for Legal
and Enforcement Counsel and General Counsel, through -the
Deputy General Counsel, is responsible for interpreting laws
and supporting regulations to ensure consistent and appropriate
Agency positions on all legal issues.  General Counsel
attorneys will assist in resolving legal issues involving
environmental statutes that arise during investigations,
during the review of criminal referrals, or during the
prosecution of criminal cases.

OLEC;  The Regional Counsel

     The SAIC will look to Regional Counsels for legal
advice on EPA's statutes and regulations during the
investigative process.  To facilitate this consultation,
a Regional attorney will be designated to work with the
criminal investigative staff at the initiation of every
investigation. ^./  This attorney will act as primary in-house
counselor during the pre-referral investigative process—a
role that is of particular importance due to the complexity
of EPA's environmental statutes and the technical nature of
the underlying regulations.  Regional attorneys assigned to
specific investigations will also coordinate the preparation
of criminal referral packages.
2/  In cases of inter-Regional dimensions, the Regional
Counsel responsible for the Federal District in which the
referral is anticipated will generally be designated as lead
Regional "Counsel, unless the Associate Administrator and
General Counsel makes another designation, for purposes of
consultation during the investigative process, preparation
of the referral package, and review and concurrence in the
referral recommendation.

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                      -10-
     R
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                      -11-
of decisions on the scope and focus of investigative activity,
including decisions to initiate, investigate, refer or close
criminal cases.

     It is important to note that the Regional Administra-
tor, like any other Agency official, will be kept apprised
'of criminal enforcement matters where necessary to achieve
effective coordination of criminal investigations and other
Agency activity.£/  This will be the case, for example,
during those rare occasions when a decision is made to
pursue parallel civil/criminal enforcement proceedings, or
during investigations of companies or individuals who are
involved with the Agency on other, unrelated matters.
Recognition of these situations will be the responsibility
of the Regional Counsel, the OLEC investigative staff and
the technical and legal personnel assigned to the
investigation.

The Assistant Administrators

     As the national program managers, the Assistant
Administrators will work with the Office of Legal and
Enforcement'Counsel in the establishment of Agency-wide
and media-specific criminal enforcement priorities.  These
priorities will provide the framework for decisions on
the allocation of our limited investigative and technical
resources in the criminal case development process.

     As in other enforcement areas, Assistant Administrators
are also responsible for providing technical support
(including appropriate Headquarters support for investiga-
tions stemming from Headquarters-managed programs), and
for providing resources in Regional program budgets to
support criminal case development.  The Office of Legal and
Enforcement Counsel will continue to work closely with the
Assistant Administrators in providing projections of antici-
pated resource needs, and to ensure adequate technical
support for criminal case development.
4/  It goes without saying that information on criminal investi-
gations is highly sensitive, and should be exchanged with
restraint.  In addition, matters occurring before the grand
jury must be protected in accordance with the mandate of secrecy
established by Rule 6(e) of the Federal Rules of Criminal
Procedure.  Internal Agency coordination on criminal matters
must occur within these constraints.

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                     -12-
The Regional Program Offices

     Regional program offices will play an integral role in
the criminal case development process, and in many cases
will be asked to assign a technical person to be a member of
the investigative team.  Accordingly, prior to the initiation
•of most investigations, a request will be made to the
Regional program office for technical assistance.  In
addition, in all investigations the Regional program office
will be contacted to ensure that no administrative actions
against the investigative  target are pending or contemplated.
While every effort riust be made to support meritorious
investigations falling within the criminal enforcement
priorities of the Agency, it is recognized that each Regional
program office acts under finite budget constraints.  If
resource difficulties are anticipated, this fact must be
highlighted at the earliest stage, so that alternative
sources of support (such as the NEIC) can be explored.  To
facilitate this early coordination, each Regional program
office should designate a "contact" person for liaison on
criminal enforcement activities.  This liaison activity
must, cf course, be conducted with appropriate sensitivity to-
the need for confidentiality in criminal matters.

     Because of the integral role of Regional technical
personnel, the Office of Legal and Enforcement Counsel has
made a special effort over the past year to provide basic
training in criminal case development through the Federal
Law Enforcement Training Center in Glynco, Georgia.  Approxi-
mately 100 technical personnel from every Region (as well as
the NEIC staff) have received this training.  The need for
Agency personnel to be sensitive to, and familiar with, the
demanding constitutional and statutory safeguards surrounding
criminal case development is self-evident.   Accordingly,
this training will continue.  Regional program offices are
asked to ensure that employees who participate in compliance
inspections, or who are regularly involved in enforcement
support activities, attend this training.  It is crucial to
the development of a professional" program.

The Justice Department

     Through its primary investigative Agency—the Federal
Bureau cf Investigation--the Justice Department will
provide investigative support for the development of
selected cases involving illegal hazardous waste activity, or

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                       -13-
requiring full law enforcenent powers (i.e., the authority
to arrest, to carry weapons and to execute criminal search
warrants).

     Further, the Justice Department and local United
States Attorneys will be available for advice during
investigations, and will provide the prosecutorial support
for all EPA criminal referrals.  At present, Regional
attorneys are working closely with the Justice Department
on several important prosecutions.  While the role of
EPA attorneys in criminal litigation is necessarily more
limited, every effort will be made to develop a significant
role for EPA attorneys in the prosecution of criminal
cases in conjunction with the Justice Department.

IV.  REPORTING PROCEDURES

     Standardized Agency forms are being developed to
document witness interviews and investigative developments,
as well as the opening and closing of investigations.
These forms will be printed in quadruplicate, and will
be disseminated for Agency-wide use following the hiring
of investigators.  One copy of each form will be set
aside upon use during field investigations; these copies
will be sent on a regular basis to the Criminal Enforcement
Division, where a second, complete Agency file will be
maintained on each investigation.  The reports will provide
one basic method of monitoring field investigative activity
at EPA Headquarters.  Special-Agents-In-Charge in each Area
Office will be responsible for ensuring that reporting
requirements are met by their investigative staffs. The
Associate Enforcement Counsel for Criminal Enforcement will
keep the Associate Administrator and General Counsel and the
Enforcemenent Counsel informed, on a regular basis, of
ongoing case development activity.

V.  INITIATION AND CONDUCT OF AN INVESTIGATION

     In Section III, above, the roles of various Agency offices
were described.  Section V is provided as a general description
of the interaction of these offices during a.routine investi-
gation; of course, these general principles are flexible,
and can change to accommodate the facts of specific cases.

     An initial "lead" or allegation of potential criminal
activity may come to the Agency from any of several sources,
including State agencies, routine compliance inspections,
disgruntled plant employees or citizen groups.  Regardless
of its source, it should be transmitted immediately to the
Special-Agent-In-Charge of the responsible Area Office, who
will assign a Special Agent to the lead for follow-up.

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                       -14-
     If the reliability of the lead is unclear, the Special
Agent will conduct a preliminary inquiry solely to determine
the credibility of the allegation, and to make an initial
assessment of the need for more thorough investigation.
This initial inquiry will be brief, and will involve no
extensive commitment of resources or time.  The sole purpose
•is to reach an initial determination on the need for a
complete investigation.

     If, in the opinion of the Special Agent and the
Special-Agent-In-Charge, the lead warrants thorough investiga-
tion, the Special Agent will immediately contact the Regional
Counsel in the Region-where the investigation is to be
conducted.  The Regional Counsel will ensure that no civil
enforcement action is pending or contemplated against the
investigative target, and will assign an attorney to work
with the investigator during the case development process.
The Reeional attorney and Special Agent will also contact
the appropriate Regional program office to ensure that no
administrative enforcement action is pending or contemplated.
In addition, where the need for technical support during the
investigation is contemplated, the Regional program office
will be asked to assess the availability of technical
resources, and when appropriate to designate a specific
individual to -work with the Special Agent during the course
of the investigation.  These activities will be carried out
in consultation with the Criminal Enforcement Division.

     If no pending administrative/civil enforcement actions
exist involving the investigative target, a case file will
be opened by the Special Agent and a copy of a case opening
report oent immediately to the Criminal Enforcement Division,
EPA Headquarters.  While simultaneous administrative/civil
and criminal enforcement actions are legally permissible,
they will be the exception, rather than the rule.  As a
general rule, an administrative or civil proceeding will be
held in abeyance pending the resolution of the criminal
investigation.  One exception to this general rule will be
those situations in which emergency remedial response is
mandated.  In these situations, however, the criminal
investigation will not be initiated without the prior
approval of the appropriate Regional Counsel and the
Enforcement Counsel.  If there is disagreement concerning
the need for a criminal investigation, the matter will be
referred to the Associate Administrator and General Counsel
for action.

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                      -15-
     The opening of a case file and submission of a case '
opening report does not commit the Agency to proceed
with a criminal referral at the culmination of the investi-
gation; nor does it reflect an Agency decision that criminal
conduct has occurred, or that criminal sanctions are the
exclusive or appropriate remedy.  All enforcement options
remain open, and should be considered,  throughout the
ensuing investigation and the formal referral to the Justice
Department.

     Management of the investigation will be the primary
responsibility of the Special Agent, acting under the
supervision of the Area Office Special-Agent-In-Charge.
The Special Agent will be responsible for determining
the basic investigative' approach, and will take the lead
in conducting interviews, assembling and reviewing records,
planning and executing surveillances, coordinating with
State, Federal or local law enforcement agencies, planning
and executing searches, developing informants, and performing
other investigative matters.  A technical person will work
with the Special Agent during those portions of an investigation
requiring technical expertise.

     In pursuing an investigation, the Special Agent will
be responsible for completing all required reports, (interview
summaries; reports of investigation etc.) and for coordination
with the Criminal Enforcement Division as required prior to
specific investigative developments.  As a general operating
practice, only one member of the investigative team will
record, or document, any stage  or development in the
investigation.

     In every investigation opened by the OLEC investigative
staff, a Regional attorney will be assigned to work with the
Special Agent managing the investigation.  The Regional
attorney will act as primary in-house counselor during the
pre-referral investigative process.  This role is of
particular importance due to the complexity of EPA's environ-
mental statutes, and the technical nature of the underlying
regulations.  In addition, legal issues frequently arise
during the case development process concerning the use of
statutory discovery devices; the pursuit of parallel
criminal and civil proceedings; the confidentiality of
business information; delegations of authority within the
Agency; State statutes and enforcement proceedings; inter-
nal EPA policy and guidance; and elements of proof under
EPA's environmental criminal provisions.  It will be the
responsibility of the Special Agent to consult with,

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                      -16-
and seek the guidance of, the Regional attorney on these and
similar issues throughout the pre-referral investigative
process.

VI.  REFERRAL PROCEDURES

     At present, criminal referrals are recommended by
Regional Counsels, reviewed within EPA Headquarters by the
Criminal Enforcement Division and the Enforcement Counsel,
approved by the Associate Administrator for Legal and
Enforcement Counsel and General Counsel, and—upon approval
—directed simultaneously to the Land and Natural Resources
Division and the appropriate local United States Attorney.
With the implementation of a centrally-controlled program
structured around the Area Office concept, these procedures
will be changed somewhat.

     As in the past, criminal cases will be developed
as thoroughly as possible prior to referral to the Justice
Department.  During this process, informal coordination
between investigative staffs and the Justice Department
and locial United States Attorneys is encouraged.  However,
formal ireferral of criminal cases for further investigation
by grand jury, or for prosecution, will require the prior
approval of the Associate Administrator and General Counsel.

     A referral recommendation will be developed when the
indepencient field investigation has been exhausted, or when
it can or should proceed no further without the initiation
of a grand jury investigation by the Justice Department.  At
this point, the results of the investigation will be assem-
bled in a referral package.  The preparation of the overall
referral package will be the responsibility of the Regional
attorney assigned to the investigation.  Drafting responsibil-
ities will be shared by members of the investigative
team.

     The Special Agent will be responsible for summarizing
for the report the factual evidence developed in the case.
Much of this evidence will already be documented in interview
summaries and investigative reports completed during the
investigative process.  Accordingly, the factual portion of

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                    -17-
the report will be a concise summary of the case, followed
by exhibits documenting the evidence that will be proved
at trial.

     The Regional attorney will be responsible for a
thorough and coordinated presentation of the statutes and
regulations underlying the referral.  This section will be
of crucial importance in determining whether a referral
should be made.  Once a referral is sent to the Justice
Department, this section will be helpful in briefing the
Justice Department and local United States Attorneys on the
complexities of environmental laws and regulations, and
should assist in minimizing delays in prosecutorial support
that result from a lack of familiarity with environmental
statutes.

     The technical person assigned to the case will be
responsible for presenting the technical portion of the
package,.including a description of the violating facility,
technical evidence Acquired during the investigation, and
a statement of environmental impact.

     The present referral package format will -continue in
use unless changed by the Associate Administrator and
General Counsel.

     Once the package is prepared, it will be reviewed
by the Special-Agent-In-Charge and the Regional Counsel,
who will act as joint signatories.  Technical portions of
the package will also be reviewed by the Regional or Head-
quarters program office, or the NEIC—depending rr. -;he
source of technical support.  During this technical review,
the availability of technical resources  to support litiga-.
tion should also be reviewed a:.d specifically  confirmed by
the appropriate technical office.

     Following completion of the referral package and
concurrence in the referral recommendation by the Special-
Agent-In-Charge and the Regional Counsel, three copies of
th3 referral package and all exhibits should be directed to
the Associate Enforcement Counsel for Criminal Enforcement,
Criminal Enforcement Division (EN-329); U.S. Environmental
Protection Agency; 401 M St. S.W.; Washington, D.C. 20460.

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                    -18-
No copies of the referral package will be sent to the local
United; States Attorney or the Justice Department until
Headquarters has reviewed the referral and the Associate
Administrator and General Counsel has approved the referral.

     If either the Special-Agent-In-Charge or the Regional
Counsel believe the referral should not be made, that
official should include a statement of the reasons under-
lying this position and make an alternative recommendation
(i.e., close out investigation; change to civil referral;
change to administrative action etc.).  The package will
nevertheless be directed to the Criminal Enforcement Divi-
sion for review; a final referral decision will be made by
the Associate Administrator and General Counsel.

     The Headquarters review will focus on the adequacy
of case; development; adherence to the criminal enforcement
priorities of the Agency; legal issues of first impression;
consistency with related program office policy; 5/ and
general prosecutive merit.  In cases involving particularly
complex issues of law, the Criminal Enforcement Division
will also consult with General Counsel attorneys.  If,
following this review process, the referral recommendation
is accepted, referral packages will be directed simultaneously
to the 'J.S. Attorney and to the Justice Department.  Appro-
priate cover letters will be drafted by the Criminal Enforce-
ment Division.

     Situations may arise in which an emergency referral
to the local United States Attorney is necessary.  For
example, immediate resort to the grand jury's compulsory
process may be required in investigations of ongoing
illegal  activity, or when there are grounds to anticipate
the flight of a witness.  Such situations will be limited.
When they arise, SAICs, following coordination with the
Regional Counsel, will contact the Criminal Enforcement
Division.  Following consultation with the Associate
Administrator and General Counsel, telephonic
j>/  Each Assistant Administrator is encouraged to appoint
one individual to coordinate with the Criminal Enforcement
Division on criminal enforcement matters.  Subject to the
normal constraints on dissemination of information concerning
criminal cases, consultation will occur during the referral
review process, to ensure that a specific case does not
raise policy issues that should be brought to the attention
of the Associate Administrator and General Counsel prior to
the referral decision.

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                     -19-
authorization for an emergency referral will be granted in
appropriate cases.  Copies of all materials transmitted to
the local U.S. Attorney in connection with the emergency
referral will then be directed immediately to the Criminal
Enforcement Division and the Environmental Enforcement
Section, Land and Natural Resources Division, Department of
Justice.

VII.  POST-REFERRAL PROCEDURES

     Following referral to the Justice Department, control
of the case shifts to the prosecutor assigned to the
referral.  Normally, the prosecutor will be a member
of the local United States Attorney's office.  In cases
of national significance, or beyond the resources of the
United States Attorney, the case may be managed by the
Environmental Enforcement Section, Land and Natural Resources
Division.  In addition, the Land and Natural Resources
Division is currently monitoring the progress of environmental
criminal referrals throughout the country.

     The Special Agent responsible for the investigation •
will act as primary liaison with the Justice Department
or the local United States Attorney.  This Special Agent
will perform and coordinate additional investigation as
required, and will normally be designated a special agent
of the grand jury if a grand jury presentation or investi-
gation is initiated.

     In most cases, the EPA attorney assigned to work with
the  investigative staff in the development of the case will
be responsible for fulfilling requests for legal assistance
during the litigation of the case.  Program office staff
must be available to provide technical support as needed.

     Most of EPA1s criminal cases will be developed further
through the grand jury following referral.  Stringent, closely-
monitored rules govern the conduct of grand jury investigations.
Agency officials will be responsible for familiarizing them-
selves completely with these rules prior to participating

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                       -20-



in a grand jury investigation. £/

VIII.  PLEA BARGAINING

     Negotiations of settlements in criminal cases, i.e.,
plea bargaining, is the primary responsibility of the
Justice Department.  Following the referral of a criminal
'case, Agency officials should never enter into independent
negotiation or discussion with the subject(s) of that
referral without prior coordination and approval by the
Justice Department attorney overseeing the case.  It
is, of course, entirely appropriate for Agency officials
working on the criminal prosecution--including investigators,
attorneys and technical personnel—to provide input,
suggestions and advice during the negotiation process.
Moreover, the Agency would expect to be consulted on any
final settlement.


IX.  REQUESTS FOR ASSISTANCE IN CRIMINAL INVESTIGATIONS
CONDUCTED BY THE JUSTICE DEPARTMENT AND THE FBI

     EPA may receive requests for technical, legal or
investigative assistance in environmental criminal cases
that are initiated independently by the Justice Department
or the Federal Bureau of Investigation.

     It will be the policy of EPA to provide support for
these requests to the extent resour-ss permit.  Requests for
legal or investigative assistance ir. criminal investigations
from the Justice Department or the FBI will be r ? -jwed in
advance by the Criminal Enforcement Division, the Enforce-
ment Counsel, and the Associate Administrator and General
£/  Agency guidelines on grand jury investigations were
circulated by OLEC on April 30, 1982.  (See Memorandum,
"Age.-cy Guidelines for Participation in Grand Jury
Investigations;" Associate'Administrator for Legal and
Enforcement Counsel and General Counsel to Assistant Admini-
strators, Regional Administrators, Regional Counsels and
Director, NEIC, 4/30/82).  Agency officials should consult
these guidelines prior to participation with the Justice
Department in a grand jury investigation.

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                       -21-
Counsel.  Accordingly, regional offices that receive any
such requests should forward the request to the Criminal
Enforcement Division for final determination by the Associate
Administrator and General Counsel.

     Any request for technical assistance should be for-
warded to the appropriate program office for determination.


X.  SECURITY OF CRIMINAL INVESTIGATIONS

     Information on criminal investigations must be
provided with restraint, and only to persons who have
a "need to know" the information.  Additionally, special
attention must be given to the care and custody of written
materials pertaining to an investigation.  This point is
of particular importance when circulating a referral
package for review.  OLEC investigative units will be
equipped with secure office space, filing cabinets, and
evidence vaults.  Similar security measures should be
utilized by program office and Regional Counsel staff
assigned to an investigation.

     Active criminal investigations shall never be discussed
with personnel outside of the Agency except as is necessary
to pursue the investigation and to litigate the case.
Accordingly, requests for information on active investi-
gations from the news media should be politely but firmly
denied.  Moreover, Agency officials should never confirm
the existence of an ongoing field or grand jury investi-
gation in response to outside inquiries.

     Finally, in the event of inquiries from Congress,
my staff will work closely with the Congressional Liaison
Office prior to releasing any information or making any
public statements.

XI.  RESERVATION

     The policy and procedures set forth herein, and
internal office procedures adopted pursuant hereto, are not
intended to, do not, and may not be relied upon to create a
right or benefit, substantive or procedural, enforceaole at
law by a party to litigation with the United Starts.  The
Agency reserves the right to take any action alleged
to be at variance with these policies and procedures or
not in compliance with internal office procedures that
may be adopted pursuant to these materials.

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                                            ATTACHMENT A
                                         Organizational Chart
                      Investigative Component of the Criminal Enforcement Program
                                        Associate Administrate-
                                               For Legal
                                        and Enforcement Counsi
                                          and General Counsel
                                                   JL
                                          Enforcement Counsel
                                          Criminal Enforcement
                                               Division
Area Office
(Philadelphia)
Office Leader:
  SAIC
Staff Investigators:
  3-5 Special Agents
Clerical:
  1 Secretary
  1 Clerk Typist
Area Office
(Atlanta)
Office Leader:
  SAIC
Staff Investigators:
  3-5 Special Agents
Clerical:
  1 Secretary
  1 Clerk Typist
Criminal Enforce-
ment Unit (NEIC)
1 SAIC
1 Special Agent
(Clerical Support to
be provided by the
NEIC).
Area Office
(Chicago)
Office Leader:
  SAIC
Staff Investigators:
  3-5 Special Agents
Clerical:
  1 Secretary
  1 Clerk Typist
Area Office
(Seattle)
Office Leader:
  SAIC
Staff Investigate!
  3-5 Special Agei
Clerical:
  1 Secretary
  1 Clerk Typist

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GM-16

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           UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                      'WASHINGTON. D.C. 20460
 C3


MEMORANDUM


SUBJECT:  Regional Counsel Reporting Relationship
                         SZ&ii-  '
FROM:     Alvin L. Aim   <-**"-*> *—*
                                                         or PICK or
                                                      TMK AOMINI1TMATOM
          Deputy Administrator Designate

TO:       Assistant Administrators
          Associate Administrators
          Regional Administrators
          Regional Counsels


     As part of an overall review of headquarters-regional
matters, I have recently reviewed the relationship among the
Regional Counsels, the Regional Administrators, the Office of
General Counsel, and'the Office of Enforcement Counsel, and
have met with a number of you to discuss this topic.  My cen-
tral desire has been to reconcile the need for strong legal
support to allow the Regional Administrators to succeed in
their duties with the need for national consistency in inter-
preting and applying the laws under which the agency operates.
The decisions which follow are an effort to meet both goals.

     Accountability of the Regional Administrators for
Enforcement.  The Regional Administrator, rather than the
Regional Counsel, will be fully accountable for enforcement
activities and enforcement results.  I believe this is prefer-
able to the current system, under which accountability is
divided between the Regional Administrator and the Regional
Counsel.  With my decisions today,.the Regional Administrators
now have control of the full range of resources needed for an
effective regional enforcement program and thus are the appro-
priate focus of accountability for that function.   The Assistant
Administrator for Enforcement will have the same policy-setting,
review, and oversight responsibilities as the other Assistant
Administrators have for their regional counterparts.

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      Allowance  holder  for  Regional  Counsel  resources.  The
 Regional  Administrator will  be  the  allowance holder for Regional
'Counsel  budget  allocations.   Administering  these  allowances  in
 headquarters has proved cumbersome  and confusing, with no off-
 setting  benefits.  The allowance  holder  shift  will take effect
 October  1,  1983, for FY 1984,

      Program direction of  Regional  Counsels.   The Regional
 Administrator is the policy-maker for his region, and is the
 Regional  Counsel's client.   Accordingly,  the Regional Counsel
 and  his  staff must be  responsive  to the  policies  and priorities
 established by  his client,  the  Regional  Administrator.  This
 means that  the  activities  of the  Regional Counsel will be
 determined  on a day-to-day basis  by the  Regional  Administrator,
 and  that  fche Regional  Counsel is  accountable for  the quality,
 timeliness, and adequacy of  the legal services provided to  the
 Regional  Administrator.

      Selection  and rating  of Regional Counsels.   Given the
 complexity  of £?A's regulatory  programs,  and the  possibility
 of confusion and damage from divergent legal approaches, I
 think we  should continue to  maintain a single  national law
 office of which the Regional Counsels are parts.  Accordingly,
 the  lead  responsibility for  selecting the Regional Counsel and
 his  staff shall remain with  the General  Counsel,  with the
 concurrence of  the Regional  Administrator on the  selection of
 the  Regiona.'. Counsel,  Similarly, the General  Counsel shall
 review and  rate the performance of  the Regional Counsel', in
 consultation with the  Assistant Administrator  for Enforcement,
 eind  with  the concurrence of  the Regional Administrator.  The
 General  Counsel shall  also have the lead in establishing rating
 and  promotion criteria for attorneys in  the Regional Counsel
 cffices.

      National Consistency.   The General  Counsel shall review
 pleadings filed in regional  cases to the extent necessary to
 assure consistency in  Agency legal  arguments and  statements  on
 issues of national significance.  The General  Counsel should
 speak for EPA  in interpreting the law.   The Regional Counsels
 must of  course  deal with interpretive problems in carrying out
 their duty  to advise the Regional Administrators. However,
 the  Regional Counsels  should consult with the  Office of General
 Counsel  to  the  extent  necessary to  assure consistency in Agency
 statements  on legal issues.

      These  decisions will  make  the  delivery of legal services
 mere efficient  Agency-wide,  and will help support an effective,
 vigorous enforcement program.   Additional directives will detail
 how  these general decisions  will  t>e implemented.

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GM-17

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*• ff^.  ^

      ^ I    UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
      .
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GUIDANCE FOR DRAFTING JUDICIAL CONSENT DECREES
    EPA GENERAL ENFORCEMENT POLICY i GM - 17
                      UNITED STATES ENVIRONMENTAL
                           PROTECTION AGENCY
                      EFFECTIVE DATE:

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THE POLICIES AND PROCEDURES ESTABLISHED IN THIS DOCUMENT 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 RIGiHT TO ACT AT VARIANCE WITH THESE POLICIES AND PROCEDURES
AND TO CHANGE THEM AT ANY TIME WITHOUT PUBLIC NOTICE.

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                      TABLE OF CONTENTS


TOPIC                                                     PAGE

I.   Introduction  	0 „	 1

II.  Front End Standard Provisions - Providing the
     Factual and Legal Background for the Consent Decree .. 3
          t
     A.  Parties	 3
           Plaintiffs - example  	 3
           Defendants - example  	,. 4
           Intervenors - example  	„	 5
                      ' "-•f
     B.  Procedural History	 5
           Examples	 5

III.  Transitional Clause - Providing a Lead into the
     Court's Order  	 €
       Example  	 7

IV.  Provisions of the Court's Order  	 7

     A.  Jurisdiction and Statement of the Claim	 7
           Jurisdiction - example  	 7
         • .Statement of the claim - example  	 7

     B.  Applicability Clause  	 8
           Example  	 8

     C.  Public Interest Provision  	 9
           Example  	•	 9

     D.  Definitions Section	 9
           Example  	 10

     E.  Compliance Provisions  	 10

         1.   Generally  	 10
               Example	..	 12
               Example - Sinter Plant  	-	 13

         2.   Compliance Provisions for Repeat Violators  .. 14

         3.   Performance Bonds	 15
               Example	 15

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     F.  Provisions Defining Other Responsibilities of
         the Parties to the Decree	  15

         1.  Notification  	  15
               Example  	  16

         2.  Penalties  	  16

             a.  Generally	  16
                   Examples  	  16, 17

             b.  Other Obligations Assumed by Defendants ..  18
                   Example	  19

         3.  Dispute Resolution Provisions  	  19

         4,  Nonwaiver Provision  	  20
               Example  	  21

         5.  Stipulated Penalties  	  22
               Example . . .,	  23

         6.  Force Majeure  	  24
               Example	  26

         7.  Public Comment, on the Decree  	--. . .  27
               Example ....'......	  27

         8.  Retention of Jurisdiction  	  27
               Example	  28

         9.  Confidentiality of Documents  	  28
               Example 	  28

        10.  Modification of the Consent Decree  	  28
               Example  	  29

        11.  Termination of the Decree and Satisfaction  ..  29
               Examples  	  29/ 30

        12.  Costs of the Action  	  30
               Example  	N	  30

        13.  Execution of the Decree  	' 31

APPENDIX A - Consent Decree Checklist

APPENDIX B - Sample Consent Decrees

                             (ii)

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I.   Introduction



     The purpose of this document is to provide guidance on



provisions which EPA should include when drafting a settlement



agreement covering a civil enforcement action for which the



Federal government has decided that judicial remedies are



appropriate.  The document explains the appropriate use of



various standard provisions and provides sample language for



these provisions.



     Each judicial consent decree negotiated by EPA differs,



because each deals with a different noncompliance problem and



embodies the results of a separate negotiating process.  Pro-



visions contained in decrees must differ to reflect the agree-



ment resulting from these-negotiations.  Most consent decrees,



however, also must contain certain relatively standard provi-



sions to address matters which are relevant in virtually 'all



enforcement actions.  Use of this standard language will



lessen the review necessary of the resulting draft consent



decree.  Of course, local court rules may also mandate specific



forms which must be followed or provisions which must be



included in settlement agreements.



     The settlement of a potential civil judicial action



should almost always result in a negotiated consent decree.



Occasionally, in the past,  EPA has entered into voluntary



agreements to settle some enforcement actions.  Those EPA



officials negotiating settlements in EPA enforcement actions



are not encouraged to use such voluntary agreements and they



should be limited to unique situations, for example,

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                             -2-
in cases in which no prospective action is required from the
defendant.
     A consent decree may operate as a release from liability
for the defendant for the violations addressed by the decree.
For this reason, the decree must be narrowly drawn and address
only the allegations made in the complaint.  The consent decree
should release the defendant from liability only after the
defendant has complied with all the terms of the decree.  In
all cases, settlements must be carefully drafted.  Many
parties may be involved as defendants or potential defendants,
particularly in hazardous waste cases; therefore, you should
be certain that non-settling defendants or potential defendants
are not released from liability because EPA .has settled with •
one or .-some of the defendants. (See, Nonwaiver Provision,
page 20 ).
    This guidance is meant to apply generally to all EPA media
areas and does not attempt to discuss unique issues limited
to a specific media..  Therefore, EPA attorneys drafting
consent decrees should consult any applicable media-specific
policies for guidance in dealing with these issues.  You
should follow separately issued guidance for procedures to
use in conducting negotiations and for the review and approval
of proposed consent decrees.

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                             -3-

II.  "Front End" Standard Provisions - Providing the Factual
     and Legal Background for the Consent Decree.

     A.  Parties and Cause of Action

         It is obvious that each consent decree must identify

the parties and the cause of action.  The plaintiff in every

action is the United States of America, on behalf of the

United States Environmental Protection Agency.  Identify the

cause of action by specifying the legal authorities allegedly

violated by the defendant and by briefly describing those

actions by the defendant which led to the filing of the complaint,

The decree should make some reference to the complaint which

has been or will be filed to demonstrate the decree's relation-

ship to pending litigation.

                           EXAMPLES
            •
         1.  Plaintiff, United States of America, on behalf
             of the United States Environmental Protection
             Agency (EPA), has filed the complaint herein on
             (date)     This complaint alleges that the
             defendant violated the Clean .Air Act, 42 U.S.C.
             § 7401 e_t seq. and the 	 State Implemen-
             tation Plan  (the SIP) adopted under the Clean
             Air Act by the following actions:

         2.  Plaintiff, United States of America, on behalf
             of the United states Environmental Protection
             Agency (EPA), filed the complaint herein on
              (date) .  This complaint alleges that the
             defendant violated the Clean Water Act, 33
             U.S.C. §1251 e_t seq.  and National Pollutant
             Discharge Elimination System (NPDES) Permit No.	
             by the following actions:


     Every consent decree should identify the defendant in terms

of the defendant's status as an individual, corporate entity,

partnership, etc.  This section should give enough factual

information to establish  the court's personal jurisdiction

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over the defendant and to establish venue.  In some situations,

the defendant will own or operate several facilities.  Facilities

covered by this decree should be specified with particularity.

If the decree fails to identify precisely those facilities

or sources which are in violation of the relevant statute(s)

and for which relief is provided in the decree, there may be

some question as to the scope of the decree.

                           EXAMPLE

             Defendant, XYZ Steel Corporation (Defendant),
             is a Delaware corporation, registered to do
             business in the Commonwealth of Virginia
             with its prinicipal place of business at 6004
             Main Street, Alexandria, Virginia.

             Defendant owns and operates an integrated steel-
             making facility known as the "Karefull Works",
             in Karefull Hills, Smith County, in the Southern
             District of Virginia.  Defendant owns and
             operates various facilities at the Karefull
             Works, including among others, a sinter plant,
             comprised of two sintering lines; an open hearth
             furnace; three blast furnaces; an electric
             arc fan shop, comprised of two electric arc
             furnaces; and two coke oven batteries.  All
             of the above facilities are alleged by the
             Plaintiff to be sources of air pollution operating
             in violation of the State Implementation Plan
             and are covered by this decree.


     In addition to the plaintiff and defendant(s), any inter-

venors in the suit (often affected States) should be identified

as parties to the decree.  Making the intervenors parties to the

decree is necessary for full settlement and can give them the

ability to enforce the decree's provisions.  Binding intervenors

to the decree's provisions also provides the defendant with

complete information as to the extent of its liability.  If

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                             -5-

motions to intervene are pending, those, as well as any other

outstanding motions, should be resolved by the decree.

                           EXAMPLE

             The State of Ohio has moved to intervene as
             Plaintiff.  The Commonwealth of Pennsylvania
             has also moved to intervene as Plaintiff to
             protect its interest insofar as resolution of
             the allegations of the complaint affect water
             quality in the Mahoning River at the Ohio-
             Pennsylvania State line.  The motions to
             intervene are hereby granted.


     B.  Procedural History

         The decree should include provisions regarding proce-

dural history if the defendant in the case at bar has been

involved in prior relevant enforcement proceedings.  It is helpful,

in these cases, to specify the relationship between this deqree
                               •

and previous decrees and orders in effect with regard to this

defendant.   The decree you are drafting may abrogate or add to

the provisions of a previous decree or order.  If so, you

should detail these facts in the decree.  In some instances,

the previous decree or order may have resolved violations at

the same facility which are so similar to those presently being

addressed that the existence of two decrees would be confusing.

A new decree which incorporates those provisions of the prior

decree still in effect may clarify the obligations of the

defendant.   Finally, if the violation of an administrative

order preceded this judicial action, you should note that

fact in this section of the decree.

                           EXAMPLES

         1.  Plaintiff and Defendant entered into a-

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                             -6-

             Consent Decree to resolve a prior case,
             Civil Action No. 	, and  the
             Defendant has fully and satisfactorily
             complied with that prior Decree.

             Plaintiff and Defendant entered  into a
             Consent Decree, to resolve violations of the
             Clean Air Act at defendant's 	_____
             facility.  That Decree retains full force and
             effect.

             Plaintiff issued an administrative order
             pursuant to §309 of the Clean Water Act to
             the Defendant on (date).  The Defendant has
             failed to comply with the terms  of this
             administrative order.
III. "Transitional" Clause - Providing a Lead  into the Court's
     Order

     Traditionally, every consent decree contains a  transi-

tional clause which signals the end of the  introductory

portions of the decree and the beginning of the Court's

order.

     You will most likely draft and execute a  consent decree

which is the result of a settlement before  the introduction

of any evidence or the finding of any facts.   In these instances,

it is inappropriate to recite that these events took place.

     ."n some instances, settlement may be reached without the

defendant admitting any facts or points of  law and refusing to

admit any liability.   It is appropriate to  use this clause to

indicate this fact.

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                             -7-

                           EXAMPLE

             There has not been a trial on any issue of fact
             or law in this case.  However, the parties wish
             to settle the dispute described above.  Accordingly,
             they have agreed to the following order through
             their attorneys and authorized officials.

             THEREFORE, it is ORDERED as follows:
     However, if the defendant has admitted certain facts,

these should be explici-tly noted in the decree.


IV.  Provisions of the Court's Order

     A.  Jurisdiction and Statement of the Claim

         Every decree must contain a provision reciting that the

court has subject matter and personal jurisdiction.  The decree

should recite the statutory authority for the court's jurisdic-

tion.  This is particularly important if the defendant disputed

the court's jurisdiction.  The following example states the fact

of the court's jurisdiction and provides a waiver by the defen-

dant of any objections to the court's jurisdiction.

                           EXAMPLE

             This Court has jurisdiction over the
             subject matter and over the parties
             pursuant to 28 U.S.C. §1345; 42 U.S.C. §7603
             and 42 U.S.C. 6973.  The Defendant
             waives any objections it may have to the
             jurisdiction of the Court.


     Additionally, Federal Rule of Civil Procedure 8(a) requires

that a complaint state a claim for which relief can be granted.

Obviously, courts cannot grant relief where no cause of action

will lie.  It is essential to state in the decree that the com-

plaint met this requirement, e.g., "The Complaint filed herein

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                             -8-

states a claim for which relief can be granted".  Such a state-

ment does not constitute an admission of liability by the

defendcint, but only that the allegations of the complaint, if

proved, would support the judgment.

     B.  Applicability Clause

         The applicability clause defines those to whom the

decree applies.  It binds the successors in interest to both

the plaintiff and the defendant, thus providing for those

instances when ownership of facilities or sources may change

after ontry of the decree.  The language used parallels the

language of Federal Rule of Civil Procedure 65(d) since that

rule sets out the scope of injunctions.

                           EXAMPLE
                                                      •
             The provisions of this consent decree shall
             apply to and be binding upon the parties to
             this action, their officers, agents, servants,
             employees and successors.  Defendant shall
             give notice of this consent decree to any
             successors in interest prior to transfer
             of ownership and shall simultaneously verify
             to plaintiff that defendant has given such
             notice.


     In some cases, particularly hazardous waste site cases,

the decree may include a further provision which will ensure

that subsequent purchasers of the property have notice

that the site was or is a hazardous waste site and that a

consent decree exists which affects the property.  For example,.

the decree could provide that it be recorded with the local

office having responsibility for the recording of deeds and

other such instruments.   Alternatively, the defendant could

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                             -9-

agree to note the decree on the deed to the property.

     C.  Public Interest Provision

         All consent decrees should contain a provision that the

parties agree and the Court has found that the decree is in the

public interest.  Such a statement by the parties and a finding

by the Court makes it more difficult for others to later attack

the decree's terms.  (This is especially true for those decrees

which are subject to public comment.  See the discussion at

page 27.)

                           EXAMPLE

             The parties agree and the Court finds that
             settlement of these matters without further
             litigation is in the public interest and
             that the entry of this decree is the most
             appropriate means of resolving these matters.


     D.  Definitions Section

         Consent decrees which contain many technical or poten-

tially ambiguous terms, or define terms according to agreement

reached between the parties should contain a separate section

listing those definitions.  This section can also give defini-

tions for potentially misleading terms.

     Of course, definitions given must conform with definitions

given in statutes and regulations.  Do not attempt to redefine

terms that have specific legal definitions; however, examples

or illustrations of these terms may be appropriate.

     For consent decrees that are very short and limited in

scope a separate section devoted to definitions may be unne-

cessary.  Terms defined in specific decrees will, of course,

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                             -10-

vary.  The following example demonstrates one form of such a

sect,ion.

                           EXAMPLE

             The following terms used in this consent
             decree shall be defined as follows:

             a.  The terra "days" as used herein shall
                 mean calendar days.

             b.  The term "permanently cease operation"/
                 when''used in such phrases as "per-
                 manently cease operation of the six (6)
                 open hearth furnaces", .shall mean the
                 complete cessation of production at the
                 relevant source and the termination of
                 all power or fuel to the source.


     E.  Compliance Provisions

         1.  Generally

     Consent decrees must require compliance with applicable

statutes or regulations and commit the defendant to a particular

remedial course of action by a date certain.  Consent decrees

negotiated by EPA contain compliance provisions whenever it

is necessary for defendant to take remedial action to cure

or prevent violations unless no injunctive relief is necessary

to obtain compliance with applicable law (i.e., penalties

only case).

     Compliance provisions set out what steps the defen-

dant nust take to remedy violations of various environmental

statutes and usually define methods EPA can use to determine

the defendant's success in meeting these provisions.   The

specific compliance provisions of each decree will vary

depending on the facts of the specific case and the media

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                              -11-
 involved.   Drafters  should  consult  media-specific  policies
 for  guidance.
      Compliance  provisions  should specify  the  standard  or level
 of performance which a  source ultimately must  demonstrate it
 has  met.   Other  than interim standards  to  be attained until
 final compliance is  achieved,  a  decree  should  not  set a
 standard  less stringent than that required by  applicable law  because
                     • -(r
•a decree  is not  a  substitute for regulatory or statutory change.
      You  should  avoid including  compliance provisions which
 require the defendant to comply  solely  by  installing certain
 equipment,  unless  specific  technical  standards are required by
 applicable  regulations.   Such provisions should require
 compliance  with  the  appropriate  standard as well.   Such a
 provision may allow  the defendant to  argue that installation
 of the equipment fulfills the requirements of  the  consent
 decree even if the equipment fails  to achieve  compliance
 with  statutes and  regulations.   You may include provisions
 which require the  installation of necessary control technology.
 However,  the provisions must be  clear that installation of
 specific  equipment does riot  relieve the defendant  from  the
 responsibility for achieving and maintaining compliance with
 the  applicable laws  and regulations.^/
_!/ Under some  statutes,  CERCLA,  for  example,  standards  for
clean-up are rarely  available.   When the  decree  involves
future clean-up activities  rather  than  cash  settlements,  the
decree may usefully  specify continuing  State/EPA responsibilities
for determining future  clean-up  activity.

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                             -12-

     An important part of the compliance section of a decree

is the inclusion of provisions which provide a means of

monitoring the defendant's performance.  Depending upon the

performance standard required by the decree, monitoring
         i
provisions might, for example, require periodic tests or reports

by the defendant.  Test protocols may be set out in technical

appendices to the decree.  Generally, in choosing monitoring
                      • '"••'
provisions you should consider such factors as the impact

on Agency resources of different monitoring requirements

and the ease with which the Agency can proceed with monitoring,

as well as the need for some type of Federal oversight to

ensure that the defendant is addressing noncompliance problems

adequately.  For example, you will want to provide for site

entry and access and document review by the Agency in the

decree.  You should not waive the Agency's right to assert

or utilize its statutory authorities, such as right of entry

or document production.

                           EXAMPLE

             Any authorized representative or contractor
             of U.S. EPA or Intervenors, upon presentation
             of his credentials, may enter upon the premises
             of the Karefull Works at any time for
             the purpose of monitoring compliance with
             the provisions of the Consent Decree.

     The decree should specify timetables or schedules for

achieving compliance requiring the greatest degree of remedial

action as quickly as possible.  Such timetables are particularly

relevant in decrees which mandate construction the defendant

must undertake or cleanup the defendant must accomplish.

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                             -13-

These schedules should include interim dates so that the

Agency can monitor the defendant's progress toward compliance,

                           EXAMPLE

   III. Sinter Plant

     A.  Applicable Emissions Limitations

         1.  Emissions from the sinter plant at Defendant's
             Karefull Works shall comply with the emission
             limitations in 25 Pa. Code SS123.41, 12'3.3 and
             123.1 as follows:

             a.  Visible emissions from any sinter plant
                 stack shall not equal or exceed 20% opacity
                 for a period or periods aggregating more
                 than three (3) minutes in any sixty (60)
                 minute period and shall not equal or exceed
                 60% at any time, as set forth in 25 Pa. Code
                 §123.41.

             b.  Visible emissions from any part of sinter
                 plant operations shall not equal or exceed
                 20% opacity for a period of periods aggregat-
                 ing more than three (3) minutes in any sixty
                 (60) minute period and shall not equal or
                 exceed 60%, as set forth in 25 Pa. Code
                 §123.41.

             c.  Mass emissions from the sinter plant
                 windboxes and from all gas cleaning
                 devices installed to control emissions at
                 the sinter plant shall not exceed 	
                 grains (filterable) per dry standard cubic
                 foot (the applicable emission limitation).

             d.  Fugitive emissions from any source of
                 such emissions at the sinter plant shall
                 not exceed the emissions limitation set
                 forth in 25 Pa.  Code §123.1

         2.  The air pollution control equipment described
             below shall be installed in accordance with
             the following schedule:

             Submit permit application  November 1, 1980
             to DER and to EPA for
             approval

             Issue purchase orders      May 1, 1981

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                             -14-

             Commence installation      November 1, 1981

             Complete installation      September 1, 1982
             and start up

             Achieve and demonstrate    November 1, 1982
             compliance

     B.  Sinter Plant Compliance Program

         1.  In order to bring Defendant's sinter plant into
             compliance with the requirements specified in
             paragraph III.A.I.e. above, Defendant shall
             install the following air pollution control
             equipment on sintering line #1-.:

             a.  Defendant shall install an air pollution
                 control device which complies with the
                 emission limitation of paragraph III.A.I.e.
                 on #1 sinter plant windbox to control sinter
                 plant windbox stack emissions.

             b.  Defendant shall install a scrubber or a
                 baghouse (or separate baghouse, as appro-
                 priate) on II sinter line and appropriate
                 ductwork to replace the existing cyclone.
                 for control of emissions from the discharge
                 end of II sinter line.

             c.  Installation of this equipment in no way
                 relieves the defendant of the require-
                 ment of achieving and maintaining comp-
                 liance with the emission limitations set
                 out in paragraph III.A.I.
         2.  Compliance Provisions for Repeat Violators

     Vfhen negotiating with a source with a long history of

repeated violations negotiators should consider including

more stringent compliance monitoring provisions in resulting

consent decrees.  The decree could include provisions for

more frequent monitoring and testing by the source to ensure

continued future compliance or opportunities for more EPA

monitoring and testing in addition to self-monitoring by the

source.

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                             -15-
          2.  Performance Bonds
     EPA may require performance bonds from a defendant to ensure
that actions required by the decree  (i.e., clean-up of a site,
installation of pollution control equipment) are actually com-
pleted.  The amount of any such bond will vary from case to
case.  The provision should state those circumstances under
which the bond becomes payable.  The bond itself is a separate
instrument which sets out more fully those circumstances
under which the bond is forfeited and those conditions under
which the bond is released, as well as any sureties guaranteeing
the bond.  Therefore, the bond instrument itself should be
closely reviewed for adequacy.
                           EXAMPLE
             The defendant shall comply with the'follwing
             provisions at Blast Furnaces 1, 2, 3 and 4.
             a.  Defendant shall install an emission
                 suppression system on furnaces 1 and 4.
                 •  t  •
                 Defendant has posted a bond payable to
                 United States Treasury in the amount of
                 $1,000,000 for each of blast furnaces
                 1 and 4 payable immediately and in full
                 if defendant fails to certify installation^
                 of an emission suppression system by December
                 31, 1982, and demonstration of compliance
                 with the above emission limitation by December
                 31, 1982.
     F.  Provisions Defining Other Responsiblities of the
         Parties to the Decree.
         1.   Notification Provision
             Various provisions in consent decrees may require
notification of different events to the plaintiff, defendant

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                             -16-

and/or the court.  When this is the case, it is appropriate

to include a provision setting out to whom such notices should

be given.

                           EXAMPLE

             Whenever, under the terms of this decree,
             notice is required to be given by one party to
             another party and/or the court, such notice
             shall be directed to the individuals specified
             below at the addresses given, unless those
             individuals or their successors give notice in
             writing to the other parties that another
             individual has been designated to receive
             such communications.

               (appropriate names and addresses)


         2.  Penalties

             a. Generally

     Often, the defendant will be liable for a civil penalty for
                      «                              •
its violation of the statute.  Some decrees may contain only

penalty provisions in situations in which some sanctions are

appropriate to respond to past violations and to deter future

misconduct, yet compliance provisions are unnecessary because

the defendant has achieved compliance before the execution

of the decree.  The decree should state that the payment is

a penalty so the defendant does hot obtain a tax advantage

froir. its payment.

                           EXAMPLE


             Defendant shall pay a civil penalty in the
             amount of 	 as a result of the defen-
             dant's violation of 	 with regard to
             facilities which are the subject of this decree.

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                             -17-
       f>

     The decree should also state terms for payment of any penalty.

Normally, payment should be in a lump sum within a short time

from the entry of the decree.  Installment payments may be allowed

in the following circumstances:

   - if the defendant can demonstrate an inability both to pay the

     lump sum penalty and to finance remedial action or continue

     in operations; and,        '

   - if there is no reason to believe that further payments will

     not be forthcoming.

If the defendant agrees to pay by installments, the decree

can provide for interest at the appropriate judgment interest

rate.

     Payment provisions should recite the amount of the payment,

to whom paid,  'how payment is made and when payment is due-.  Normally,

the provisions should require defendants to submit a cashier's

check  payable to "Treasurer, United States of America" to the

appropriate Regional Counsel.

                           EXAMPLE

             Defendants agree to pay a civil penalty in the
             total sum of ONE MILLION, THREE HUNDRED AND FIFTY
             THOUSAND DOLLARS ($1,350,000).  The terms of
             this paragraph do not limit remedies available
             for violation of this decree.   Payment of ONE
             MILLION DOLLARS ( $1,000 ,.000 ) of such penalty
             shall be made within five days of the entry of
             this decree, by cashiers check payable to
             "Treasurer, United States of America", delivered
             to the Regional Counsel, USEPA, Region V, 230
             South Dearborn Street,  Chicago, Illinois 60640.

             The remaining THREE HUNDRED AND FIFTY THOUSAND
             DOLLARS ($350,000) of such penalty shall be paid
             in the same manner, either by December 31, 1982,

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                             -18-

             in which event there will be no interest charge,
             or by June 30, 1984, in which event interest
             shall be charged at the rate provided in 28 U.S.C.A.
             §1961, for the time period between the date of entry
             of this decree and the date of payment.

                 b. Other Obligations Assumed by Defendants

     During negotiations, defendants may offer to take certain

action in order to offset or in lieu of a cash penalty.  For

example, the defendant may offer to install extra pollution

control equipment which'1' is not necessary to meet legal requirements.

     If EPA has agreed to accept lesser amounts in settlement

because of extra pollution control activity by the defendant,

drafters of consent decrees must be sure that this agreement

is explicitly noted in the decree, and that the decree requires

the defendant to operate and maintain any "extra" equipment.

Consent decrees have precedential value, a.nd any such' trade-off

between the Federal government and defendants must be readily

apparent to readers of the decree.  This provision will also

ensure that the defendant is bound by its agreement to undertake

these actions.   You should refer to applicable civil penalty

policies for guidance, in evaluating credit-worthy activities and

their appropriate use.

     An effective means of ensuring the defendant's performance

of these actions is to include a provision which defers

collection of some or all of a penalty amount until performance

is completed, so long as the amount ultimately paid is acceptable

under -any applicable penalty policy.  The provision could

then excuse payment of the deferred portion of the penalty

entirely when performance has been satisfactorily completed.

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                              -19-

                            EXAMPLE

             The payment  of the penalty amount  due on  (date)
             shall be excused by the  plaintiff  if the  plaintiff
             finds that the following conditions have  been
             met.

             a) By (date)  ,  defendant shall  install and operate
             a coke-side  shed (as described  in  paragraph I.B.l.b.)
             on each battery to control pushing emissions--
             Each shed shall be evacuated continuously to
             capture and  clean emissions from both the pushing
             operation and  all door leaks.

             b) Defendant  shall achieve, maintain and  demonstrate
             compliance with the emission limitation set forth
             in paragraph  I.A.l.d. with respect to mass emissions
             attributable  to coke oven pushing  operations by
             (date) .  Defendant shall achieve  and demonstrate
             compliance with the emissions limitation  set forth
             in 25 Pa. Code  §123.44(a)(3) with  respect to
             door emissions  under the shed by (date).

             c) Defendant  shall certify completion of  the conditions
             listed in subparagraphs  (a) and (b) above to the
            . plaintiff by  certified letter.  This notification
             should be sent  by U.S. Mail, return receipt
             requested to  (name, title and address)  by (date).


         3.  Dispute Resolution Provision

     Disputes may arise between EPA and the defendant  after

execution of the decree as  to the defendant's compliance with

the terms of the decree.  The decree  can provide its own mechanism

for resolving some or all of  these potential disputes  by the

parties before resorting to  the court  for resolution of the dispute.

Dispute resolution by the parties should be limited to a specific

amount of time.  Such a dispute resolution provision will

allow EPA to avoid resolution of each  dispute by the court.

Advantages of such a provision include:

     a) speedier resolution  of disputes because resort to

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                             -20-
        the court may not be necessary; and
     b) technical disputes can be resolved by those with the
        requisite expertise, thus avoiding the need to
        educate the court before evidence can be evaluated.
     A number of dispute resolution devices can be used in
decrees.  For example:
     a) EPA and the defendant could agree to negotiate for a
        a limited period of time any such dispute or specified
        disputes which arise.
     b) The parties could agree to submit the matter to
        arbitration.  Again, a limited time period should be
        specified during which the parties could submit the
        matter to arbitration.  A specific time limit would be
        appropriate for the arbitration process as well. •
     c) Failing resolution by the parties, the decree should
        provide for application to the court to resolve disputes.
        If the matter is submitted to the court for resolution,
        the decree should provide that the defendant bears the
        burden of proof.
         4. Nonwaiver Provision
     At times a set of actions by a defendant may violate
separate statutory requirements.  One violation may be settled
while other claims are litigated.  In all decrees, it is
proper to state that the decree does not affect the defendant's
liability with regard to other statutes or regulations.  The
following sample is acceptable.

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                             -21-

                           EXAMPLE

             This consent decree in no way affects or
             relieves defendant of responsibility to
             comply with any other State, Federal or
             local law or regulation.

     If a consent decree settles a portion of a dispute under a

statute, the consent decree should clearly indicate that other

aspects of the case have not been settled.  For example, in

some hazardous waste cases an agreement may be reached

dealing with surface clean-up of a site but issues on ground

water contamination may be reserved for later resolution.  These

partial consent decrees should clearly state that the defendant

is not fully released from liability.

     Various statutes grant EPA specific powers to deal with

emergency situations.  The decree may specify that the Agency

retains the power to act in these situations.

                           EXAMPLE

             This decree in no way affects the ability of
             EPA to bring an action pursuant to Section
             303 of the Act, 42 U.S.C. §7603.

     Additionally, you may want to include a provision to

preserve the government's cause of action against third parties
             •
who are not parties to the suit and who may be responsible along

with the named defendant(s).


                           EXAMPLE

             This decree does not limit or affect the
             rights of the defendants or of the United
             States as against any third parties.

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                             -22-
         5. Stipulated Penalties
     Most decrees should contain provisions for stipulated
penalties.  These provisions encourage compliance and simplify
enforcement by providing a significant, clearly defined sanction
in She event the defendant violates a provision of the decree.
Stipulated penalties are appropriate for violation of the
following types of provisions:
             a)  final and interim compliance requirements/
             b)  reporting, testing or monitoring requirements,
             c)  any other performance requirements  (including
                 requirements to pay. civil penalties).
     IProvisions for stipulated penalties should include the amount
of th<> penalty, how the penalty should be paid, and  to whom the
penally should be paid.  To set the amount of a proposed stipulated
penalliy,  you should be guided by applicable statutes, regulations
and EPA policies.  Normally, defendants should pay stipulated
penalties by delivering a cashiers check made payable to "Treasurer
United States of America" to the appropriate Regional Counsel.
     The decree may also provide that the court issuing the
decree will resolve disputes between the parties as  to liability
for and the amount of an assessed stipulated penalty.  The provision
should also make clear that stipulated penalties are not the
plaintiff's exclusive remedy for the defendant's violation of
the decree and that the plaintiff reserves its right to seek
injunctive relief.

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                             -23-

                           EXAMPLE

             Failure by the defendant to achieve full compliance
             as required by Paragraphs IV.A.I through 9, except
             as excused pursuant to Paragraph V herein (force
             majeure), shall require defendant to pay a stipulated
             penalty of $7,500 per day for each day that such
             failure continues.

             Stipulated penalties are payable upon demand as follows:

             Cashiers check payable to:    Treasurer, United States
                                           of America

             Address for payment:          USEPA, Region III
                                           Curtis Building, Second Floor
                                           6th and Walnut Streets
                                           Philadelphia, PA. 19106
                                           Attn: Regional Counsel

             Any dispute with respect to defendant's liability
             for a stipulated penalty shall be resolved by this
             court.  The provisions of this paragraph shall not be
             construed to limit any other remedies, including
             but not limited to institution of proceedings for
             civil or criminal contempt, available to plaintiff or
             intervenors for violations of this consent decree or
             any other provision of law.

     You may want to provide for stipulated penalties which esca-

late based on the number of days the source is not in compliance

or on the amount of excess emissions or effluents discharged

by the source in violation of the decree.  For example, for days 1

through 30 of violation the stipulated penalty could be $1000

per day.  This could increase to $2000 per day for days 30 through

60 and so on.  Similarly, excess discharges or emissions could

be expressed as a percentage over the daily limitation and a scale

could be devised for these as well.  For example, discharges which

are less than 10% over the daily discharge limitation would be

subject to a stipulated penalty of $500, from 10% to 25%, $1000

and so forth.

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                             -24-
     Another approach which may aid  the  negotiation process  is
to t.se a stipulated penalties provision  which allows  the payment
of penalties for interim violations  into some kind of escrow
account.  The clause could provide for the return of  these payments
to the defendant if timely final compliance  is achieved and  the
terms of the consent decree are satisfied.   If such an escrow
account arrangement is used, EPA staff should review  the escrow
agreement itself.  Tire" agreement should  clearly give  the escrow
agent the authority to turn the fund over to EPA in the event
of noncompliance.
     6.  Force Majeure
     The purpose of a force majeure  clause is to excuse the
defendant's performance pursuant.to  the  decree because of cir-
cumstances beyond the defendant's control /e.g., acts of God).
Therefore, such a clause should not  be included in a  decree
unles.s the defendant insists on its  inclusion.
     Although a force majeure clause is  something the defer'Ir-.t
may want in the decree, it normally will be  to EPA's  negotiating
advantage if Agency representatives draft the clause.  Generally,
the following elements should be included in drafting such a
clause.
     a)  The clause must clearly limit excused delays in per-
formance to those events which are beyond the control of the
defendant.  The decree may define specifically which  circum-
stances would trigger the force majeure  clause.  Arriving at
a list of such circumstances, however, may consume a  good deal

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                             -25-
      «


of negotiating time.  For this reason,  the term  "circumstances



beyond the control of the defendant"  is acceptable.  The language



in the example (circumstances entirely  beyond the control of the



defendant) is better.



     The clause should not allow the  defendant to claim economic



hardship or increased costs as circumstances beyond defendant's



control which trigger the force majeure clause.



     b)  The clause should clearly place the burden on the



defendant to prove that the events causing the delay are based



on circumstances beyond its control.  The burden should be one



satisfied by clear and convincing evidence, if possible.



     c)  The clause should include a  provision requiring



notification within a time certain by the defendant to the



plaintiff and the court of any delay  or anticipated delay



the defendant claims triggers the force majeure clause.  This



notification should include the cause of the delay and the ex-



pected duration of the delay.  Failure  to give notice of a



particular problem should preclude the defendant from invoking



the force majeure provision based on  that problem.



     d)  The clause should provide that the defendant take



measures to prevent or minimize the delay to the maximum extent



reasonable and to propose a time when the preventive measures



will be fully implemented.



     e)  The clause should state that events triggering the force



majeure clause do not automatically excuse the defendant from



complying with the terms of the decree.  Ultimate compliance



should occur as quickly as possible,  consistent with the decree's

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                             -26-

tenns and any extensions granted because of the force majeure

clause.

     f)  Finally, the clause should provide some mechanism

for dispute resolution, since there may be instances in which EPA

and the defendant cannot agree that a specific delay is caused by

circumstances beyond the defendant's control.  (See the discussion

of dispute resolution provisions on page 19.)  it is acceptable
                     '' t*
to «illow the defendant to submit such disputes to the court for

resolution if agreement cannot be reached between the parties.

                           EXAMPLE

     a)  If any event occurs which causes or may cause delays
         in the achievement of compliance at Defendant's faci-
         lities as provided in this decree, Defendant shall
         notify the Court, the Plaintiff and Intervenors, in
         writing within 20 days of the delay or anticipated •
         delay, as applicable.  The notice shall describe in
         detail the anticipated length of the delay, the precise
         cause or causes of the delay, the measures taken and to
         be taken by Defendant to prevent or minimize the delay,
         and the timetable by which those measures will be
         implemented.  The Defendant shall adopt all reasonable
         measures to avoid or minimize any such delay.  Failure
         by Defendant to comply with the notice requirements
         of this paragraph shall render this paragraph void and of
         no effect as to the particular incident involved and
         constitute a waiver of the defendant's right to request
         an extension of its obligation under this Decree
         based on this incident.

     b)  If the parties agree that the delay or anticipated delay
         in compliance with this decree has been or will be caused
         by circumstances entirely beyond the control of Defendant,
         the time for performance hereunder may be extended for a
         period no longer than the delay resulting from such
         circumstances.  In such event, the parties shall stipulate
         to such extension of time and so inform the Court.  In the
         event the parties cannot agree, any party may submit
         the matter to this Court for resolution.

     c)  The burden of proving that any delay is caused by
         circumstances entirely beyond the control of the
         Defendant shall rest with the Defendant.  Increased

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                             -27-
        . costs or expenses associated with the implementation
         of actions called for by  this Decree shall not,  in any
         event, be a basis for changes in this decree or  extensions
         of time under paragraph b.  Delay in achievement of one
         interim step shall not necessarily justify or excuse delay
         in achievement of subsequent steps.
     7.  Public Comment on the Decree
     A Department of Justice regulation calls for a thirty day
public comment period on consent decrees which enjoin the dis-
charge of pollutants.  '(See, 28 CFR S50.7)  A provision should
be included in these decrees which acknowledges this reguire-
ment.
                           EXAMPLE
             The parties agree and acknowledge that final
             approval and entry of this proposed decree
             is subject .to the requirements of 28 CFR
             $50.7.  That regulation provides that notice
             of .the proposed consent decree be given to
             the public and that the public shall have
             at least thirty days  to make any comments.

     In the usual case, the proposed consent decree is executed
by the parties and forwarded to the court with a cover letter
advising the court that the decree should not be signed by the
Judge or entered until the thirty  day comment period has passed.
When the comment period has passed, the court is advised either
that no adverse comments were received or is advised of comments
received and the EPA/DOJ responses to the comments.  The court is
then requested to sign and enter the decree.
     8.  Retention of Jurisdiction
     The decree should include a provision which recites  that the
court will retain jurisdiction of  the case in order to enforce

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                             -28-

the decree and resolve disputes under the decree not specifically

provided for elsewhere.

                           EXAMPLE

             The Court shall retain jurisdiction to modify and
             enforce the terms and conditions of this decree
             and to resolve disputes arising hereunder as
             may be necessary or appropriate for the construction
             or execution of this decree.


     9.  Confidentiality of Documents

     In some actions, defendant will claim that documents

provided by it are confidential in nature.  In these cases,

the decree should provide that EPA-regulations will control with

regard to such documents.

                           EXAMPLE

             All information and documents submitted by
             defendants to EPA/State pursuant to this
             decree shall.be subject to public inspection
             unless identified and deemed confidential by
             defendants in conformance with 40 CFR Part 2.
             The information and documents so identified
             as confidential will be disclosed only in
            .accordance with EPA and State regulations.

     10.  Modification of the Consent Decree

     Consent decrees entered by the court are court orders and

as such may not be modified without the court's approval.

Currently, consent decrees are executed on EPA's behalf by

the Special Counsel for Enforcement or her delegatee.  There _

fore, modifications of decrees should be similarly executed.

A provision in the decree reciting these principles will

help to make clear to defendants what they must do in

order to modify the decree.

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                             -29-
                           EXAMPLE
             Any modification of this consent decree must be
             in writing and approved by the Court.  Any such
             written modification must be executed on EPA's
             behalf by the Special Counsel for Enforcement
             or her delegatee or successor.
     11.  Termination of the Decree and Satisfaction
     Since the defendant has agreed to settle the case and avoid  •
trial, it is appropriate that EPA agree to a termination of the
consent decree after the defendant has complied with fill consent
decree provisions.  This provision is most appropriately placed at
the conclusion of the decree or in the introductory 'front end1
provisions of the decree.
     This termination may be automatic upon completion of the terms
of the decree.   However, a provision calling for a motion for
termination by the plaintiff is preferred.  This required action
by EPA would aid in eliminating disputes as to whether compliance
was achieved or not and as to when the consent decree terminated.
The decree may provide for 'a time lag between the time the defen-
dant comes into compliance with the decree and the termination of
the decree.   This time lag ensures that the defendant continues to
comply for a specified period of time.  When termination is delayed
in this manner, the time period specified is at least 180 days in
most instances.
                           EXAMPLE
             The defendant must demonstrate to the plaintiff's
             satisfaction that the defendant has complied with
             all of the terms of the decree.  One hundred and
             eighty days (180) after such a showing by the
             defendant, the plaintiff agrees to move the court
             to terminate the decree.

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                             -30-
     Additionally, during negotiations the defendant may insist
on a provision which recites that the decree constitutes a full
settlement of the action contained in the complaint and that this
settlement bars the plaintiff from any other action against the
defendant based on those violations.  Such a clause should not
be included in a decree unless the defendant specifically insists
on its inclusion.  These clauses should be narrowly drawn so that
it is clear that only^the specific action in the complaint is
covered.   Also, cases with multiple defendants or potential defen-
dants require extra care so that these other parties are not
released from liability when that is not intended.
                           EXAMPLE
             Plaintiff and Intervening Plaintiff will refrain
             initiating any other civil enforcement action pursua
             to Section 113(b)  of the Act, 42 U.S.C. §7413, Sect
             304 of the Act, 42 U.S.C. §7604, or applicable state
             law, with respect to the limitations contained in
             this Decree for the emission of particulate
             matter and visible emissions from the bark boiler
             while Defendant is in' compliance with this Decree.
     12.  Costs of the Action
     A consent decree should contain a provision which allocates
responsibility for payment of court costs incurred in the action
up to the date of settlement.  In most negotiated settlements,
each party bears its own costs.
                           EXAMPLE
             Each party in this action shall bear its
             own costs.

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                             -31-
     t


     13.  Execution of the Decree



     The decree should include signature lines for those who



will execute the decree on behalf of the parties and for the



court.



     The authority to settle judicial actions is currently



delegated to the Associate Administrator for Legal and Enforce-



ment Counsel.  Therefore, consent decrees must be signed by

                     • • tf

the AA for OLEC or his delegatee.  Additionally, in keeping with



EPA's Memorandum of Understanding with the Department of Justice,



settlements of cases in which DOJ represents the Agency require



the consultation and concurrence of the Attorney General.



Therefore, the decree should be signed by the Attorney General



or his  delegatee.

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                          APPENDIX A
                   CONSENT DECREE CHECKLIST
   (This checklist can be used as a guide for inclusion of
                 consent decree provisions.)
NAME OF CASE:
U.S. v. 	
Civil Action No.
PROVISION
    INCLUDED
     YES NO I
COMMENTS
Identification of Parties
 and cause of action -

 Plaintiff & initiation
 of the action

 Defendant - where defen-
 dant does business or is
 incorporated,  facilities
 covered by decree

 Intervenors
Procedural history - prior
consent decrees and status
prior administrative action
Transitional Clause
Jurisdiction
Statement of claim - com-
plaint states claim for
relief
Applicability clause -
to whom decree applies
Public Interest - decree
is in the public interest
Definitions

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                             -2-
PROVISION
INCLUDED
 YES NO
COMMENTS
Compliance Provisions -

 Test method for demonstra-
 tion of compliance

 Monitoring provisions

 Entry and access

 Standards defendant must
 meet

 Schedules - final deadline
 and interim schedules
 construction schedules

 Operation & maintenance
 procedures

 Performance bonds
Notification provision


Civil penalties -

 Amount and form of payment
 (lump sum or installment)

 Penalty payment to State

 Credits


Dispute Resolution


Nonwaiver provision


Stipulated penalties -

 Items covered

 How payed

 Dispute resolution

 Escrow arrangements

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                             -3-
PROVISION
INCLUDED
 YES NO
COMMENTS
Force Majeure

 Events covered

 Burden of proof on
 defendant

 Defendant's duties
 (notification requirement)

 Dispute resolution
Public comment on decree
(28 CFR §50.7)
Retention of jurisdiction
 (by the Court)
Confidentiality of
 documents-
Modification of decree
Termination & satisfaction
Costs of the action
Execution of decree

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                     APPENDIX B


               SAMPLE CONSENT DECREES
(Attached are consent decrees from the Air and Water
 Programs.   Although these decrees do not contain all
 of  the provisions  discussed in the guidance,  they
 can be used as examples of completed decrees.)

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                IN THE UNITED STATES DISTRICT COURT
               FOR THE WESTERN DISTRICT OF MICHIGAN
UNITED STATES OF AMERICA,        )
                                 )
         Plaintiff,       '       )
                                 )
         and                     )  CIVIL ACTION NO. G 81-289 CA 7
                                 )
STATE OF MICHIGAN, et al.,       )  JUDGE BENJAMIN F. GIBSON
                                 )
         Intervening Plaintiff,  )
                                 )
         v.                      )
                                 )
PACKAGING CORPORATION OF AMERICA )
         Defendant               )

                          CONSENT DECREE
         Plaintiff, United States of America, representing the
United States Environmental Protection Agency (hereinafter, the
"EPA"), having filed the Complaint herein o.n June 3, 1981;
                                »
         And the State of Michigan, representing the Michigan
Department of Natural Resources (hereinafter, the "DNR") and the
Michigan Air Pollution Control Commission (hereinafter, the
"Commission" or "MAPCC"-), having moved to intervene as a party
plaintiff on June 4, 1981, and this Court having granted said
Motion;
         And Plaintiff and Intervening Plaintiff having acted in
concert in this action against Defendant, Packaging Corporation
of America;
         And Plaintiff, Intervening Plaintiff and Defendant
having agreed that settlement of this matter is in the public

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interest and that entry of this Decree without further litigation
     j
is the most appropriate means of resolving this matter;
         And Plaintiff, Intervening Plaintiff and Defendant
having moved the Court to enter this Consent Decree;
         NOW, THEREFORE, before the taking of any testimony, upon
the pleadings, without adjudication of any issue of fact or law,
without any admission or denial of the violations alleged in the
Complaint and upon consent and agreement of the parties of this
Decree, it is hereby Ordered, Adjudged and Decreed as follows:

                           STIPULATIONS
         1.  This Court has Jurisdiction of the subject matter
herein and of the parties consenting for the purpose of entering
this Consent Decree.  The Complaint states a claim upon which
relief can be granted'against Defendant,, under Section 113 of the
Clean Air Act, as amended, (hereinafter, the "Act"), 42 U.S.C.
7113.
         2.  The provisions of this Consent Decree shall apply  to
and be binding upon all the parties to this action, their
officers, directors, agents, servants, employees, successors and
assigns, and.all persons, firms and corporations having notice  of
the Consent Decree and who are, or will be, acting in concert and
privity with the Defendant to this action or its officers, direc-
tors, agents, servants, employees and successors and assigns.  In
the event Defendant proposes to sell or transfer its real
property or operations subject to this Consent Decree, It shall
                               -2-

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adv'ise such purchaser or transferee of the existence of this
       t
Decree/ and shall notify all parties to this Decree of such
proposed sale or transfer.
         3.  The parties agree and acknowledge that final ap-
proval and entry of this Decree Is subject to the requirements of
28 C.P.R. §50.7, which provides that notice of proposed Consent
Decrees be given to the public and that the public shall have at
least 30 days in which to make any comments.
         4.  Defendant owns and operates a facility in Filer
City, Michigan  (hereinafter, the "Filer City facility") which
includes a Rlley bark-fired boiler (hereinafter, the "bark
boiler").  The bark boiler is a source of air pollution emissions
subject to the provisions of Michigan Air Pollution Control
Commission Rules and the federally approved Michigan State
Implementation Plan (hereinafter, the' "Michigan SIP").
         5.  Former MAPCC Rule R 336.44 established an emission
limitation for partlculate matter of 0.65 pound of particulate
matter per 1000 pounds of exhaust gases, corrected to 50 percent
excess air, for the bark boiler.
         6.  Former MAPCC Rule R 336.41 established a smoke plume
opacity limitation of 40 percent, generally, with certain exemp-
tions not material to this Decree.
         7.  On May 31, 1972, the Administrator of the EPA ap-
proved, as'part of the Michigan SIP, MAPCC Rules R 336.44 and R
336.41.
                               -3-

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         8.  On or about November 19,  1979>  Defendant  received
from 'the EPA a Notice of Violation citing,  Inter alia,  the  bark
boiler for violations of R 336.44 and  R 336.41  of the  approved
Michigan SIP.  On December 19, 1979,  a conference was  held  at EPA
offices In Chicago, Illinois, with representatives of  Defendant
and the DNR, to discuss the cited violations.
         9.  MAPCC Rule R 336.1331 currently establishes an
emission limitation for particulate matter  of 0.50 pound of
                      • ;(f
particulate matter per 1000 pounds of exhaust gases, corrected  to
50 percent excess air, for the bark boiler.
         10. MAPCC Rule R 336.1301 currently establishes a  smoke
plume; opacity limitation of 20 percent, generally, with certain
exempt^005 not material to this Decree.
         11. On Kay 6, 1980, the Administrator of the  EPA condl-
tibnally approved MAPCC Rules R 336.1331 and R 336.1301, as part
of the Michigan SIP (45 Fed. Reg. 29791).
         12. On or about August 17, 1982, Defendant received from
the EPA a Notice of Violation citing  the bark boiler for viola-
tions of R 336.1301 of the Michigan SIP.
         13. Defendant owns and operates a  boiler (hereinafter,
the "Ko. 5 boiler") at its Filer City facility, which boiler was
formerly a recovery boiler but is currently fired with natural
gas.  Defendant has applied to the Michigan DNR for an installa-
tion permit to convert the No. 5 boiler to  multi-fuel  operation
(including the combustion of coal, wood, bark, wood waste,
sludge, and natural gas).  The Commission has recently approved
                               -4-

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the Issuance of such installation permit.  The converted No. 5
boiler-will have a baghouse collector as Its air pollution con-
trol equipment (hereinafter the "No. 5 baghouse").

                              ORDER
         In consideration of the foregoing and the representa-
tions made in open Court by the parties hereto, IT IS HEREBY
ORDERED;

         Defendant shall achieve, demonstrate, and maintain final
compliance with MAPCC Rules R 336.44, R 336.41, R 336.1331 and R
336.1301, and other emission limitations specified in this
Consent Decree, in accordance with the following paragraphs:

                     .   COMPLIANCE PROGRAM
         1.  Defendant shall install an add-on collector (side-
stream separator) to the existing pollution control equipment of
the bark boiler according to the following schedule:
             a.  commence engineering and
                 preparation of plans and
                 specifications                   Completed
             b.  submit copies of plans
                 and specifications to EPA
                 and DNR; submit applica-
                 tion to DNR for Installation
                 permit                           Completed
             c.  issue purchase order for
                 collector                        1/31/83
             d.  begin on-site construction       8/31/83
                               -5-

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             e.  complete construction and
                 installation                     10/31/83
             f.  complete "shakedown" and
                 achieve compliance with a
                 partlculate emission limita-
                 tion of .'40 pound of partlcu-
                 late matter per 1000 Ibs of
                 exhaust gases, corrected to
                 50 percent excess air, and
                 MAPCC Rule R 336.1301            11/30/83
             g.  demonstrate compliance with
                 the emissions limitations set
                 forth In Subparagraph l(f) In
                 accordance with Appendix A       12/31/83
         2.  If Defendant elects to proceed with the No. 5 boiler
conversion and construction of the No. 5 baghouse In lieu of the
                            v
compliance program set forth In Paragraph 1 it shall, on or
before March 15, 1983, so notify the EPA and the DNR, In writing,
and certify that It has sent' out requests for bids for the com-
pletion of- the No. 5 boiler conversion and No. 5 baghouse and
that the necessary funds have been appropriated.  Upon such
notification and certification, Defendant shall proceed with the
compliance program set forth In Paragraph 3 and shall be there-
after excused from complying with subsequent requirements of
Paragraph 1; provided, that If any stipulated penalties have
accrued, prior to the date of such notification and certifica-
tion, for failure to comply with the requirements of Paragraph 1
such penalties shall then become due and payable upon demand.  If
the notification and certification described herein is not given
to the EPA and the DNR on or before March 15, 1983, Defendant  .
shall not be relieved from the obligation under Paragraph 1 to
                               -6-

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install the sldestream collector in accordance with the terms
       4

thereof".

         3.  If Defendant elects to proceed with the No.  5 boiler

conversion and complies with the notice and certification re-

quirements of Paragraph 2 on or before March 15, 1983,  It shall

install the No. 5 baghouse and either (a) route the bark boiler

exhaust through the No. 5 baghouse, or (b) complete the No. 5

boiler conversion such that no bark or wood wastes are  burned in

the bark boiler, but will be burned instead in the No.  5 boiler,

the emissions of which will be controlled by the No. 5  baghouse,

in accordance with the following schedule:
                                                  Completed

                                                  Completed

                                                  6/30/83

                                                  2/28/84
             a.  prepare specifications and
                 submit copies to EPA and DNR

             b.  obtain installation permit

             c.  award contract

             d.  begin on-site construction

             e.  complete construction and
                 installation and achieve com-
                 pliance at the bark boiler
                 with a particulate emission
                 limitation of .05 pound of
                 particulate matter per 1000
                 Ibs of exhaust gases, cor-
                 rected to 50 percent excess
                 air, and MAPCC Rule RJ36.1301

             f.  demonstrate compliance with the
                 emissions limitations set forth
                 in Subparagraph 3(e) in accor-
                 dance with Appendix A            7/31/84

If Defendant elects to proceed with the compliance program set

forth in this paragraph it shall not operate the bark boiler
                                                  6/30/84
                               -7-

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after'June 30, 1984, unless the emissions thereof are controlled
by the No. 5 baghouse.
         4.  If the No. 5 boiler and bark boiler are both con-
trolled by the No. 5 baghouse, at no time shall they be operated
simultaneously.
         5.  If Defendant proceeds with construction and instal-
lation of the sldestream collector in accordance with the terms
of this Decree, nothing herein shall preclude it from proceeding
                      •( ?
with conversion of the No. 5 boiler at a later date (after March
15, 1983); provided, that such later election to proceed with the
conversion shall not relieve Defendant from any obligation
arising under this Decree to complete the requirements of Para-
graph 1, hereof.

                       INTERIM REQUIREMENTS
         6.  Until final compliance is achieved pursuant to
Paragraph 1 or 3, whichever Is applicable, Defendant shall
achieve and maintain compliance by the bark boiler with MAPCC
Rule ,'H 336.1331 and limit the density of visible air contaminants
to a maximum of *U percent opacity, determined as a six-minute
average, except that a maximum of one six-minute average of up to
51 percent opacity shall be permitted in any one hour.  Com-
pliance shall be determined in accordance with EPA Method 9,
Appendix A', 40 CPR, Part 60.
                               -8-

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         7.  The operation and maintenance procedures set forth
      *
      4
in Appendix B shall be implemented and followed until such time
as bark boiler emissions are controlled by the No. 5 baghouse.
         8.  Upon request of the EPA or the DNR, and within
thirty (30) days of any such request, Defendant shall perform
stack testing at the bark boiler in accordance with Appendix A.
Defendant shall notify the EPA and the DNR of the date of the
stack test in sufficient time to allow said agencies to observe
the testing.  Such tests shall not be requested more often than
every three months unless evidence is shown of noncompliance with
the interim limits specified above.

                CONTINUOUS MONITORING REQUIREMENTS
         9.  Defendant has installed and calibrated, and shall
maintain and operate, a continuous 'opacity monitoring -system -in
the stack which serves the bark boiler, in accordance with the
procedures set forth in **Q CFR Part 60, Appendix B, or any other
applicable procedures approved by the EPA.
         10. Beginning with the calendar quarter commencing on
January 1, 1983, Defendant shall prepare quarterly reports of
"excess" emissions as measured by the Opacity-monitor identified
in Paragraph 9 above.  The reports shall be submitted to the EPA
and the DNR within 30 days from the end of each calendar quarter
and shall include the following information:
        a.  The magnitude of "excess" emissions in percent
            opacity, the date and time of commencement and
            completion of each time period of excess emis-
            sions, and the cause of each such exceedance.
                               -9-

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        b.  If a malfunction is indicated in the report, the
            corrective actions taken, if any.
        c.  The date and tines the opacity monitor was
            inoperative, or of system repairs and adjust-
            ment.       •  '
        d.  When the opacity monitor is inoperative,
            all equipment malfunctions and corrective
            actions taken.
        e.  Where no "excess" emissions have occurred, such
            shall be stated.

For the purposes of continuous emissions reporting pursuant to
this Decree, "excess" emissions are those opacity monitor
readings which exceed the applicable opacity standard.  Average  .
values may be obtained by integration over 6 minutes or by
arithmetically averaging a minimum of 24 equally spaced, Instan-
taneous opacity measurements in each 6 minute period.
         11. During the period from January'1, 1983, through
March 31, 1983, and for the first 90 days following a demonstra-
tion of compliance pursuant to paragraph Kg), Defendant shall
report all six-minute averages of excess emissions during boiler
operation, Including startup and shutdown.  During all other
times., Defendant shall maintain records of opacity during startup
and shutdown and shall report all six-minute averages pf excess
emissions during boiler operation.  During startup and shutdown,
unlesjs requested otherwise by the EPA or the DNR, Defendant need
only report the times of excess emissions and the highest and
lowest opacity readings.
                               -10-

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          12.  After  termination  of  this  Consent Decree, Defendant
 shall  continue  to maintain  the .information  required for "excess"
 emissions  reports at  its  Filer  City  facility and make such infor-
 mation available to the EPA and the  DNR upon request.
          13*  Beginning with the calendar quarter commencing on
 January 1,  1983, and  continuing until all necessary work is
 completed,  Defendant  shall  send to the EPA  and the DNR, within 30
 days from  the end of  each calendar quarter, quarterly reports on
^progress  toward the achievement of final compliance with the
 terms  of  this Decree.  If Defendant  fails to meet a compliance
 schedule  increment, it shall notify  the EPA and the DNR within 10
 days of such  failure  and  set forth the cause therefor.
          14.  EPA and  DNR  repesentatives may at any time during
 normal  business hours enter upon the premises of the Filer City
 facility  to monitor compliance  with  this Decree including, but'
 not limited to, performing  stack tests on the bark boiler.
 Authorized  contractors of the EPA  or the DNR may, upon five days
 notice  to Defendant,  enter  upon said premises for purposes of
 inspecting  the  facility or  records pertaining to the bark boiler
 or stack testing of the bark boiler.
         15.  All information, reports, and notifications required
 by this Decree  to be  submitted  by  Defendant shall be sent to the
 following addresses:
    Chief, Air  Compliance Branch     Chief, Air Quality Division
    United States Environmental     Michigan Department of
    .   Protection Agency,  Region V      Natural Resources
    230 South Dearborn               P.O. Box 30028
    Chicago,  Illinois  6060H        Lansing, Michigan  48909
                               -11-

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                        GENERAL PROVISIONS
         16. As consideration for Defendant's entry into this
Consent Decree and the assumption of the obligations provided for
herein, Plaintiff and Intervening Plaintiff will refrain from
initiating any other civil enforcement action pursuant to Section
113(b) of the Act, 42 U.S.C. §7413, Section 304 of the Act, 42
U.S.C. $7604, or applicable state law, with respect to the limi-
tations contained in t'his Decree for the emission of particulate
matter and visible emissions from the bark boiler while Defendant
is in compliance with this Decree.
         17. This Consent Decree in no way affects Defendant's
responsibility to comply with any other state, federal or local
regulations or any Order of the Court including, but not limited
to-, Section 303 of the Act; .42 D.S.C. §7604.
         18. Defendant acknowledges that it has been advised that
it may be subject to the applicable requirements of Section 120
of the Clean Air Act, 42 U.S.C. §7420, but reserves the right to
contest the assessment of any penalties under such Section.
         19. Nothing in this Decree shall be construed as an
admission by Defendant of violations of any provisions of the Act
or of the Michigan SIP.
         20. Notwithstanding any other provision of this Decree,
          •
Defendant may achieve compliance with any emission limitation or
compliance requirement herein applicable to the bark boiler by
permanently ceasing operation of the bark boiler.  Stipulated
                               -12-

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pehallpies associated with failure to perform any such requirement
or achieve such limitation shall cease to accrue on the date of
actual shutdown and written certification thereof to the EPA and
the DNR.  All stipulated penalties which have accrued prior to
such actual shutdown and certification shall become due and
payable upon demand.
         21. The EPA and the DNR reserve the right to seek a
modification of this Decree to Impose more stringent emission
limitations on the bark boiler, and to enforce such more strin-
gent emission limitations, by reason of any revised (federally
enforceable) state or federal law or regulation, including any
revised implementation plan.  Defendant reserves the right to
seek a modification of this Decree if the EPA promulgates or
approves a revised SIP that contains requirements that are less
                                                                •
                                  «
stringent than the emission limitations set forth in the Michigan
SIP for the bark boiler as of the date of lodging of this Decree.
It is the intent of the parties that any such modification of
this Decree be accomplished through mutual agreement on a revised
control strategy or compliance schedule (if necessary), followed
by a Joint application to the Court.
         22. The parties anticipate that'the installation of the
add-on collector (sidestream separator) referred to in Paragraph
1 of this Consent Decree will result in compliance with the
partlculate and visible emission limitations further specified in
Subparagraph l(f).  Should such compliance not be achieved with
proper operation and maintenance of such equipment, PCA may apply
                               -13-

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to' the MAPCC for the establishment of an alternate visible emis-
sion limitation, pursuant to MAPCC Rule R 336.1301(1) (c), the
establishment of a partlculate mass emission limitation (not to
exceed 0.5 lb per 1,000 pounds of exhaust gases, corrected to 50
percent excess air), or both.  In either case, the DNR agrees not
to oppose such application on the basis that compliance can be
achieved by the installation of pollution control equipment
additional to that required by this Consent Decree, unless such
additional pollution control equipment is required because o£ a
change in the applicable law.  Such application shall in no way
relieve PCA of Its obligation to fully and timely comply with all
interim and final requirements as set forth in this decree or
from any liability for payment of stipulated penalties pursuant
to Subparagraph 27(e)(l).
         23. No provision of any Installation permit necessary to
implement the compliance program set forth in Paragraph 1 shall
be construed to conflict with any express provision of this
Consent Decree.
         24. Nothing in this Consent Decree shall be construed to
limit the right of the MAPCC and the DNR to impose and enforce
more stringent emission limitations or'pollution control equip-
ment requirements for the bark boiler as the result of any revi-
sion to the Commission's rules.

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                     CIVIL PENALTY AND COSTS
         25. In consideration of Intervening Plaintiff's agree-
ment to settle this action, Defendant agrees to reimburse the
State of Michigan the sum "of $40,000 for its costs and expenses
associated with this case.  Payment shall be made by certified
check payable to "Treasurer, State of Michigan" and sent to the
                                                               •
Assistant in Charge, Environmental Protection Division, Depart-
ment of the Attorney General, Law Building, Lansing, Michigan
48913, within 15 days after final entry of this Decree.
         26. The United States has determined that, pursuant to
Section 113 of the Act, 42 U.S.C. §7413 and the Civil Penalty
Policy of July 8, 1980, Defendant should pay a civil penalty of
$40,000.  Payment shall be made by certified check payable to
"Treasurer, United States of America" and sent to the Regional
Hearing Clerk, United States Environmental Protection Agency,
Region V, 230 South Dearborn, Chicago, Illinois 60604, within 15
days after final entry of this Decree.

                       STIPULATED PENALTIES
         27. It is hereby stipulated and agreed among the parties
that unless excused by the provisions of Paragraph 28 of this
Decree the following stipulated penalty provisions shall apply
and may be enforced by the United States:
         a'.  If Defendant fails to complete the installation of
    all pollution control equipment required by this Decree by
    the date specified (in Paragraph 1 or 3, whichever.is
                               -15-

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applicable) It shall be liable for a stipulated penalty of
$7,500 for each day It operates the bark boiler without the
required pollution control equipment.
     b.  If Defendant Tails to Issue a purchase order for the
{iidestream collector by the date specified In Paragraph l(c),
iLt shall be liable for a stipulated penalty of $2,000 for
each day such failure continues.
     c.  If Defendant fails to meet any other Interim date of
*. construction schedule (In Paragraph 1 or 3, whichever Is .
applicable), it shall be liable for a stipulated penalty of
41500 for each day such failure continues.  Any penalty
liability under this subparagraph will be forgiven If
Defendant meets the final compliance date in the applicable
schedule for'completion of the installation of the required
                                                      *
pollution control equipment.
     d.  If Defendant fails to meet any interim testing
requirement or emission limitation for the bark boiler it
shall be liable for the following stipulated penalties:
         1)  The sum of $1000 for each day that the
             failure to meet a testing requirement
             continues;
         2)  The sum of $1,500 for each day that a
             violation of an interim opacity limit
             continues;
                           -16-

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         3)  The sum of $7,000 for each day that a
             violation of an interim particulate mass
             emission limitation continues.
     e.  If Defendant 'falls to demonstrate final compliance
with the applicable emission limits under Paragraph 1 (if
applicable) by December 31, 1983, or fails to maintain
compliance thereafter, it shall be liable for stipulated
penalties'as follows:
         1)  The sum of $2,500 per day for each day
             failure to demonstrate and/or maintain
             compliance with the specified particu-
             late mass emission limit in Subparagraph
             l(f) continues.  Defendant's total
             liability under this subparagraph shall
             not exceed $20,000.
         2)  The sum of $7,000 for each day failure
             to demonstrate and/dr maintain com-
         •     i
             pllance with MAPCC Rule R 336.1331
             continues.
         3)  If Defendant fails to demonstrate and/or
             maintain compliance with MAPCC Rule R
             336.1331 and also falls to comply with R
             336.1301, the additional sum of $2,500
             for each day failure to demonstrate and/
             or maintain compliance with MAPCC Rule R
             336.1301 continues.
                           -17-

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     f.  If Defendant fails to demonstrate final com-
pliance with the applicable emission limits under
Paragraph 3 (if applicable) by July 31, 1984, or falls
to maintain compliance thereafter, It shall be liable
for stipulated penalties as follows:
         1)  The sum of $2,500 for each day failure
             to demonstrate and/or maintain com-
             pliance with the specified particulate
             mass emission limit in Subparagraph 3(e)
             continues.  Defendant's total liability
             under this subparagraph shall not exceed
             $20,000.
       •  2)  The sum of $7,000 for each day failure
             to demonstrate and/or maintain com-
             pliance with MAPCC Rule R 336.1331
             continues.
                 •     *
         3)  The sum of $2,500 for each day failure
             to demonstrate and/or maintain com-
             pliance with MAPCC Rule R 336.1301
             continues.

     g.  If Defendant fails to comply with any of the
operation and maintenance requirements set forth in
Appendix B of this Decree, it shall be liable for a
                           -18-

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  '  stipulated penalty of $2,500 for each day such failure
    continues.
         h.  If Defendant fails to submit any quarterly
    "excess" emissions reports pursuant to Paragraph 10 or
    progress reports pursuant to Paragraph 13, it shall be
    liable for a stipulated penalty of $500 for each day
    such failure continues.
One-half of any payment made under this paragraph shall be by
certified check payable to "Treasurer, Dnited States of America"
and sent as specified in Paragraph 26, within 15 days after a
demand for payment has been made. The remaining one-half of any
payment made under this paragraph shall be by certified check
payable to "Treasurer, State of Michigan" and sent as specified
in Paragraph 25, within 15 days after a demand for payment has
been made.  Such payments shall not be considered the exclusive
remedy for violation of this Decree.

                          FORCE MAJEURE
         28. Defendant's obligation to meet any requirement set
out in this Decree, including achievement of compliance with any
specific emission standard or regulation, may only be excused to
the extent that such delay is beyond the control of, and without
the fault of Defendant.  Defendant shall notify the EPA and the
DNH in writing within twenty (20) days of the event which causes
or may cause the delay, describing in detail the anticipated
length of the delay, the precise cause or causes of delay, the
                               -19-

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measures taken and to be taken by Defendant to prevent or mini-
mize the delay, and the timetable by which those measures will be
implemented.  Defendant will adopt all reasonable measures to
avoid or minimize any such delay.
       »
         29. If the parties agree that the delay or anticipated
delay was beyond the control of, and without fault of, Defendant
this may be so stipulated and the parties may petition the Court
for appropriate modification of this Decree.  If the parties are
                        '.*'
unable to reach such agreement, any party may petition the Court
for appropriate relief.  The burden of proving that any delay was
beyond the control of, and without fault of, Defendant is on
Defendant.  Failure by Defendant to comply with the notice re-
quirecents of this paragraph shall render Paragraphs 28 through
30 void and of no force and effect as to the particular incident
involved and constitute a waiver of Defendant's right to request
an extension of its obligations under this Decree based on such
incident.  Increased cost, by itself, shall not constitute an
appropriate Justification, for the purposes of this paragraph, to
excuse noncompilance with any of the terms of this Decree.
         30. An extension of one compliance date based upon a
particular incident does not necessarily mean that Defendant
qualifies for an extension of a subsequent compliance date or
dates.  Defendant must make an Individual showing of proof re-
          •
garding each incremental step or other requirement for which an
extension is sought.
                               -20-

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                           TERMINATION
         31. This Decree shall terminate one year after  the  date
scheduled for demonstration of compliance in Paragraph Kg)  or
3(f), whichever is applicable, or at such earlier date as Defen-
dant has demonstrated and maintained compliance with the require-
ments of Paragraph l(f) or 3(e), whichever Is applicable, as nay
be modified by the M.APCC pursuant to Paragraph 22, for a con-
tinuous period of six months, unless either party petitions  the
'Court for an extension of this Decree and the Court grants such
extension.  Until termination of this Decree, Jurlsdication  is
retained by this Court for the purpose of enabling any party to
this Decree to apply to this Court at any time for the enforce-
ment of any terms of this Decree.

For Plaintiff - United States of America:
                                           Dated
     HENRY HA^CHT II
  Acting Assistant Attorney General
  Land and Natural Resources Division
  United States Department of Justice
  Assistant United States Attorney
Vestfern Dis/tri
          .
  Regional Admlni
  U.S. Environmental
    Protection
                 t of Michigan
            ADAfKUS
               strato/r   )
              gency, Region V
                                           Dated
                                           Dated
                               -21-

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By     . V<    .$tk-.~ _           Dated
  DE30RAK CAREER
  Assistant  Regional  Counsel
  U.S. Environmental
     Protection  Agency, Region V

By  ^~v     ,     . _          Dated
  Courtney M£ Price            .                 Tj
  Special Counsel for Enforcement                 ^
  United States Environmental
    Protection Agency
For Intervening Plaintiff - State of Michigan,  et  al.:
By -C^t V^wffc-^              Dated  &*^ 7
  E.E. VALENTINE                                  ?^
  Assistant Attorney General,
  Environmental Protection Division
                                           Dated     .-1 •?,
  STEW A;
  Asslstant-In-Charge
  Environmental Protection Division
For Defendant - Packaging Corporation of America
By •ygo^r - . _          Dated
  K«R. KAYMON
  Pi-esldent
  Packaging Corporation of America
Attest
       A. A. Haller
       Assistant Secretary
       Packaging Corporation of America
                               -22-

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                                                               *

         Consent Decree entered in accordance with the foregoing


this 	 day of 	,  1983.
                                Judge Benjamin F. Gibson
                                United States District Court
                                For The Western District of
                                  Michigan
  Deputy Clerk
                               -2?-

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                                                           JUL  15
          IN THE UNITED STATES DISTRICT COURT FOR THE
               SOUTHERN DISTRICT OF WEST VIRGINIA
                  Civil Action No. 77-1163-BL
UNITED STATES OF AMERICA,        )
             Plaintiff,          )
v.                               )
                                 )        CONSENT ORDER
CITY OF WELCH, McDOWELL COUNTY,  )
WEST VIRGINIA, a municipal       )
corporation, WELCH SANITARY      )
BOARD, and the STATE OF WEST     )
VIRGINIA,                        )
                                 )
             Defendants.         )
     THIS MATTER having come before the Court upon the
application of the United States of America for entry of this
order; and
     WHEREAS, the United States of America, the City of Welch
(hereinafter, "Welch"), Welch Sanitary Board (hereinafter,
"Board"), and the State of West Virginia have consented to
entry of this order;
     WHEREAS, this Court has jurisdiction of this action
pursuant to 28 U.S.C. 1345 and 33 U.S.C. 1319(b);
     WHEREAS, venue is proper in this Court pursuant to 28
U.S.C. 1391(b) and  (c); and
     WHEREAS, the Court finds that: Welch owns a sewage
collection system in McDowell County, West Virginia, which
discharges pollutants into Tug Fork; Welch controls the

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                             - 2 -



financing and initiation of construction of sewage treatment


work,(5 for that city; Welch created the Board to supervise,


control, administer, operate and maintain any and all works for


the collection and treatment of sewage which are owned by Welch;


Tug Fork is a navigable waterway as defined in the Clean Water


Act, section 502(7), 33 U.S.C. 1362(7); on August 23, 1974,


pursuant to 33 U.S.C. 1342, and based upon an application


submitted on behalf of the Board, the United States (through


the L".S. Environmental Protection Agency) issued a national


pollutant discharge elimination system (hereinafter, "NPDES")

permit for the discharge of pollutants from the Board's sewage

treatment system; the terms or conditions of the permit were


not contested by the Board, Welch, or the State; the permit
  •                                                        *
became effective on September 22, 1974; the permit required


the Board to submit to the United States not later than March

22, 1975, a compliance schedule for termination of its discharge

in accordance with 33 U.S.C. 1311 (b) (1) (B); the Board has


failed to submit the compliance schedule in violation of the

permit; on May 17, 1976, the United States pursuant to 33


U.S.C. 1319(a)(3) and (4) issued findings of violation and an


order for compliance to the Board, citing the Board for


violations of its permit conditions and directing the Board to

submit to the United States not later than June 18, 1976, a


schedule for compliance; the Board has failed to submit the


schedule for compliance in violation of the May 17, 1976,

order; neither Welch nor the Board have constructed a sewage
                                                              ***•
treatment works capable of achieving effluent limitations

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                             - 3 -

based upon secondary treatment as defined by the Adminstrator
of the Environmental Protection Agency pursuant to .33 U.S.C.
1314 (d)(l); Welch and the Board have continued to discharge
pollutants within the meaning of 33 U.S.C. 1311; the discharge
of pollutants by Welch and the Board is not in compliance with
an NPDES permit and is in continued violation of 33 U.S.C.
1311; and
     WHEREAS, the parties have agreed that this order shall be
lodged and made available for public comment prior to entry by
the Court, pursuant to the procedures identified at 28 C.F.R.
50.7; and
     WHEREAS, entry of this order is in the public interest;
                        9
NOW THEREFORE,
     Pursuant to F.R.C.P. 65, IT IS on this 	 day of
	, 1983, ORDERED that:
     1'.  Municipal compliance plan.
     Within 120 days of the entry of this order, or by November
30, 1983, whichever is earlier, the Board shall pursuant to
F.R.C.P. 5 file with the Court and serve upon an individual
designated by the United States Environmental Protection Agency
(hereinafter, "EPA designate") and serve upon an individual
designated by the West Virginia Department of Natural Resources
(hereinafter, "WVDNR designate") a plan (hereinafter,
"municipal compliance plan") for achieving compliance with the
Clean Water Act.  The Board shall file a municipal compliance
plan which:

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                             - 4 -

        (a) has been certified by a registered professional
engireer;
        (b) identifies a treatment technology which the Board
proposes to use and whieh will achieve the level of effluent
quality attainable through the application of secondary
treatment;
        (c) proposes that construction .of the treatment facility
which will achieve the level of effluent quality attainable
through the application of secondary treatment will be started
by no later than May 1, 1984;
        (d) proposes that construction of the treatment facility
will be completed no later than May 1, 1986;
        (e) proposes that the level of effluent quality
attainable through the application of secondary treatment will
be achieved no later than August 1, 1986;
        «     t
        (f) estimates the capital requirements of the treatment
technology proposed;
        (g) estimates the operation and maintenance costs of
the treatment technology proposed;
        (h) identifies the financial mechanisms proposed to be
used by the Board for facility construction;
        (i) identifies the financial mechanisms proposed to be
used by the Board for generating adequate revenues for operation
and maintenance;
     2.  Modifications to municipal compliance plan.  The
United States may inform the Board of any modifications which
the United States proposes to the municipal compliance plan.-

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                             - 5 -

In the event the Board agrees to modify the municipal compliance
plan as proposed by the United States, 'the Board shall pursuant
to F.R.C.P. 5 file with the Court, and serve upon the EPA
designate and the WVDNR designate, the modifications to which
the Board and the United States have agreed.  In the event the
Board does not agree to modify the municipal compliance plan
as proposed by the United States (or in the event the Board
fails to file with the Court modifications to which the United
States and the Board have agreed), the United States may
pursuant to F.R.C.P. 5 file with the Court and serve upon the
Board proposed modifications to the municipal compliance plan.
The municipal compliance plan shall be deemed to be modified
      0
as proposed by the United States unless, within fourteen days
of the filing of the proposed modification, American Cyanamid
applies to the Court pursuant to F.R.C.P. 7 for further order.
     3.   Implementation of municipal compliance plan;  The
Board shall implement the municipal compliance plan filed by
the Board, as modified by (a) modifications filed with the
Court to which the Board and the United States have agreed,
(b) modifications filed by the United States and for which
timely motion for further order has not been made by the Board,
and (c)  further order of the Court.
     A.   Minimum effluent limitations.  After August 1, 1986,  .
the Board and Welch are enjoined from discharging any effluent
from the collection system or treatment works that does not
achieve the following effluent limitations:
        (i) the arithmetic mean of the values for biological

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                             - 6 -

oxygen demand for effluent samples collected in any period of
thirty consecutive days shall not exceed 30 milligrams per
liter;
        (ii) the arithmetic mean of the values for biological
oxygen demand for effluent samples collected in any period of
seven consecutive days shall not exceed 45 milligrams per
liter;
        (iii) the arithmetic mean of the values for biological
oxyg€;n demand for effluent samples collected in any period of
thirty days shall not exceed 15 percent of the arithmetic mean
of the values for influent samples collected at approximately
the same times during the same period;
        (iv) the arithmetic mean of. the values of suspended
solids for effluent samples  collected in any period of thirty
consecutive days shall not exceed 30 milligrams per liter;
        (v) the arithmetic mean of the values of suspended
solids for effluent samples collected in any period of seven
consecutive days shall not exceed 45 milligrams per liter;
        (vi) the arithmetic mean of the values of suspended
solids for effluent samples collected in a period of thirty
consecutive days shall not exceed 15 percent of the arithmetic
mean of the values for influent samples collected at approximately
the satae time during the same period;
        (vii) the effluent values for pH shall be maintained
within the limits of 6.0 to 9.0; and
        (viii) the fecal coliform content of the effluent shall
not exceed 200 per'100 milliliter as a 30-day geometric mean

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                             - 7 -
based on not less than five samples during any 30-day period
nor exceed 400 per 100 milliliter in more than ten percent of
all samples during any 30-day period.
     5.  Compliance with NPDES permit.  After August 1,  1986,
the Board and Welch are enjoined from discharging any pollutant
from the collection system or treatment works except in
compliance with an NPDES permit issued pursuant to the Clean
Water Act.
     6*  Penalty.  The Board shall pay a civil penalty of
[amount], by tendering a check in that amount payable to the
order of the Treasurer of the United States within thirty
days of the entry of this order.
     .7.  Stipulated penalties.  If the Board violates any
provision of this order, the Board shall pay a civil penalty
        (i) $100 per day for each of the first 30 days of
violation,
        (ii) $200 per day for each of the next 60 days of
violation,
        (iii) $500 per day for each of the next 60 days of
violation, and
        (iv) $1000 per day for each of the next 60 days of
violation.  Thereafter, the United States may apply to the
Court for appropriate penalties.  The United States may apply
to the Court at any time for other non-penalty relief in the
event of any violation of the Act, of any permit issued
pursuant to the Act, or of this order.

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                             - 8 -

    • 6'.  Nonwaiver provision.  This order in no way relieves
any defendant of responsibility to coaply with any other State,
Federal or local law or regulation.  The order dated May 17,
1976,, of the United States EPA retains full force and effect.
                               U.S.D.J.

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GM-18

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IMPLEMENTATION OF DIRECT REFERRALS FOR CIVIL CASES
     EPA GENERAL ENFORCEMENT POLICY I GM  -  18
                         UNITED STATES ENVIRONMENTAL
                              PROTECTION AGENCY

                          EFFECTIVE DATE:     DEC  i   1983

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        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                      WASHINGTON. DC SM«0
                           28  J9B3
                                                  •ttrOHCEMCMT I
MEMORANLOM

SUBJECT: Implementation of Direct Referrals for Civil Cases
          Beginning December 1. 19B3
                          f\   -*-    /X
FROM:    Courtney M. PriceV^r/J!Zi*»y '" '
         Assistant Administrator foe Enforcement
          and Compliance Monitoring

TO:      Regional Administrators, Regions I - X
         Regional Counsels, Regions I - X
         Associate Enforcement Counsels
         OECM Office Directors
I.  BACKGROUND

     On September 29, 1983, the Environmental Protection*
Agency (EPA) and the Land and Natural Resources Division of
the Department of Justice (DOJ) entered into an agreement
which, beginning on December 1. 1983, allows certain
categories of cases to be referred directly to DOJ fron EPA
Regional offices without my prior concurrence.  A copy of
that agreement is attached to this memorandum.

     This memorandum provides guidance to EPA Headquarters
and Regional personnel regarding procedures to follow in
implementing this direct referral agreement.  Additional
guidance will be issued as required.

II. PROCEDURES FOR CASES SUBJECT TO DIRECT REFERRAL

     The attached agreement lists those categories of
cases which can be referred directly by the Regional
Administrator to DOJ.  All other cases must continue to be
reviewed by Headquarters OECM and will be referred by me to
DOJ.  Cases which contain counts which could be directly
referred and counts which require Headquarters concurrence
should be referred to EPA Headquarters.  If you are uncertain
whether a particular case may be directly referred, you
should contact the appropriate Associate Enforcement Counsel
for guidance.

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                            -2-

      Many  of  the procedures for direct referral cases are
 adequately explained  in the September 29th agreement.
'However, there are some points" I vant to emphasize.

      Referral packages should be addressed to Mr. P. Henry
 Habicht, II,  Assistant Attorney General, Land and Natural
 Resources  Division, U.S. Department of Justice, Washington.
 D.C.  20530, Attention: Stephen D. Ramsey.  The time limitations
 set forth  in  the agreement for review and initial disposition
 of the package will commence upon receipt of the package in
 the Lend and  Natural  Resources Division, and not -at the DOJ
 mailroom.   Delivery of referral packages to the Land and
 Natural Resources Division will be expedited by use of
 express nail, which is not commingled with regular nail in
 DOJ1 s ma 11 room.

      The contents of  a referral package (either direct to
 DOJ or to  EPA Headquarters) should contain three primary
 divisions: (1) a cover letter; (2) the litigation report;
 (3) the documentary file supporting the litigation report.

      The cover letter should contain a summary of the following
 elements:

    .  (a) identification of the proposed defendant(s); •
                                             *
      (b) the  statutes and regulations which are the basis
         for  the proposed action against the defendant(s);

      (c) a brief statement of the facts upon which the
         proposed action is based;

      (d) proposed relief to be sought against the defendant(s);

      (e) significant  or precedential legal or factual issues;

      (f) contacts with the defendant(s), including any
         previous administrative enforcement actions taken;

      (g) lead Regional legal and technical personnel;

      (h) arty  other aspect of the case which is significant and
         should be highlighted, including any extraordinary
         resource demands which the case may require.

      A referral to DOJ or to Headquarters EPA is tantamount
 to a  certification by the Region that it believes the case
 is sufficiently developed for the filing of a complaint,
 and that the  Region is ready, willing and able to provide
 such  legal and technical support as might be reasonably
 required to pursue the case through litigation.

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     AB provided in the September 29, 1983, agreement,
information copies of the referral package nay be provided
to the U.S. Attorney for the appropriate judicial district
in which the proposed case nay be filed.  These information
packages should be clearly labelled or stamped with the
following words: "Advance Copy ~ No Action Required At
This Time".  Also, information copies should be simultaneously
provided to the appropriate OECM division at Headquarters.
It is important that the directly referred cases be tracked
in our case docket system and Headquarters oversight initiated.
Copies of the referral cover letter will be provided to
OECM1 s Office of Management Operations for inclusion tn the
automated case docket system when Headquarters informational
copy is received at OECM's Correspondence Control Unit.

Department of Justice Responsibilities

     DOJ shares our desire to handle these cases as expedi-
tiously as possible.  To that end, DOJ has agreed that,
within thirty days of receipt of the package in the Land and
Natural Resources Division at DOJ Headquarters, it will
determine whether Headquarters DOJ or the U.S. Attorney
vill have the lead litigation responsibilities on a specific
case.  DOJ will notify the Regional offices directly of its
determination in this regard, with a copy to the appropriate
OECM division.  Although USA offices will have lead respon-
sibilities in* many cases, the Land and Natural Resources
Division will continue to have oversight and management
responsibility for all cases.  All complaints and consent
decrees will continue to require the approval of the
Assistant Attorney General for the division before the case
can be filed or settled.

     DOJ has reaffirmed the time frame of the Memorandum
of Understanding, dated June 15, 1977, for the filing of
cases within 60 days after receipt of the referral package,
where possible.  Where it is not possible, DOJ will advise
the Region and Headquarters of any reasons for delays in
filing of the case.  However, when DOJ determines that
the USA should have the lead responsibilities in a case, DOJ
will forward the case to the USA within thirty days of
referral to the extent feasible.

     DOJ can request additional information from a Region
on a case or return a case to a Region for further develop-
ment.  In order to avoid these delays, referral packages
should be as complete as possible and the Regions should
work closely with DOJ to develop referral packages.

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                            -4-

     The Deputy Administrator has expressed  concern  in the
past on the number of cases returned to the  Regions or
declined by EPA or DOJ.  I have assured the  Deputy Administrator
that I will closely track the number of cases declined by
DOJ or returned to the Regions and the reasons  for the
declination or return as indications of whether direct
referrals are a feasible method of handling  EPA's judicial
enforcement program.

Headquarters OECM Responsibilities

     Although OECM vill not formally concur  on  cases directly
referred to DOJ, OECM vill still review these packages and
may offer comments to the Regions and DOJ.   DOJ is free  to
request EPA Headquarters assistance on cases, as DOJ
believes necessary.  EPA Headquarters review will help to
point out potential issues and pinpoint areas where  future
guidance should be developed.  OECM will also be available
as a consultant to both DOJ and the Regions  on  these cases.
OECM will be available to address policy issues as they
arise and, as resources permit, nay be able  to  assist in
case development or negotiation of these cases. Any request
from a Regional office for Headquarters legal assistance
should be in writing from the Regional Administrator to
me, setting forth the reasons for the request and the type
of assistance needed.

     OECM also maintains an oversight responsibility for
these cases.  Therefore, Regional attorneys  must report
the status of these cases on a regular basis through use
of the automated case docket.All information  for the case
required by the case docket system must appear  in the
docket and be updated in accordance with current guidance
concerning the automated docket system.

Settlements in Cases Subject to Direct Referral

     I will continue to approve and execute  all settlements
in enforcement cases, including those in cases  subject to'
direct referral and amendments to consent decrees in these
cases.  This is necessary to ensure that Agency policies and
enforcement activities are being uniformly and  consistently
applied nationwide.  After the defendants have  signed the
settlement, the Regional Administrator should forward a
copy of the settlement to me (or my designee) with a written
analysis of the settlement and a request that the settlement
be signed and referred for approval by the Assistant Attorney
General for the Land and Natural Resources Division  and  for
entry.  The settlement will be reviewed by the  appropriate
OECM Enforcement Division for consistency with  law and
Agency policy.

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                            -5-

     VIthin twenty-one days from the date of receipt  of  the
settlement by the appropriate OECM division,  I vill either
sign the settlement and transmit it to DOJ Vith  a request
that the settlement be entered, or transmit a memorandum to
the Regional Office explaining factors which justify  post*
ponement of referral of the package to DOJ, or return the
package to the Region for changes necessary before the
agreesent can be signed.

     Obviously, we want to avoid the necessity of
communicating changes in Agency settlement positions  to
defendants, especially after they have signed a  negotiated
agreement.  To avoid this, the Regional office should
coordinate with Headquarters OECM and DOJ in development of
settlement proposals.  A copy of all draft settlement
agreements should be transmitted by the Regional Counsel to
the appropriate Associate Enforcement Counsel for review
before it is presented to the defendant.  The Associate
Enforcement Counsel will coordinate review of the settlement
with the Headquarters program office and respond to the
Regional office, generally, within ten days of receipt of
the draft.  The Regional office should remain in contact
with the Headquarters liaison staff attorney as  negotiations
progress.  Failure to coordinate settlement development
with appropriate Headquarters offices nay result in rejection
of a proposed settlement which has been approved by the
defendant(s) and the Regional office.

     I will also continue to concur in and forward to DOJ
all requests for withdrawal of cases after referral.  In
addition, 1 will review and concur in any delay  in the filing
or prosecution of a case after referral..  This is appropriate
because cases which are referred to DOJ should be expeditiously
litigated to conclusion, unless a settlement or  some  other
extraordinary event justifies suspending court proceedings.
The review of reasons for withdrawal or delay of cases
after expenditure of Agency and DOJ resources is an important
function of OECM oversight.  Therefore, should the Regional
offices desire to request withdrawal or delay of a case
which has been referred to DOJ, a memorandum setting  forth
the reasons for such a request should be forwarded to the
appropriate OECM division, where it vill be reviewed  and
appropriate action recommended to me.

III.  CASES NOT SUBJECT TO DIRECT REFERRAL

     Those cases not subject to direct referral  will  be
forwarded by the Regional Administrator to the Office
of Enforcement and Compliance Monitoring for review prior
to referral to DOJ.  OECM has committed to a twenty-one  day
turn-around time for these cases.  The twenty-one day
review period starts when the referral is received by the
appropriate OECM division.

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                            -6-

     Within this twenty-one day period,  OECM will decide
whether to refer the case to DOJ (OECM then has fourteen
additional days to formally refer the case) , to return the  .
case to the Region for further development, or to request
additional information from the Region.

     Because of this ihort OECM review period, emphasis
should be placed on dev-eloping complete referral packages
so that delay occassioned by requests for additional infor-
mation from the Regiou will be rare.  OECM may refer a case
to DOJ which lacks some information only if the referral
can be supplemented with a minimum of time and effort by
information available to the Regional office which can
immediately be gathered and transmitted to DOJ.  However,
this practice is discouraged.  In the few instances in
which a case is referred to DOJ without all information
attached, the information should, at A minimum, be centrally
organized in the Regional office and the litigation report
should analyze the completeness and substantive content  of
the information.

     A referral will be returned to the Region, with an
explanatory memorandum, if substantial information or
further development is needed to complete the package.
Therefore, the Regions should work closely with OECM
attorneys to be certain referral packages contain all
necessary information. '           .                        .

IV.  MEASURING THE EFFICACY OF THE DIRECT REFERRAL AGREEMENT

     I will use EPA's case docket system, OECM's quarterly
Management Accountability reports and DOJ'6 responses to
the referral packages to review the success of the direct
referral agreement.  OECM will review the quality of the
litigation reports accompanying directly referred cases  and
discuss the general quality of referrals from each Regional
office at case status meetings held periodically with DOJ's
Environmental Enforcement Section.

     If you have any questions concerning the procedures
set out in this memorandum, please contact Richard Mays,
Senior Enforcement Counsel, at FTS 382-4137.
Attachment

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r    l.
 '             UNITED STATES EKirtRDNMEKTAi. FnrDTECTiOt%
    ••t-
                                                                id t*
     Honorable F. Benry Babicbt, XX    'J.
     Acting Assistant Attorney General -:
     land and natural Resources Division
     U.S. Department of Justice
     Washington, D.C.  20530
                                  < •'*•."••
     Dear Banks                   •.''-'
            "  •        "'•          ' '•'"• '-**
          As a result of our meeting on Thursday, September B," 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 fro*
     CPA's Regional Offices to the Land and natural Resources Division
     of the Department of Justice in Washington, D.C.

          The terns, 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 requirement
          of the Assistant Administrator's prior concurrence for referral
          to the Department of Justice for the following classes of
          judicial enforcement cases:

          la)  Cases under Section 1414(b) of the Safe Drinking Kater
               Act which involve violations of the National Interim
               Primary Drinking Hater Regulations, such as reporting or
               nonitoring violations, or maximum contaminant violations!

          (b)  The following cases under the Clean Hater Acts
                                                     •
               (i)    cases involving discharges without a permit
                      by industrial dischargers}

               (li)   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 fr
                 industrials under consent decrees;

          (v)    referrals to collect Administrative spill penalties
                 under Section 311 (J) of the CWXj
                         . 4 '+*~*r            * *!•• '*
     (e)  All cases under the Clean Air Act except the following:
                           ' * . .            . r
          (i)    cases involving the steel industry*
                           * .             .
          (ii)   cases involving non-ferrous smelters;
     .  ... .  •                  ..-    •  .        .                  •    ,
          (iii)  cases involving National emissions Standards for
                 Bazardoue Air Pollutants;  >
                              *     •*
          (iv)   cases involving the post-1982 enforcement policy.

2.   Cases  described in Section 1, above, shall be referred
     directly from the Regional Administrator  to the Land snd
     Natural Resources Division of DOJ in the  following scanners
                 f
     (a) The referral package shall be forwarded to the Assistant
         Attorney General for Land snd Natural Resources , 0*6.
         Department of Justice (DOJ), with copies of  the package
         being simultaneously forwarded to the 13.5. Attorney
          (USA) for the appropriate judicial district  in which
          the proposed case is to be filed (narked 'advance  copy-
        . no action required  at this tine"), and the Assistant
         Administrator for Enforcement and Compliance Monitoring
          (DECK) at EPA Headquarters.  OECM shal.1 have the following
         functions with regard to said referral packages

          (i)    DECK shall have no responsibility for review of
                 such referral packages , and the referral 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 a\ay observe in the package.  DOJ Bay, of course »
                 continue to  consult with OECM on such referrals.
                 Otherwise, OECM shall be responsible  only for
                 routine oversight of the progress and management
                 of the case  consistent with applicable present
                 and future guidance.  OECM shall, however,  retain
                 final authority to approve settlements en behalf
                 of EPA for these cases, as in other cases.
          (ii)   The referral  package  ahall 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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           fill I  DOJ shall, within 30 days iron receipt of the
                 referral package, determine (1) whether the Lands
                 Division of TJQZJ will have lead responsibility for
                 the case; or 12) whether the USA will have laad
                 responsibility for the case.
                          i . ri: •           ' *   '
                 While it is agreed that to the extent feasible,
                 cases in which the USA will have the lead will be
                 transmitted to the DSA for filing and handling
                 within this 30-day period, if DOJ determines that
                 the case requires additional legal or factual
                 development »t DOJ prior to referring the «att«r
                 to the USA, the case may be returned to the
                 Regional Office, or may be retained at the Lands
                 Division of DOJ for further development t including
                 requesting additional information from the Regional
                 Office.  Zn any event, DOJ will notify the Regional
                 Office, OECH and the DSA of its determination of
                 the lead role within the above-mentioned 30-day
                 period.

           (iv)   Regardless of whether DOJ or the DSA is determined
                 to have lead responsibility for management of
                 the case, the procedures and time limitations set
                 forth in the MOD and 2B CFR fO.65 et seq., shall
                 remain in effect and shall run cpncurrently with*
                 the management determinations made pursuant -to
                 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 OECH 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 DSA for the appropriate judicial district*
          the DSA'* copy being marked 'advance copy-no action required
          at this
     (b)  OECH 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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          Any request for information* or return of the
          to the Region ahall be transmitted by appropriate letter
          or sjemorandun signed by the AA for OECH (or her designer)
          within the aforementioned twenty-one day period.  Should
          O£CM concur In the proposed referral of the case to J>OJ*
          the actual referral shall be by letter from the AA for
          OECM Cor her designee) signed within fourteen days of
          the termination of the aforementioned twenty-one day
          review period.  Copies of the letters referred to herein
          shall be sent to the Assistant Attorney General for the
          Lands Division of 909 •            .

    : ' t<0  Upon receipt of the referral package by DOJ, the
          procedures and time deadlines set forth in paragraph
          Mo. 8 of the KOU shall apply.

      i\\ order to allow sufficient tine prior to implementation of
this  agreement to stake the U.S. Attorneys, the Regional Offices
and ouir staffs aware of these provisions, it is agreed that this
agreement shall become effective December 1, 19B3.  Courtney Price
will  distribute a memorandum within EPA explaining this agreement
and how it will be^implemented within the Agency.  (You will receiw
a copy,,)        .: ~       .   .  ..
               •s .              ''9

      I believe that this agreement will eliminate the necessity of
formally amending the Memorandum of Understanding between our
respective agencies, and will provide necessary experience to
ascertain whether these procedures will result in significant
saving; of time and resources.  In that regard, I have asked
Courtney to establish criteria for measuring the efficacy of this
agreeaiunt during the one year trial period, and 2 ask that you
cooperate with her in providing such reasonable and necessary
information as she may request of you in naking that determination.
At  the end of the trial period—or at any time in the interval—
we  may propose such adjustments in the procedures set forth herein
as  may be appropriate based on experience of all parties.

      !•: is further understood that it is the mutual desire of the
Agency and DOJ that cases be referred to the 05A for filing as
expedittiouBly as possible. '

      I appreciate your cooperation in arriving at this agreement*
If  thiis meets with your approval, please sign the enclosed copy
in  the space indicated below and xeturn the copy to ae for our
files.
                                    Sincerely yours.
                                    Alvin L. A*m
                                    Deputy Administrator
Approve
F. Penry H^bicht, II
Acting Assistant Attorney General
.Land and Natural Resources Division
U.S. Department &f Justice

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GM-19

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CONSENT DECREE TRACKING SYSTEM GUIDANCE
EPA GENERAL ENFORCEMENT POLICY I GM - 19
                      UNITED STATES ENVIRONMENTAL
                           PROTECTION AGENCY
                      EFFECTIVE DATE:
                                       DEC 20 1983

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           UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON. DC 20460
                           DEC &0 1983
                                                        orrici or
                                                    •NFOKCKMEMT COUNSEL.
MEMORANDUM

SUBJECT:

FROM:



TO:
Concent Decree Tracking System Guidance

CourtTTeyp^ice, Assistant Administrator
Office of Enforcement and Compliance Monitoring

Assistant Administrators
Associate Administrator for Policy
   and Resource Management
Associate Administrator for Regional Operations
General Counsel
Associate Enforcement Counsels
Regional Administrators, Regions I-X
Regional Counsels, Regions I-X
     I am forwarding to you for use by you and your staff
enforcement guidance on the use of the consent decree tracking
system developed by NEIC and OLEP.  This tracking system is
designed to enable the Agency to track the compliance of
consent decrees for all media on a national basis.

     This guidance was circulated in draft form to the Regional
Administrators and to the program Assistant Administrators for
review and comment.  I believe the guidance will help ensure
proper use of the consent decree tracking system, better
enabling EPA to meet its legal responsibility to the courts of
ensuring that the terms of each consent decree are being met.

     This consent decree tracking system will be only as good
as the data that is put into it.  In order to ensure that the
consent decree data in the system is kept up to date, I have.
asked Lew Crampton to incorporate a requirement to maintain
the tracking system into the Administrator's Management
Accountability System (AMAS).  Staff from Lew's office and
mine will jointly contact each Assistant Administrator's
office in the near future to formally negotiate the measure,
so that it can be included in future AMAS reports.

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                             -2-
     I also have attached another guidance document developed
by my office entitled, "Implementation of Direct Referrals
for Civil Cases Beginning December 1, 1983".  This document
provides guidance to EPA Headquarters and Regional personnel
on making direct referrals to DOJ from EPA Regional offices
for certain categories of cases.  Both of these documents
should be added to your copy of the General Enforcement
Policy Compendium which was distributed in March of 1983.
A revised table of contents and index for the Compendium are
also attached.

     If you have questions concerning this guidance, please
contact Mike Randall at FTS 382-2931 or Gerald Bryan at
FTS 382-4134.

Attachments

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                      TABLE OF CONTENTS



                                                      PAGE



INTRODUCTION	 1



Scope and Exclusions	 2



TRACKING SYSTEM	 4



Tracking System Objectives	 4



Key Tracking System Components....	 4



  1. The Repository....	 5



  2. The Consent Decree Library	 5



  3. Compliance Monitoring	 6



  4. Compliance Tracking	 7



Tracking System Operation.	 8



OFFICE RESPONSIBILITIES	 10



  1. National Enforcement Investigations Center	 11



  2. Regional Administrator's Office	 12



  3. Office of Enforcement and Compliance Monitoring.. 13

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INTRODUCTION

     The Environmental Protection Agency (EPA) places a high
priority on consent decree compliance.  This is consistent
with the Agency's Congressional mandate to enforce the nation's
environmental laws.  It is also consistent with EPA's legal
responsibility to the Courts of ensuring that the terms of
each consent decree are met properly.
     A uniform national approach to consent decree compliance
tracking can enhance the Agency's consent decree enforcement
efforts.  This uniform approach should incorporate ah
automated management information system intended primarily
for consent decree compliance tracking.  This will enable
Agency managers to:

          0 Address consent decree compliance problems quickly
            and effectively.
          0 Assess overall national trends in EPA's consent
            decree enforcement efforts.
          * Respond quickly and accurately to Congressional
            and public inquiries concerning the compliance
            status of the Agency's consent decrees.

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                             -2-




     Until recently, EPA had no uniform automated information


system intended primarily for consent decree compliance


tracking.  Some Agency offices do use automated information


systems to track source compliance generally.   However, the


use of these systems varies throughout the Agency, making it


difficult to integrate compliance data.  Moreover, some


offices track consent decree compliance by hand, resulting


in lergthy information retrieval times.


     On August 4, 1982, EPA managers met to discuss establishing


a uniform national approach to consent decree compliance
     • ..•*)'   ''   "' ~— - *

tracking which incorporates the use of an automated information


systen, intended primarily for tracking consent decree


compliance.  They agreed that this tracking system should


build upon, rather than replace, existing information systems


maintained by various Agency enforcement offices.


     Subsequent to that meeting, the National Enforcement


Investigations Center (NEIC), working closely with the Office


of Legal and Enforcement Policy (OLEP), developed ideas for


such a tracking system.  This document describes the proposed


tracking system and Agency office roles in implementing and


maintaining it.
Scope and Exclusions




     This tracking system will include information on all


court entered judicial consent decrees in enforcement cases to

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                             -3-

which EPA is a party, as well as the status of compliance
efforts required by these decrees.  It will not include:

          • State consent decrees to which EPA is not a party.
            This includes cases in which EPA may have a
            continuing interest in the compliance status of
            the decree even though, for example, EPA originally
            deferred the underlying enforcement action to
            appropriate State authorities.  This topic will be
            discussed generally in guidance entitled,
            •Coordinating Federal and State Enforcement Actions".
          0 Federal Facilities Compliance Agreements.  These
            agreements are negotiated with Federal facilities
            to bring them into compliance with applicable
            environmental statutes.  Executive Order 12088
            provides a non-judicial mechanism for negotiating
            these agreements.  Within EPA, the Office of
            Federal Activities (OFA) has the lead responsibility
            for tracking compliance with these compliance
            agreements.  OFA is developing guidance on this
            area entitled, 'Federal Facilities Compliance
            Program - Resolution of Compliance Problems".

     Also, considerations in selecting an appropriate enforcement
response to a consent decree violation are discussed generally
in forthcoming guidance entitled, "Enforcing Consent Decree
Requirements".

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                             -4-


TRACKING SYSTEM


Tracking System Objectives


     This uniform national approach to consent decree compliance

tracking seeks to achieve the following objectives:


          * Facilitate consent decree enforcement by uniformly

            tracking the compliance status of all EPA consent

            decrees.

          0 Keep senior Agency managemement informed of the

            compliance status of all EPA consent decrees.

          0 Provide timely, accurate information upon request

            to Congress and the public concerning the compliance

            status of EPA consent decrees.
Key Tracking System Components



     To achieve these objectives, the tracking system relies

on four key components:
                   i
          1. The Repository

          2. The Consent Decree Library

          3. Compliance Monitoring

          4. Compliance Tracking


These components are described below.

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                             -5-
1. The Repository
     The Repository is a collection of physical copies of over
425 EPA consent decrees NEIC has on file.  NEIC assembled
this collection with the assistance of the Regional Offices, the
Department of Justice (DOJ), and the Federal Courts.  NEIC
is continuing its efforts to complete the collection of consent
decrees to be filed in the Repository.  To facilitate this
effort, the Regional Counsels should forward copies of all
new consent decrees to NEIC for inclusion in the Repository.
     NEIC maintains the Repository and, upon request, can
provide a copy of any EPA consent decree on file to requesting
Agency offices.
2. The Consent Decree Library

     NEIC developed, and will maintain, the consent decree
library as an automated management information system to
store summaries of each EPA consent decree on file in the
Repository.  Each consent decree summary will include the
following information:

          0 Case name.
          0 Date the consent decree was entered and, if
            applicable, the date the decree was modified.
          0 Consent decree requirements, including due dates,
          0 Information indicating when these requirements
            were met.

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                             -6-
NEIC will develop these summaries and send them to the Regional
Counsels' Offices to review and confirm their accuracy.  The
information in the library can be updated by NEIC, based upon
information sent to NEIC by the Office of Enforcement and
Compliance Monitoring (OECM), to reflect the current compliance
status; of EPA consent decrees.
     The library contain^ summaries of most EPA consent
decrees on file.  Computer terminals will link EPA Bead-
quarters and the Regional Offices electronically with the
library.  NEIC will provide OECM and Regional Office personnel
training on how to use the library.
     Direct access to the library will provide the Agency's
attorneys and enforcement staff with information on active
or terminated consent decrees which may be useful in drafting
and negotiating new consent decrees.  Direct access to the
library will also provide Regional managers with information
on upcoming requirements which may be useful in targeting
source inspections and in projecting resource needs.
3. Compliance Monitoring
     Consent decree compliance monitoring is presently
conducted to determine whether individual consent decree
requirements are properly met.  Compliance monitoring activities
often include source reporting and on-site inspections.

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                             -7-

     Under the national consent decree tracking system, the
Regional Program Offices are primarily responsible for con-
ducting monitoring activities in accordance with national
guidance issued by EPA Headquarters.  The Regional Program
Offices will continue to conduct compliance monitoring using
whatever automated information system (e.g., PCS for Water
Enforcement) they choose to use to assist them in their
monitoring efforts.
4. Compliance Tracking

     Compliance tracking is the gathering and compiling of
compliance information which Agency management can use to
determine and assess general trends in the Agency's consent
decree enforcement efforts.  Compliance tracking will be
based upon the information gathered by the Regional Program
Offices in the course of conducting their compliance monitoring
activities.
     OECM is responsible for tracking EPA's enforcement efforts
on a national level, including whether the Agency is meeting its
legal responsibility to the Courts for ensuring that consent
decree requirements are met.  Consequently, OECM will be
principally responsible for compliance tracking, through use
of the automated Consent Decree Library operated by NEIC, to
ensure that Agency consent decree enforcement efforts are
adequate.

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                             -8-



     To facilitate OECM compliance tracking activities,


The Office of Management Operations (ONO) will send each


Regional Administrator periodic information requests concerning


the compliance status of each consent decree in the Region.


These information requests will serve as a tool to ensure


that Regional Offices focus on source compliance with individual
                                 v

milestones in each consent decree.
Tracking System Operation



     Tiie operation of the tracking system will draw from the


information stored in the consent decree library.  At the


beginning of each quarter, OMO will send to each Regional


Administrator two computer print-outs (see attachments)


containing consent decree information from the consent decree


library.  The computer print-outs will list:



          a. All consent decree milestones in each Region


             which are scheduled to come due during the


             present quarter (prospective).


          b. All consent decree milestones in each Region


             for which the Region was responsible for


             ensuring compliance during the preceding


             quarter (retrospective).

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                             -9-

     The prospective print-out is intended as a tool for use
by the Regional and OECM management generally.  It may be
used, for example, as an alert device to assist each Regional
Administrator in advance preparations for ensuring that
consent decree milestones coming due during the quarter are
met properly.
     The retrospective print-out will contain instructions
asking each Regional Administrator to respond to OMO, within
ten working days of the transmission date of the print-out,
with the following summary information:

          0 Whether each consent decree milestone which came
            due during the preceding quarter was achieved.
          • The consent decree milestones which were not
                                                   t   •
            in compliance.
          0 Whether any consent decree milestones were
            renegotiated.
          0 If any milestone is not achieved or renegotiated,
            the enforcement response the Region intends to
            take to ensure that the milestone is achieved.

     The Associate Enforcement Counsels in OECM will review
the information provided by the Regional Administrator for
use in tracking the Agency's overall consent decree enforce-
ment efforts.  OMO will send the raw data to NEIC to be
used to update the information in the consent decree library.

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                             -10-





     It will be important for the Regional Administrator to



make ciure that the response is properly coordinated between



the various offices in the Region (e.g., the Regional



Progre.m Offices and the Regional Counsels' Offices).  This



will better ensure that the information in the tracking system



is accurate and complete.



                       ' '•)'



OFFICE RESPONSIBILITIES





     Three Agency components will share responsibilities in



implementing and maintaining the consent decree tracking



system.  These three offices are:





          1. NEIC



          2. Regional Administrators



          3. OECM Headquarters





The respective responsibilities of these offices are specified



below.

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                             -11-

1. NEIC

     NEIC's responsibilities generally will involve the
start-up operations and the maintenance of the Repository and
the Consent Decree Library.  This will include the following:

          0 Completing the collection of physical copies of
            EPA consent decrees to be filed in the Repository.
          • Maintaining the Repository and making available to
            Agency personnel upon request copies of consent
            decrees filed in the Repository.
          0 Ensuring that summaries of all EPA consent decrees
            filed in the Repository are fed into the Consent
            Decree Library.  NEIC will send copies of the
            summaries to the Regional Counsels' Offices for
            review to ensure the accuracy of the summaries.
          0 Maintaining the Consent Decree Library and ensuring
            the smooth technical operation of the library.
          0 Providing OECM and Regional Office personnel with
            training on how to use the library and establishing
            a contact point in NEIC to respond to Agency
            inquiries on proper library use.
          0 Updating the Consent Decree Library with compliance
            information sent to NEIC quarterly by OMO.

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                             -12-

2. Regional Administrators

     The Regional Administrators are ultimately responsible
for keeping informed of the compliance status of the consent
decrees in their Regions, so that they can act promptly to
remedy any identified instances of noncompliancec  It will be
important for the Regional Administrator to make sure that
the Region's consent decree compliance efforts are properly
coordinated between the Regional Program Off ices, the Regional
Counsel's Office, and other appropriate offices in the Region.
With regard to the consent decree tracking system, these
compliance efforts will include:

          • Reviewing the consent decree summaries prepared
            by NEIC for accuracy prior to final entry into
            the Consent Decree Library.
          0 Forwarding to NEIC copies of all future EPA
            consent decrees that have been entered in Court,
            including any renegotiated consent decrees.
          0 Conducting compliance monitoring in accordance with
            policy issued by the national program offices to
            determine if the terms of each consent decree
            are met.  Regional Offices may use whatever
            automated information system they choose to
            assist them in monitoring.

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                             -13-

          0 Responding to OHO requests for information
            concerning consent decree compliance status*
          0 Using the Consent Decree Library as may be
            necessary to ensure the compliance of
            existing consent decrees and in drafting and
            negotiating new consent decrees.
TTOECM
     Under the tracking system, OECM's general responsibilities
of tracking consent decree compliance will be shared by OMO
and the Associate Enforcement Counsels.  These responsibilities
will include:

               0 Sending quarterly information requests
                 inquiring about the compliance status of the
                 consent decrees in each Region to each
                 Regional Administrator.
               e Forwarding summary information from
                 the Regional Administrator to KEIC to use
                 in updating the Consent Decree Library.
               0 Forwarding to NEIC copies of all future EPA
                 consent decrees in nationally managed cases,
                 including any renegotiated consent decree in
                 which the Associate Enforcement Counsel took
                 the lead in the renegotiation.

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                             -14-



               * Tracking the overall EPA consent decree


                 enforcement effort using information


                 contained in the Regional Adminstrator'e


                 responses to OECM's quarterly consent


                 decree compliance information requests.


               • Evaluating each Region's accomplishments


                 in monitoring consent decree compliance and

                      ' "•('
                 responding to noncompliance problems.



     The success of this uniform national system for tracking


consent decrees depends upon how well Agency offices work


together in implementing and maintaining the system.  If


properly implemented and maintained, the tracking system can


enhance EPA's consent decree enforcement efforts.


     If you have any questions concerning the system, please


contact Michael Randall of OLEP at FTS 382-2931 or


Gerald Bryan of OMO at FTS 382-4134.



Attachments

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Attachment A
  SAMPLE PROSPECTIVE REPORT FOR THE QUARTER BEGINNING 7/1/83

Listed below are the consent decree milestones which will
come due during the present quarter.
   1. Republic Steel          Chicago, 111
         Milestone: Place purchase order
         Due date:  9/15/83
   2. Great Lakes Steel       Zug Island, MI
         Milestone: Commence construction
         Due date:  8/1/83
   3. Ford Motor Co.          Dearborn, MI
         Milestone: Demonstrate compliance
         Due date:  ft/30/83

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Attachment B

  SAMPLE RETROSPECTIVE REPORT FOR THE QUARTER ENDED 6/30/83

Please provide the requested information for the
consent decrees milestones listed below.

A. Milestones due in quarter dated 4/1/83 to 6/30/83:

   !•> Republic Steel    Chicago, 111

         Milestone: Submit engineering plan
         Due date:  6/30/83

      a. Was Milestone Achieved?
         (yes or no)

      b. If not achieved, was milestone renegotiated?
         (yes or no)

      c. If renegotiated, please indicate new milestone.
         (e.g., new milestone date due is 9/30/83)

      d. If not achieved or renegotiated, what action is
         contemplated to bring source back into compliance?
         (e.g., referral to OLEC HQ)


B. Milestones due in previous quarters which were not met
   in those quarters and had not been renegotiated or
   achieved as of 3/31/83?

   lo Great Lakes Steel    Zug Island, MI

         Milestone: Place purchase order
         Due date:  1/1/83

      a. Has milestone been achieved since the previous update?
         (yes or no)

      b. If not achieved, has milestone been renegotiated since
         the previous update?
         (yes or no)

      c. (Repeat above)

      d. (Repeat above)

C. Total number of consent decrees with milestones not
   met or renegotiated by 6/30/83.                         (number)

D. Total number of consent decrees this quarter
   brought back into compliance with milestone
   requirements due to action (including
   renegotiation) taken by the Region?                     (number)

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GM-20

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GUIDANCE ON EVIDENCE  AUDITS OF CASE FILES
EPA GENERAL ENFORCEMENT  POLICY  «GM - 20
                      UNITED  STATES ENVIRONMENTAL
                          PROTECTION AGENCY      „_.,.
                                        DEC 301983
                      EFFECTIVE  DATE:    w       	

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   «»: &•«.
\5S2Z
IjJNITED STATES ENVIRONMENTAL PROTECTION AGENCY.
:*                 WASHINGTON. D.C. 20460


                     DEC 3t
MEMORANDUM

SUBJECT:  Guidance for Evidence Audit of Case Files for
        -  Civil Referrals
           rerrals ^.             f\

            M. Pricl^t^IJZvO^^A-c-^
FROM:     Courtney              j_
          Assistant Administrator for Enforcement and
            Compliance Monitoring

TO:       Assistant Administrators
          Regional Administrators, Regions I-X
          Regional Division Directors, Regions I-X
          Regional Counsels, Regions I-X                  '••

      1 recently forwarded to you a draft policy relating to
the performance of an evidence audit in all cases which were
to be referred to Headquarters for possible judicial enforcement,
and invited comments upon that draft policy.

     I have received comments from many of you, and have
considered them carefully.  Most of the comments were directed
to the requirement that evidence audits be mandatory in all
cases which were about to be referred to Headquarters.   While
I firmly believe that evidence audit would be useful in all
cases, I agree that it should not be mandatory.  I have,
therefore, revised the policy so that those cases which, in
the opinion of the Regional Administrator, are sufficiently
complex or involve substantial quantities of documents, may
be subjected to an evidence audit before referral at the
option of the Regional Administrator.  After referral,  I may
order an evidence audit should I believe one to be warranted.

     Attached is the final policy on evidence audits which
incorporates the approach described above.  Your comments on
the draft were appreciated, and I would welcome additional
suggestions as experience with evidence auditing is gained
under this policy.

Attachment

cc:  Director, NEIC
     Deputy Adrr, ; i.. strator

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                 GUIDANCE FOR EVIDENCE AUDIT OF
                 CASE FILES FOR CIVIL REFERRALS
INTRODUCTION
Cases developed  by  EPA,  pursuant to the  environmental  -statutesr
and referred  to  the  Department  of Justice  for potential  civil
litigation, must  be  based  upon  rigorously  documented  evidence
and supporting  data  in  order  to  minimize  delay  in  filing,
facilitate discovery  proceedings/  present a convincing  case for
the EPA  and  DOJ attorneys  engaged in  pre-trial  negotiations,
and finally,  to  prevail  in the   courtroom.   EPA  Headquarters
and Regional  staffs  have demonstrated widely  varying  approaches
to the  provision  of  well-ordered  referral  packages  and  the
supporting documentation.

The types  and volume of documents  relating  to a case  are  often
overwhelming.  For  instance,  a  single  hazardous  waste  case nay
involve 100,000 or more  documents.  The  attorneys  are  confronted
with difficult tasks  of  assembling  and  organizing  all  documents,
preparing witness lists, and  extracting  information necessary to
conduct interrogatories  and  depositions.   Documents  supporting
EPA civil  referrals  may originate  in Regional  and Headquarters
program offices,  State  files and/or contractors performing sup-
port services for the Agency.  Records obtained from the prospec-
tive defendants  are  often  so voluminous  and/or disorganized that

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it is difficult for  the  EPA/DOJ case management team to effec-

tively review them.  Lack of  sufficient  assembly and organiza-

tion of this material  becomes obvious at the time of discovery

(production of documents) or  during  settlement_and negotiation

discussions.  The consequences may include unknowingly exposing

case strategy* inadvertently  releasing privileged or confiden-
                                  •
tiai material, or being unaware of documents that could strength-

en or weaken  the  case.  The  Agency  position  is vulnerable to

attack if  the  EPA/DOJ case management  team is  not  assured of

the integrity  of  the  supporting documentation,  as  well  as  a

case file  that is  organized  for  rapid  and  efficient access.

Zndeod, attack of the government's documentation  and procedural

weaknesses is now being advocated in  journals and papers of the

legal profession as a tactic  for defending attorneys.



Evidence Auditing



An evidence audit includes the review, inventory and organization

of the documents  that make  up  a  case   file.   The  audit  of  a

simple case may  involve  only  the assembly and handwritten com-

pilation of the documents present and a  review of the case files

to ensure  that all  pertinent  documents  are present.   The audit

of a highly  complex  case involving  large  numbers of documents

may Involve, in addition to assembly  and  inventory, computerized

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listing and  sophisticated  categorization,  construction of evi-
dence profiles, and elaborate formatting as an aid to understand-
ing the material content of the documents.  These audits assist
case attorneys  in their preparations  for pre-trial  and trial
phases of Agency litigation efforts.  The evidence audit system
is designed  to:  (1) establish an overall case document control
system, (2)  provide  quick  and complete access  to  records,  and
(3) provide  a means  for assuring admissibility of the evidence.
The system  is  flexible  to  accommodate  the increase  of material
as the  case progresses  and is  adaptable to changes  in  case
strategy.
               •
                                                          *
With the advent of the hazardous waste enforcement programs and
the conduct  of  a  major  portion  of  the  Agency's hazardous waste
site investigations  by   contractors,  the  National  Enforcement
Investigations Center  was  assigned  responsibility  for making
evidence audits available  to Regional and  Headquarters staffs
for enforcement case referrals  developed as  a  result of these
activities.  Accordingly,  an evidence  audit  capability has  now
been available for approximately three years and is extensively
used and endorsed  by Regional  and  Headquarters case management
teams who have availed themselves of this service.

Evidence audits  lend a  major  advantage  to   the case develop-
ment process?  enhancing  the supportive rationale  and develop-
ment of  legal  strategy  of cases;  detecting  flaws  in evidence

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wi':h timeliness that permits repair; the avoidance of presenting
questionable evidence in the court room; and perhaps most impor-...
t&ntly, conserving the time and case-handling capacities of the
ca,»e attorneys and Regional and Headquarters Technical staff.
PROPOSED PROCEDURE

It is recognized that EPA cases vary greatly in terns of com-
plexity involving volume and types of records generated.  The
scope of the audit should be tailored to the complexity of the
case and to the number of documents involved.

Because each case is unique, and not all cases nay require an
                                •
evidence audit, the decision pn whether an evidence audit will
be performedr either for cases referred directly to the Depart-
ment of Justice by the Region or before referral to Headquarters
Office of Enforcement and Compliance Monitoring prior to trans-
mictal to the Department, will be nade by the Regional Administra-
tor or his/her deslgnee.  For those cases referred to the Assist-
ant Administrator for Enforcement and Compliance Monitoring,
the Assistant Administrator nay require an evidence audit after
referral by the Region and prior to transnittal to the Depart-
ment of Justice, should it become apparent during the review
process that such an audit is necessary.  In general, the
audits should include:
     o    document assembly
     o    document organization and review

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      o     evidence  profiles
      o     document  storage and  retrieval
'Each  of  these  elements  Is discussed briefly in  the following
 •ections.

 Document Assembly

 The case management team  is  responsible for identifying all EPA
 and contractor groups generating  records  for  the ease.  Each of
 these organizational components should be instructed  to gather
 and transmit complete files  to  the Regional case attorney or
 Headquarters case attorney  (for nationally managed cases).
 Continuing investigation  and data collection, if. any, should be
         ^^       ^^                i-****"
 described  in the transmittal aeao from the document generating
 group to the case management team and a date  specified when the
 remaining  documents will  be  transmitted.   The attorney should
 also  gather all of  the  documents  obtained from  the prospective
 defendant(s) and place  them  in one location for review.

 The NEIC Contract Evidence Audit  Team  (CEAT)  can provide assist-
 ance  to  Regional and/or Headquarters case management  teams for
 identification of organizational  elements generating  documents
 participating  in the case and to  track receipt  of records.  The
 team  can also  assist in the  assembly of documents.

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Document Organization and Review

This process establishes a complete case file of readily retriev-
able records.  The  case  management team decides on  an organiza-
tional format.  A variety of formats is available (chronological*
by subject  natter,  author,  recipient,  type of  document,  etc.).
Once this  decision  ir made,  the  documents  are examined  by the
Evidence Audit Team and  placed in the proper  order.  Each docu-
ment is  stamped  with a  serial number and  pertinent  identifying
information is recorded on an inventory sheet.  Computer services
enhance this  effort  and  can  provide  keyword  search  capability.
Computerized document databases are accessible to  all members of
the case management team and printouts can be provided to facili-
tate document 'retrieval.   Databases  are secured  and  access is
United to  those persons authorized  by the  case management team.
In addition  to  describing  each  document,  the  review process is
designed to identify originals, duplicates,  confidential business
information, enforcement sensitive records, privileged material
and evidentiary records.

Files obtained from the  prospective defendant(s)  are also organ-
ized and  reviewed   in  a  similar  manner.   As  new documents are
generated or received, they are added to the system.

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Evidence Profiles

Evidence profiles  are  graphic or  narrative  presentations  of the
history and chain-of-custody of,evidence from the time of collec-
tion through final disposition.  They are particularly useful for
demonstrating integrity  of  samples  and analyses where  multiple
laboratories, field teams, or other entities are involved.   Field
and laboratory records must  be  located  and audited.   Information
documenting the  transfer,  handling,  and  storage  of samples  is
extracted and summarized.  The  profile  identifies  the following:

     o    when evidence was collected
     o    who collected it
     o    all transfers of custody
     •
     o    when received by a laboratory
     o    who received it
     o    how it was secured
     o    who performed analytical tasks
     o    when tasks occurred
     o    where samples are stored after analysis

The source and serial  number of documents containing this  infor-
mation is also recorded.  This  procedure  enables the case  attor-
ney to assess the adequacy of sampling and analysis records  and to
rehabilitate deficient areas  in the paper trail.  The goal is to
demonstrate integrity  of  the evidence  in order to  arrive  at  a
stipulation for uncontested entry of  the data.

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 Document Storage and Retrieval

 Completed files Dust be controlled to provide quick and complete
 access to the documents and .to prevent, deterioration of the filing
 aystern.  Document control procedures oust be followed to kaep
x track of the location and distribution of All records.  A document
 control officer (DCO) or the case attorney oust assume this respon-
 sibility..  Files ahould be securely stored and Bade available only
 on a check-out basis.  Computerized inventories enable multiple
 users of the files to identify documents they need to access.

 The NEIC, through its evidence audit capability has developed an
 additional litigation support service to assist Regional case
 management t«ams with large and complex cases.  The procedures
 provide for assembly of records, categorizing, stamping, and in-
 ventorying the documents, and making microfiche copies.  A com-
 puterized listing of the documents is prepared which includes the
 following information:
      o    document control number
      o    document date
      o    document type
      o    source of document
      o    author
      o    recipient
      o    title or subject

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Information retrieval can be selected on any of these categories.
Complete microfiche  sets  can be provided  to all members  of the
litigation team and  hard  copies  can  be  made available as needed.

This procedure enables the team to work with  the information while
keeping the original files intact.

The evidence  audit  procedures  described  above  are  intended  to
lead to admissibility  of  evidence and to  assure  that supporting
documents for allegations listed in  the  complaint are controlled
and available.

OPERATIONAL OUTLOOK

Based on historical  data, completion of evidence audits  in re-
sponse to  requests for assistance  from  the NEIC  Evidence Audit
Team can be  expected to  be  from  two weeks for  cases  involving
small numbers of documents to four to six weeks for complex cases
with large numbers of documents.

During fiscal year 1964,  the NEIC  Evidence Audit Unit can assist
Regions and Headquarters  elements  in establishment  and  implemen-
tation of internal document control and evidence audit procedures
as requested.
To secure evidence audit  services,  the Regional  Adrr.inistracer  or
his/her designee she-Id contact  either of  the two Deputy Project

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                                                             10
Officers (Mr. Robert  Laidlaw or  Ms.  Geraldine  Hilden)  at FTS
234-4656 to describe  the  nature of the  case  and documents and
work out schedules  and logistics.   The requestor  should then
confirm the request,  in writing, to the DPO.

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GM-21

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                                   PL/-/
                                       -21
     POLICY ON CIVIL PENALTIES           '
EPA GENERAL ENFORCEMENT POLICY #GM - 21
          UNITED STATES ENVIRONMENTAL

               PROTECTION  AGENCY




          EFFECTIVE DATE:   FEB I fi 1984

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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 outline  of 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
address differences between statutes or between priorities of
different programs.  Accordingly, it cannot be used,  by itself,
as a basis for determining an appropriate penalty in  a specific

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                                -2-

 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:

           0  For cases that are  substantially settled,
              apply  the old policy.

           0  For cases that will require further  sub-
              stantial negotiation,  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 §107.   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.

           0   Clean  Water  Act  §311(f) and (g).  This also
              is cost recovery in  nature.   As  in CERCLA
              §107 actions,  the penalty assessment
              approach is  inappropriate.

           0   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 noncompliance.  It should  be  noted, how-
              ever,  that this general penalty  policy builds
              upon,  and  is  consistent with  the approach
              Congress took  in that section.

     Muc.n 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.  Further
guidance on the issue of seeking penalties against non-profit
entities will  be forthcoming.

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                                -3-

 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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                               -4-

 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 seriousness 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.
 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  penalties must have enough
 flexibility to make adjustments  to reflect  legitimate differences
 between similar violations.  Otherwise the  policy might 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 ovex complying parties.  Furthermore, because the benefit
and gravity components are generated systematically,  they

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 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:

           0  Degree  of willfulness  and/or negligence

           0  History of noncompliance.

           0  Ability to pay.

           0  Degree of cooperation/noncooperation.

           0  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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                                -6-

      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:

           0  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  cooperation/noncoopera-
              tion  discussed above.

           0  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 delaying compliance.

     The  preliminary  deterrence amount is based in part upon
the expected  duration of the violation.  If  that projected period
of time  Ls  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.
JL/  For the purposes of this document, litigation is deemed to
begin:
          0 for administrative actions - when the
            respondent files a response to an adminis-
            trative complaint or when the time to
            file expires or

          0 for judicial actions - when an Assistant
            United States Attorney files a com-
            plaint in court.

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                               -7-


 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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                               -8-

                           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

      Ac   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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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
                EFFECTIVE  DATE:
                                 ' ™ '

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Contents	Page


    Introduction                                               1
    Writing  a Program-Specific Policy                          2

         I.     Developing a Penalty Figure                     2

         II.    Calculating a Preliminary  Deterrence Amount     2

         III.   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

        I.    Flexibility-Adjustment Factors                   17

             A.   Degree  of  willfulness and/or  negligence     17
             B.   Degree  of  cooperation/noncooperation         19
             C.   History of noncompliance                     21
             D.   Ability to pay                               23
             E.   Other unique factors                         24

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                             11






Appendix (Con't)






     II.   Alternative Payments                           24



     III.   Promoting Consistency                          27






     Use of Penalty Figure in Settlement Negotiations     28

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                               _ 1 _
 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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                                -2-
 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 portions 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 development
 team  feels it  is appropriate.   In administrative actions,  this
 figura  generally is the  penalty  assessed in  the  complaint.
 While in  judicial actions, the government's  complaint will  request
 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

     !3ach program-specific policy must 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 similar previous
                 violations.

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                               -3-

           0  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:
                                                I
           0   amount  of  pollutant,
           0   toxicity of pollutant,
           0   sensitivity of the  environment,
           0   length  of  time of  a violation  and
           0   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 may 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:

          0  Degree of willfulness and/or negligence

          0  Cooperation/noncooperation  through  pre-
             settlement  action.

          0 History  of  noncompliance.

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                               -4-

            0  Ability  to pay.

            0  Other unique  factors  (including strength  of
              case, competing  public policy considerations).

      The policy may 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 reas-
 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 noncompliance 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	

     !3ach program-specific policy should contain a section on
the use of the policy in litigation.  Requests for penalties

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                                -5-

 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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                               -6-

                             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 benefit of  noncompliance  is  referred to
 as  the  "benefit component;"  that part  of the  penalty  which  reflects
 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 section 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 issues

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                                -7-

  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:

           0   Failure to install equipment needed to meet
              discharge  or emission  control standards.

           0   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.

         .  °  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  that 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 thumb"
 method generally should not be used in any of  the following cir-
  cumstemces:

           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.

           0   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 economic
 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 refined
 version  of the method used in  the previous Civil Penalty Policy
 issued July 8, 1980, for the Clean Water Act and Title I of  the
Clean Air Act.   It will  also be consistent with the  regulations

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                                -9-

  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.

           0   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.

           0  Failure to establish  or  follow  precautionary
              methods required by regulations  or permits.

           0  Improper storage, where  commercial  storage  is
              reasonably available.

           0  Improper disposal, where redisposal or cleanup
              is not  possible.

           0   Process,  operational, or maintenance savings
              from removing pollution equipment.

           0  .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 Noncom-
pliance.  Again, until the Metholology is issued, the method
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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                              -10-

      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:

           0  Selling banned products.

           0  Selling products for banned uses.

           0  Selling products without  required labelling
              or  warnings.

           0  Removing or  altering pollution  control
              equipment for  a fee,  (e.g.,  tampering with
              automobile emission  controls.)

           0   Selling  products without  required regula-
              tory  clearance,  (e.g., pesticide  registra-
              tion  or  premanufacture notice under TSCA.)

     To adequately remove the economic  incentive for such viola-
tions,  it  is  helpful  to estimate  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
follov/ing principles should be followed:

          0  The amount of the profit should be based on
             the best information available concerning
             the number of transactions resulting from
             noncompliance.

          0  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.

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                               -li-

      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
 Noncompliance 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 is relatively  small,  it
           may not provide  a sufficient deterrent,  by

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                               -12-

             itself, to achieve the goals of this policy.

          °  The certainty of the size of the benefit
             component;  If 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 where
there are compelling public concerns that would  not  be served by
taking a case  to trial.   In such  instances, it may become necessary
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.

         0  Settlement will avoid or terminate an
            imminent risk  to human health or the
            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   Removal  of the economic benefit  would
            result in plant  closings,  bankruptcy, or
            other extreme  financial burden,  and  there
            is  an important  public interest  in allow-
            ing the  firm to  continue in business.

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                                -13-

                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 program must develop a system for quantifying the
gravity of violations of the laws and regulations it administers.

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                              -14-

 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)  the 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 the  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 categorization of the events relevant
 to the penalty decision  should  be  noted  in the penalty develop-
ment portion of  the case file.

     B,   Gravity Factors

     In quantifying the  gravity  of a  violation, a program-specific
policy  should rank different  types of  violations according  to the
seriou.-sness of  the act.  The  following is  a suggested  approach  to
ranking the seriousness  of violations.  In this approach to rank-
ing,  tiie following factors should be  considered:

          0  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.

          0  Importance to the regulatory scheme;   This
             factor focuses on the importance of the
             requirement  to achieving the goal  of 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.

         0   Availability of data from other  sources;
            The  violation  of  any recordkeeping  or
             reporting  requirement  is  a very  serious

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                                -15-

              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.)

           0   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.

         °   The  length of  time  a  violation continues;
             In most circumstances, the  longer a
             violation  continues uncorrected,   the
            greater is  the risk of harm.

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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
 rathei: 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 noncompliance with certain regulatory
 progrcims 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  increasing 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
 eguitable 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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                                -17-

       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.


  I.   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
these determinations if they  so desire.  Of course the authority
to exercise the Agency's concurrence in final settlements is
covered by the applicable delegations.

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                                -18-

  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:

           0  How  much control the  violator had over the
              events constituting the violation.

           0  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.

           0   The level of sophistication within the
              industry in dealing  with  compliance issues
              and/or the  accessibility  of appropriate
              control technology (if this information is
              readily available).   This should be  balanced
              against the technology forcing  nature of  the
              statute,  where  applicable.

           0   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 absolute discretion to adjust  the
penalty  up or  down by 20% of the gravity component.  Adjustments
in the + 21-30% range should only be made in unusual circumstances.

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                                -19-

 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
 +  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:
          0 for administrative actions - when the
            respondent files a response to an adminis-
            trative complaint or when the time to
            file expires or

          0 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 the  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 il: 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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                                -21-

      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:

           0   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:

          0  The same  permit was violated.

          0  The same  substance was involved.

          0  The same  process points were the source
             of  the violation.

          0  The same  statutory or regulatory provision
             was violated.

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                              -22-

           0  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 in this section.  New ownership often
 raises similar problems.   In 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 violator 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 can
 be increased up to 70%.   If the pattern is one of "similar"
 violations, the case development team has  absolute discretion to
 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 in  extraordinary
circumstances,  but such adjustments will  be subject to scrutiny
in any performance audit.

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                              -23-

      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.

            0   Consider  straight  penalty reductions  as  a  last
               recourse;   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. j|/

            0   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.

      E.   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, each
 policy should allow for adjustment for  unanticipated factors
 which night 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 reduction
 must be  expressed in writing in  the case file  and in any memoranda
 accompjinying 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

     ID the past, the Agency has accepted  various environmentally
 beneficial  expenditures  in settlement of a case and chosen not  to
J3/ If c\ 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 the
penalty amount.

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                               -25-

 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 accepted:^/

           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.

          0  The  project  cannot be something which the
             violator  could  reasonably be expected to do
             as part of sound  business practices.
£/ 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-
           0  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:

           0  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.

           0   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.

           0   The company should  agree  tha.t  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.
_5/ This limitation does not apply to public awareness activities
such as those employed for fuel switching and tampering violations
under the Clean Air Act.  The purpose of the limitation is to
preserve the deterrent value of the settlement.  But these viola-
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 tiwareness 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 uniform
 approaches for  applying  adjustment factors to  arrive  at  an initial
 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 adjustments.
Only  through  such  complete documentation can enforcement attorneys,
program  staff and  their  managers  learn from each others' experience
and promote the fairness required by the Policy on  Civil Penalties.

     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 for
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 negotiations.
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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GM-23

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            UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                         VASMIMCTON. OC 104»0


                              KOV 2 I I2S3
MEMORANDUM

SUBJECT:  Guidance Concerning Compliance with the Jencks Act
                           n   T-
FROM:     Courtney M. Price^Jft-u-JU-.-v.
          Assistant Administrator   (j
          Office of Enforcement and  Compliance Monitoring

TO:       Assistant Administrators
          Regional Administrators
          Regional Counsels
          Associate Enforcement Counsels
          Director, NEIC
Background

     The Jencks Act  (IB 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 nay 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.  Litigation
has mainly concerned questions as to what is a "statement"
and what sanctions should be imposed should the Government
fail to produce Jencks Act material.  This memorandum will
discuss these points and the procedures which must be used
to preserve the material.

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                             -2-
Issue'

     What written materials will be considered "statements"
subject to production to the defense during the course of
crixiinal litigation?
                               *•
Discussion

      A • statement" is defined in part in 18 U.S.C. J3500(e)
as (1) a written statement made by the witness and signed or
otherwise adopted or approved by him; or (2) a stenographic,
mechanical, 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
     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
note:; or laboratory reports of a technician or inspector
are "(«)(!) 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
mat tor who records the statement or for what purpose; it
remains Jencks Act material.  EPA technical personnel mist
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 are "(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 manner of a  stenographer who accurately memorializes the
 witness's wordf.  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 become 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 form.
 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 P.B.I, agents, detectives or EPA
•agents are "(e)(l) statements" of the agent and  may be
 producible.  If  a Criminal Enforcement Division  Special Agent
 testifies, it can be anticipated 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)i Holmes v. United  States, supra.
 Although it is incumbent upon the trial judge  to separate
 out personal evaluations and "discussions of legal  and
 practical problems of a prosecution" 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. 619 (1961).

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                              -4-
     Notes,  reports,  etc. r  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 b« 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 F.2d 642 (D.C. Cir.  1971): Emmett v.
 Ricketts,  397 F.  Supp. 1025  (N.D.  C«. 1975);  United  States  v.
 fflederberqer, 580 F.2d 63  (3d Cir. 1978);  United States v.
         ,  60~4 F.2d  1102  (8th  Cir.  1979).   AS  soon  as a case
 is  opened by the  Criminal  Enforcement  Division,  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,
. helpiiul  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 liubject 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. Zn
 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. . Xf 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 vhica &b* wri&Loe
conforms to the witness's language (e.g., "I dumped it because
X thought the load was hot.*); \/ 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*; I/ the appearance
of the substance of the witness's remarks (i.7., 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.
\J Palermo v. United States» supra.

2/ United States v. Judon,  581 P.2d 553  (5th Cir. 1978);
DnitedfStates v. Durham, 587 F.2d 799  (5th Cir. 1979);
Goldberg v. United States,  425 D.S. 94  (1976); Palermo v.
United "States, supra.

2/ Campbell v. Dnited States, 365 U.S. B5 (1961).

4/ United States v. Muckenstrun, 515 P.2d 568  (5th Cir.),
Tsert. denied, 423 U.S. 1032  (1975);  United States v.
Pennett, 496 P.2d 293 (10th Cir. 1974);  United States v.
Bines, 455 F.2d 1317 (D.C. Cir. 1971).

   Dnited States v. "Pfingst, supra.

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            Issue

                When must Jencks Act material be made available to the
            defense  and what are 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
            unt.Ll after the witness has testified at trial for the Govern-
            ment.   However, because of the delay which this creates (while
 !           th« defense reviews the material)* most courts expect that a
            prosecutor will agree. ;to turn over Jencks Act material either
 |           at  Ithe  start of each day of. trial or before the witness testi-
            fies; on  direct examination.  Some prosecutors even allow the
 j           defense  to examine the material before trial.
 i
                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
            the:.r 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
 7           competent statements of a governmental witness in possession
            of  nhe  Government touching the events or activities as to
            which the witness has testified at trial."  Campbell v. Dnited
            States,  supra, 365 O.S. at 92. If the defense's ability to
 <,           cros.s-examine is impeded by the deliberate or inadvertent
 i           losi;, 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
 a           Act material, courts have warned law enforcement agencies of
 |           their duty to promulgate procedures to ensure preservation.
 in

 *.               {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  trill ensure
 this  end.

 Issue

      What  procedures  should be  implemented throughout the
 Agency  to  preserve Jencfcc Act material?

 Discussion
                                                               •
      As a  general rule, after a matter is referred to the
 Criminal Enforcement  Division for  investigation,  investi-
 gators  from  that  Division will  be  responsible for reports
 written to document factual developments in ongoing  cases.
 This  would include, for example, interview write-ups, sur-
 veillance  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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                          APPENDIX A
§3500 Demands for production of statements and reports of
      witnesses.
      (a)  In any criminal prosecution brought by the United
States, no statement or report in the possession of the United
States which vas made by a Government witness or prospective
Government witness (other than the defendant) shall be the
subject of subpoena, discovery, or inspection until said wit-
ress 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 e-xwaiTWtion, 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.  Zf 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)r 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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GM-24

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          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY       JK
                        ttASMINGTON.DClMtO                    J/Z
                          1CV 22«3
                                                       or net or
                                                             OMMMb
MEMORANDUM

SUBJECT:  Working Principles Underlying EPA'c
          National Complianre/Enforcemflnt Programs
FROM:     Courtney M.       _
          Assistant Administrator for Enforcement
          and Compliance Monitoring

TO:       Assistant Administrators
          Associate Administrators
          Regional Administrators, Regions 1 • X

     The working principles for EPA's national compliance/
enforcement programs set out below were developed by the
Compliance/Enforcement Task Group and are intended to establish
the framework and philosophy for the compliance and enforcement
programs administered by EPA.

     I believe it is important for us to strive to apply the
principles set out below in managing the*compliance/enforce-
ment components of the Agency's programs.  To that end,
please make sure Office Directors and staff members with
responsibilities in these areas receive copies of this memorandum
so they that can use it as a guide in making choices for
managing these programs.

     1 expect these principles to be dynamic and to change  as
we proceed to implement the program specific compliance  and
enforcement strategies the Task Group has developed.

     The fundamental objective of EPA's national compliance/
enforcement program administered by EPA and the States is to
protect public health and the environment through a comprehensive
effort to foster full and expeditious compliance with environmental
laws and regulations.  Different components of the national
program are designed to achieve this goal through —

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                           -2-
        4

     -» setting program goals and priorities  to achieve  the
        environmental benefits;
                              *
     — identifying the regulated community to understand the
        scope of the problen;

     -<- promoting compliance by the regulated cosmunity;

     .. monitoring compliance by the regulated community to
        reliably detect violations of lavs and regulations and
        establish program priorities;

     •» responding appropriately to detected  violations;

     -- working with State and local governments to  achieve
        national compliance and enforcement goals;

     — continually evaluating our progress in aeetiag our
        goals and objectives in each area of  the compliance/
        enforcement program and refining our  efforts accordingly;

     -•- building public confidence in our compliance and enforcement
        efforts.

     Each of these components vill be discussed in Bore  detail
below.


I.  Setting Prograc Goals and Priorities to Achieve  Environmental
    Benefits

     *   federal and State governments oust chare responsibility
         for developing and implementing national compliance and
         enforcement strategies.

     *   EPA*s national compliance and enforcement programs
         vill be based on realistic and attainable goals.
         considering the size of the regulated community and
         the scope of the requirements governing its activities.

     *   Although statutes enforced by EPA nay require strict
         compliance in all cases, EPA aust establish priorities
         for enforcesent since it is unlikely that ETA could
         respond with the same level of effort to each detected
         violation.  Individual programs «ay  establish both
         long term and short term goals to achieve full,
         expeditious compliance.  In establishing and pursuing
         these specific goals, national strategies for compliance/
         enforcement activities vill base priorities and
         targets cm the following factors:

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    —  likelihood that a violation by a source or
        category of sources will result in  pollution
        presenting a significant risk to human  health and
        the environment (baaed .OB,  for example,  the
        pollutant(s) at issue, the type and size of the
        source, or the likely scope of exposure to the
        excess pollution),

    —  Likelihood that a source or category  of sources
        will violate environmental  lavs or  regulations
        (based on, for example, £beir sophistication or
        compliance history, the Heroes* trx  Tcnrpl-exity of
        the regulations, or the economic incentives for
        noncompliance).

        Likelihood that an action vill contribute
        significantly toward assuring s credible enforcement
        presence (for example, if the action  is precedential
        in nature, highly visible to the regulated community,
        or necessary to ensure that some attention is
        paid to a particular compliance/ enforcement area.)

    National programs must achieve a balance  between those
    compliance and enforcement actions which  aost  clearly
    result in significant, immediate environmental benefit
    and those designed primarily to support a credible
    enforcement presence (and the environmental benefits
    which that presence produces less'directly) •         • .

    The type of compliance or enforcement action chosen in
    individual cases will depend on the priority or relative
    importance of the action in light of the  considerations
    listed above and the amount of resources  necessary to
    pursue a given type of action relative  to other possible
    actions.
Identifying the Regulated Community to Understand the Scope
of tbe Problem

*   To the extent practicable,  EPA's national  compliance
    and enforcement programs Bust be able to identify
    parties subject to environmental lavs and  regulations
    according to the types of requirements governing
    their activities and the types of activities they
    perform.  Such "inventories  are useful to establish
    priorities and select targets across a program.
    This identification also aids in evaluating the
    effectiveness of compliance/enforcement programs,,

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                           -4-

     0  ' EPA will pursue All available,  cost-effective Beans
         for identifyiag the regulated community, including
         in-house investigator* and regulatory aecnanins.

     0   Priority vill be given to identifying those parties
         ID the regulated community who,  If  in con compliance,
         would have a significant iapact on  the environment,
         public health or the credibility of the enforceaeoc
         prog ram.


III.  I'mooting Compliance by theTegulated  Community

     *   Compliance promotion entails ensuring that the
         regulated community has adequate information, tools,
         and techniques available to achieve compliance and
         the incentive to use them. Compliance promotion
         includes:

             clarifying responsibilities for the regulated
             community;

         —  providing technical information on compliance
             techniques; and,

         —  encouraging voluntary efforts to achieve, maintain
             and monitor compliance.

     *   EPA vill promote compliance by  resolving issues affecting
         permit issuance and by issuing  required permits in a
         timely manner.  Permits should  clearly state the
         compliance responsibilities of  the  permittee.

     *   Regulated parties bear responsibility for ensuring
         their own compliance,   nevertheless, because preventing
         violations is more beneficial for environmental
         protection than remedying the violations after they
         occur, national programs should provide for compliance
         promotion activity.

     *   A credible enforcement presence based on credible
         enforcement responses is a prerequisite to ensure
         that regulated parties have incentive to follov
         through on compliance promotion efforts.

     *   Discretion and flexibility should generally be given
         to an individual regulated party for deciding on
         the best vays it can prevent non compliance.

     •   Compliance promotion activities should focus on
         making accessible meaningful  information on compliance
         techniques and systems for monitoring compliance
         and correcting concompliance.

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                           •5-
         4
     *   'Compliance promotion activities  should  focus most
         seriously on situations which involve newly-imposed
         or complicated requirements OT inexperienced.
         unsophisticated parties.


IV.  Monitoring Coapliance; Collecting and  Assessing Compliance
     Information

     *   Objectives of compliance monitoring  by  the Federal
         government and States include:

             collecting evidence necessary  to support enforcement
             actions regarding identified violations;

         —  reviewing source compliance  to identify potential
             violations;

             developing an understanding  of compliance patterns
             of the regulated community to  aid in  targeting
             activity, establishing compliance/enforcement
             priorities, evaluating strategies,  and communicating
             information to the public; and,

             helping to establish an enforcement presence.

     *   Priorities for compliance monitoring activities  should
         be set by EPA to achieve the objectives set out  above.
         Factors to consider in setting priorities among  these
         objectives and targeting compliance monitoring
         activities should include:

         —  the seriousness of violations  which have
             been identified in the past  for a particular
             aource or category of sources;

             the extent to which compliance patterns already have
             been identified;

         —  the extent of source review  needed  to establish a
             credible enforcement presence; and,

         —  the criteria listed in Part  I  above.

     *   Methods for compliance monitoring  will  depend upon the
         objective of the monitoring activity and  the resource
         requirements associated vith the activity.  Thus, evidence
         collection efforts to support enforcement actions vill
         employ more resource-intensive methodologies (e.g.,
         on-site inspections by expert, in-house criminal
         investigators) than vill surveys of regulated community
         compliance patterns (which can rely more  easily  on
         contractors or a elf-monitoring reports).

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Regulated parties should keep track of their own
compliance status using any required methods, AS
veil as whatever other means they deea reasonable
to provide themselves vith reliable information.

Where reliable, cost-effective said authorized by lav.
national programs vill rely on enforceable self-reporting
requirements as a primary screening tool for identifying
potential violations.

Because of the importance of self-report ing to the Agency's
task of compliance monitoring, national programs vill
place high priority upon enforcement actions, including
criminal prosecutions, in cases of deliberate distortion
and/or falsification of self-reporting data.
              ''(f
National programs should use any available legal
authorities to collect useful information, but
must ensure that information requests are precisely
formed to avoid imposing any unnecessary information
collection requirements and should carefully consider
the extent to which the requests may inhibit the
regulated party's own voluntary self-compliance
efforts.

All information requests not qualifying under the
enforcement • exempt ion must conform to the requirements
of the Paperwork Reduction Act.

Programs should identify and use, where cost-effective,
all sources of information concerning violations
(including citizen groups and outside regulatory
and lav en for cm en t agencies).

Clear protocols should be identified to provide adequate
assurance of the quality and reliability of compliance
monitoring data in light of the purpose for which the
data vill be used.

Compliance monitoring activity must, where feasible, assess
regulated parties' success at maintaining compliance as
well as at achieving it initially.

To the extent feasible, national programs will track
compliance patterns across all segments of the regulated
community in order to target enforcement intiatives
by identifying the relative seriousness of problem
areas.  Where not presently feasible, national programs
should attempt to identify and pursue vays for attaining
that capability.

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                       -7-
    *
    4
Responding to Violations (Enforcement Responses)

 *   Federal or State officials,  as  appropriate, will evaluate
     each detected violation and  make a  conscious decision as
     to the appropriate enforcenent  response.

 *   Enforcement responses to violations vill seek to
     balance the following goals:

     —  Correction of the violation as  quickly as practicable
         in light of governing  law,  technological feasibility
         and ongoing environmental risk.

     —  Deterrence of future violations by  the came party
         or other parties.

     —  Equitable treatment of the  regulated eonnunity
         through a uniform approach  to selecting enforce-
         ment responses and by  taking responses which
         remove significant benefits the violator nay
         gain through noncompliance.

     ~~  Punishment of serious, willful  wrong-doing by
         imposition of crininal sanctions.

     --  Effective use of enforcement resources through the
         least resource-intensive enforcement response
         which still pern its achievement of  the other national
         enforcement goals.

 *   Priorities for targeting violations for enforcement
     responses should be based  on criteria listed in Part I.
     Governseat officials may decide according to these
     criteria that a technical  violation merits such low
     priority that no further response action need be
     considered.

 *   The severity of the response necessary  to pursue these
     national enforcement goals will depend  upon the following
     considerations:

     —  the range of responses authorized by law;

     —  the actual or potential  ham to public health
         and the environment presented by the violation;

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                  -*-
(
 —  other significant public expense or injury caused
     by the violation;

 —  economic benefit accruing to the violator;

 —  the violator's  efforts to identify, report, aad
     correct the violation independent of the enforcement
     response;

     the violator's  previous history of compliance/non-
     compliance;

 --  the culpability of  the violator;

     the sufficiency of  evidence demonstrating a violation
     linked to the party in question;

 —  the likelihood  that a given response may establish
     good or bad precedent; and.

 ..  the importance  of the action to maintaining a
     credible enforcement presence.

 These sane factors, as  veil as a violator's ability to
 pay, should be considered in deciding whether to pursue
 civil penalties,  and for what amount.  The economic
 benefit to a violator fron noncompliance is a particularly
 important objective to  consider in deciding on an appro-
 priate amount.   Civil penalty actions are appropriate,
 even if the underlying  violation has been corrected, if
 necessary to establish  adequate deterrence against future
 violations or to restore equity relative to other members
 of the regulated community which have been ia compliance.

 The form of the enforcement response (e.g., administra-
 tive vs. judicial)  is not important per se. as long as
 the response can achieve desired results.  Programs
 vill chose responses based on the facts of the case
 and the factors set out above.  Each available enforce-
 ment tool (including judicial litigation) Bust be
 used often enough to establish the credibility of
 that tool and provide real incentives for regulated
 parties to pursue solutions in the context less
 drastic measures (e.g.. negotiations).

 If a lover level enforcement response doe* not
 result in achievement of the objectives for that
 response, EPA vill  escalate its enforcement response
 accordingly.

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                  -s-

Negotiated resolution of enforcement actions  should
be viewed as a cost-effective way of responding  to
violations as long as the response still achieves
national enforcement goals.  However, a credible
threat of litigation or enforceable administrative
action is necessary for an effective negotiation
program.

Negotiations and other response activity oust adhere to
definitive, government- established schedules  to  ensure
expeditious completion and remedy.  Government officials
— •  apprise the alleged violator of the violation quickly
    so as to facilitate its correction;

    develop prior to the start of negotiations  a common
    and clear understanding of the desired remedy or
    relief; and,

    in litigative enforcement matters,  communicate through
    the attorneys representing each side.

Government officials must avoid taking  any actions
or making representations which may foreclose possible
future enforcement actions in a case, particularly
in the event that new information subsequently  comes
to light.

To preserve a credible enforcement presence,  the
use of exemptions or relaxation of operative  permit
provisions instead of enforcement responses as  a
means of 'addressing committed violations should be
avoided unless exemptions or revisions  are truly
warranted (i.e., the source qualifies for exemption
through straightforward application of  criteria),
                                                         i
When Agency officials have determined that a  response to
a violation should be developed as a potential  criminal
enforcement action, civil proceedings typically
should await completion of the criminal action
unless injunctive relief is necessary.

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                           -10-
        M
     *   Unless expressly exempted, con-profit institutions,
         including government entities,  L*ve the Bane compliance
         responsibilities as entities operated for profit.
         The factors set out belov. in light of the seriousness
         of the violations, may affect the length of  the
         violator's compliance schedule  or the amount of
         penalties imposed, but not the  institution's ultimate
         obligation to compl'yTnevertheless, because at x&e
         unique characteristics of these institutions, selec-
         tion of responses to violations by these institutions
         vast carefully consider:

         —  the availability of funds to the institution  to
             aeet the costs of compliance;

         --  the extent,''if any, to which economic benefit from
             non-compliance nay have motivated the institution
             or have disadvantage^ complying competitors;  and,

         —  the ability of the institution to pay penalties.

     *   EPA will respond to violations  by Federal facilities
         through the mechanisms provided by Executive Order 12086.

     *   Enforcement responses to violations once initiated,
         must be completed expeditiously and monitoring must
         be undertaken to ensure that affected parties comply
         with the requirements which the responses impose.

     *   Administrative or judicial orders should be  drafted in
         a manner which facilitates their enforcement.  Require-
         ments and responsibilities should be clear and
         capable of being enforced.

     *   Significant violations of requirements imposed in prior
         enforcement responses to address comparable  violations
         merit responses of their own which are at least as
         severe as the prior response.  Such a response should
         Include, in appropriate cases,  actions for civil  or
         criminal contempt.  Responses which are inadequate
         to bring continuing violations  to a halt can undermine
         the establishment of a credible enforcement  presence.


VI.  Coordinating Federal and State Activities

     *   Most environmental protection statutes provide States
         with the lead role in compliance and enforcement
         activities once EPA has authorized the State program.

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                  •11-

EPA retains the lead compliance end enforcesent role
for statutory programs requiring national administration
(e.g., programs which.regulate nationally-marketed
products).  Otherwise, it has been EPA policy to
transfer the administration of such compliance and
enforcement programs to State and local governments
in a nanner consistent with applicable statutory
requirements*

EPA and the States oust work together to develop national
and local strategies and to plan their respective roles
in implementing these strategies.  Toles -nay vary accord-
ing to the programs and States involved, but in all cases
should be articulated clearly at the planning stage of
strategy implementation.

EPA responsibilities include formulating national compliance
and enforcement goals and priorities;  development of
necessary policy, guidance, and procedures;  overseeing
State performance; providing grants, technical assistance,
and training to States; and pursuing compliance and
enforcement action directly for nationally-administered
programs and for other cases where necessary to ensure
successful implementation of national strategies.
Such activities, should reflect early and continuing
consultation with States.

State responsibilities include direct implementation of
authorized compliance and enforcement programs consistent
with national strategy and policy; putting federal grants
and technical assistance to effective use; contributing
meaningfully to the development of national policy and
strategy; and providing EPA with information necessary
to oversee and evaluate State activities and national
program implementation.

Oversight of State activities by EPA is undertaken to
ensure that compliance/enforcement responsibilities
are being carried out by the States.  .Moreover,
oversight is a tool EPA uses to improve both Federal and
State enforcement programs by identifying problem areas
and aiding States in resolving problems identified.

EPA must base its oversight of State compliance and
enforcement activities according to clearly articulated
measures of State success in pursuing the goals of the
national compliance/enforcement program.

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                  •12-

States oust provide EPA with the information necessary
to perform oversight.   EPA must define information
needs clearly and uniformly, limit information gathering
to that necessary to oversee State activities and
national program implementation, and avoid  frequent
changes to the acope of reporting requirements,  to the
extent feasible.

EPA vill take the following action (or a combination
of these actions) when oversight identifies an  ineffective
state compliance and enforcement program (depending on
the degree of
--  provide more training for State employees  or technical,
    or on-site administrative assistance;  or

    implement more detailed reporting requirements;

—  take a more active role in compliance  *nd  enforcement
    actions;

--  vithdrav State program authorization (but  only  in  the
    most extreme cases).

EPA vill consider providing additional funds to help
States- improve effectiveness if it is clear that
inadequate funding is causing the ineffectiveness,
that additional funding at the State level is  cot
readily available, and that Federal funds  are  available.

The level of scrutiny EPA gives to individual  State
actions vill depend on:

    demonstrated State success in implementing a
    given program, i.e., achieving acceptable  rates
    of compliance;

—  the extent to which the State requests direct
    involvement;

    the environmental importance of a given individual
    action; and.

•-  the minimum level necessary to ensure  the  integrity
    of the national enforcement effort.

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                           -13-
       4
     *   Where legal authority exists.  States generally will
         have primary responsibility for monitoring  compliance
         and pursuing responses, to identified violations.
         However, EPA has ultiaate responsibility  for  ensuring
         effective national enforcement of environmental
         lavs.  Therefore, EPA vill take an active role in
         natters in which the State is  unable or unwilling  to
         act, adequately or expeditiously, or if the natter
         is one which has national implications  or precedential
         impact.  EPA will exercise this authority based upon
         clear criteria and will assure proper coordination
         with "State programs.

     *   States will have flexibility in choosing  appropriate
         enforcement responses, which need not be  identical to
         the response which EPA might have chosen,   nevertheless,
         EPA will take its own action,  despite ongoing State
         action, if EPA finds that State response  to a significant
         violation is npt expeditious or is clearly  inappropriate
         or inadequate to achieve the relevant goals of an
         enforcement response (as listed in Section  V).

     *   EPA vill not expect States to  take enforcement actions
         which are more severe or expeditious than EPA itself
         would take in practice under comparable authorities.

     *   Both EPA and the States are responsible for keeping each
         other informed on significant  ongoing compliance and-
         enforcement activity of interest  to the other to promote
         proper coordination, mutually-supportive  action, and
         effective use of resources at  both levels of  government.


VII.  Implementing. Evaluating and Refining Strategies

     *   Regional offices and State agencies, in consultation with
         each other, aust develop their own plans  for  implementing
         national program strategies.

     *   Each national program oust track  compliance and enforce-
         ment activity implementing its national strategy in order
         to

         —  evaluate the success of the program in  achieving
             the strategies goals;

         --  maintain understanding of patterns  of compliance and
             noncompliance in the regulated community.

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                           -u-

     0  EPA will pursue the establishment of national tracking
        eye tens which can facilitate strategy  evaluation and
        refinement by indicating,  at A oininuBJ:

         ..  compliance rates and  patterns for significant
             aources;

         —•  the extent of compliance review activity (i.e.,
             inspections, •elf-monitoring reports,  etc.);

             the extent of complete and  expeditious  imple-
             mentation of enforcement responses.

     0   Periodic evaluation of strategy implementation on
         the national, Regional, and State level vill be
         undertaken within EPA to  influence  the annual budget
         process and operating guidance.

     9   Periodic refinement of strategies vill take place
         based on formal evaluation results  and other relevant
         information.  Refinement  can focus  both on new ways
         to achieve the original goals of the  program or on
         achieving new goals established for the refined
         strategy.


VIII.   Building Public Confidence in EPA**  Enforcement and
        Compliance Programs

     *   A credible enforcement program  is the foundation of
         an effective national strategy  which  ensures that
         regulated parties have the requisite  incentive to
         achieve full and expeditous compliance.  National
         programs must possess the following characteristics
         to promote establishment  of a credible enforcement
         presence:

         --  Fairness.  Oversight  of the activities of regulated
             parties «u*t be conducted In an unbiassed aanaex.
             Enforcement responses vust  be commensurate with the
             seriousness of a violation, yet be flexible enough to
             account for extraordinary circmstances relevant to
             the violation.  Violators should  not benefit
             froa their violations relative  to parties which
             are in compliance.

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              •15-

Certainty.  Compliance requires en ts aust be defined
with sufficient clarity and precision  to communi-
cate expected standards of behavior.   The national
programs nust be effective in identifying significant
violations and establish an adequate likelihood
that any kind of violation can be detected.
Responses to identified violations nust be
consistent, expeditious and follow these principles
and specific national guidance.

Uniformity.  EPA  should follow a uniform view
of which actions constitute a violation of  a
given legal requirement.  EPA and States should
employ reasonably similar treatment toward  parties
in comparable situations.

Openness.  Final actions taken in the  compliance
and enforcement areas will be available for public
scrutiny to the extent allowed by law  and the
extent to which the success of future  enforcement
activity is not jeopardized.

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GM - 25, was revised in November 1988.   The old version
has been deleted and relevant excepts of the new docu-
ment have been put in its place in the manual.   A
complete copy of the strategy can be obtained from the
Office of Federal Activities.

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GM-25

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EPA
United States
Environmental Protection
Agency
Office of
Federal Activities
Washington, D.C.
EPA/00 FA 88-001
November 1988
         Federal Facilities
       Compliance  Strategy

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      Federal Facilities
    Compliance Strategy
     Office of Federal Activities

U.S. Environmental Protection Agency
         November 1988

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         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                            WASHINGTON. D.C. 20460
                                                            NOT   8
                                                         THE ADMINISTRATOR
The U.S. Environmental Protection Agency (EPA) believes that Federal agencies have an
inherent obligation to comply with all Federal environmental statutes in the same manner
and degree as all other regulated entities.  It is imperative that every effort be made to
ensure that Federal facilities achieve and maintain high rates of compliance with all
environmental requirements. And it is important to EPA's compliance and enforcement
efforts at non-Federal entities that facilities of the Federal government demonstrate that they
have their "own house in order."  In order to demonstrate EPA's commitment in mis
important area, we have established a new goal for our Federal Facilities Compliance
Program which states that EPA shall help "ensure that Federal agencies achieve compliance
rates in each media program which meet or exceed those of major industrial and major
municipal facilities."

To help achieve this goal, EPA has developed a new Federal Facilities Compliance Strategy
which establishes a comprehensive and proactive approach to achieving compliance at
Federal facilities. This document, also known as the "Yellow Book", provides the basic
framework and consistent  guidelines for all EPA media programs (e.g., air, water,
hazardous waste, etc.) to follow in their compliance and enforcement activities  at Federal
facilities.  It also attempts to reconcile EPA's dual responsibilities to provide technical
assistance and advice to Federal facilities pursuant to Executive Order No. 12088, and our
statutory authorities to take enforcement actions for  violations at Federal facilities in
appropriate circumstances.

Recently-authorized  environmental statutes have included special requirements and
additional provisions which are specific to Federal facilities. These provisions clarify that
Federal agencies must comply with environmental laws in the same manner and degree as
all other facilities subject to such requirements. EPA intends to utilize the full range of its
available enforcement authorities to ensure compliance by Federal facilities.  However,
EPA also recognizes that there are some limitations and differences in the types of
enforcement actions which EPA can take at Federal facilities. These special circumstances
have made it clear that if EPA is to be truly effective in ensuring high compliance rates at
Federal facilities, a separate strategy such as this is needed to address this unique subset of
facilities which we regulate.

Thorough and consistent implementation of this Strategy should significantly strengthen
EPA's compliance and enforcement program for Federal facilities. We will apply the same
timeframes for taking enforcement action at Federal facilities as EPA docs for other
facilities. We also have established a formal dispute resolution process with strict time
periods for escalation  when Compliance Agreements or Consent Orders cannot be
expeditiously negotiated between EPA Regional offices and Federal facilities.

This Strategy also emphasizes the use of innovative compliance management techniques
(e.g., environmental auditing), selected initiatives for  improved compliance tracking of
Federal facilities and more effective use of the Federal Agency A-106 Pollution Abatement

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Planning Process.  In addition, since many of EPA's programs are delegated to the States,
we have devoted  a separate chapter in this document to the critical role of States in
responding to compliance problems at Federal facilities.

In closing, I would like to reiterate that EPA is very serious in its efforts to ensure
compliance by Federal  facilities, and we will take  all necessary actions, including
enforcement in appropriate circumstances, to improve the environmental status of facilities
of the Federal government.  Federal facilities have done much to increase the effectiveness
of their environmental management programs, but further progress is needed if Federal
facilities are to meet their obligations to comply to the fullest extent possible with all of the
environmental laws. We at EPA believe that this is an attainable goal and look forward to
working together with affected parties in implementing this strategy and demonstrating that
Federal facilities can truly be the model for compliance which we feel they are capable of
becoming.
       Dae  I                                                 Lee lit, Thomas
                                                                 Adminis

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            FEDERAL FACILITIES COMPLIANCE STRATEGY

                    TABLE OF CONTENTS
                                                          Page
                                                         Number
INDEX OF EXHIBITS	   vi

LIST OF ACRONYMS AND ABBREVIATIONS	   vii

LIST OF APPENDICES	   ix

EXECUTIVE SUMMARY	    x

CHAPTER L-   INTRODUCTION

A.  PURPOSE OF THE STRATEGY	.'	   1-2

B.  OVERVIEW OF THE STRATEGY	   1-3

CHAPTER n.-   SUMMARY OF RELEVANT ENVIRONMENTAL STATUTES AND
              EXECUTIVE ORDERS

A.  FEDERAL FACXLTTY COMPLIANCE WTTH STATE AND LOCAL
    POLLUTION CONTROL STATUTES	 H-l

B.  FEDERAL ENVIRONMENTAL STATUTES	'	 H-l

    B.I  dean Air Act	 n-2
    B.2  Qean Water ACL	 H-2
    B.3  Resource Conservation and Recovery Act	 n-4
    B.4  Federal Insecticide, Fungicide, and
         Rodenticide Act	H-5
    B.S  Toxic Substances Control Act	n-6
    B. 6  Comprehensive Environmental Response,
         Compensation, and Liability Act	n-6
    B.7  Safe Drinking Water Act	H-7

C.  EXECUTIVE ORDERS	H-8

    C.I  Executive Order 12088 - Federal Compliance with
         Pollution Control Standards	D-8
    C.2  Executive Order 12146 - Management of Federal
         Legal Resources	n-9
    C.3  Executive Order 12580 - Suoerfund Implementation	II-9

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                                                            Page
                                                           Number


CHAPTER IR- IDENTIFICATION OF THE REGULATED COMMUNITY

A.  DEFINITION OF A FEDERAL FACILITY	 ffl-1

B.  STRATEGY FOR IDENTIFYING AND TRACKING THE
    UNIVERSE OF FEDERAL FAOUTIES	ffi-1
    B. 1   Identifying the Types of Federal Facilities
          in the Regulated Community	ffl-2
    B .2   Improved Use of Available Information and
          Existing Data Systems.	ffl-2
   t B.3   Special Initiatives	ffl-4

CHAPTER IV.- COMPLIANCE PROMOTION. TECHNICAL ASSISTANCE AND
              TRAINING

A.  COMPLIANCE PROMOTION	IV-1

    A.I   Information Transfer	IV-1
    A.2   Identifying Compliance Patterns of
          Federal Agencies	IV-2
    A.3   Environmental Auditing	IV-3

B.  TECHNICAL ASSISTANCE AND TRAINING	IV-5

    B.I   Technical Assistance	IV-5
    B.2   EPA "Hotline" Assistance	IV-6
    B. 3   Federal Facilities Compliance Program
          Assistance and Oversight	 IV-7
    B. 4   Training Opportunities for Federal Facilities
          Compliance Personnel	IV-7

CHyVPTER V. -  COMPLIANCE MONITORING

A.  OBJECTIVES OF COMPLIANCE MONITORING ACTIVITIES	V-l

B.  SOURCE SELF-MONITORING, REPORTING AND
    RECORDKEEPING REQUIREMENTS	V-2

C.  INSPECTION STRATEGY FOR FEDERAL FACILITIES	V-3

    C.I   Annual Inspection Planning	V-4
    C.2   Regional Reporting of Inspection and Enforcement
          Activities at Federal Facilities  	 V-4

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                                                                Page
                                                              Number

     C.3   Identification of Environmentally
           Significant Federal Facilities for
           Multi-Media Inspections	V-4

     C.4   Coordination with States on Federal
           Facilities Inspections.	V-5

           C4.a   Annual Meeting with States on
                  Federal Facilities Compliance	V-5
           C.4.b   State Reporting on Federal Facility
                  Compliance Status	V-5

D. » ACCESS TO FAOLniES REQUIRING SECURITY
     CLEARANCES	  V-6

E.   SUBMISSION AND REVIEW OF FEDERAL AGENCY A-106
     POLLUTION ABATEMENT PLANS AND PROJECTS	V-6

     E.1    Identification of Priority Projects	V-7

           E.I.a  A-106 Compliance Classes	  V-7
           E. 1 .b  Targeting Resources to Address
                 Priority Areas	  V-8

     E.2    A-106 Process Overview and Time Table	V-8
     E.3    State Participation in the A-106 Process	V-10

CHAPTER VL-  ENFORCEMENT RESPONSE TO COMPLIANCE PROBLEMS AND
               VIOLATIONS OF ENVIRONMENTAL LAWS AT FEDERAL
               FACILITIES

A.   OVERALL COMPLIANCE POLICY AND PHILOSOPHY	 VI-2

B.   EPA RESPONSE TO FEDERAL FACILITIES VIOLATIONS	 VI-3

     B.I    Federal Facilities Compliance Process:  Civil
           Administrative Enforcement Procedures	VI-4

           B.l.a  Notification of Violation	 VI-4
           B. 1 .b  Response by Federal Facilities:
                 Certification of Compliance or
                 Remedial Action Plans	VI-5
           B. 1 .c  Initial Negotiation of Compliance
                 Agreements or Consent Orders	VI-6
           B. 1 .d  Issuance of Proposed Consent Orders
                 or Proposed Compliance Agreements	 VI-8
           B.I.e  Internal EPA Dispute Resolution Procedures	VI-9
           B. 1 .f  Federal Facilities Dispute
                 Resolution Process	  VHO
                                  ui

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                                                                   Page
                                                                  Number

           B. 1 .g  Use of Executive Order 12088 •
                  Federal Compliance with Pollution
                  Control Standards	VI-11
           B. 1 .h  Use of E.0.12146-Resolution of Interagency
                  Use of Legal Disputes	VI-12
           B. 1 .i   Use of Other Dispute Resolution
                  Procedures for Violations of Signed
                  Agreements or Consent Orders.	VI-11
           B. 1 .j   Impact of Funds Availability on
                  Achieving Compliance and Negotiating
                  Compliance Schedules	VI-12
           B.l.k  Exemptions	VI-13
   »
     B.2   Enforcement Actions for Violations at
           Federal Facilities Directed at Non-Federal
           Parties	VI-14

           B.2.a  Limitation on Gvil Judicial
                  Enforcement Actions Applies Only to
                  Executive Branch Agencies	VI-14
           B.2.b  Contractor and Other Private Party
                  Arrangements Involving Federal
                  Facilities	 VI-14
           B.2.C  Contractor Listing	VI-16

     B. 3   Criminal Enforcement Actions at
           Federal Facilities	VI-16
     B. 4   Press Releases for EPA Enforcement Actions at
           Federal Facilities	 VI-16
     B.5   Monitoring Compliance	 VI-17

CHAPTER VII. -  ROLE OF THE STATES IN RESPONDING TO FEDERAL
                FACILITIES VIOLATIONS

A.   STATE RESPONSE TO FEDERAL FACILITIES VIOLATIONS	VH-1

     A.I   Use of State Enforcement Authorities	VII-1
     A.2   State Enforcement Response Lead Following
           EPA  Inspection  in Delegated States	VH-2
     A.3   EPA Involvement in State Enforcement Actions	VII-2
     A.4   Relationship of State Administrative and
           Judicial Citizen Suits to EPA Compliance
           Agreements,	VH-3

B.   FEDERAL FAdUTIES IN THE STATE/EPA ENFORCEMENT
     AGREEMENTS PROCESS	  VH-3
                                    IV

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                                                                  Page
                                                                 Number
     B.I   Gear Oversight Criteria and Oversight
           Approach.	 VIM

           B. 1 .a   Identification of and
                  Priorities for the Regulated
                  Community	VIM
           B.l.b   Clear and Enforceable Requirements	VIM
           B. 1 .c   Accurate and Reliable Compliance
                  Monitoring	VIM
           B.l.d   High or Improving Rates of
                  Continuing Compliance	VIM
    i       B. 1 .e   Timely and Appropriate Enforcement
                  Response	VII-5
           B.l.f   Accurate Recordkeepingand
                  Reporting	  VII-5

     B.2   Direct EPA Enforcement	VH-5
     B.3   Advance Notification and Consultation.	Vn-3
CHAPTER Vm.- EPA ROLES AND RESPONSIBILITIES FOR PROGRAM
               IMPLEMENTATION

A.   REGIONAL OFFICE STAFF	VHI-1

     A.I    Regional Administrator	VDI-1
     A.2    Regional Administrator/
           Deputy Regional Administrator	VEQ-2
     A.3    Regional Counsel	Vm-2
     A.4    Regional Program Staff/Division Directors	Vm-3
     A.5    Regional Federal Facilities Coordinator	Vffl-4

B.   EPA HEADQUARTERS OFFICES	VHI-6

     B.I    Headquarters Program Offices	  Vffl-7
     B .2    Office of External Affairs/Office of
           Federal Activities	Vm-8
     B.3    Office of Enforcement and Compliance
           Monitoring	Vm-10
     B.4    Office of General Counsel	 Vm-10

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                       INDEX OF  EXHIBITS
                                                                      Page
                                                                     Number
   I-I     EPA Federal Facilities Coordinators ............... . ......    1-5
 in-1     Defining the Federal Facility Coordinators ....... ............  ffl-6
 III-2     Identification of the Regulated Community of
          Facilities with Federal Involvement .............. . ........  ffl-7
 in-3     Federal Facilities Identification Numbers ....................  ffl-9
 lD-4     Program Information Systems .......................... HI- 11
  «
 IV-1     The EPA Journal ............................ . ......   IV-9
  V-l     Media Program Inspections ................. . ............ V-ll
  V-2     Annual Timetable of Key A-106 Events ........ . ............ V-14
  V-3     Federal Agency A-106 Pollution Abatement Plan-
          Project Repon Form No. 3500-7 ............. ............  V-15
  V-4     EPA Inadequate and Needed Sheets and the Federal
          Agency Response Formats .............................. V-16
 \?l-l     Timely and Appropriate Enforcement
          Response Matrix ...................................  VI-18
 >HI-2     Federal Facility Enforcement Response Process
          and Dispute Resolution Process .........................  VI-21
 V*-3     EPA Initial Enforcement Response to Violations
          at Facilities with Federal Involvement. ......... . . . ......... VI-23
YUM     EPA Regional Office Staff Coordination ..................  Vm-11
VTH-2     EPA Headquarters Office Staff Coordination ........ . ......  VHI-12
                                    VI

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                 LIST OF ACRONYMS AND ABBREVIATIONS
AA        Assistant Administrator
AO        Administrative Order
ATS       Administrator's Tracking System
•
CAA       QeanAirAct
CERCLA   Comprehensive Environmental Response, Compensation, and Liability Act
OOOO     Contractor Owned/Contractor Operated
COCO (E)  Contractor Owned/Contractor Operated (Equipment)
CWA      QeanWaterAct
DOD       Department of Defense
DOJ       Department of Justice
DRA       Deputy Regional Administrator
E.O.       Executive Order
ESD       Environmental Services Division
FARES     Federal Activities Regional Evaluation System
FEMA     Federal Emergency Management Agency
FFIS       Federal Facilities Information System
FIFRA     Federal Insecticide, Fungicide, and Rodenticide Act
FINDS     Facility Index System
GAO       General Accounting Office
COCO     Government Owned/Contractor Operated
GOGO     Government Owned/Government Operated
GOPO     Government Owned/Privately Operated
IRIS       Integrated Risk Information System
JOCO      Jointly Owned/Contractor Operated
NEIC      National Enforcement Investigations Center
NRC       Nuclear Regulatory Commission

                                    vii

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           LIST OF ACRONYMS AND ABBREVIATIONS (Continued)

NOV       Notice of Violation
QARM     Office of Administration and Resources Management
GEA       Office of External Affairs
•
QECM     Office of Enforcement and Compliance Monitoring
(FA       Office of Federal Activities
OGC       Office of General Council
OIRM      Office of Information and Resource Management
OMB       Office of Management and Budget
OMSE      Office of Management Systems Evaluation
OPPE      Office of Policy and Program Evaluation
ORD       Office of Research and Development
POGO      Privately Owned/Government Operated
PWSS      Public Water Supply System
RA        Regional Administrator
RAP       Remedial Action Plan
RCRA      Resource Conservation and Recovery Act
SARA      Superfund Amendments and Reauthorization Act
SDWA     Safe Drinking Water Act
SNC       Significant Noncomplier
SPMS      Strategic Planning and Management System
TSCA      Toxic Substances Control Act
UIC       Underground Injection Control
                                  vm

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APPENDIX A
APPENDIX B
APPENDIX C

APPENDIX D
APPENDIX E
APPENDIX F

APPENDKG
APPENDIX H

APPENDIX I
APPENDDCJ
APPENDKK
         LIST OF APPENDICES

Summaries of Federal Environmental Statutes:
.  dean Air Act (CAA)
.  dean Water Act (CWA)
.  Resource Conservation and Recovery Act (RCRA)
.  Federal Insecticide, Fungicide and Rodenticide Act (FIFRA)
.  Toxic Substances Control Act (TSCA)
.  Comprehensive Environmental Response, Compensation, and
   Liability Act (CERCLA)
.  Safe Drinking Water Act (SDWA)
Executive Orders 12088,12146, and 12580
EPA Program Definitions for Majors, Minors, Significant
Noncornpliers and Significant Violators
EPA Environmental Auditing Policy
EPA "Hotline" Assistance
Reporting, Recordkeeping, and Self-Monitoring Requirements Under
the CAA, CWA, CERCLA and RCRA
OMB Circular No. A-106
Department of Justice Letters (10/11/83 and 12/20/85) and
Congressional Testimony on Federal Facilities Compliance (4/28/87)
Enforcement Response Authorities by Program
Sample Enforcement Response Forms and Letters
Enforcement Actions under RCRA and CERCLA at Federal Facilities and
Elevation Process for Achieving Federal Facility Compliance Under RCRA
APPENDDC L      Policy on Publicizing Enforcement Actions
                                    IX

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EXECUTIVE SUMMARY

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                            EXECUTIVE  SUMMARY
       The Federal Facilities  Compliance  Strategy establishes a comprehensive and
proactive approach to achieving and maintaining high rates of compliance at Federal
facilities.  It provides the basic framework for EPA's media programs to follow in ensuring
that Federal facilities are fully integrated into Federal and State compliance monitoring and
enforcement activities. It also attempts to reconcile the Agency's dual responsibilities of
providing technical assistance and advice to Federal facilities to help ensure their
compliance, as required under Presidential  Executive Order No. 12088, and of taking
enforcement actions against Federal facilities, where appropriate, as provided for in the
various environmental statutes.

       This Strategy clarifies that Federal agencies must comply with environmental laws
in the same manner and degree as non-Federal entities and EPA will utilize the full range of
its available enforcement mechanisms to ensure compliance by Federal facilities. However,
EPA also recognizes  that there are certain  limitations and differences in the types of
enforcement actions which EPA will take at Federal facilities. In addition, EPA's mandate
to provide technical assistance as well as the restrictions inherent in the Federal budget and
appropriations process influenced EPA's decision that a separate strategy was needed to
address compliance problems at Federal facilities.

       This document was written  to serve several audiences:  to serve as guidance for
EPA Headquarters and Regional staff; to clarify State and Federal compliance monitoring
and enforcement roles; to inform Federal agencies of EPA's  strategy and identify
procedures to be followed when  violations have been discovered;  and finally, to
communicate EPA's approach for addressing compliance problems at Federal facilities to
Congress, the public, and concerned interest groups.


Chapter II - Summary of Environmental Statutes and Executive Orders

       Federal agencies  generally must  comply with all provisions of Federal
environmental statutes and regulations as well  as all applicable State and local requirements,
with the exception of very limited Presidential exemptions which may be issued on a site-
specific basis. Presidential Executive Orders also stress the mandate for Federal facilities to
comply fully with environmental requirements and to establish procedures for ensuring that
this is accomplished, including special procedures for resolving compliance disputes within
the Executive Branch involving EPA and other Federal agencies.


 Chapter HI - Identification of the Regulated Community

       A more definitive inventory of Federal facilities will enable EPA to establish more
effective  priorities and select targets for assistance, compliance monitoring, and
enforcement activities.  The Strategy clarifies that EPA is focusing on that subset of Federal
facilities which have potential for environmental impact

       The Strategy defines the various types of Federal facilities and Federal lands, and
describes how available sources of information and program data systems will be used by
EPA to identify and track compliance at Federal facilities. It outlines new actions that EPA
will undertake to improve the quantity and quality of information on the Federal facilities
universe, including reviews of Federal facility classifications and major/minor facility

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definitions and the identification of important Federal facility minors and environmentally
significant facilities on a multi-media basis.


Chapter IV - Compliance Promotion, Technical Assistance and Training

       To meet its unique responsibilities under E.O.12088 to provide technical assistance
and advice to Federal agencies, EPA is establishing a more systematic communications
system for  exchange  of information  on new or revised regulatory or statutory
environmental requirements.  The Strategy describes  the functions of EPA's various
[Hotlines" and encourages Federal agency personnel to utilize these services to assist them
in maintaining compliance at  their facilities.  In addition to information transfer, the
Strategy introduces improved  approaches for informing Federal facilities of available
training courses. EPA will attempt to target particular agencies for courses in areas where
an Agency has had a pattern of compliance problems.
    «
       EPA has a unique opportunity to work with other Federal agencies and the States to
identify broad patterns of current and potential compliance problems among facilities in a
given Agency.  Based upon information from Regions and States about patterns of
noneompliance by Federal facilities, EPA  will develop a comprehensive strategy to correct
these noncompliance patterns and will work with the parent Agency to ensure the strategy
is implemented.  In an effort to prevent  future compliance problems, the annual A-106
planning process will be used more effectively to inform Federal agencies of EPA priority
areas find request them to direct their A-106 projects to these areas where appropriate.

       Federal facilities are also encouraged to adopt environmental auditing programs to
help achieve and maintain higher levels of overall compliance. EPA will provide technical
assistance to other Federal agencies in  the initiation and implementation of auditing
programs.


ChapUT V—Compliance Monitoring

       The Strategy strengthens compliance monitoring activities as Federal facilities by
ensuring that EPA or the States' presence is being demonstrated at all Federal agencies
which have the potential for environmental impact Federal facilities are to be inspected at
least &i> frequently as all other sources, consistent with the priorities, frequencies and types
of inspections established in each media  program guidance.  In addition, Regions are to
identify  the  most environmentally significant  Federal facilities across several media
programs as candidates for multi-media inspections.

       EPA  plans to improve the efficiency  and effectiveness of the Federal agency A-106
pollution abatement planning  process by addressing compliance problems  at Federal
facilities before they become violations, linking the process more closely to identified EPA
environmental priorities and other systematic program improvements.


Chapter VI - EPA Enforcement Response at Federal Facilities

       The most significant provisions of this Strategy deal with the basic approach and
procedures EPA will use when responding to violations at Federal facilities. The strategy
clarifies* that Federal agencies are required to comply with environmental laws the same as
non-Federal  regulated entities and that EPA will utilize all  of its available enforcement
mechanisms at Federal facilities. The strategy also recognizes that  there are certain
                                       XI

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limitations and differences in terms of the types of enforcement action which EPA will take
against Federal facilities.

       EPA and States are to pursue "timely and appropriate" enforcement responses to
address violations at Federal facilities in a manner similar to actions taken to address
violations at non-Federal facilities. EPA's enforcement responses emphasize that if a
violation is not or will not be corrected within the timeframe for violations of mat class, an
enforcement action should be taken consistent with media program guidance.
•
       EPA's formal enforcement responses for Federal facilities emphasize the use of
mutually negotiated remedial actions and schedules in the first instance, formalized through
Compliance Agreements or Consent Orders, depending upon program authorities and
guidance.  EPA will issue proposed administrative enforcement actions where mutual
agreement cannot be reached in a timely manner, and will promptly utilize all available
dispute resolution mechanisms to effectively resolve areas of disagreement. Hie Strategy
also, clarifies that Federal agency officials are required to take all available steps to obtain
sufficient funds to achieve compliance on the most expeditious schedule possible.

       EPA's enforcement  process  for  Executive  Branch Agencies  is purely
administrative, and neither provides for civil judicial action nor assessment of civil
penalties.1  This limitation does not apply to enforcement actions taken by States as
authorized under various statutes nor to EPA actions directed to non-Federal operators of
Federal facilities who are not officials of Executive Branch Agencies. EPA will pursue the
full range of its enforcement authorities against private operators of Federal facilities (e.g.,
GOCOs) where appropriate and also take action against Federal agencies at COCO facilities
in certain circumstances. EPA will develop a COCO Enforcement Strategy as a follow-up
to this document to further clarify this issue.


Chapter VII - Role of the States in Federal Facilities Compliance

       States generally may exercise a broader range of authorities and enforcement tools
than EPA to address violations at Federal facilities.  Under many statutes, delegated or
authorized States can use the full range of these enforcement authorities to address Federal
facility violations to the same extent they are used for non-Federal facilities.  States are also
encouraged, wherever possible,  to pursue bilateral,  negotiated agreements or Consent
Orders with Federal facilities.  In any delegated State enforcement action involving Federal
facilities EPA will be careful not to interfere with the State's enforcement proceedings.
However, EPA will be available upon request to either party to help facilitate expeditious
compliance.

       State  and Federal roles in compliance and enforcement are defined through
State/EPA Enforcement Agreements negotiated by the Region and each of its States for
each media program, consistent with the Policy Framework for State/EPA Enforcement
Agreements and program-specific implementing guidance. While most aspects of these
Agreements pertain equally to Federal and non-Federal facilities, the  Strategy outlines
several areas in which Federal facilities should be explicitly addressed in the Enforcement
Agreements process.
   This limitation does not apply to penalties for violations of Interagency Agreements under Section 120
   of the 1986 Superfund Amendments and Reauihorization Act (SARA).
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       As pan of the State/EPA Enforcement Agreements process, Regions should review
die Strategy with their States and address five areas: (1) the enforcement approach the State
plans to use for responding to Federal facility violations; (2) the types of situations where
the State would request EPA support or direct action; (3) any additional information die
Slat! has agreed to report to EPA on Federal facilities compliance and enforcement
activities; (4) how the State will be involved in the A-106 process; and (5) plans for a joint
EPA/State annual review of compliance problems at Federal facilities in the State.

•
Chapter VIII - EPA Roles and Responsibilities for Strategy Implementation

       The Strategy clarifies EPA roles and responsibilities for implementing this Strategy
and Che overall Federal facilities compliance program. It outlines the roles of the Regional
staff and the various Headquarters offices.

    t   The Strategy emphasizes the need for Federal facilities to be integrated into the
ongoing compliance and enforcement activities of each EPA media program. The Federal
facilities Coordinator's role is to coordinate Regional program office implementation of
thesct activities.  Implicit in this Strategy is the need for teamwork among the various
offices and staff involved in addressing Federal facilities compliance.


                                 ************
       This Strategy replaces the previous program document, entitled "Resolution of
Compliance Problems at Federal Facilities" (known as the "Yellow Book"), dated January
1984, and will still be referred to as the "Yellow Book." Full implementation is being
phased in over the next few years, beginning in tnid-FY 1988. The enforcement response
provisions are to be fully implemented immediately. EPA's  Annual Operating Year
Guidance will set subsequent priorities for the implementation of the remainder of this
Strategy. Enforcement and remedial response procedures under CERCLA/SARA generally
are not addressed by this document. However, references to CERCLA/SARA have been
included in several places for informational purposes only.

       In addition, the Strategy document has a number of Appendices which contain
various reference documents, model response forms, compliance agreements, definitions
of key EPA terms, etc., all of which should prove to be helpful to environmental staff in
other Federal agencies.  Additional copies of the Strategy may be obtained by written
request to EPA at the following address:


       U.S. Environmental Protection Agency
       Office of Federal Activities (A-104)
       Federal Facilities Compliance Program
       401 M Street, S.W.
       Washington, D.C 20460
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       VI.   ENFORCEMENT  RESPONSE TO COMPLIANCE
     PROBLEMS AND VIOLATIONS OF ENVIRONMENTAL
                   LAWS AT FEDERAL FACILITIES

       This Chapter outlines the basic approach and procedures which EPA uses when
 responding to violations of environmental law at Federal facilities.1 It explains the concept
 of timely and appropriate enforcement response and why it is important to gaining high
 levels of compliance. It discusses unique features of Federal enforcement procedures,
'State enforcement responses to Federal facility violations as well as the enforcement roles
 and responsibilities of each level of government EPA media program offices also may
 develop  specific enforcement guidance for Federal facilities through either their annual
 Operating Guidance or in other program policy documents. However, any media-specific
 enforcement guidance which is issued for Federal facilities will be consistent with the basic
 framework and concepts set forth in this strategy.

   *   In summary, EPA  and States are to pursue "timely and appropriate" enforcement
 responses to address violations at Federal facilities in a manner similar to actions taken to
 address  violations at non-Federal facilities. EPA's enforcement response guidance
 emphasizes that if a violation is not or will  not be corrected within the timeframe for
 violations of that class, a formal enforcement  action must be taken consistent with media
 program guidance, including required degrees of formality and rimrliimn

       EPA's enforcement approach for Federal facilities emphasizes the importance of
 negotiated responses for the correction of violations and schedules formalized through
 Compliance Agreements  or Consent Orders, depending upon program authorities and
 guidance. Where agreement cannot be reached on all issues in a timely manner, EPA will
 promptly utilize all available enforcement and dispute resolution mechanisms to effectively
 resolve areas of disagreement.

       This chapter also clarifies that Federal officials are expected to take all available
 steps to obtain sufficient funds to achieve compliance on the most expeditious schedule
 possible. While EPA recognizes that the Anti-Deficiency Act places certain limitations on
 Federal officials' abilities to commit funds which they have not been authorized to spend,
 they may seek additional funds where needed to correct identified compliance problems.

       EPA's enforcement response for Executive Branch agencies differs somewhat from
 its enforcement against non-Federal parties in that it is purely administrative, and neither
 provides for civil judicial action nor assessment of civil penalties.2  This does not apply to
 enforcement actions taken  by States as authorized under various statutes nor to EPA actions
 directed  to non-Federal operators of Federal facilities (e.g., GOCO's). EPA will  pursue
 the full range of its enforcement responses  against private operators of Federal facilities in
 appropriate circumstances.  In addition, sanctions may be sought against  individual
 employees of Federal agencies for criminal  violations of environmental statutes.
    The provisions of this Chapter are not applicable to enforcement actions under CERCLAVSARA. Any
    references to GERCLA/SARA are included for information purposes only.

    This limitation does not apply ID penalties for violations of Interagency Agreements under Section 120
    of the 1986 Superfund Amendments and Reauthorizatioo Act (SARA) pursuant to Sections
    109
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A.     OVERALL  COMPLIANCE  POLICY  AND  PHILOSOPHY

       Enforcement is an essential supplement to the strong public mandate for Federal
facilities to comply with Federal, State and local pollution control requirements to the
extent as non-Federal entities. Enforcement reinforces the special sense of public duty to
comply that this mandate instills in our Federal officials. It is generally recognized by tPA
and the public that compliance promotion activities such as technical assistance and training
are not in themselves sufficient to create full compliance nor to provide the necessary
•incentives for public >r private officials to affirmatively prevent and anticipate problems in
complying with environmental laws.

       Federal agencies must comply with Federal environmental laws in the same manner
and degree as non-Federal entities and EPA will utilize the full range of its available
enforcement mechanisms to ensure Federal facilities compliance.  Federal environmental
statutes require that, in most circumstances, facilities of the United States Government
comply with Federal, State, and local pollution control requirements to the same extent as
non-Federal entities. There are, however, certain limitations and differences in terms of the
type) of  enforcement actions which EPA will take against Federal facilities.  Unique
considerations and procedures that are applicable when enforcement is undertaken against
Federal facilities by EPA are explained in the next section of this Chapter.

       Federal and State enforcement officials must adhere to the concept of timely and
appropriate enforcement response, which EPA and the States have defined for each
prop-am to establish a strong, stable, and predictable national enforcement presence. What
this means is that if violators are not returned to compliance within a certain timeframe,
through  a variety  of informal contacts and enforcement responses, timely  formal
enforcement action is required Timely and appropriate enforcement response guidance,
with its timelines, required degree of formality, sanction and escalation, is deemed essential
to aclueving high levels of Federal facility compliance.

       National guidance issued for each environmental program establishes timelines for
key milestones in the enforcement Framework for Implementing State/Federal Enforcement
Agreements," which sets forth the Agency's general principles on timely and appropriate
enforcement response, and program implementing guidance are summarized in Exhibit VI-
1 and Appendix C  This exhibit also includes the criteria for defining what constitutes a
formal enforcement response.  The principles of  timely and appropriate enforcement
response  apply to the full range of sources regulated under Federal statutes; however, the
application of specific timelines and definitions in Exhibit VI- 1 is generally directed to the
most significant violations in each environmental program. Appendix C contains each of
the EPA media programs' definitions for significant noncompliance. Regions and States
should also apply these timeframes to other types of violations at Federal facilities to the
extent possible with available resources and consistent with media program guidance.

      The national timely and appropriate milestones are adapted to specific legal
enforcement mechanisms and procedures unique to each State. Agreements which embody
these "timely and appropriate" requirements and definitions are reached between EPA
Regions and States and committed to writing in State/EPA Enforcement  Agreements,
discussed more fully in Chapter VH These agreements may also specifically address other
compliance activities and response actions of Federal facilities.

      EPA emphasizes negotiation with responsible Federal officials on corrective actions
and schedules needed to expeditiously  resolve noncompliance situations.  EPA will
generally use either Compliance Agreements or Consent Orders (depending upon available
                                     Vl-2

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statutory authorities and  media program guidance) as the primary mechanism for
formalizing agreements with Federal facilities.

B.    EPA RESPONSE TO  FEDERAL FACILITIES  VIOLATIONS

       The Federal enforcement process outlined in this Section is designed to provide a
uniform approach to responding to violations at Federal facilities, recognizing that each
environmental statute establishes somewhat different enforcement response mechanisms.
There are several facu.s which distinguish EPA's enforcement response to Federal
facilities from enforcement at non-Federal facilities and by the States:

   (a)  EPA has a broad mandate to provide technical assistance and advice to Federal
       agencies to ensure their compliance, as required under Executive Order 12088 (See
       detail in Chapter n). However, implementing this mandate will not interfere with
       the  application by EPA (or States) of timely and appropriate  enforcement
    *   procedures to achieve the most expeditious schedule of ffmrlM**T
   (b)  EPA places emphasis on negotiations with responsible Federal officials in resolving
       Federal facility noncompliance with enforcement documents issued on consent and
       signed by both parties. This Strategy also explains how failure to reach agreement
       in a timely manner will be resolved.

   (c)  Federal EPA enforcement  actions and procedures for resolution of compliance
       problems differ in certain respects for Federal versus non-Federal facilities:

       i.  EPA will not bring civil judicial suit against Executive Branch Agencies and will
       rely upon administrative enforcement mechanisms for Federal facilities as outlined
       in Appendix I. This respects the position of the Department of Justice mat civil
       suits within the Federal establishment lack the constitutionally required "justiciable
       controversy."  (See Appendix H which contains the Justice Department's testimony
       on this issue at a Congresional oversight hearing in April, 1987).

       u.  EPA generally will not  assess civil penalties against Federal facilities under
       most environmental statutes.3  This also is in response to the Justice Department
       position disn'tefd above as  well as Federal District court rulings which have issued
       conflicting decisions as to whether or not the United States government has clearly
       and unambiquously waived its soverign immunity for penalties under  various
       environmental statutes.

       Hi EPA will negotiate Compliance Agreements or Consent Orders with Federal
       agencies to address violations at Federal facilities. The timeframes for negotiation
       of Compliance Agreements and Consent Orders are defined by EPA's media
       specific "timely and appropriate" criteria. Prior to issuing a final Compliance
       Agreement or Consent Order to a Federal facility, the Federal Agency will be
       provided an opportunity to  meet with EPA to discuss key issues and to sign it on
   This limitation does not apply to penalties for violations of Interagency Agreements under Section 120
   of the  1986 Superfund Amendments  and Reauthorization Act (SARA) pursuant to Sections
   109(aXlXE)and 122(g)of SARA.
                                      VI-3

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     '  consent prior to the order or agreement becoming final and effective.4  This
       approach is also  based in part on DOJ's written position which states that
       "Executive Branch agencies  may not sue one another nor may one agency be
       ordered by another to comply without the prior opportunity to contest the order
       within the Executive Branch."

       iv. Additional dispute  resolution procedures are provided in media program
       guidance to resolve compliance issues through EPA, and if necessary, involve
       OMB under E.0.12088 for funding disputes, the Attorney General under E.O.
       12146 for legal interpretation and the EPA Administrator under E.0.12580 for
       CERCLA/SARA.

       v. Federal facilities, like all public entities, face problems in ensuring that funds
       are adequate to meet environmental requirements and remedy noncompliance. The
       obligation to  comply is not  altered by such funding considerations; the most
    ,   expeditious means of achieving compliance and obtaining funds is expected.
       However, the  process for acquiring funds does pose unique considerations which
       should be taken into account in negotiating compliance schedules as described in
       Section  B.l.f.

B.1   Federal Facilities Compliance  Process:   Civil   Administrative
       Enforcement Procedures

       The Federal facilities compliance process outlines the administrative procedures
EPA will follow when responding to  civil violations identified at Federal facilities.  This
process is illustrated in Exhibit VI-2 and discussed below. These procedures apply when
civil enforcement responses are directed at facilities of Executive Branch Agencies.

B.1 .(I Notification  of Violation

       EPA monitors compliance status and identifies violations at Federal facilities
through reviews of source self-monitoring and reporting documents, onsite inspections,
and the A-106 process. Once a violation is discovered, EPA makes a.determination of
noncompliance and takes its initial enforcement response.

       EPA's initial enforcement response to an identified violation may vary depending
on the type of violation and nature of the violator.  Media-specific guidance governs the
type of initial response and timeframe  for such response. See Appendix I for types of
enforcement mechanisms used under each Federal environmental program. When EPA has
made iits determination that a violation has occurred at a Federal facility. Federal Facilities
Coordinators or media program staff may informally notify the facility (e.g., via telephone)
prior to issuance of formal written notification. If Federal Facilities Coordinators provide
this informal notification,  they should first consult with appropriate media  program staff.
This vail provide the  Federal facility with some additional time  to remedy the identified
violation before receiving formal written notification from EPA.

       Generally, EPA issues a Notice of Violation (NOV), or other program equivalent as
the  initial written notice for requiring  response to address significant violations. NOVs or
program equivalents issued for violations at Federal facilities are similar to those issued for
   EPA may issue unilateral administrative orders to Federal facilities under Section 106 of SARA
   following concurrence by the Department of Justice pursuant to Section 4(bXl) of Executive Order
   12580.
                                     Vl-4

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non-Federal violations except that they should not mention civil judicial actions by EPA.
At a minimum. NOVs or their program equivalent issued for Federal facilities should:

    •  Be issued to base commander or facility director level officials.

    •  Describe the violation and how it was identified.

    •  State that the consequences of not meeting the requirements stated in the NOV in a
       timely manner or responding to EPA by the dates specified will result in  ,ie
       issuance of an order or formal escalation of the enforcement action. Relevant
       citizen suit provisions of involved statutes may also be cited here.

    •  Explain  that the Federal agency can either submit a written certification that it has
       corrected the violation if only a short-term "fix" is required or an action plan and
       schedule for a violation requiring more extensive remedial action.  Selection of a
    '   date for requiring submission of a certification of compliance or remedial action
       plan and schedule is dependent on the timely and appropriate timeframes shown for
       each program in Exhibit VI-1. In certain cases, EPA may also include a schedule,
       proposed order, or proposed compliance agreement as pan of or attached to the
       NOV. The NOV should also state the number of days EPA will take to respond to
       the reply.

    •   Refer to any available alternatives to compliance (e.g., Presidential exemptions or
       specific legislative relief).

    •   Offer to schedule a meeting or conference with Federal agency officials who are
       authorized to sign a Compliance Agreement or Consent Order. These officials must
       also have  the authority to make the necessary budget requests to correct the
       violation according to the schedule outlined in the Agreement

       The NOV, or program equivalents, should be tailored to address the specific
noncompliance situation  identified at the facility. Appendix J provides  a model for
developing an NOV. Copies of all NOVs and other enforcement actions issued by EPA to
Federal facilities shall be sent to the involved  Headquarters media program enforcement
office with a copy to the Office of Federal Activities.

B.1.b Response  by  Ftdtral  Facilities:   Certification of Compliance
       or Remedial Action  Plans

       Once a facility has received the official notice of violation or program equivalent, it
is required to submit either a certification of violation correction, or a remedial action plan
(RAP) to EPA. A facility can also dispute EPA's noncompliance rinding through appeals as
provided for through the dispute resolution process outlined in Section B.l.e.

       The certification of violation correction will consist of a letter from the facility
which identifies the violation and describes remedial action taken. It is accompanied by
support documentation that demonstrates achievement of compliance. When remedial
actions needed to correct the violation will exceed the timeframes for timely and appropriate
enforcement response  for either  achieving  compliance or being  subject to  formal
enforcement response, the facility must submit a remedial action plan. The plan should:

    •   Describe the noncompliance situation;
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    •   Identify die corrective actions to be taken;

    •   Outline the schedule for implementing the remedial actions; and

    •   Describe the content and frequency of progress reports.

       EPA will acknowledge the receipt of the proposed certifications and remedial action
plani; with a  written response.  An example of such a Response Form is provided in
•Appendix J. A response should be worded so the facility is not insulated from farther EPA
or State enforcement action. The response should also specify a date by which EPA will
respond which should normally be within 30 days.  In complex situations, detailed
comments may follow thereafter.

       Remedial actions and schedules proposed by the Federal facility may serve as a
basis for a Compliance Agreement or Consent Order. Although a remedial action plan does
not Constitute an EPA enforcement response, it may be used as a basis for monitoring
future compliance for violations that are not sufficiently significant, as defined in program
guidance, to mandate formal enforcement response.

       In the event of disputes in instances where formal enforcement response is not
necessary, the Region may use the dispute resolution processes described in Section B.Le
to father escalate and resolve compliance.

B.1.C Initial  Negotiation  of  Compliance  Agreements  or  Consent
       Orders

       Where formal enforcement response is required, following the notification of
violation,  EPA generally will use Compliance Agreements or Consent Orden as the
primary formal enforcement response to formalize bilateral agreements between EPA and a
Fedesal agency to ensure expeditious return to compliance. Compliance Agreements will be
used as EPA's principal  formal enforcement response unless media program guidance
indicates that statutory authorities are available for use of Consent Orders for Federal
facilities violations. Appendix I indicates die specific enforcement responses in each media
program and highlights those which are avai
.able for use at Federal facilities.  Consent
Orden should be used when agreements are negotiated jointly with a State and the State has
administrative order authority.

       It is EPA policy that Compliance  Agreements or Consent Orders should be
negotiated within required media-specific, "timely and appropriate" timeframes or EPA may
take further formal administrative enforcement action to achieve compliance.  EPA will
prepare Compliance Agreements or Consent Orders for joint signature by the affected
fanliiy and EPA.  At a minimum til Compliance Agreements and Consent Orden should
state nhat the violating facility is accountable for meeting timeframes and taking required
actions as outlined in the Agreement or Order or be subject to further enforcement action.
In ceitain cases, it may be necessary to negotiate a two phased agreement or order for the
same violation: the first detailing a schedule for studies necessary to correct the problem
and the second establishing a plan and schedule for remedying the problems based on the
results of the studies. The time schedules included in both may overlap or be concurrent.

       Environmental audit provisions will be emphasized in negotiations in instances in
which, the Federal agency can constructively  be directed to correct similar violations which
are likely to occur at other related facilities or there appear to be systematic compliance
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 management problems. This is consistent with the July 9, 1986 Policy Statement on
 Environmental Auditing, 51FR 25004 (See Appendix D).

        Federal Facility Coordinators will assist the media program offices and the Regional
 Counsel's office in preparing and negotiating Compliance Agreements or Consent Orders
 with Federal agencies. Appendix J outlines a format to use when developing a Compliance
 Agreement or Consent Order for a Federal facility. This sample Compliance Agreement
 incorporates model language developed by the Department of Justice.
•
        EPA media programs may consider including enforceabiliry clauses in Compliance
 Agreements with Federal facilities which reference the applicable citizen suit provisions of
 the involved statute.  The RCRA program has developed a model "Enforceabiliry Clause"
 to be included in all RCRA Federal Facility Compliance Agreements.  These clauses
 reference the use of applicable citizen suit provisions by States or citizens for failure to
 comply with terms or schedules in Compliance Agreements. See Appendix J for a copy of
 thetRCRA Program Enforceabiliry Clause. Certain EPA Media program offices also have
 developed specific guidance concerning Compliance Agreements. For example, the RCRA
 program model language for Federal facility Compliance Agreements is contained in the
 lanuarv 25, 1988 memorandum "Enforcement Actions under RCRA and CERCLA it
 Federal Facilities," which is contained in Appendix K.

    •   Timely and Appropriate Response Criteria

        EPA's timely and appropriate enforcement guidance sets forth the criteria for the
 commencement of an enforcement action at a facility in violation.  The negotiation of
 Compliance agreements and Consent Orders at Federal facilities are subject to EPA's timely
 and appropriate enforcement response criteria. Based on the type of violation at the facility,
 this guidance establishes the time it should take to issue the initial enforcement action, the
 type of enforcement action that should be taken, and the amount of time it should take the
 facility either to achieve full physical compliance or to enter into a Consent Order or
 Compliance Agreement which incorporates a schedule for achieving compliance.

     •   If compliance is not achieved or a Compliance Agreement or Consent Order can not
 be negotiated within required  media-specific timcframes, EPA generally will issue  a
 proposed order or proposed compliance agreement prior to escalating its enforcement action
 using the dispute resolution procedures outlined in Section B.l.e.

        Timeframes for issuance of proposed Administrative Orders or Compliance
 Agreements and their program equivalents will follow media-specific timely and
 appropriate guidance  as shown in Exhibit VI-1.

        Informal assistance from OF A and Headquarters media program offices can be used
 at any point in the process.  Regional program offices are encouraged to request OFA
 assistance through the Federal Facilities Coordinators who will assist them in contacting
 Federal agency regional operations and commands to resolve compliance problems. OFA
 and the media program office will work directly with the parent agency's Headquarters
 office and appropriate EPA Headquarters and Regional legal  and compliance program
 offices to try to resolve the problem.

        EPA Regional staff also should successively escalate unresolved issues up to the
 Deputy Regional Administrator (DRA), to the extent appropriate before taking formal
 administrative action due to unresolved issues in remedying compliance problems. The
 DRA may then contact an equivalent level official of the other Federal Agency in an effort
 to achieve resolution.
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B.t.d  Ittuanct of  Proposed Constnt Orders or Proposed
        Compliance  Agrttmtntt

       EPA may issue proposed administrative orders or proposed  Compliance
Agreements at a number of different points in the compliance process in order to expedite
the timely resolution of violations by Federal facilities.  Proposed orders or compliance
agreements generally are issued to Federal facilities when:

    "   A Federal facility fails to respond by the date(s) specified in • notification of
       violation or program equivalent

    °   A Consent Order or Compliance Agreement cannot be or is not successfully
       negotiated within the timeframes established in media-specific guidance because of
       disagreement  on proposed remedial actions, the schedule for correcting the
    1   violation, or other outstanding issues.

    •   A Federal facility has violated the terms of a signed Compliance Agreement or
       Consent Order.

    *   There is  an imminent and substantial endangerment to human health or the
       environment which necessitates immediate ac *
       When initial negotiations for a Compliance Agreement or Consent Order ID address
tile violations at a Federal facility exceed the timely and appropriate enforcement response
timeframes for resolving violations, EPA shall escalate the enforcement response action by
issuing either a proposed administrative order or a proposed Federal Facility Compliance
Agreement to the violating Federal facility. EPA's use of either a proposed order or a
compliance agreement as the formal enforcement mechanism for Federal facility violations
is dependent upon both the scope of EPA's administrative order authority under each of the
environmental statutes and  media program-specific enforcement guidance on the
appropriate use of Consent Orders vs. Compliance Agreements at Federal facilities.
Appendix I contains a statute-by-statute summary of EPA's administrative enforcement
response authorities for Federal facility  violations. Since there are certain procedural
differences when using orders vs. compliance agreements at Federal facilities, these two
mechanisms are discussed separately as follows:

   •   Compliance Agrtemena

       Where agreement has not been reached within the media program's timeframes for
   formal enforcement action, EPA generally will issue a proposed compliance agreement
   to a Federal facility and allow a specified  period of time, usually 30 days, for the
   Federal agency to  respond in  writing as to whether it agrees with the terms of the
   agreement or whether it will seek resolution of disputed issues through EPA dispute
   resolution process procedures.  Upon issuance of the proposed compliance agreement,
   EPA will notify the Federal facility that failure to either agree to the conditions of the
   agreement or resolve the remaining issues within 30 days of issuance will trigger the
   formal dispute resolution process. If at the end of the 30-day period, the Federal
   agency chooses to accept the proposed compliance agreement,  the agreement will
•   become final and effective  upon signature  by both parties.  If die Federal Agency
   appeals the conditions of the compliance agreement in writing or fails to respond within
   30 days, the formal EPA dispute resolution procedures will be initiated.  See Section

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    file, below which outlines the formal procedures for escalating and resolving disputes
    between Executive Branch agencies.

    •  Consent Orders

       Where EPA has statutory administrative order authority for Federal facilities, and
    where  it is  specified in media-program guidance, EPA  will issue a proposed
    administrative order to a Federal facility and allow a specified period of time, generally
    30 days, for the Federal agency to respond in writing stating whether it will (a) accept
    the terms of the proposed order on consent or (b) seek resolution through formal
    administrative appeals procedures EPA has established for the type of order which was
    issued (e.g.,  "Final Administrative Hearing Procedures for RCRA Section 3008 (h)
    Orders," issued by EPA on February 19, 1987). If the Federal facility chooses to
    accept the proposed order within the 30-day time period, it will be signed by both
    parties and become a final consent order.

       If the Federal  facility fails to take advantage of this, opportunity and does not
    respond to EPA within the 30-day time period specified in  the proposed order, die
    order will become a final administrative order, effective at the time established in the
    proposed order. It is important to point put that it is incumbent upon the Federal
    agency to respond to EPA in writing within the timeframe specified in the proposed
    order (i.e., generally 30 days) or it will become a final administrative order which will
    foreclose any further opportunity to negotiate and sign an order on consent  This
    approach is consistent with the Justice Department's position that EPA may not issue
    Administrative Orders to other Federal agencies "without the  prior opportunity to
    contest the order within the Executive Branch."

       When a Federal facility has chosen to appeal a proposed order through EPA's
    established administrative appeals procedures, it shall be subjected to such proceedings
    in the same manner and degree as any private party.  If a settlement is reached through
    the use of these appeals procedures, EPA and the involved Federal facility will both
    sign a final  administrative order on consent.  If, however, these administrative
    proceedings have been fully exhausted and agreement cannot be reached on consent,
    the formal dispute resolution process will be initiated and the dispute will be escalated
    to EPA Headquarters following the steps outlined in Section B.l.e. The proposed order
    will be stayed pending escalation and resolution of the dispute.

B.1.« Infernal  EPA  Dlsputt Resolution  Proctdurts


       This strategy sets forth EPA's basic Federal Facilities Dispute Resolution Process
as described in detail in Section B.l.f below. There are however, certain existing formal
administrative procedures which are applicable to all regulated entities and these will be
utilized for Federal facilities in appropriate circumstances. Certain  media  programs also
have issued specific written guidance for resolving disputes at Federal facilities which may
be followed consistent with the process outlined in Section B.l.f.below. The types of
internal EPA dispute resolution procedures that may be utilized to resolve compliance
problems at Federal facilities are:

    1)  Administrative procedures established for certain specific statutory authorities (e.g.,
       "Final Administrative Hearing Procedures for RCRA Section 3008(h)");
                                      Vl-9

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    2)  Media-program specific written guidance for dispute resolution at Federal facilities
       (e.g.,  "Elevation Process for Achieving Federal Facility Compliance Under
       RCRA," March 24,1988 (See Appendix K)); or

    3)  EPA's Federal Facilities Dispute Resolution Process as described below.

       If available, established administrative procedures should first be invoked to resolve
disputes between Executive Agencies. If there are no existing administrative procedures in
pUux to resolve a conflict at a Federal facility, the Regions should utilize media specific
guulance, when available, or the general Federal facilities EPA Dispute Resolution Process
outlined below.  Media-specific dispute resolution procedures for Federal facilities still
follow the general concepts set forth in the EPA Federal Facilities Dispute Resolution
Process.  However, media-specific  guidance may contain certain variations to
accommodate media program procedural difference or preferences,

B.f.f  Ftdtral Facllltlts  Dlsputt Rtsolutlon Process

       Tbt focus of EPA's Federal Facilities Dispute Resolution Process is on cases where
EPA and the Federal agency are unable to agree on the conditions, terms or schedules to be
contained in a Compliance Agreement or Consent Order.  This process is also
utilized for resolving disputes resulting from violations of signed agreements or orders. In
add:don, certain EPA media  programs (e.g., RCRA) have established other dispute
resolution procedures for use when a facility has violated the terms of a signed Older or
agreement as described further in section B.l.f.

       EPA will make every effort to resolve noncompUance disputes at the Regional level
However, when EPA and a Federal agency are unable to reach formal agreement in a
signed Consent Order or a signed Compliance Agreement, the dispute will be formally
referred by the Regional  Administrator (RA) to the Assistant Administrator (AA) for the
affected media program, the AA for the Office of Enforcement and Compliance Monitoring
and the AA for External Affairs as shown in Exhibit Vl-2. This joint referral should take
place only after the Regional Office has  tried to resolve the issue within established
time frames for guiding what constitutes  "timely and appropriate" enforcement response
(See Exhibit VI-1).  In the Federal facility compliance process, the use of internal EPA
dispute resolution procedures  is the functional equivalent of a referral of civil judicial
enforcement actions for prosecution in the sense that it provides a final forum in which
disputes may be resolved  for Executive Branch Agencies.

       A formal referral shall be sent to  EPA Headquarters within 60 days after the
established media timefirame for formal  enforcement action has been exceeded and the
Federal facility has failed to sign a proposed order or proposed compliance agreement.  If a
proposed order has been appealed, EPA's formal administrative appeals procedures should
first be exhausted prior to making a formal referral to EPA Headquarters. The referral
package should describe the identified violation, provide a historical summary of the
communications and negotiations with the facility, identify enforcement actions taken
(including any State or citizen actions),  identify the unresolved issues and include
appropriate support data, with  documentation similar to a litigation report The referral
package must be signed by the EPA Regional Administrator.

       The Office of Federal Activities, or the lead media program office, will notify the
RA in writing when Headquarters receives the referral package and also will report to the
Reg: on informally on a monthly basis and quarterly on a formal basis the status of those
facilities formally referred to Headquarters. The involved EPA Headquarters media
                                     VI-10

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 program office, with assistance from OFA and OECM, will attempt to negotiate an
 acceptable solution with the parent Federal agency Headquarters office within a m««imvm
 of 90 days of the referral  to EPA Headquarters. At the conclusion of this ninety-day
 period, if these negotiations are unsuccessful, the Assistant EPA Administrator for the
 affected media program will refer the dispute to the Administrator for resolution.

       The EPA Administrator has primary responsibility for resolving environmental
 disputes between Executive Branch agencies. The EPA Administrator will consult with the
' head official of the parent Federal agency and make every effort to reach agreement on an
 acceptable solution to the problem. If the EPA Administrator determines that there are
 remaining issues that cannot be resolved, the Administrator may exercise his authority to
 invoke the procedures afforded by Executive Order 12088 or Executive Order 12146 and
 involve either OMB or DOJ, respectively, in resolution of the dispute.

 B.1.g  Use of Executive Order 12088 • Federal Compliance  with
   '    Pollution Control Standards

       Section 1-602 of Executive Order 12088 states that "the Administrator shall make
 every effort to resolve conflicts regarding such violations between Executive tgenices."
 The EPA Administrator may request OMB's  involvement particularly in cases where
 funding or schedules are the primary issues in resolving the dispute. Section 1-603 further
 clarifies that OMB "shall consider unresolved conflicts at the request of the Administrator."
 This  means that the EPA Administrator is the only Executive Branch official who can
 formally request OMB resolution of a conflict between Federal agencies under Executive
 Order 12088. The section further states that in resolving such conflicts OMB "shall seek
 the Administrator's  technological judgment and  determination with regard to the
 applicability of statutes and regulations."

       It also is important to point out that Section 1-604 of Executive Order 12088 states
 that "these conflict resolution procedures are in addition to, not in lieu of, other procedures,
 including sanctions, for the enforcement of applicable pollution control standards."  This
 provision recognizes that applicable EPA internal dispute resolution procedures shall be
 utilized prior to Executive Order 12088 being invoked by the EPA Administrator.

 B.Lh  Use  of Executive Order 12146 • Resolution  of  Interagency
        Legal Disputes

       Executive Order 12146 (Appendix B) provides for the nominal of legal disputes
 between Federal agencies to the U.S. Attorney General whenever Executive Branch agency
 heads are unable to resolve such legal disputes. The Executive Order clarifies that an
 interagency legal dispute" would include "the question of which [agency] has jurisdiction
 to •HminicMr a particular program or to regulate a particular activity." In addition, Section
 1-402 of Executive Order 12146 specifically states thac

       "Whenever two or more Executive agencies  whose heads serve at the
       pleasure of the President are unable to resolve such a legal dispute, the
       agencies shall submit the dispute to the Attorney  General prior to proceeding
       in  any court, except where there  is specific  statutory vesting  of
       responsibility for a resolution elsewhere."

      This means that while the EPA Administrator may invoke E.0.12088 for Federal
 facility  disputes related primarily to funding and scheduling  issues, he may invoke
 Executive Order 12146 in cases involving legal disputes. Therefore, for Federal agency
                                     VI-11

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legiil disputes the EPA will utilize its internal dispute resolution procedures prior to
invoking EO. 12146 as outlined above. When a legal dispute cannot be resolved between
the EPA Administrator and the involved Agency head, the EPA Adminstrator may request
the involvement of the Justice Department in resolving the dispute as outlined inE.0.
12146. Another significant difference between the EO. 12088 and the E.0.12146 dispute
resolution procedures is that, unlike E.O. 12088, referral of disputes to the Attorney
General is not limited to EPA, ie., either Federal agency or both that are involved in a legal
dispute may submit the case to the Justice Department.

B.1.1 Use of Other Dispute Resolution  Procedures for Violations of
       Signed Agreements  or  Consent Orders

       The internal dispute  resolution procedures outlined above are  used primarily to
resclve disputes which arise prior to the rtnalization of a signed Compliance Agreement or
Consent Order (e.g., the involved parties cannot  agree on the terms, conditions or
schedules in the order or agreement). However, there are also situations where disputes
occur when a Federal facility violates the terms of a Compliance Agreement or Consent
Order which has already been signed by both EPA and the involved agency. In such cases,
other dispute resolution procedures may be utilized  if EPA and the  Federal facility had
previously agreed to use other means of resolving disputes that arise in the context of
signed agreements or consent orders. For example, the RCRA program has developed this
type of dispute resolution  process  as outlined  in their January  25.  1988 guidance
memorandum "Enforcement Actions Under RCRA and CERCLA it Federal Facilities"
(See Appendix K). The primary differences between these procedures and what is provided
for in the Federal Facilities Dispute Resolution Process (Section B.l.f.) are different
time frames and establishment of the EPA Administrator as the final arbiter for disputes
resulting from violations of signed agreements.

       In  addition, the use of alternative dispute resolution (ADR) procedures, Le.,
employing neutrals such as mediators, fact-finders, or arbitrators, may be very helpful in
resolving compliance problems and disputes at a Federal facility (See the Administrator's
Guidlance on the Use of Alternative Dispute Resolution in EPA Enforcement Cases, dated
August  14,1987).

B.1..J  Impact of  Funds Availability on Achieving Compllancs and
       Negotiating  Compliance  Schedules

      The Federal environmental statutes generally require that Federal facilities must
comply with pollution control requirements to the same extent as non-Federal entities. The
oblif anon of a Federal facility to comply is not solely contingent upon the availiabiliry of
existing funds.  In fact. Executive Order 12088 sates that, "the head of each Executive
Branch agency shall ensure that sufficient funds for compliance with applicable pollution
control  standards are requested in the agency budget" Specific exemptions under the
statutes discussed in Section B.l.k.  do provide a highly limited exception where the
President has specifically requested an appropriation as pan of the budgetary process and
the Congress failed to ""ire available such requested  appropriation (See RCRA (6001,
CAAJ118.CWAS313).

      Federal facilities are expected to seek all possible means of funding to achieve
environmental compliance. While the A-106 pollution abatement process is the primary
vehicle which Federal agencies use to plan for environmental projects, it is not the only
funding related mechanism available. Many compliance problems may not require large
capiul expenditures, e.g., operation and maintenance (O&M) activities, and Federal
                                     VH2

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 agencies tit expected to use all available existing funds to return to compliance in such
 circumstances. Some Federal agencies have O&M accounts or capital accounts for building
 and construction funding, which can serve as a source of funds. If a compliance problem
 does require significant capital expenditures, the agency can consider reprogramming
 funds, transfer authority, or requesting a supplemental appropriation, which will enable an
 agency to receive funds in the year in which they are needed.

       During negotiations on Compliance Agreements and Consent Orders, Federal
• officials will be expected to offer the most expeditious means of funding required remedial
 action(s).  However, EPA recognizes that the Anti-Deficiency Act (31  U.S.C. (1341)
 prohibits Federal officials from commiting funds beyond those they are authorized to
 spend. Therefore, the language in the model Compliance Agreement in Appendix J simply
 commits the Federal official to seek any additional necessary funding where existing funds
 are unavailable to correct identified compliance problems. Additional appropriations should
 be sought only where it has  been determined that existing agency funds are either
 unavailable or inadequate to  address the violations.   The Federal official signing a
 Compliance Agreement or Consent Order should have the authority to obligate the funds or
 make the necessary budget requests to expeditiously correct the violation according to the
 schedule outlined in die Agreement or r J
        Section 1-602 of E.O.12088 provides the opportunity for OMB to consider such
 alternate sources of compliance funding as reprogramming or environmental accounts and
 should be used by Federal agencies to ensure that all possible avenues of securing
 necessary funds are exhausted

 B.1.k Examptlons

       As directed by Section 1-703 of E.O. 12088, EPA can advise the President on
 recommendations made by Federal  agencies concerning exemptions of facilities from
 compliance with applicable environmental regulations. Exemptions may be granted only
 where such exemptions are necessary  in the interest of national security or in the paramount
 interest of the United  States.  Additional requirements are imposed in particular
 environmental statutes, e.g., in some, such an exemption is authorized for one year and
 may be renewed, if necessary. In addition,  as noted in Section B.I A, exemptions may
 only be granted for lack of funds if  the President specifically requests such funds from
 Congress and they are denied.  Section B of Chapter n summarizes the provisions of each
 of the statutes which provide for such exemptions.  It should be noted that while such
 exemptions are provided for in the statutes, they have been rarely, if ever, invoked to date,
 and it is  not anticipated that there  will be  any increase in the request or granting of
 exemptions in the future.

       The Regional office will assist any Federal facility which believes it cannot comply
 with pollution control requirements in finding ways to achieve compliance. Every effort
 will be made to negotiate an alternative to an exemption which is acceptable to the parent
 Federal agency, EPA, and State and local pollution control agencies.

       If a Federal agency recommends that a facility receive an exemption, the EPA
 Regional office will provide OF A, the Headquarters media enforcement office and OECM
 with documentation of the problem so that EPA can establish a position on the exemption.
 The Regional office should also submit its analysis of the pros and cons of granting such
 an exemption. The analysis should include the positions of any affected States. OF A will
 then submit a recommended position for the Administrator to submit to OMB with the
 views of all affected offices within EPA.
                                      VM3

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       If an exemption is granted to • Federal facility, EPA will provide assistance to the
facility in order to correct the pollution problem as expeditiously as possible. The objective
is to bring the facility into compliance prior to the expiration of the exemption to preclude
the need for a renewal A copy of the exemption will be sent to any affected States.

6.:2   Enforcement Actions For Violations at Fedora! Facilities
       Directed  at Non-Federal  Parties
•

       This section outlines EPA's enforcement approach for addressing violations at
Federal facilities which are operated by private contractors or other non-Federal parties,
whilch generally are subject to the full range of EPA's civil judicial and administrative
enforcement authorities.

B.ij.a Limitation  on Civil  Judicial Enforcement Actions  Applies Only
        to Executive  Branch Agencies

       Although EPA will not bring civil judicial enforcement action  or assess civil
penilties under most statutes  against other Executive Branch Departments and Agencies,
EPA intends to exercise its full authority to bring civil suits and assess civil penalties, as
appropriate, against parties that are not subject to this constraint.

Bc2.b Contractor and Other Private Party  Arrangements  Involving
        Federal   Facilities

       Most environmental statutes authorize enforcement response to be pursued against
eithtT facility owners, operators or both to correct violations or environmental law. There
are numerous Federal facilities and public lands which have some level of private party or
non-Federal government involvement in their operation or use.  In its April 28, 1987
Congressional testimony the Department of Justice stated that EPA has the authority to take
enforcement action against private contractors at Federal facilities (See Appendix H). There
may be cases where it will be more appropriate to direct enforcement responses to these
other parties, or to  both the non-Federal party and the Federal agency depending on the
nature  of the non-Federal involvement, the language of the involved environmental statute
or other factors. This issue arises frequently at government-owned, contractor-operated
Federal facilities, commonly known as GOCO facilities.

•   EPA Enforcement Response Policy a COCO Faculties

       EPA's initial enforcement response at GOCO facilities is influenced by a number of
factors including: the statutory language as to  who can be held responsible, (Le., providing
thaft enforcement can be directed at the ownrr, operator or both); decisions made by State
and 1EPA officials  in deciding who the  permit holder should be  in the case of permit
violations; established contractual arrangements; the nature and  type of violation(s); and
other factors which may determine where enforcement response will  yield the most
expeditious return to compliance and deterrence for future violations. In this regard, it is
EPA policy to pursue the  full range of  its enforcement authorities against contractor
operators of government-owned facilities in appropriate circumstances. EPA also may take
enforcement actions against Federal agencies at GOCO facilities following the procedures
outlined earlier in  this chapter.  In certain situations, it may be appropriate to pursue
enfoTtxment actions against both the private contractor and the involved Federal agency.
                                     VI-14

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Enfo
       As t follow-up to this strategy, EPA will be developing in Agencywide GOCO
       ment Strategy which will provide more detailed criteria and factors to be considered
 in determining which party or parties to pursue enforcement action against This strategy
 shall also address  the extent to which there are certain Federal agency-specific
 circumstances which could affect to whom EPA's initial enforcement response should be
 directed.

       Exhibit VJ-3 provides definitions of the various types of facilities and lands with
•Federal involvement This exhibit designates which party EPA generally will direct its
 initial enforcement response against when violations are identified (i.e., either the Federal
 agency or the involved private party). Oiven the complex mix of public and private
 ownership, operation, and use of the term "Federal facilities," the guidelines in Exhibit VI-
 3 should help EPA to eliminate  delays in taking initial action to return violators to
    «   It is important to note that this approach focuses only on the party at which EPA's
"initial enforcement response" will be directed.  Following this initial response, EPA's
review of additional information and possible discussions with each party may affect
against which party any further enforcement action should be taken, if such further action is
necessary. In addition, EPA's enforcement response against either or both parties does not
limit or otherwise restrict any future determination of their possible joint or several liability
in cases involving CERCLA or RCRA cleanup actions. Simultaneous enforcement actions
against both the Federal agency and the contractor should be considered if this would
facilitate resolution of the compliance problem.

•   Notification Procedures for GOCO Enforcement Actions

       When EPA has determined which party it will pursue enforcement action against,
EPA will make every effort to notify (through, at a minimum, a formal copy (cc) of the
enforcement action) other involved parties of the action being taken against either the
Federal facility  or  the  contractor.  This is important not only  to  enhance effective
communication but also to assist in bringing about expeditious compliance and remedying
the violation as soon as possible.

       When EPA determines that its initial enforcement response will be directed at the
contractor, EPA will take  enforcement action appropriate for private parties.  This will
usually be an NO V,  administrative complaint or the program equivalent (depending on the
nature of the violation and the media program guidance) to the contractor explicitly stating
that they are primarily or individually responsible for correcting the violation in a timely
manner and for responding directly to EPA by the date specified. The limitations on civil
judicial enforcement and on the imposition of penalties that is applicable to enforcement
actions against Federal Executive Branch Agencies, are not applicable to enforcement
actions taken against non-Federal parties. Where the notice or complaint is sent to the
contractor, it also will  state  that the involved Federal agency has been simultaneously
notified of the action being taken against the contractor. A copy (cc) of the action taken
against the contractor should not only inform the  Agency of the enforcement action being
taken against the contractor but also include a notice which emphasizes the importance of
their responsibility  to  effectively oversee their contractor to ensure compliance (See
Appendix J). It should also request the Agency's complete cooperation in  working with the
contractor to correct the violation and return the facility to compliance as Quickly as.
possible. In circumstances where Federal funding is required to correct  the violation, the
approach  and considerations described in Section B.l.j. are applicable and  will be
considered in any agreements reached on expeditious compliance schedules,
                                      Vl-15

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   - -'  When EPA determines that its initial response should be directed at the involved
Federal facility, EPA will send, where appropriate, an NOV or the program equivalent to
the Federal facility stating that they are responsible for correcting the violation in a timely
manner and for responding to EPA by the date specified A copy of the notice will be sent
simultaneously to the involved contractor.

B.2.c  Contractor  Lifting

       The regulations at 40 CFR Part 15 establish the contractor listing program in which
facilities that violate Clean Air or Qean Water Act standards may be put on a Ust of
Violating Facilities. Any facility on the List is ineligible to receive any non-exempt Federal
government contract, grant, or loan, or other assistance. Contractors operating Federal
   "ities are not exempt from being placed on the tj«»
       Such listing is mandatory where a violation at a facility gives rise to a criminal
conviction under ft 113(c) of the CAA or 5 309(c) of the CWA. It Is EPA policy to initiate
discretionary listing actions against recalcitrant contractors who are operating Federal
facilities in a manner which causes continuing or recurring violations of the CAA or the
CWA. Under the regulations, EPA may initiate a discretionary listing action against a
facility only if the facility is already the subject of requisite EPA or State enforcement action
against the contractor. The policies and procedures for the contractor listing program are
described in guidance issued by OECM "Implementation of Mandatory Contractor Listing,"
August 8,19S4; "Implementation of Discretionary Listing Authority," July 18,1984; and
"Contractor Listing Protocols," October 1987.

6.3  Criminal Enforcamant Actions  it Fadaral Facllltlts

      In situations where employees of Federal agencies have committed criminal
violations of environmental statutes applicable criminal sanctions may be sought against
such individuals, in the same manner as is done with respect to employees of other types of
regulated entities.  Such criminal violations will be addressed in accordance with the
investigative policies and procedures of the EPA/NEIC Office of Criminal Investigations
and the Agency's criminal enforcement priorities set by the Office  of Enforcement and
Compliance Monitoring.

6.4  Prass Ralaaaaa for  EPA Enforcamant Actlona at Fadaral
      Facllltlaa

      It is the policy of EPA to use die publicity of enforcement activities as a key element
of the Agency s program to promote compliance and to deter noncompliance with
environmental laws and regulations. Publicizing EPA enforcement actions on an active and
timely basis informs both the public and the regulated community of EPA's efforts to
ensure compliance and take enforcement actions at Federal facilities. The issuance of press
releases in appropriate circumstances can be a particularly effective tool for expediting
timely compliance at violating Federal facilities.

      Consistent with EPA November 21, 1985, "Policy on Publicizing Enforcement
Actions," (Appendix L) the strategy for EPA press releases on enforcement actions at
Federal facilities is as follows:

   •  Press releases generally will be issued for major enforcement actions such as:
                                     YI-16

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      .; -  Significant Compliance Agreements or Consent Orders signed by both parties
          (and  approvals of major RAPs  where  Compliance Agreements are
                  ary).
       •  Referral of disputes to EPA Headquarters when agreement cannot be reached at
          the Regional level

       •  Proposed contractor listings and the administrative decision to list
•                                                                »
       All press releases should be done as a pan of communications strategy which will
be developed for all EPA enforcement actions involving Federal facilities consistent with
EPA Order No. 1510.1 "Communication Strategy Document Development" issued April 7,
1987 and transmitted by memorandum from the Administrator to all EPA Senior Managers
on June 24,1987. This order states that "Communication Strategy Documents will be
developed for all major actions by the appropriate AA or RA."  "Enforcement Actions" are
included in the definition of Agency actions covered by the Order (See section 5 of EPA
Order 1510.1).  At a minimum, these communication strategies should include provisions
for notifications to OEA and affected Headquarters program offices as well as a senior
ranking official at the affected Federal facility or agency.

       EPA's decision to issue a press release and the contents of press releases are not
negotiable with Federal agencies or other regulated entities. The publicity of enforcement
actions  against Federal facilities must be consistent with EPA's "Policy On Publicizing
Enforcement Actions" (GM-46) jointly issued on November 21,1985 by the Office of
Enforcement and Compliance Monitoring and the Office of External Affairs; in addition, in
the case of criminal enforcement actions such publicity must be in accordance with the EPA
guidance memorandum  (GM-55) "Media Relations on Matters Pertaining to EPA's
Criminal Enforcement Program" jointly issued by the Office of Enforcement and
Compliance Monitoring and the Office of External Affairs on December 12,1986.

B.5   Monitoring  Compliant*

       The  EPA  Regional office is responsible for monitoring a Federal facility's
compliance with any remedial actions and associated schedules which have been agreed to
in formal EPA enforcement actions. Such Compliance Agreements or Consent Orders
between EPA and Federal facilities are tracked in the EPA Consent Decree Tracking System
maintained by the Office of Enforcement and Compliance Monitoring. Regional Federal
Facilities Coordinators in cooperation  with the regional program offices, must closely
review A-106 submissions against all Compliance Agreements, Consent Orders, approved
remedial action plans or consent decrees to ensure that projects and corrective actions
agreed to are being requested as scheduled. Compliance monitoring and the A-106 process
are further addressed in Chapter V.
                                     VI-17

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                                            EXHIBIT  Vl-l
                                TWEIT AND APPROPRIATE  ENFORCEMENT RESPONSE MATRIX
illcy rramewort  1

 tional  programs nust
 tabllsh benchmark or
 lestones for what
«st1tvtes timely and
•propriate enforcement
.ses toward ultimate
•solution and full
'jrsical  compliance.

i d«sl9ntng over-
fht criteria for
mely enforcement
fsponse, each prcg-
• will  attempt  to
.pture the fol loving
incepts:

 A  set  umber of
ys  from detection
' violation to
                          HPDES*
                           Tes
Drinking
 water*

  Tes
OIC*
  AIRS
Tes
Tes
                     Date of »1ola-
                     tlon 1s when
                     agency learns
                     about violation
                     Required to
                     screen all  ONRs
                     within 30 days
                     of receipt.
                     By the time a
                     permittee ap-
                     pears on th«
                     QNCR, Informal
                     or formal en-
                     forcement ac-
                     tions should
                     have been Initi-
                     ated.
Clock starts
after State
is consider-
ed to have
•discovered*
an SNC
(within 2
months after
the end of
each report-
ing period).












Clock
starts
30 days
after
date of
insp. or
receipt
of sel f-
monl tor-
Ing re-
port.
The SNC
Shoul d
be re-
solved
by the
end of
the
quarter
in which
the SNC
first
appears.
Clock starts
30 days af-
ter date of
Inspection
or receipt
of a source
self -moni-
tor Ing re-
port which
first iden-
tifies the
violation.
By day 45
source should
be notified
by State of
the violation






RCRA«
                                        fes
                                    Clock starts when
                                    case development
                                    staff deteralncs
                                    a violation has
                                    occurred through
                                    revlev of Inspec-
                                    tion report and/
                                    or other data
                                    (for tracking pur-
                                    poses, fiied at
                                    45 days after in-
                                    spection.
                                    Initial enforce-
                                    •ent response for
                                    Class I violators
                                    is an MOV within
                                    30 days of dis-
                                    covery.  For High
                                    Priority Violators
                                    thcru is no initt-
                                    tial tnforatl ac-
                                    tion—the initial
                                    action is formal.
                                            US-1/5A
                                            Interpretative
                                            lule re State
                                            Prtaacy for
                                            •se violations
                                            fihich deal  on-
                                            ly with in-
                                            stances where
                                            IPA refers
                                            violations to
                                            State, not
                                            with viola-
                                            tions dis-
                                            covered by  "*
                                            States.
                                            Clock starts
                                            •Hen CM re-
                                            fers signifi-
                                            cant violators
                                            to State.
                                            State has 10
                                            days to ini-
                                            tiate an In-
                                            vest if at ion
                                            (can obtain
                                            extensions
                                            based on cL
                                            cuvstancej
•Pol Icy Fraaework for State/EPA Enforcement Agreements* August  25,  1986.
•FT 1987 National Guidance for Oversight of NPOES  Progran* April  18,  1986.
Guidance for FT 1987 PVSS Enforcement Agreements,' August 1986,  "PUSS Compliance Strategy,' April 1. 1987.
and definitions of Timely and Appropriate Action  «nd  Significant Non-Compliance.' August 27, 1987.
•MlC-Prograi Guidance 153,' December 1986 and TJIC Co»pll«nce Strategy.* March  31. 1987.
•Timely and Appropriate Enforcement Response Guidance* April U,  1986.
•Enforcement Response Policy* December 21, 1984.
Interpretive Rule • FIFRA State PrimKy Enforcement Responsibilities, 40 CFR  P«rt 173, Jan. IS. 1983.
                                                   \n 10

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                                           vl>i  (continued)
                                 T1NELY MO APPROPRIATE CITORCEMCNT RCSPOftSE NATKIX
11 cv Framework

   \er a specific
    I of time, a
   •ange of en-
   «ent tools
r bt used to try
 achieve COB-
iance.
     HPOES
 Discussed full
 range of Infor-
 mal,  formal,
 administrative.
 and judicial
 enforcement
 tools.9
Printing Miter

Discusses full
range of infer-
M), forma),
administrative
and judicial
enforcement
tools.10
                                                          UIC
Discusses
full range
of Informal,
formal, ad-
mini strati ve,
and judicial
enforce-
ment tools.
                   AIR
                                                                    RCRA
Focuses on       Allows for full
formal enforce-  range of en-
men t but Impl ies forcement res-
use of Informal  ponses for
tools.  CPA may  Class I i II
develop case at  violations.
day 90 and will
normally Issue
                                                                        at day 120
                                                                    If violation is
                                                                    still  un-
                                                                    resolved.
                                                    rtFIA
                                   Interpretive
                                   mle focuses
                                   •A formal
                                   enforcement
                                   action.
A  prescribed num-
 ef days  from  1ni-
1  action  within
ch a determination
uld generally  be«
e  that either  coa-
ance has  been
leved or  an edninf-
atlve enforcement
Ion has been taken
:h meets minimum
Ml requirements.
judicial referral
initiated as
•oprlate.8-
 Prior to
 appearing on a
 2d QNCR for the
 same violation
 (generally w/i
 60 days of the
 1st QNCR identi-
 fying the SNC)
 permittee must
 be in compliance
 or formal en-
 forcement action
must be taken.
 (p. 30)  Per-
mittees that are
 Still in viola-
 tion on the 2d
QNCR. go on
Exceptions List
which is part of
SPMS system.
Prior to
appearing on
a 2d quarterly
report for the
same violation,
source must be
in compl lance,
on an enforce-
able compli-
ance schedule,
or formal en-
forcement ac-
tion must be
taken.
Prior to
appearing on
a 2d quarter-
ly report for
the same vio-
lation.
source must
be In com-
pliance, on
an enforce-
able schedule
or formal
enforcement
action must
be taken.
ly day 120.
source must be
either 1n com-
pliance or on an
administrative
or judicial or-
der, subject to
referral, or
subject to pro-
posed SIP revi-
sion that is
likely to be
approved and is
scheduled for
State hearing.
                 Nigh Priority
                 Violators must
                 commence with
                 formal enforce-
                 ment within
                 W days of
                 discovery. For
                 medium priority
                 violator. If com-
                 pliance Is not
                 achieved w/1 90
                 days after the
                 violation discovery,
                 a decision to
                 escalate is made.
After tmt t*»
vestlgatton
Is completed.
States mave
30 days to
commence Che
enforcement  ;
action.
 Formal enforcement action defined in Policy Framework as having, at a minima, the following elements:
 - £«^licitl> requires recipient to take some corrective/remedial action, or refrain from certain  behavior, to
    achieve or maintain compliance;
 - Ciplicitly 1s baed en the issuing agency's determination that a violation nas occurred;
 • Requires specific corrective action, or specifics a desired result that may be accomplished as  the recipient
    chooses. ••*< specifies a timetable for completion:
 - My Impose requirements In addition to ones relating directly to correction, e.g.. specific monitoring,
    planning, or reporting requirements; and
 - Contains requirements that are independently enforceable without having to prove original  violation and
    Subjects the person to adverse legal consequences for noncompllance.

 See "Enforcement Management System Guide* issued 2/27/86 by AA for Mater for Enforcement Response Guide.

  See 'Safe Drinking Water Act Public Hater System Settlements" - Interim Guidance" issued 11/17/83 by AA for OECM.
                                                          VT.IO

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                                        EXHIBIT vi-l  (continued)
                                 TINILT AND APPROPRIATE ENFORCEMENT RESPONSE WTRIX
IIcy Framework _

 Follow-Up end
calation:  Asptcl-
c point at which a
termination Is «ade
trier that finaS
yslcal compliance
s been achieved or
at escalation to
judicial  enforce-
it action should be
«en if such actions
*e not already
m initiated.
                            •JPOES
                 Drinking Mater
UIC
AIR
                                RdtA
Final physical
ipl lance date  is
vly established
l required of
; facility.

Expeditious
•slcal ccnpH-
.e  is required.
Scope of Co*era/rad
violations.


En forewent
case-specific
No specific
language




StfCt as
defined ana
appl led to
all well
classes.


Enforcement
case-specific
Expeditious
compliance
implicit an
guidance.


The following
cUsses of SIC:
Class A SSP vi-
olators in non-
attaimeAt areas


Enforcement
case-specific
Expeditious
compliance
required.



Applies to
Nigh Priority
Violators and
mcdtue priority
violators


Enforcement
case-specific
.
rule < )'
signif. /
violations
that EPA re-
fers to State
Not •pproprf.
etc



                                               In violation
                                               for pollutant for
                                               which area  is in
                                               mootttalnment.
                                               •NSPS violators and
                                               sources operating in
                                               violation of Part C*
                                               0 peralt requirements;
                                               end KESHAP  violators.

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                                          EXHIBIT VM
                                FEDERAL FACULTIES ENFORCEMENT
                                      RESPONSE PROCESS
          INSPECTION
            OR SELF-
           REPORTED
           VIOLATION
  EPA
 ISSUES
NOV/NON
K»
NEGOTIATE
 GREEMENT
 EPA ISSUES
 PROPOSED
AGREEMENT/
   ORDER
                                                                         ORDER
                                                                        BECOMES
                                                                       EFFECTIVE
                               FEDERAL
                               AGENCY
                              RESPO
1


t

INIT1
DISP
RESOL

                                                         INITIATE
                                                         DISPUTE
                                                        RESOLUTION
                                                         PROCESS
                                             INITIATE
                                              FORMAL
                                             APPEALS
                                             PROCESS

-------
                              EXHIBIT  VI-2
                              (Continued)

          FEDERAL FACILITIES DISPUTE RESOLUTION PROCESS
 HEAD OFFICAL
 OF THE PARENT
FEDERAL AGENCY
     EPA
ADMINISTRATOR
    REGIONAL
  ADMINISTRATOR
                                                           DOJ
                                                         UNDER
                                                        E.O. 12146
                                                          OMB
                                                         UNDER
                                                        E.O. 12088
                                     REFFERAL
                                     WITHIN 90 DAYS
                            AA FOR AFFECTED
                             MEDIA PROGRAM
                             AA, OECM; AND
                                AA, OEA
                                              NEGOTIATIONS
                                              NOT TO EXCEED
                                              90 DAYS
                               PARENT FEDERAL
                                AGENCY HEAD-
                                  QUARTERS
                                   OFFICE
                   FORMAL REFERRAL OF
                   DISPUTE WITHIN 60 DAYS
                   AFTER TIMEFRAME FOR
                   ENFORCEMENT ACTION IS
                   EXCEEDED

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                                            EXHIB
                                   EPA INITIAL ENFORCEMENT RESPONSE
                          TO VIOLATIONS AT FACILITIES WITH FEDERAL INVOLVEMENT
tJ
Acronym/
Torm Definition
OOOO:
PERMITTEE:
WITHDRAWAL
FROM PUBLIC
USE:
OOCO:
JOCO:
COPO:
COCO:
COCO(E):
POOO:
LEASEE:
GRANTEE:
CLAIMANT:
PATENT .
HOLDER:
HOLDER:



nmiarit tin •*••••!
parmi nouaraj.
^\mn4<****wtf**^9QuncYto**>to^r^'f^n.\x*to^f«*r**\j***
Poacy and Uanagaimol Act aa long aa t» tolandad uaa doaa not tooK* da**uc*>n
of via land (a.0. rnaftaiy uaaa and oainaj.


or portona of il ara oparaiad by pnvata eontTactorfa).

and prcwJuraa aoma gftoda and aarvirtaa tor Via FaitaraJ apancy and atMna tor its own IAM
or prott
Govanwiiart ownadto*^alalv ooafiiad ia a tacJity ajhara *Sa cw^nmanl has laasad
al or part of ito laality to a privata opafator for t-W oparabon and prolt




manulaclura a product or prowida a aarvtea. '
or opooo tof mi oporooono.








baankwuad a patent
land) toil 3ft CFB 2S1 SI.
EieapHa* «r

Rooponoo
Dtroetool ot:


viol Kaon oocufrad.

Excapl • oVtalad by ata


EMOpt V petuoon obotw
rodOral brMy for tio fw


MO 01 owiof mcvra.


-T.fc . J i li ii «
ogoncy oporodon.
OrnorvFoMwripoAo.

— FEDERAL
FACILITY
FEDERAL
FACILITY
	 OR
PRIVATE
PARTY
	 PRIVATE
PARTY

-------
      CHAPTER VII

 ROLE OF THE STATES IN
RESPONDING TO FEDERAL
 FACILITIES  VIOLATIONS

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          VII.  ROLE  OF THE  STATES IN  RESPONDING
              TO  FEDERAL FACILITIES  VIOLATIONS


       The purpose of this Chapter is  to clarify the role of the States in responding to
Federal facilities violations and to highlight several aspects of the State/EPA relationship
that will be spelled out in the State/EPA  Enforcement Agreements. This Chapter should be
read in conjunction with Chapter VI, which sets forth the basic approach and procedures
'EPA and delegated or approved States will use when responding to violations of Federal
law at Federal facilities.

  A.   STATE RESPONSE TO FEDERAL  FACILITIES  VIOLATIONS

       States with delegated or authorized Federal programs have primary responsibility
for responding to violations at Federal facilities under most of the environmental statutes
with a few exceptions such as toxic chemical controls under TSCA, and enforcement of
certain motor vehicle requirements under the Clean Air Act In addition, as direumd in
Chapter II-A of this Strategy most Federal environmental statutes require that Federal
facilities must comply with Federal laws and regulations, but also with all applicable State
and local environmental requirements to  the same extent as non-Federal entities.

       EPA retains parallel legal authority and responsibility to enforce Federal law even in
delegated or approved States, As  a matter of policy, in order to avoid duplication of effort
where both EPA and States have parallel enforcement authority, EPA enforcement action in
States where programs are delegated or  approved only take place when a State: (1) fails to
take timely and appropriate action, (2)  requests EPA to take the lead or decide that joint
enforcement action is appropriate, or (3) in other limited circumstances as outlined in the
"Policy Framework for Implementing State/EPA Enforcement Agreements." The remainder
of this section highlights the following areas concerning State responses to Federal facility
violations;

    •   The use of State enforcement authorities;

    •   State eriforcement response following EPA inspections in delegated States; and

    •   The relationship between EPA and State enforcement actions against Federal
       facilities.

A.1  Ust of Statt Enforctmtnt Authorities

       As noted above, most EPA statutes envision that States with adequate authority and
capability will assume operating responsibility for environmental programs, including
Federal facilities. While the extent of delegation varies from program to program and State
to State, the majority of EPA'$ responsibility for direct program administration on a day-to-
day basis  including initial obligation for enforcement, has been assigned to the States
through delegation or authorization.

       States are not subject to the same constraints as EPA regarding enforcement actions
against Federal facilities.  As a result.  States generally may exercise a broader range of
authorities and enforcement tools than EPA to address violations at Federal facilities.
States should use the full range of their  enforcement authorities to address Federal facility
violations to the  same extent they are  used for non-Federal facilities while meeting the
requirements of timely and appropriate enforcement response. States are also encouraged,
                                    vn-i

-------
 wherever possible, to pursue bilateral, negotiated agreements, or consent orders or decrees
 ts appropriate with Federal facilities or three party (EPA/State/Federal agency) agreements
 as outlined in Section B.l.c where this would facilitate compliance. EPA will, however,
 deem acceptable any State enforcement approaches which are at least comparable to EPA's
 in meeting goals for timely and appropriate enforcement response.

 A.S!   Stata Enforeamant  Rasponsa  Laad Following EPA Inspactlon
        In Dalagatad Statas

       Even where program authorities ire authorized or delegated to States, EPA may
 conduct inspections of regulated entities, including Federal facilities, for a variety of
 purposes including State oversight, response to citizen complaints,  as pan of special
 enforcement initiatives, or where required by statute (e.g., RCRA Section 3007(c) and
 (d)), EPA generally provides States with advance notification prior to such inspections and
 generally invites them to participate.

       When violations are identified through such EPA inspections of Federal facilities in
 delegated States, EPA will immediately contact the State and offer  them the first
 opportunity to pursue timely and appropriate response with the involved Federal facility,
 consistent with the State's delegated  authority.  EPA will send  the inspection report
 identifying any  violations to the Federal facility simultaneously with EPA's sharing of this
 information with the State. An up-front mutual decision will then be made between EPA
 and the responsible State agency as to which of them  will take any follow-up action. If a
 State is unwilling or unable to take action, or fails to take action in a timely manner after
 initially agreeing to pursue the case, EPA will take direct Federal action after advance
 consultation and notification of the State pursuant to the State/EPA enforcement agreement.

       To the extent possible, arrangements should be made in advance in individual
 State/EPA Enforcement Agreements on  the types of situations involving Federal facilities in
 which  the State would request EPA support or direct action, paying particular attention to
 these situations in which follow-up is required to EPA inspections. In particular, in the
 case of a State's use of an EPA inspection as  the basis for its own action, EPA and the
 State; should agree on how EPA evidence and expertise will be utilized in taking State
 enforcement action. How the State uses EPA's inspection report will be up to the State so
 long as the state's response to any violations identified by EPA's inspection report are
 addressed in a timely and appropriate manner.

 A.3   EPA Involvamant  In Stata Enforeamant Actions

       Because of EPA's ongoing responsibility to provide technical  assistance and
 support to Federal Agencies in achieving compliance, as required under E.0.12088, EPA
 may need to be involved in assisting to resolve noncompliance problems even when a State
 takes the lead in an enforcement action.  If either the State or the Federal facility in violation
 requ<£ts EPA's involvement, EPA will participate to the extent determined appropriate by
 affected Regional program division directors in consultation with the Federal Facility
 Coordinator.  EPA's involvement should focus more on resolving disputes rather than on
 providing project-level technical assistance to the Federal facility which could conflict with
 the State's ongoing enforcement proceedings.

       As directed  in  E.O.  12088, EPA has a duty to "make every effort to resolve
 conflicts regarding such violations between Executive agencies and, on request of any
pony, such conflicts between an Executive agency and a State, interstate or a local agency."
 However, in each such case, EPA's involvement will respect the perogatives of the State to
                                      VH-2

-------
pursue independent enforcement action and EPA will be careful not to interfere with Stue
enforcement proceedings. EPA will offer both parties its assistance to promote a speedy
resolution of identified problems, and communicate fully with both the State agency and
affected Federal agency officials of its responses and suggested role consistent with EPA't
conflict of interest rules and judicial ethics,

A.4   Rtlatlonshlp of Statt Administrative and Judicial Citizen Suits
       to EPA Compliance Agreements

       Usually, when EPA pursues a judicial enforcement action against a violator, it
serves as a bar to further enforcement action by States or citizen  (under citizen  suit
provisions provided in most of the statutes) for similar action for the same violation.  The
Federal EPA enforcement process described for Executive Branch Agencies relies heavily
on Compliance Agreements, which do not bar State administrative or judicial actions or
citizen suits to compel compliance by Federal Agencies. Therefore, when EPA has
negotiated a Compliance Agreement, as opposed to issuing an Order on consent, it would
not legally affect the rights of non-parties to the Agreement Despite EPA's belief that in
the vast majority of cases Compliance Agreements should be a very effective means of
ensuring a prompt return to compliance, there may be circumstances in which States or
private citizens choose to exercise their rights to take further enforcement action. EPA
encourages such non-parties to the EPA/Federal agency Compliance Agreement to fully
consider and use it as a basis for relief sought in their own actions to seek expeditious
compliance. It is also for the above reasons that it is desirable for States to sign Compliance
Agreements and Consent Orders  along with EPA and involved Federal facilities. In
addition, EPA compliance agreements may contain enforceabiliry clauses which rcwgiUTt
the rights of states and citizens to enforce these agreements through the citizen suit
provisions of the relevant statutes.

B.    FEDERAL FACILITIES  IN THE  STATE/EPA ENFORCEMENT
       AGREEMENTS  PROCESS

       State and Federal roles are defined through negotiated multi-year State/EPA
Enforcement Agreements, which are reviewed annually on a State-by-State basis for  each
environmental program. Implementation  of these agreements is guided by the EPA "Policy
Framework for State/EPA Enforcement  Agreements" (issued June 26,1984, revised and
reissued June, 1986), associated national program implementing guidance, and an annual
guidance meroo on the enforcement agreements process from the Deputy Administrator to
the Regions. The purposes of these Agreements are:  to establish clear expectations for
what constitutes a good State or EPA enforcement program through oversight criteria
specified in advance, to establish clear roles and responsibilities for State and Federal
enforcement to avoid duplication of effort and use  limited resources effectively and
efficiently, and to ensure effective national reporting of accomplishments.

       The Regions have a great deal of flexibility in determining the form of the
agreements and the internal process for handling the agreements. Some Regions  have
umbrella agreements thai include all programs in one comprehensive agreement negotiated
between the RA and the State Environmental Commissioner. Other Regions have program-
specific agreements with the respective State Agency. To the extent possible, Regions are
encouraged to incorporate the enforcement agreement provisions into existing documents,
e.g., grants, Memorandum of Understanding's, State/EPA Agreements.

       The timing of negotiations/reviews of the agreements depends on the vehicle chosen
and the Region or State planning cycle. Regional program staff should consult with the
                                     VD-3-

-------
Federal Facilities Coordinator in the development and negotiation of the Enforcement
Agreements.

       While most aspects of the Agreements pertain equally to Federal and non-Federal
facilities, this Chapter focuses on how Federal facilities should be explicitly ^rrsifd in
ths State/EPA Enforcement Agreements in three of the areas covered in the Policy
Framework: clear oversight criteria, criteria for direct Federal action, and advance
notification and consultation.
B 1   CLEAR  OVERSIGHT CRITERIA AND OVERSIGHT APPROACH

       There are seven general criteria mentioned in the Policy Framework and covered in
various forms in program guidance:

B,1.i Identification of and Priorities for the  Rtgulattd Community

       States will be expected to have included Federal facilities in their inventories and
program information systems, appropriately identified as such through the use of assigned
Federal facility ID numbers. The Federal Facility Coordinator will make the information
available to the  State on the different types of Federal facilities using the FINDS
information system. As pan of the enforcement agreements process, EPA Regions and the
Suite will review any special needs for identifying and tracking Federal facilities.

B.l.b  Clear and Enforceable  Requirements

       Requirements established through permits, compliance agreements, administrative
orders, and consent decrees should define in enforceable terms a timetable for Federal
facility remedial  actions. In particular, EPA and the States need to assure that Federal
facilities have permits that are current If there are permitting problems at Federal facilities,
Regions and States should develop a strategy for addressing them as part of the annual
work plan negotiations process, consistent with national program permitting strategies,
where applicable.

B.l.c  Accurate and Reliable  Compliance Monitoring

       EPA and the State will review the planned inspection schedules for the coming year
for each program to ensure that Federal facilities are inspected at required frequencies.

       EPA will assist in resolving any particular problems of access to facilities that the
Stales may be encountering, including instructions on how to obtain security clearances,
where necessary.

B.'l.d  High or Improving  Rates of Continuing Compliance

       As pan of each media program tracking  system, administering agencies should
track the progress of returning Federal facility significant violators to compliance. To
ensure broad Federal facility compliance, the States may be asked to participate in targeted
initiatives  in compliance monitoring and enforcement for Federal facilities of specific
agencies or by facility type.
                                     VH-4

-------
B.1.t< Timely  and  Appropriate  Enforcement  Response

        States are responsible for talcing timely and appropriate enforcement action, as
described in Chapter VI.  EPA Regions and States are to reach agreement on adapting
national definitions of appropriate enforcement response and timerrames to state-specific
authorities and procedures. Regions and States should discuss the enforcement approach
the State generally plans to use for responding to Federal facility violations. They should
also reach agreement on any differences in procedure that the State plans to use, if any, that
'are different from those used for non-Federal facilities. For example, the Region and State
should discuss any upfront agreements the State wants to make about taking enforcement
action based  on an EPA  inspection (e.g., for statutorily-required EPA inspections of
Federal TSD's in RCRA), and agree on how Federal or State evidence and expertise will be
used in taking such action.

B.^.f   Accurate  Recordkeeplng  end  Reporting
       In order to support an effective program, administering agencies must have timely.
complete, and accurate information on Federal facility compliance status and enforcement
actions. States should report Federal facility compliance data as pan of each program's
reporting measures and commitments (e.g., SPMS and program-specific system).  The
Regions should also request States to provide different information on Federal facilities
compliance status if mutual agreement can be reached as pan of the State/EPA enforcement
agreements process.  EPA is especially interested in receiving copies of State enforcement
actions at Federal facilities.

B.2  DIRECT EPA ENFORCEMENT

       EPA will take direct Federal action principally where a State is unwilling or unable
to take "timely and appropriate" enforcement action, or where the State asks EPA to join in
or take enforcement action.  To the  extent possible, arrangements should be made in
advance, as pan of the enforcement agreement, concerning the types of situations in which
the State would request EPA to take direct enforcement action to address Federal facility
violations.

B.3   ADVANCE NOTIFICATION  AND CONSULTATION

       As pan of the agreements process, Regions and  States are to agree in writing as to
who, how, and when EPA will notify and consult with the State agency in advance of
Federal inspections and enforcement actions.  Federal facilities may involve a greater or
different need for coordination between  States and Regions than non-Federal facilities,
particularly where the Federal facilities request EPA technical assistance or where EPA is
required to conduct an inspection  (e.g.,  under RCRA).  Because Federal facilities
compliance problems are often of a multi-media nature, it may be appropriate to arrange a
single point of contact in a State, statewide or in a particular program, for Federal facility
issues.

       The advance notification and consultation protocols in the State/EPA Enforcement
Agreements should incorporate any of the above-mentioned types of special arrangements
necessary for Federal facilities.

       The protocols should also address how  the State will be involved in the review of
Federal agency A- 106 submissions, and include plans for an annual review of patterns of
compliance problems at Federal facilities in the State.
                                     VH-5

-------
      CHAPTER  VIII

     EPA ROLES AND
    RESPONSIBILITIES
          FOR
PROGRAM IMPLEMENTATION

-------
            VIII.   EPA  ROLES AND RESPONSIBILITIES
                FOR  PROGRAM  IMPLEMENTATION


       The Federal Facilities Compliance Program is a multi-media program requiring
 close coordination and cooperation among all involved parties.  The purpose of this
 Chapter is to clarify the roles and responsibilities of EPA Headquarters staff and the
 Regional offices for implementing the Federal facilities program and this Strategy. This
•Chapter is necessary in order to ensure implementation and integration of all elements of
 this strategy into the various media programs and EPA's overall internal management
 systems.

       The EPA tasks  for ensuring Federal facilities compliance are divided between the
 Regional offices and Headquarters staff. Coordination among both staffs is necessary to
 ensure  that this Strategy is executed consistent with national and program policies,
 procedures, and guidance.  Therefore, this Chapter has been divided into the following
 sections:

   (1)  Regional office staff • This section addresses the roles and responsibilities of the
       Regional Administrator,  Deputy Regional Administrator, Regional Counsel
       Regional Program Staff/Division  Directors, and  Regional Federal Facilities
       Coordinators for implementing various aspects of the Strategy.

   (2)  Headquarters offices - This section describes the roles and responsibilities of those
       Headquarters offices that have certain responsibilities for coordinating and working
       with the Regions on Federal facility activities.

       Responsibilities for implementing key strategy features such as identification of the
 regulated community, technical assistance/ training, compliance monitoring, involvement in
 the A-106 review process, and participation in the dispute resolution process are described
 for Headquarters and Regional program offices and staff.

 A.    REGIONAL  OFFICE  STAFF

       The following section describes the roles and responsibilities of the Regional office
 staff with regard to the Federal facilities program.  See Exhibit VIII-1 at the end of this
 Chapter for a diagram which depicts these Regional relationships.

 A.1   Regional  Administrator

       The Regional Administrator (RA) ensures that Agency policies and guidance on
 implementing  Executive Orders 12088 and 12146 and the environmental statutes are
 effectively carried out  The RA is responsible for the level of Federal facility compliance in
 the Region through encouragement of and support for the Regional staff in their efforts to
 resolve compliance problems at Federal facilities. The RA will formally refer disputes with
 other Federal agencies that cannot be resolved at the Regional office level within established
 media tirnefraroes to the Assistant Administrator (AA) for the affected media program, the
 AA for External Affairs and the AA for OECM.  These referrals  will be signed by the
 Regional Administrator.
                                    vni-i

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A.!2   Regional  Administrator/Deputy  Rtglonat  Administrator

       The RA or Deputy Regional Administrator (DRA) defines the following based on
internal Regional operating procedures consistent with the guidelines in this strategy:

   (i)  Involvement of Regional Counsels and the role of Program Divisions in the
       issuance of enforcement actions and negotiations of compliance agreements for
       Federal facilities;

   (b)  The process for evaluating inspection schedules for Federal facilities and
       opportunities for multi-media inspections and the respective roles of the Program
       Divisions, Environmental Services Divisions (ESD's) and Federal Facilities
       Coordinators in this process;

   (c)  Designation of Regional staff responsible for signing Compliance Agreements,
   *   NOVs, Consent Orders, etc., for Federal facilities violations;

   (d!)  Assurance that Regional program reviews/audits of delegated State programs
       include a review of the  State's progress  in addressing Federal facilities
       compliance problems and ensuring that Federal Facilities Coordinators are informed
       and involved in these reviews;

   (e)  Responsibilities for Regional review of Federal agency A-106 submissions and
       coordination with States on the A-106 process; and

   (f)   Assurance that Federal facilities compliance is specifically addressed in State/EPA
       enforcement agreements.

       In appropriate cases where agreement cannot be reached in the negotiation of
Compliance Agreements or Consent Orders with Federal facilities, Regional staff should
escalate unresolved issues to the RA/DRA for resolution within media specific timely and
appropriate timeframes prior to issuance  of a proposed Order. The RA/DRA may then
choo!« to contact an equivalent level official at the involved Federal agency to attempt to
resolve remaining issues.


A.3   Rtglonal  Counstl

       Upon request, the Regional Counsel provides legal advice to the RA, the Federal
Facilities Coordinator, and the Regional media program staff on:

   o   Determining the compliance status of Federal facilities;
   *   Evaluating the sufficiency of data supporting compliance determinations;
   •   Negotiating  agreements on solutions to compliance problems;
   •   Resolving compliance disputes with Federal facilities; and
   •   Reviewing  draft Compliance Agreements and Consent Orders for  their legal
       sufficiency and consistency with Agency policy.

       Each Region should clearly identify the role of the Regional Counsel in  the Federal
facilities compliance process. It is imperative, however, that the  Regional Counsel consult
with OECM and Headquarters Office of General Counsel on questions  of  national
significance concerning Federal facilities.
                                     VTH-2

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 A.4  Regional  Program  Staff/Division Directors

       Each Region is responsible for designating a staff person to serve as the primary
 point of contact for the Federal Facilities Coordinators to deal with on media-specific
 Federal facilities compliance issues. This designee also is responsible for the following
 activities.

 Identifying the Regulated Community • Ensure that Federal facilities data in program
•information systems is maintained through the use of a support identification code for
 Federal facilities.
 Technical Assistance/Training • Assist Federal Facilities Coordinators with their Rei
 multi-media technical program workshops for Federal facilities in their Region. In addition,
 provide the Federal Facilities Coordinator and OFA, at the beginning of the fiscal year,
 with the program's annual training plan and notify the Federal Facilities Coordinator of all
 program training courses and workshops which will be open to Federal facilities in the
 Region.  On a quarterly basis, notify the Federal Facilities Coordinator of availability of
 spaces for Federal facilities participants.

       On-me-job training opportunities should be considered for officials of other Federal
 agencies where feasible, in cooperation with Regional Federal Facilities Coordinator.

 Compliance Monitoring • Ensure that Federal facilities are receiving the required number of
 inspections for programs where EPA has the lead. This includes conducting at least the
 same percentage of program oversight inspections for Federal facilities as is done for other
 facilities in delegated or approved states. The Regional media-program contact should
 provide the Regional Federal Facilities Coordinator with copies of all EPA inspection
 reports of Federal facilities.

 State Oversight - Develop and negotiate the State/EPA Enforcement Agreements in
 consultation with the Federal Facilities Coordinator and ensure that at least the required
 number of inspections of Federal facilities are being conducted in delegated or authorized
 States.

        The Regional media-contact should  ensure that a separate component in the
 Regional reviews/audits of delegated programs is included on State handling of Federal
 facilities compliance problems.  This insert should be developed in consultation with the
 Federal Facilities Coordinator.

 Responding to Violations • At the beginning of the fiscal year and periodically as required
 by the program, the Regional media-contact in coordination with the Regional Federal
 Facilities Coordinator, identifies those Federal facilities in significant noncompliance and
 following media-program Strategic  Planning  and Management System (SPMS)
 requirements, reports program actions against the identified Federal facilities Significant
 Noncomplien (5 NO) to Headquarters. Also, works with the Federal Facilities Coordi-
 nator to establish quarterly targets for Federal facilities inspections.

       Following consultation with the Regional Federal Facilities Coordinator, the
 program offices  are responsible for issuing  NOVs,  Compliance Agreements, and/or
 Consent Orders, where appropriate, for Federal facilities violations within the time frames
 established in program-specific timely and appropriate guidance.  Program Division
 Directors have the responsibility for sign-off on Federal facilities NOVs, Compliance
 Agreements and Consent Orders in most Regions consistent with the  delegations of
                                      Vffl-3

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 authorities for their respective media. Federal Facilities Coordinators should be notified by
 Division Directors prior to issuance of any enforcement action to i Federal facility. For any
 dilutes formally referred to Headquarters under the RA's signature, the program offices
 are responsible for formulating referral packages, in consultation with the Federal Facilities
 Coordinator.

       Where there is contractor or other private parry involvement at a Federal facility
 (e.jj., GOCO's), the program office must ensure that other panics receive a copy of any
•edorcemem action sent to any of the involved parties.

 Involvement in A-106 Review Process • Another responsibility of the Regional media-
 program contact is to review all Federal agency A-106 submissions and provide comments
 to the Federal Facilities Coordinator on media-related pollution ab.  -rnent projects in the
 arais of engineering, timeliness, and cost to ensure that proposcu projects have been
 appropriately designed and adequately funded  to meet compliance requirements. In
 addition, Regional media-program contacts  must work with  the Federal Facilities
 Coordinator on identified media program priority areas that should be targeted for A-106
 projects by Federal agencies.

       As requested, media-program contacts  should participate in on-site preliminary
 pluming and design review conferences for significant projects with the Federal Facilities
 Coordinator.

 Consent Decree Tracking System • In consultation with the Regional Federal Facilities
 Coordinator, media-program contacts will report to HQOECM on the status of eprnplianct
 with the schedule and actions agreed to in an EPA Compliance Agreement or Consent
 Order with Federal facilities, following guidance on the Agency's Consent Decree Tracking
 System.  Items reported should be consistent with SPMS requirements for consent decrees.
 (Thi; is consistent with the guidance on "Consent Decree Tracking," Memorandum from
 Alviii L. Aim, Deputy Administrator, dated August 15,1984.)

 A.5   Regional Federal Facilities Coordinator

       The  Federal Facilities Coordinator is responsible for coordination with Regional
 program offices on implementation of Federal facilities compliance activities in the Regional
 office. The  Coordinator also is the Regional liaison with the Office of External Affairs
 (OEA) and serves as the primary point-of-contact for EPA with all Federal agencies in the
 Region on environmental compliance matters. Duties of the Coordinator typically include:

    •  Ensuring that the Regional staff are knowledgeable on guidance issued by OEA:

    «  Coordinating and quality assurance of Regional A-106 reviews;

    *  Monitoring actions being taken by the Regional staff to resolve compliance
       problems at Federal facilities;

    e  Coordinating negotiations of Compliance Agreements; and

    •  Providing data to OEA on the compliance status of Federal facilities located in the
       Region.
                                      vm-4

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Besides those duties mentioned above, the Federal Facilities Coordinator has specific
responsibilities for implementing various aspects of this Strategy and the Federal facilities
program as highlighted below.

Identifying the Regulated Community • Regional Federal Facilities Coordinators regularly
identify Federal facilities information, by type of facility, (i.e., COCO, GOCO, POGO,
etc.) in the Facility Index System (FINDS) information system. Data for mis system is
provided by Regional program offices and States in order to track the compliance status of
Federal facilities.  In addition to identifying the regulated community via FINDS data, all
Coordinators should develop a name list for applicable media programs of those Federal
facilities minor sources considered to be environmentally significant (limited to no more
than to 10% of all minor sources per program) and monitor the compliance status of these
sources.  Besides maintaining the list of minor sources, they also track  those facilities
which are the most environmentally significant in each Region.   This  list is updated
annually in consultation with media program staff.

Technical Assistance/Training • The Federal Facilities Coordinators are tasked to conduct at
least one Regional multi-media technical program workshop annually for Federal facilities
in their Region with assistance from program offices.  In  addition, they invite Federal
agency environmental personnel in each Region to bimonthly meetings to discuss new and
upcoming program, generic compliance problems, etc.
       The Coordinator serves as the Regional clearinghouse for information exchange
with Federal agencies on new regulations, policies, etc. They also identify appropriate
EPA training courses and workshops for the Federal agencies and in coordination with
media program offices and conduct compliance program assistance visits to facilities to help
them with overall environmental program practices and management.

       As pan of their technical assistance role, Federal Facilities Coordinators provide
Federal agencies  assistance with designing environmental auditing programs through
training, workshops, guidance manuals, etc.

Compliance Monitoring • Federal Facilities Coordinators work with Regional program
offices  and  Environmental Services Division (BSD) to establish quarterly targets for
Federal facilities inspections and schedule multi-media inspections, as appropriate. As pan
of this effort, the Coordinators provide ESD annually with a name list of Federal facilities
that are appropriate candidates  to receive multi-media inspections based upon their
environmental significance in a number of media program areas.

       Pan of their compliance monitoring tasks involve coordination with program offices
prior to negotiations with States on the State/ EPA enforcement agreements to decide on a
mutually acceptable approach to receive compliance and inspection data on Federal facilities
from delegated or approved States.

Involvement in A-106 Review Profess • Coordination of the Regional office review of
Federal agency A-106 submissions is overseen by the Federal Facilities Coordinators in
accordance with national guidance provided by OFA and OMB. The Coordinators work
with the program  offices in evaluating the adequacy of proposed projects in the areas of
engineering, timeliness and cost to ensure that the projects have been appropriately
designed and adequately funded to meet all  compliance requirements.  The Coordinators are,
responsible for final quality assurance of Regional reviews and for the timely submission
of materials to OFA.
                                      vm-5

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           ries of the A-106 submissions are provided by the Coordinators te*the States in
 January of each year for their review.  Once the States receive  their copies, the
 Coordinators conduct an annual meeting with appropriate State representatives to discuss
 their comments on A-106 projects as well as any identified Federal agency patterns of
 noncompliance.

       Federal agencies are informed of selected annual program priority areas toward
 which A-106 projects should be targeted.  Federal Facilities Coordinators work with the
•agencies to ensure that-A-106 projects an proposed for facilities  with compliance
 problems.

        Federal Facilities Coordinators are available to participate in preliminary planning
 and design review conferences on significant projects at Federal facilities, as appropriate.
 They may also request media program technical assistance when necessary.

 Responding to Violations -At the beginning of the fiscal year, in coordination with the
 Regional program offices, the Regional Federal Facilities Coordinators identify the names
 of those Federal  facilities in significant noncompliance. They assist with negotiations of
 Compliance Agreements between EPA media programs and involved Federal agencies to
 resolve identified compliance problems and violations.  As pan  of this process, the
 Coordinator may informally notify the Federal facility of identified violations following an
 EPA inspection and prior to issuance of written notification of violation. Hie FFC should
 initiate informal notification process after first consulting with the affected media program
 offices.

 Dispute Resolution Process • As described in Chapter VI, Federal Facilities Coordinators
 may informally request Headquaner's OFA assistance in resolving disputes at any point in
 the Federal facilities compliance resolution process. They also will assist the program
 office in developing referral packages for disputes formally referred to Headquarters under
 the Regional Administrator's signature.

 Consent Decree Tracking • Each Coordinator provides the program offices assistance with
 tracking the status of EPA Compliance Agreements and Consent Orders with Federal
 facilities for reporting to Headquarters and input into the  Agency's Consent Decree
 Tracking System.

 B.    HEADQUARTERS  OFFICES
       The following Headquarters staff have certain responsibilities for working with the
Regions on Federal facilities activities, resolving compliance problems, and developing
poucy and guidance:

       Program Offices;
       OEAOFA;
       OECM;
       OGCand
       Office of the Administrator.

See Exhibit Vffl-2 at the end of this chapter for a diagram depicting these Headquarters
relationships.
                                      vm-6

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 B.1   Headquarters  Program  Offices

       In order to fully implement this Strategy it is critical that the program offices work
 with OFA to ensure that media-specific regulations, policies and guidance, and Federal
 facilities compliance guidance are mutually consistent and address Federal facilities
 compliance issues where appropriate. Also, it is important that the program offices:

    •   Meet with OFA periodically to ufcntify and discuss generic a)inpliiince problems at
       Federal facilities.

    •   Continue to provide OFA with speakers, documents and other assistance for the
       monthly meetings of the EPA/Federal Agency Environmental Roundtable.

    •   Ensure that Headquarters evaluations of Regional programs address  Federal
       facilities compliance and that program offices report the results of these evaluations
       to OFA.

 In addition to these general responsibilities, Headquarters program offices are tasked to
 ensure that specific initiatives of this Strategy are integrated program-wide as discussed
 below.
Identifying the Regulated Community • Program office staff will maintain current Ft
facilities data on program information systems and data bases for tracking purposes 1
upon input from Regions and States and ensure that proper Federal facilities identify
                                                                        .Federal
                                                                          i based
upon input from Regions and States and ensure that proper Federal facilities identification
numbers are included for all appropriate sources.
Compliance Monitoring • Headquarters program office staff will ensure that the required
number of Federal facilities inspections (of majors, etc.) are being conducted annually by
Regions and the States, as appropriate. Headquarters will verify that the Regions are
conducting at least the same number of oversight inspections for Federal facilities as for
other facilities in delegated States.

Dispute Resolution Process - The involved media program office shall have the lead in
resolving disputes referred to Headquarters, in cooperation with OFA and OECM. Each of
the Headquarters program offices shall provide technical advice and assistance in the
resolution of disputes upon referral from the Region.  Headquarters media program offices
shall notify OFA and provide copies of any Federal facility disputes which have been
referred to their office, either formally or informally.

Compliance Statistics - Headquarters program offices will work with OMSE, OECM and
OFA to improve  the quality of Federal facilities data currently  in EPA's various
Headquarter and Regional media tracking and information systems. Program offices will
periodically review their definitions of "majors" to ensure that Federal facilities are
adequately addressed.  In addition, appropriate offices  will issue guidance  requiring
Regions and States to code input data into existing tracking and information systems with
Federal facilities  indicators and  identification numbers as  appropriate.  Periodic
management reports for the Federal facility subset of regulated sources for subminal to
OFA will be prepared by program office staff, as requested

Involvement in A-106 Review Process • Review of Regional program staff A-106
submissions "by the program offices is necessary to ensure that media program priority
areas are reflected in proposed projects and to identify compliance problems. All program
                                     vra-7

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offices should meet annually with OFA to update media program priority areas that are to
be •*Mr»wi by Federal agencies through the A-106 process.
Development of Policy and Guidance - Media-specific policies and guidance will be
developed by appropriate program offices. These policies and guidances should, where
appropriate, address implementation of program requirements by Federal agencies.  Upon
request by  the media program office, OFA  can coordinate Federal agency review and
comment on media i'n>£> **** documents.

B.2   Offlct of External Affairs/Office of Fadaral Actlvltltt

       OEA/OFA is responsible for ensuring effective implementation of Section  1-6 of
Executive Order  12088 which specifies the administrative procedures to be used in
re solving compliance problems at Federal facilities.  OEA/OFA also chairs the EPA
Standing Committee on EO. 12088.

       OEA establishes applicable Agency policy and guidelines on Federal facilities
compliance in consultation with OECM, OGC and the Headquarters program offices.
Implementing operating guidance for the Regional Federal Facilities Coordinators is
developed and issued by OEA/OFA.

       OFA conducts annual audits (Le., the FARES review) of Regional Federal facilities
programs to ensure proper adherence to national guidance, thorough coordination with
Regional program offices, adequate and ongoing assistance to Federal agencies, and overall
consistency of the program with this Strategy.

       OEA  is the principal point-of-contact  with the national offices of other Federal
agencies through the EPA/Federal Agency Environmental Roundtable.

       OEA assists affected Headquarters program offices in resolving Federal facilities
compliance problems which the  Regional offices escalate for dispute resolution. In
addition, OEA actively participates in Agency strategic planning and management systems
to ensure Federal facilities compliance concerns are being integrated into program priorities
and plans and provides analysis of patterns of Federal facilities noncompliance to program
offices on an annual basis.

       Periodic reports on the compliance status of Federal facilities are prepared by
OEA/OFA  for administrative purposes. A quarterly report identifying major Federal
facilities which are not meeting substantive pollution control requirements is produced for
the Administrator. The Federal agencies are provided, semi-annually, with a listing of all
non-complying facilities under their jurisdiction. A nm\\»r report is submitted annually to
the OMB. This OMB report will be expanded to include information on the compliance
status of all Federal facilities.  In addition, OEA/OFA conducts annual meetings with
Headquarters offices of other Federal agencies to  discuss identified  patterns of
Doncompliance. Other OEA/OFA Federal facilities responsibilities are addressed below.

Identifying  the Regulated Community • Coordination with Headquarter program offices
and the FINDS office is done by OEA/OFA  staff to ensure that program information
systems have adequate and current information for tracking Federal facilities compliance
status.

Technical AssistancefTraining - OEA/OFA conduct monthly meetings of the EPA Federal
Agency Environmental Roundtable for top Federal agency officials to exchange information
                                    vra-s

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   regulations, policies, etc. Participation of program office staff is solicited regularly
     meetings.

   Currently, OEA/OFA is implementing a comprehensive system for technical
•once, training and information transfer in cooperation with program offices and
tonal Federal Facilities Coordinators.

   OEA/OFA serves as a national clearinghouse for opportunities for other Federal
icy participation in EPA training courses and workshops, and technical assistance
ices available from the National Enforcement Investigations Center (NEIQ and die
ce of Research and Development (ORD) labs.  Also, ensures that all of the EPA
ines are accessible to Federal agency personnel

   OEA/OFA coordinates extensively with the Office of Administration and Resources
•gement (OARM) in the planning and development of the EPA Training Institute to
re opportunities are available for Federal facilities participants. Also, coordination
OECM on the development of the basic inspector training .course occurs for the same
ose.

   Federal agencies are encouraged to implement environmental auditing programs and
t/OFA provides assistance in designing and establishing such  programs through
shops, manuals, guidance, etc.

toe Resolution Process • When requested by Regional program staff, in consultation
the Federal Facilities Coordinator, OFA will provide informal assistance by working
Evolved  agencies' parent offices to attempt to resolve disputes.  Such assistance
   t working with the parent agency of the noncomplying facility, where appropriate,
  k • " ir» MMJ • m W •••• «••«? •^•MWIB* «k£W»»W* W» »»»W ••W««WM«ft**J ***£ »l»^»*»»Jf W »•*• V • 9 jf» WBT* MBMPf
  V that funds are made available to correct identified violations as expeditiously as
  i or to secure the cooperation of a recalcitrant facility manager.

  After the RA has tried but been unable to resolve disputes within established media
frames, the cases are formally referred jointly to Headquarters media program office,
!M and OFA for resolution. Upon receipt of the referral package, OFA or the media
ram office will notify the RA in writing of their receipt of the package.
   OEA/OFA may assist in negotiations of a mutually acceptable solution between
  xdia programs and the official re
fcadauaners of the parent agency.
\A tor the affected n
inistrator for resolution.
                ^           ^,— — -___-_„ _ — — — __- — ^ ____^_._  ._.  _.
 media programs and the official responsible for environmenal compliance matters at
ieadauaners of the parent agency. If this effort fails, within a maximum of 90 days
\A for the affected media program office escalates the problem to the EPA
  OFA will develop and maintain a system for notifying the Regional Administrator
nally on a monthly basis and formally on a quarterly basis on the status of those
ral facilities actions formally referred to Headquarters.

'.vement in A-106 Review Process • OEA/OFA is tasked to coordinate the Agency-
 review of Federal agency A-106 submissions via the Pollution Status Report and
jce the annual report to OMB evaluating proposed projects for use by OMB in budget
w process.
                                 vrn-9

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If 3   Office   of  Enforcement  and  Compliance  Monitoring

       OECM advises the Administrator, and OEA, and provides guidance to die Regional
Offices on general enforcement and compliance policy issues relating to Federal facilities
including:

                     the cotnpl'gncf f**^ of Fgdffiil
       •   Assessing the sufficiency data supporting compliance determinations;

       •   Conducting negotiations of agreements on solutions to compliance problems;

       •   Resolving compliance disputes with Federal frgHfoff:

       •   Assuring that Federal facilities compliance efforts support national
          compliance and enforcement objectives;
       •   Developing (with OFA and media programs) compliance and en/or
          strategy guidance for Federal facilities;

       •   Coordinating and overseeing the State/EPA enforcement agreements process;

       •   Maintaining the Agency consent decree melting system, including tracking of
          Federal facilities compliance agreements; and

       •   Conducting follow up on possible criminal violations.

OECM also provides assistance and expertise in the use of alternative dispute resolution
proaxiures for resolving compliance problems at Federal facilities.

B.4   Office  of  General  Counsel

       OGC provides legal advice and assistance to the Administrator, OEA, media
program offices and  the Regional counsels on legal matters and interpretations related to
FedaaJ facility compliance with the environmental statutes. OGC also plays a major role in
resohing interagcncy legal disputes and in making referrals to the Department of Justice
under Executive Order 12146 when necessary.
                                    vm-io

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            EXHIB11  . ,IM
EPA REGIONAL OFFICE  STAFF
        REGIONAL
      ADMINISTRATOR
         DEPUTY
        REGIONAL
      ADMINISTRATOR
   PROGRAM
    STAFF
  FEDERAL
  FACILITY
COORDINATOR
                  REGIONAL
                  COUNSEL

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          EPA  HEADQUARTERS  OFFICE STAFF
            OFFICE
          OF GENERAL
           COUNSEL
   OFFICE
   OF THE
ADMINISTRATOR
-^
            MEDIA
           PROGRAM
           OFFICES

   OFFICE
    OF
  EXTERNAL
   AFFAIRS
 -

|;:
  OFFICE OF
 ENFORCEMENT
AND COMPLIANCE
  MONITORING

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GM-26

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\,•/
I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                WASHINGTON, D.C. 20460

                    liAR  * 1964
 MEMORANDUM
 SUBJECT:   Headquarters Review^and  Tracking >CLf  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 nay 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).

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                              -2-

   Class Us   Cases involving issues of significance which
               may be unique or precedential, or which are
               important to establish or further Agency
               enforcement goals.  The lead legal and
               technical responsibilities in such eases
               usually  rest in the Regional offices, with
               substantial assistance and oversight from
               Headquarters.

   Class 112:  Caves which are significant and important to
               Agency enforcement goals, but which are not
               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 ensure
               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.

   Class  IVs   Cases which may be  referred directly  from the
                Regions  to  Department of Justice  (DOJ)
                Headquarters  pursuant to the  September 29,
                1983  letter agreement between Alvin L. Aim
                for EPA and  F.  Henry  Habicht,  31  for  DOJ
                (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  Enforr
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
roiscateyorized, he or she should consult  with the  Regional
Adminis; rator-or the designated Regional enforcement  contact

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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 will
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 nay
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) nay 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, 1583, memorandum I addressed to Regional
Administrators, Regional Counsels and Headquarters staff  (copy
attached).   As a  point of clarification, it is my intent  that
contempt actions  may  also be handled as direct referrals  if the
original case would meet the current criteria for direct  referral

      Headquarters will review and evaluate the information copy
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
 P.  Henry Habicht, II  for which direct referral nay 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 memorandum

    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
oj: 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

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                               -5-

      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 simple 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,
1963, November 23,  1983, and  November 28, 1983  (copies
attached).  The  following  docket guidance supplements and,
where inconsistent, supersedes those memoranda.

     Each Regional  attorney has primary responsibility for
updating all of  his or  her active cases as part of the monthly
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 Facility
Data Form, and a copy of the cover letter referral memorandum
to Headquarters Docket Control for entry of the case into
the Docket System.  Regions with Regional Docket Control should
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 nay result in
tie cases not being entered in the Docket System, and the
Region not receiving credit for the case at the time of
referral.

     Copies of direct referral packages are to be sent simul-
taneously to the Department of Justice and EPA Headquarters.
Tie 'Date to EPA Headquarters" and the "Date Referred to
DDJ" 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
aid 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
aid 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 q.S. Attorney will have the lead•
litigation responsibilities as  provided  in the September 29,
1983 letter agreement between Alvin Aim  and Henry  Habicht,  XI.


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  recommending
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 tone 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 all
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.  Me
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 communicate in writing on the
subject to the Regional Office and Department of Justice and
place a copy of the nemo 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 course, proceed  on a parallel
track, but they generally should not result in  suspension of
litigation activities.  My November 28, 19B3 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

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                               -8-

or not the case was directly referred, the Associates should
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
required to ensure that an Agency policy or a legal require-
ment is followed, or that a case is prosecuted expeditiously,
this office will not 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 meets
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  final
settlements before they are filed  in  court.


Attachments

cc: Office Directors, DECK

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                       INDEX OF ATTACHMENTS


1.  Memorandum from Courtney M. Price, Assistant Administrator
    for Enforcement and Compliance Monitoring  to Regional
    Administrators, Regional Counsel, Associate Enforcement
    Counsels and OEM Office Directors (November 28, 1983)
    (concerning implementation of direct referrals beginning
    December 1, 1983)•

2.  Memorandum from Courtney M. Price, Assistant Administrator
    for Enforcement and Compliance Monitoring  to Regional
    Counsels (November 23, 1983)  (concerning further  instructions
    for maintenance of the enforcement docket  system).

3.  Letter from Alvin L. Aim, Deputy Administrator, U.S. EPA to
    F. Henry Habicht, 11, Acting Assistant Attorney General,
    US Department  of Justice (September  29,  1983)  (concerning
    direct referral of classes of cases)..
                                          •
4.  Memorandum from Courtney M^ Price, Assistant Administrator
    and General Counsel to Associate Enforcement Counsels,
    Regional Counsels, OLEC Office Directors and Correspondence
    Control Unit (April 21, 1983) (concerning  procedures  for
    maintenance of enforcement docket system).

5.  Enforcement Docket System  Case Data  and Facility Data Forms.

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GM-27

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 *"
        ! UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON. O.C. 20460
                           Affi  18 B84
                                                         IWOftCfMEMTANO
                                                       COMPUAMCX MONTTOM
 MEMORANDUM
 SUBJECT:   Guidelines for Enforcing Federal District Court Orders
 FROM:      Courtney M. Price {jbjJZi rTrO^x-*-*
           Assistant Administrator for Enforcement
             and Compliance Monitoring
 TO:        Assistant Administrators
           General Counsel
           Inspector General
           Regional Administrators
           Regional Counsels

      Attached please find the most recent addition to the General
 Enforcement Policy Compendium entitled "Guidelines for Enforcing
'Federal District Court Orders in Environmental Cases.*  The
 document  emphasizes the very high priority we attach to preserving
 the  integrity of court orders to enable the Agency to maintain its
 credibility with the courts, the public, and the regulated community
 so as to achieve environmental objectives.  If you have any
 questions concerning this guidance, please contact Glenn Unterberger,
 Director of the Office of Legal and Enforcement Policy.  He nay
 be reached at (FTS) 382-4541.
 Attachment
 cc:   Assistant Attorney General for Land and Natural Resources
      Chief, Environmental Enforcement Section, DOJ

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      GUIDELINES FOR ENFORCING FEDERAL DISTRICT COURT ORDERS
                      IN ENVIRONMENTAL CASES
Purpeties .

    This guidance emphasizes the importance of enforcement of
Federal district court orders that embody either consensual or
nonconsensual resolutions of environmental enforcement litigation.
It establishes uniform Agency objectives in preparing for and in
responding to violations of court orders.  The goal of this
initiative is to minimize the number of violations of court
orders and to facilitate enforcement efforts when such violations
are detected.  Recently, the Agency developed the Consent Decree
Tracking System which will provide a centralized data base and
reporting system to upgrade consent decree enforcement.  Ultimately,
the lists of 'significant violators* maintained in each program
area should include all significant violations of court orders.

Policy

    EPA places a very high priority on enforcement of court orders.
This policy ensures that defendants meet the requirements of each
court order in order to achieve the objectives of the underlying
civil Action.  Moreover, vigorous enforcement of court orders is
essential to enable the Agency to maintain its credibility with
the cojrts, the public, and the regulated community * and to achieve
the desired environmental objective.

Scope

    Th;is guidance specifically applies to the enforcement of consent
decree;; and nonconsensual orders entered in Federal district court
that romedy violations of any of EPA's laws or regulations.  It
also covers the following areas:

       •— Drafting court orders to ensure enforceability.*

       — Selecting responses to violations of consent decrees
          and other court orders.

       — Considering other procedures in implementing an
          enforcement response.
\/ Additional guidance on drafting enforceable consent decrees
"~  can be found in Agency policy entitled, "Guidance for Drafting
   Judicial Consent Decrees' (General Enforcement Policy Compendium,
   GM-17, dated 10/19/83).

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                                -2-
 Drafting Orders to Ensure Enforceability

      EPA should obtain terms that are legally enforceable in
 negotiating a consent decree or writing an order at the request
 of the court.  The order should provide for reasonable methods
 for monitoring compliance with the order's requirements and should
 establish adequate incentives for compliance.

       Careful elimination of areas for future dispute can
 facilitate enforceability.  Requirements in the order should
 be clear, understandable, and should avoid any possible
 ambiguities.  The order should both clearly require compliance
 with the applicable regulations and establish the method or
 procedure that will be used to determine compliance.   In some
 cases, it may be appropriate to specify the pollution control
 technology to be used.  In no event, however, should the order
 deem compliance to mean anything but compliance with the
 applicable legal requirement.

      In every case, the obligation to comply must rest solely
 with the defendant.  Provisions that operate to "excuse" non-
 compliance, e.g., a force majeure clause, should be narrowly and
 explicitly drawn.2  The order should avoid any ambiguities
 regarding the defendant's compliance obligations associated with
 revisions to the underlying requirements.  If the litigants
•expect future legislative or regulatory changes to the underlying
 requirements, the court order must clearly establish the procedures
 that would change the order's compliance obligations.   The order
 should provide that revision to the underlying requirement does
 not excuse noncoropliance with the terms of the order unless and
 until the court amends the order.

      The order should establish explicit compliance verification
 procedures.  Because inspections are likely to be more objective
 than self-monitoring, the order should provide authority for EPA
 to conduct inspections at reasonable times.  If resources will
 not permit detailed inspections by EPA or State or local
 authorities, some alternative form of compliance verification
 (e.g., self-monitoring, self-reporting, third-party verification)
 should be required.  In such cases, the order should  require the
 defendant to conduct compliance tests at its own expense on the
 basis of the test methods established in the order.   In addition,
    Economic hardship should not  be  established  as  a  force majeure
    event.   Instead,  the  defendant suffering  the hardship should
    petition the court for a modification of  the order.  See,
    Federal Rules of  Civil Procedure Rule 60.  EPA  should oppose
    such petitions unless the defendant  convincingly  demonstrates
    extreme circumstances that justify modifications  to  the order.

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                               -3-


the order should provide for prior notice to EPA to enable the
Agency to observe the test or other critical event.  However,
the order should always preserve EPA's authority to inspect or
otherwise .obtain information on its own, and should also provide
for inspections by EPA contractors.

     Compliance verification requirements should not be more
burdensome to the defendant than is necessary to determine
compliance.  EPA should carefully review each report that the
defendant submits to verify that it includes all of the information
that the order requires.  The order should provide that the
information used by defendants to generate self-reports must be
retained for a reasonable period of time, and that EPA must have
access to such information during that period of time.  A provision
which establishes that self-monitoring and third party verification
information is admissible in proceedings to enforce the order is
highly desirable.

     To facilitate verification of compliance with penalty payment
provisions, the Regional Office must ensure that, at a minimum,
it receives notice when penalties that are due have been paid.
The Regional Office should maintain organized records indicating
penalty collection dates.

     It is essential to include in court orders the mechanisms
necessary to assure compliance with the terms of those orders.
Such mechanisms may include stipulated penalties, posting and
forfeiture of performance bonds or letters of credit, suspension
of operation, increased reporting requirements, and advance
approval from EPA f'or certain activities.  Regional Offices
should determine appropriate mechanisms on a case-by-case basis
taking into account the factors described below.

     The compliance mechanisms should be strong enough to deter
noncompliance by, for example, removing the economic incentives
for noncompliance, yet flexible enough to deal equitably with
the possible range of future violations.  The force majeure
clause and prudent exercise of prosecutorial discretion are the
proper mechanisms for providing flexibility.  In addition, the
compliance incentive provisions should not be excessive although
stipulated penalties should permit assessments which are large
enough to take into account that the violator of a court order
is, by definition, a recividist or a recalcitrant and, therefore,
in need of more serious incentive to comply.

     The order should expressly provide that the compliance
mechanisms therein are not the exclusive remedies available to
the government.  This type of provision preserves the government's
ability to seek civil or criminal contempt penalties, specific
performance of compliance provisions, and such other relief
as the government may deem appropriate to obtain final compliance
or to provide adequate deterrence against future violations.

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                               -4-


     'Court orders should generally require the defendant to
maintain and be able to demonstrate compliance for a specified
period of time after the initial demonstration of compliance.
This requirement ensures that the defendant is likely to remain
in compliance.  This provision should be consistent with the
order's termination clause.

     Finally, the order should explicitly state that it is binding
on subsequent owners, operators, assignees, and other successors
in interest in the facility.  The order should require that these
successors, etc., receive notification of the existence of the
court order.  The order should also require notification to EPA
of any transfer of interest.

Selecting Responses to Violations of Court Orders

     The primary objectives of enforcement of court orders are to
correct the violation expeditiously, deter future violations by
the defendant and by the regulated community, and preserve the
integrity of court ordered remedies so as to achieve the desired
environmental protection objective.  Responses to violations
must be prompt and firm to reflect the importance which EPA
attaches to the court ordered requirements.

     The government may pursue a range of remedies to address
violations of court orders.  These remedies include specific
performance of the order's requirements (e.g., through a notion
to enforce the order), additional specific performance requirements,
stipulated monetary penalties, civil and criminal contempts,
contractor suspension and debarment proceedings in appropriate
cases involving the Clean Air Act or the Clean Water Act, and
revised or extended compliance schedules (in the limited circumstances
described below).  These remedies may be used individually or in
combination.

     The government must weigh several factors in deciding upon
the type and extent of relief to pursue.  The chief factors are
the environmental harm or risk caused by the violation, the
degree of willfulness or negligence displayed by the defendant,
the degree of economic benefit accruing to the defendant from the
noncomplying behavior, any attempts to mitigate the violation, the
deterrence value of the response, and the likelihood that the
response will remedy the violation.  It is also appropriate to
consider the defendant's history of noncompliance and any
extraordinary costs borne by the public.  In addition, and
as a secondary consideration, the government must assess the
resource implications of the enforcement response.

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                               -5-


     All responses must require compliance with the order's
terms as Quickly as possible.  This requirement includes initiation
of post judgment proceedings to collect civil penalties originally
imposed in; the decree for the underlying violation if the defendant
has failed to pay such penalties.  Collection should be for the
full penalty amount.

     Responses to violations of court orders typically should be
more severe than those which the government normally would seek
for a comparable initial violation of a statute, regulation/ or
administrative order.  Absent a convincing demonstration by the
defendant of mitigating circumstances* the government typically
should pursue significant monetary penalties unless the violations
are clearly de minimis. •' Penalties must remove any appreciable
economic benefit accruing to the violator.  In addition to recouping
economic benefit, the penalties should reflect the recidivistic
or recalcitrant behavior of the defendant.  The case file must
include an explanation of why the case managers have decided to
pursue a particular penalty figure or no penalty.

     Tho government should seek imposition of specific relief
beyond dhat already required in the court order when necessary to
provide adequate assurances of future.compliance.  Factors to
consider in determining the need for such assurances are the like-
lihood of future violations, the environmental harm or risk which
a future violation would be likely to pose, and the government
resources involved in monitoring compliance with the additional
requirements.  Examples of further specific relief include more
stringent reporting requirements, advance EPA approval of relevant
activities by the defendant, temporary or permanent shutdown of
violating facilities, more stringent operation and maintenance
obligations, and posting of revocable or irrevocable letters of
credit or performance bonds.

     Normally, the government should avoid agreeing to extensions
of compliance schedules without pursuing significant monetary
penalties.  Extensions without penalties typically should be
limited to cases in which the defendant can prove that the violation
was cauued by circumstances falling squarely within the force
majeure clause of the order.  Moreover, an extension without
penalties is permissible only if the extension poses limited
environmental harm or risk, and a substantial public interest
basis exists for extending the deadline.  Extensions of compliance
schedules must set realistic timetables for compliance aimed at
securing compliance as quickly as possible.  In any event, the
defendant must continue to otherwise comply with the order.

     Tht; government should also consider the possibility of
criminal contempt under the provisions of 18 U.S.C. § 401(3)
in situzitions of aggravated noncompliance with consent decrees
for which punishment is a legitmate objective of an enforcement

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                               -6-


rcspons'e.  Factors to be considered in deterroing the appropriate-
ness of criminal sanctions includei  (1) the scope and duration
of the noncompliance involved in the violation of the consent
decree; (2) the environmental contamination or human health
hazard resulting from that noncompliance; (3) the willfulness of
the violation (in a criminal contempt action the government Bust
show that the violation was willful and deliberate)} C4) any
falsification activity involved in the noncompliance (i.e.,
misrepresentation by the party subject to the consent decree
concerning compliance with that consent decree); (5) the ability
of the party that is subject to the consent decree to achieve
compliance; and (6) the evidence of motivation for the noncompliance.

     When dealing with deliberate noncompliance with a civil
consent decree, one is by definition dealing with a corporation
or individual that has already gone through less severe enforcement
actions which have proven ineffective.  The potential for using
criminal contempt should, therefore* be considered in all
significant cases of noncompliance with judicial consent decrees

Other Matters To Consider In Implementing An Enforcement Response

     The government should make every effort to coordinate enforcement
responses with any governmental co-plaintiff.  If no satisfactory
agreement is possible, EPA must still fulfill its mandate to enforce
environmental laws.  Similarly, the government should give careful
consideration to the enforcement concerns of private co-plaintiffs,
particularly regarding final settlements.  Even if the private
party's role is limited to commenting on the settlement, the
government should carefully consider such comments.

     The government should establish a timetable for responding
to a violation which reflects the high priority EPA places on
enforcement of court orders.  The timetable should take into
consideration the nature of the violation, the need, if any, to
take immediate action, the sufficiency of the available proof,
and the complexity of the potential enforcement litigation.  In
uncomplicated cases that do not present an emergency to the public
health or environment and, absent time requirements specifically
imposed by the court order, the Regional Office should attempt
to develop and refer the case to Headquarters within 45 days from
the date the violation was detected.  Headquarters and the Justice
Department should process cases according to the timetable
established in the September 29, 1983, agreement between the EPA
Deputy Administrator and the Assistant Attorney General for
Land and Natural Resources.

     Any consent decrees and modifications to consent decrees must
be in writing and signed by the Assistant Administrator for the •
Office of Enforcement and Compliance Monitoring and the Assistant
Attorney General for Land and Natural Resources.  Attorneys must

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                               -7-
make clear to the defendant that the government requires such
signatures to legally bind the Dnited States notwithstanding
recommendations of acceptance of the terms of the document by
the government negotiators.

     The policies and procedures set forth in this document 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.
                                  Courtnf"  M. Price
                             Assistant Administrator for
                         Enforcement and Compliance Monitoring

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GM-28

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   "V,
     I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

    /               WASHINGTON. D.C. 20460
                  •
      *t

                        JUN 13 1984
MEMORANDUM
SUBJECT:
FROM:
TO:
                                                        orricf 0*
                                                      •**0*CtM|inANO
                .-.-.-.* rt^rv?*
Liability of Corporate Shareholders and Successor
Corporations For Abandoned Sites Under the Compre-
hensive Environmental Response, Compensation, and
Liability Act (CERCLA)
Courtney M. Price
Assistant Administrator for
  and Compliance Monitoring
                                        nforcement
Assistant Administrator for
  Solid Waste and Emergency Response
Associate Enforcement Counsel for Waste
Regional Administrators
Regional Counsels
Introduction

     The following enforcement memorandum, which was prepared
in cooperation with the Office of General Counsel, identifies
legal principles bearing on the extent to which corporate
shareholders and successor corporations may be held liable
for response costs that arise as a result of a release of a
hazardous substance from an abandoned hazardous waste facility.
In the discussion section pertaining to each part, the memorandum
reviews the law on'the subject from established traditional
Jurisprudence to current evolving standards.  Although general
.rules of liability are delineated, these principles must be
carefully applied to the unique fact pattern of any given
case.

I.   THE LIABILITY OF CORPORATE SHAREHOLDERS UNDER CERCLA

Background

     Normally, it is the corporate entity that will be held
accountable for cleanup costs under CERCLA.  In certain

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                              -2-


instances, however, EPA nay want to extend liability to include
corporate shareholders.  This may arise, for example, where a
corporation* which had owned or operated a waste disposal site
at the time of the contamination, is no longer in business.
The situation nay also occur if a corporation is still in
existence, but does not have sufficient assets to reimburse
the fund for cleanup costs.  There are two additional policy
reasons for extending liability to corporate shareholders.
First, this type of action would promote corporate responsibil-
ity for those shareholders who in fact control the corporate
decision-making process? it would also'deter other shareholders
in similar situations from acting irresponsibly.  Second, the
establishment of shareholder liability would aid the negotiation
process and motivate responsible parties toward settlement.
                                                              i
     Traditional corporation law favors preserving the corporate
entity, thereby insulating shareholders from corporate liability.
Nevertheless, as will be discussed below, there are exceptions
to this general principle that would allow a court to disregard
corporate form and impose liability under CERCLA on individual
shareholders.

Issue
                                 £
     V'hat is the extent of liability for a corporate share-
holder under CERCLA for response costs .that arise as a result
of a release of a hazardous substance from an abandoned hazardous
waste facility?
                                      i
Summary

     The question of whether EPA can hold a shareholder of a
corporation liable under CERCLA is a decision that must turn
on the unique facts' specific to given situation.  Generally,
however, in the interests of public convenience, fairness, and
equity, EPA may disregard the 'Corporat*2 entity when the shareholder
controlled or directed the activities of a corporate hazardous
waste generator, transporter, or facility.

Discussion

     Section 107(a)(2) of CERCLA provides that any owner or
operator of a facility which releases a hazardous substance
shall be liable for all necessary response costs resulting
from  such a release.  Section 101(20)(A)(iii) of CERCLA clearly
states that the term 'owner or operator* as applied to abandoned
facilities includes 'any person who owned, operated, or otherwise

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                              -3-


controlled activities at such facility immediately prior to
such abandonment" (emphasis added).

     In addition, Sections 107(a)(3) and 107(a)(4) of CERCLA
impose liability for response costs on any person who arranged
for the disposal or treatment of * hazardous substance (the
generator), as veil as any person who accepted a hazardous
substance for transport to the disposal or treatment facility
(the transporter).

     The term 'person* is defined in CERCLA Section 101(21)
as, inter alia, an individual, firm, corporation, association,
partnership, or commercial entity.  A 'shareholder may exist
as any of the forms mentioned in Section 101(21).  Therefore, a
shareholder may be considered a person under CERCLA and, conse-
quently, held liable for response .costs incurred as a result
of a release of a hazardous substance from a CERCLA facility
if the shareholder:

        •  Owned* operated, or otherwise controlled activities
           at such facility immediately prior to abandonment
            (CERCLA Section 107(a)(2)i Section 101(20)(A)(iii)]t
                                             .•
        •  Arranged for the disposal or treatment (or
           arranged with a transporter for the disposal or
           treatment) of the hazardous substance [CERCLA
           Section 107(a)(3))» or  .

        •  Accepted the hazardous substance for transport to
           the disposal or treatment facility selected by such
           person [CERCLA Section 107(a)(4)J.

     Notwithstanding CERCLA's statutory language, courts
normally seek to preserve the corporate form and thus maintain
the principle of limited liability for its shareholders. V
In fact, fundamental "to the theory of corporation law is"
the concept that a corporation'is a Legal separate entity, a
legal being having' an exis&nefe separate and distinct from
I/  See Pardo v. Kilson Line of Washington, Inc., 414 F.2d
"~   1145, 1149  (D.C. Cir. 1969); Krivo Industrial Supply Co.
    v. National Distillers t Chem. Corp., 483 F.2d 1098,
    1102 (5th Cir. 1973), modified per curiam, 490 F.2d 916
    (5th Cir. 1974); Homan' and Crimen, Inc. v. Harris, 626
    F.2d 1201,  1208 (5th Cir. 1980).

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                              -4-


that .of its owners." £/  This concept permits corporate
shareholders "to limit their personal liability to the extent
of their investment.* 2/  Thus, although a shareholder nay
be considered a *persoK" under CERCLA (and therefore subject
to the Act's liability provisions), the application of corporate
law would tend to shield the shareholder from such liability.

     Nevertheless, a court nay find that the statutory language
itseli! is sufficient to impose shareholder liability notwith-
standing corporation law. V  Alternatively, to establish
shareholder liability, a co~urt nay find that the general prin-
ciples; of corporation law apply but, nonetheless, let aside
the lilnited liability principle through the application of
the equitable doctrine of 'piercing the corporate veil.*

     !!imply stated, the doctrine of piercing the corporate
veil refers to the process of disregarding the corporate
V  Krivo Industrial Supply Co. v. National Distillers t Chem.
""   Corp., 483 F.2d 1098, 1102 (Sth Cir. 1973), modified peT
    curiam, 490 F.2d 916 (Sth Cir. 1974).

3/  Id.

.!/  §111 United States v. Northeastern Pharmaceutical and
~"   Chemical Company, Inc., et al. , 80-5066-CV-S-4, memorandum
    op. (W.D. Mo., 1984).  In Northeastern Pharmaceutical the
    district court noted that a literal reading of Section
    101(20) (A) 'provides that a person who owns interest in a
    facility and is actively participating in its management
    ct.n be held liable for the disposal of hazardous waste."
    (Memorandum op. at 36.)  The court went on to find that
    there was sufficient evidence to impose liability on one
    of the defendants pursuant to this statutory definition
    of 'owner and operator,' and the Section 107(a)(l) liability
    provision of the Act.  The fact that the defendant was a
    mcjor stockholder did not necessitate the application of
    corporate law, and thus the principle of limited liability:
    "To hold otherwise and allow [the defendant] to be shielded
    by the corporate veil 'would frustrate congressional purpose
    by exempting from the operation of the Act a large class
    of persons who are uniquely qualified to assume the burden
    imposed by ICERCLA]."  (Memorandum op. at 37, citation
    omitted. )

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                              -5-


entlty to hold either corporate shareholders or specific
individuals liable for corporate activities. V

     In order to determine whether to disregard corporate form
and thereby pierce the corporate veil, courts generally have
sought to establish two primary .elements. */  First, that the
corporation and the shareholder share such""a unity of interest
and ownership between them that the two no longer exist as
distinct entities. '/  Second, that a failure to disregard the
corporate form woulH create an inequitable result. 8/

     The first element nay be established by demonstrating
that the corporation was controlled by an 'alter ego.*  This
would not include 'mere majority or complete stock control,
but complete domination, not only of finances, but of policy
and business practice in respect to the transaction attacked
 /  s_ee_ Henn, LAW OF CORPORATIONS §5143, 146 (1961).  This
~~   doctrine applies with equal force to parent-subsidiary
    relationships (i.e., where one corporation owns the
    controlling stock of another corporation).

£/  Generally, courts have sought to establish these elements
**   in the context of various theories, such as the 'identity,'
    •instrumentality," "alter ego," and "agency" theories.
    Although these terms actually suggest different concepts,
    each employs similiar criteria for deciding whether to
    pierce the corporate veil.

2/  See United States v. Standard Beauty Supply Stores,
    Inc., 561 F.2d 774, 777 (9th Cir. 1977); FMC Fin. Corp.
    v. Murphree, 632 F.2d 413, 422 (5th Cir. 1980).

8/  See Automotriz Del Golfo de Cal. S.A. v. Resnick, 47 Cal.
"   2d 792, 796, 306 P.2d 1 (1957); DeWitt Truck Broker, Inc.
    v. W. Ray Flerming Fruit Co., 540 F.2d 681, 689 (4th
    Cir. 1976).  Some jurisdictions require a third element
    for piercing the corporate veil: that the corporate
    structure must have worked an injustice on, or was the
    proximate cause of injury to, the party seeking relief.
    See e.g., Berger v. Columbia Broadcasting System, Inc.,
    453 F.2d 991, 995 (5th Cir. 1972), cert, denied, 409
    U.S. 848, 93 S.Ct. 54, 34 L.Ed.2d 89 (1972); Lowendahl
    v. Baltimore t O.R.R., 247 A.D. 144, 287 N.Y.S. 62, 76
    (1936), aff'd 272 N.Y. 360, 6 N.E.2d 56 (Ct. App. 1936),
    but see, Brunswick Corp. v. Kaxman, 599 F.2d 34, 35-36
    (2d Cir. 1979).

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                               -6-
 so that the corporate entity as to this transaction had at the
 time no separate mind, will or existence of its own."
      In analyzing this first element, courts have generally
 considered the degree to which corporate •formalities have
 been followed [so as] to Maintain a separate corporate iden-
 tity." 10/  Por example, the corporate veil has been pierced
 in instances where there had been a failure to maintain adequate
 corporate records, or where corporate finances had not been
 kept separate from personal accounts. ££/

      The second element of the test is satisfied when the
 failure to disregard the corporate entity would result in
 fraud or injustice. !£/  t^is would occur, for example, in
 cases where there has .'been a failure to adequately capital-
 ice for the debts normally assocated with the business
 undertaking, ££/ or where the corporate form has been employed
 to misrepresent or defraud a creditor. **/
     Berger v. Columbia Broadcasting System, Inc., 453 F.2d
     991, 995 (5th Car. 1972), cert, denied, 409 U.S. 848,
     93 S.Ct. 54, 34 L.Ed.2d 89 (1972).

     Lsbadie Coal Co. v. Black, 672 F.2d 92, 96 (D.C. Cir.
     1982); See Dewitt Truck Broker, Inc^ v. W. Ray F lemming
     Fruit Co. , 540 F.2d 681, 686 n. 14 (collecting cases)
     T*th Cir. 1976).

     Lakota Girl Scout C., Inc. v. Havey Fund-Rais. Man.,  Inc.,
     519 F.2d 634, 638 (8th Cir. 1975); Dudley v.  Smith,  504
     F.2d 979, 982 (5th Cir. 1974).

*2/  Some courts require that there be actual fraud or injustice
     oliiin to fraud.  See Chengelis v. Cenco Instruments Corp.,
     3B6 F. Supp 862 (W.D. Pa.) aff 'd mem., 523 F.2d 1050  (3d
     Cir. 1975).  Most jurisdictions do not require proof  of
     actual fraud.  See DeWitt Truck Brokers v. VJ« Ray Flemming
     Fruit Co., 540 F.2d 681, 684 (4th Cir. 1976).

il/  £ii Anderson v. Abbot, 321 U.S. 349, 362, 64  S.Ct. 531,
     88 L.Ed. 793 '.1944)? Machinery Rental, Inc. v. Herpel
     (In re Multiponics , Inc.), 622 F.2d 709, 717  (5th Cir.
     1980).
£J/  See FMC Fin. Corp. v. Hurphree, 632 F.2d 413, 423 (5th
     Cir. 1980).

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                              -7-
     In applying the dual analysis, courts act under consider*
at16ns of equity; therefore, the question of whether the
corporate veil will be lifted is largely one of fact, unique
to a given set of circumstances.  However, the substantive
law applicable to a case may also have great importance.  For
example, in applying state corporation law, state courts have
been generally reluctant to pierce the corporate veil. *v
Federal courts, however, in applying federal standards,""Rave
shown more willingness to disregard the corporate entity and
hold individuals liable for corporate actions. **/

     In nany instances federal decisions do draw upon state
law and state interpretations of common law for guidance. £V
However, federal courts that are involved with federal
question litigation are not bound by state substantive law
or rulings. *8/  In such cases, either federal common law
     See discussion in Note, Piercing the Corporate Law Veil:
     The Alter Ego Doctrine Under Federal Common Law,  95
     Harvard L.R. 853, 655 (1982).

     It is well settled that a corporate entity must be dis-
     regarded whenever it was formed or used to circumvent
     the provisions of a statute.  See United States v. Lehigh
     Valley R.R., 220 U.S. 257, 259, 31 S.Ct. 387,  55 L.Ed.
     458 (1911); Schenley Distillers Corp. v. United States,
     326 U.S. 432, 437, 66 S.Ct. 247, 90 L.Ed. 181  (1945);
     Kavanaugh v. Ford Motor Co., 353 F.2d 710, 717 (7th
     Cir. 1965); Casanova Guns, Inc. v. Connelly,  454 F.2d
     1320, 1322 (7th Cir. 1972).

17/  See Seymour v. Hull t Horeland Eng*g, 605 F.2d 1105 (9th
     Cir. 1979); Rules of Decision Act, 28 U.S.C.  $1652 (1976).
     Generally, federal courts will adopt state law when to
     do so is reasonable and not contrary to existing federal
     policy.  United States v. Polizzi, 500 F.2d 856,  907 (1974)
     See also discussion in note 19, infra.

18/  UNITED STATES CONSTITUTION art. VI, el. 2.

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                           -8-
or specific statutory directives may determine whether or not
to pierce the corporate veil. *V
     See Anderson v. Abbot , 321 U.S. 349, 642 S.Ct. 531, 88
     L.Ed. 793 (1944)i Town of Brookline v. Gorsuch, 667 F.2d
     215, 221 (1981).  For a general discussion of federal
     common law and piercing the corporate veil see, note 15,
     supra.  The decision as to whether to apply state law or
     • federal standard is dependent on many factors:
                                      i
          •These factors include the extent to which: (1) a
          need exists for national -uniformity ; (2) a federal
          rule would disrupt commercial relationships predicated
          on state law; (3) application of state law would
          frustrate specific objectives of the federal program;
          (4) implementation of a particular rule would cause
          administrative hardships or would aid in administrative
          conveniences; (5) the regulations lend weight to the
          application of a uniform rule; (6) .the action in
          question has a direct effect on financial obligations
          of the United States; and 17) substantial federal
          interest in the outcome. -of the litigation exists.

          Even with the use of these factors, however, whether
          state law will be adopted as the federal rule or
          a unique federal uniform rule of decision will be
          formulated remains unclear.  The courts have failed
          to either mention the applicable law or to state the
          underlying rationale for their choice of which law to
          apply."  Note, Piercing the Corporate Veil in Federal
          Courts; -Is Circumvention of a Statute Enough?, 13 Pac.
          L.J. 1245, 1249 (1982) (citations omitted).
     In discussions concern* ng^CERCLty  the courts and Congress
     have addressed several of the above mentioned factors.
     CERCLA.  For example, the need for national  uniformity  to
     carry out the federal superfund program has  been clearly
     stated in United States v. Chem-Dyne, C-l-82-840,  slip  op.
     (S.T. Ohio, Oct. llr 1983).  In Chem-Dyne, the court  stated
     that the purpose of CERCLA was to  ensure the development
     of a uniform rule of law, and the  court pointed out the
     dangers of a variable standard on  hazardous  waste  disposal
     practices that are clearly interstate.  (Slip op.  at
     11-13.)  See also, Ohio v. Georgeof f , 562 F. Supp. 1300,

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                              -9-
    . The general rule applied by federal courts to cases in-
volving federal statutes is that "a corporate entity may be
disregarded in the interests of public convenience, fairness
and equity.* ££/  In applying this rule, "federal courts
will look closely at the purpose of the federal statute to
determine whether that statute places importance on the
corporate form.* «y Furthermore, where a statute contains
specific directives on when the corporate entity may be
disregarded and individuals held liable for the acts or debts
of a valid corporation, courts oust defer to the congressional
mandate. **/
                                      i
     Thus, even under general principles of corporation law,
courts may consider the language of statute in determining
whether to impose liability on corporate shareholders.
Therefore, a court may use the statutory language of CERCLA
either as a rationale for piercing a corporate veil (when
corporation law is applied) or as an independent statutory
basis for imposing liability (notwithstanding the general
principles of corporation law). 23/
   (continued)/
                                    •

     1312 (N.D. Ohio, 1983); 126 'Cong. Rec.  H. 11,787 (Dec.
     3, 1983).

     The Chem-Dyne court stated that "the improper disposal
     or release of hazardous substances is an enormous and
     complex problem of national magnitude involving uniquely
     federal interests." (Slip op. at 11.)  The court further
     noted that *a driving force toward the development of
     CERCLA was the recognition that a response to this
     pervasive condition at the State level was generally
     inadequate: and that the United States has a unique
     federal financial intejf-esl in thfe trust fund that is
     funded by general and excise ta«s.B  (Slip op. at 11,
     citing, 5 U.S. Code Cong. 4 Ad. News at 6,142.) See
     also, 126 Cong. Rec. at B. 11,801.

     Capital Telephone Company, Inc. v. F.C.C. , 498 F.2d 734,
     738 (D.C. Cir. 1974).           •

21/  Town of Brookline v. Gorsueh, 667 F.2d 215, 221 (1981).

I2/  Anderson v. Abbot, 321 U.S. 349, 365, 64 S.Ct. 531,
     88 L.Ed 793 (1944).
     see discussion, supra, note 4.

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                              -10-


Conei.usion

     The Agency should rely upon the statutory language of the
Act us the basis for imposing liability on any person who
controlled or directed the activities of a hazardous waste
facility immediately prior to abandonment, or on any person
who is a generator or transporter, notwithstanding the fact
that that individual is • shareholder.  Additionally, and
alternatively, the Agency nay rely on the general principles
of corporation law to pierce the corporate veil by applying
the current federal standard of public convenience, fairness,
and equity.  However, when seeking to pierce the corporate
veil, the Agency should be prepared to apply the traditional
dual test previously discussed in order to provide additional
support for extending liability to corporate shareholders.
XX.  THE LIABILITY OF SUCCESSOR CORPORATIONS UNDER CCRCLA
Background

     Section 10?(a)(2) of CERCLA extends liability for response
costs to "any person who at the time of disposal of any hazardous
substance owned cr operated any facility at which such hazardous
substances were disposed of."  Situations nay arise, however,
where a corporation, which previously had owned or operated a
hazardous waste facility, now transfers corporate ownership to
another corporation.  In such cases, it is important to determine
whether the liability of the predecessor corporation's action
regarding the disposal of hazardous waste is also transferred
to the successor corporation. 34/

Issue

     What is the extent of liability for successor corporations
under CERCLA?
24/  tfhe discussion that follows is equally applicable to
     successor corporations of generators and transporters
     iissociated with hazardous substances released from CERCLA
     facility.

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                               -11-
 Sumtnary

     When  corporate ownership  is transferred from one cor-
 poration to another,  the  successor  corporation  is liable for
 the  acts of its predecessor  if the  new corporation acquired
 ownership  by merger or  consolidation.  If, however, the
 acquisition was through the  sale or transfer of assets, the
 successor  corporation is  not liable unless:

         a)   The purchasing corporation expressly or
             impliedly agrees to assume such obligations;

         b)   The transaction  amounts to a *de facto" consoli-
             dation or mergeri

         c)   The purchasing corporation is merely a continu-
             ation of  the  selling corporation; or

         d)   The transaction  was fraudulently entered into
             in order  to escape liability.

     Notwithstanding  the  above criteria, a successor corpora-
 tion may be held liable for  the acts of the predecessor
 corporation if the new  corporation  continues substantially
 the  same business operations as the selling corporation.

 Discussion

     The liability of a successor corporation, according to
 traditional corporation law. is dependent on the structure of
 the  corporate acquistion. £v   Corporate ownership may be
 transferred in one of three  ways:   1) through the sale of stock
 to another  corporation; 2) by  a merger or consolidation with
 another  corporation;  or 3) by  the sale of its assets to another
 corporation. 26/  Where a corporation is acquired through the
 "purchase  of aTl of its outstanding stock, the corporate
'entity remains intact and retains its liabilities, despite
 25/   See N.J. Transp.  Dep't v. PSC Resources, Inc., 175 N.J.
      Super.  447,  419 A.2d  1151 (Super. Ct. Law Div. 1980).

 26/   Note, Torts  - Product Liability - Successor Corporation
      Strictly Liable for Defective Products Manufactured by
      the Predecessor Corporation, 27 Villanova L.R. 411, 412
      (1980)  (citations omitted)  [hereinafter cited as Note,
      Torts - Product Liability].

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                              -12-


the change of ownership." 27/  By the sane token, a purchasing
corporation retains liability for claims against the predecessor
company if the transaction is in the form of a merger or con-
solidation. ££/  Where, however, the acquisition is in the form
of a sale or other transference of all of a corporation's assets
to a successor corporation, the latter is not liable for the
debts and liabilities of the predecessor corporation. «'/

     There are four exceptions to this general rule of non-
liability in asset acquisitions.  A successor corporation
Is liable for the actions of its predecessor corporation if
one of the following is shown:

        1)  The purchaser expressly or impliedly
            agrees to-assume such obligations;

        2)  The transaction amounts to a *de facto"
            consolidation or merger)

        3)  The purchasing corporation is merely a
            continuation of the selling corpor-
            ation; or

        4)  The transaction is entered into fraudulently
            in order to escape liability. 30/

     The application of the traditional corporate law approach
to successor liability has in many instances led to particularly
     N.J. Transp. Pep't v. PSC Resources, Inc., 175 N.J.
     Super. 447, 419 A.2d 1157 (Super. Ct. Law Div. 1980).

££/  j[d.  A merger, occurs when one of the combining corpor-
     ations continues to exist; a consolidation exists when
     all of the combining corporations are dissolved and an
     entirely new corporation is formed.

£V  5>ee N.J. Transp. Dep't v. PSC Resources, Inc., 175 N.J.
     liuper. 447, 419 A.2d 1151 (Super. Ct. Law Div. I960),
     citing, Jackson v. N.J. Manu. Ins. Co., 166 N.J. Super.
     488, 454 (Super. Ct. App. Dav. 1979), cert, denied, 81
     N.J. 330 (1979).

30/  Id., Note, Torts - Product Liability, supra note, 26 at
     ?i!3 n. 15-18.

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                              -13-
harsh and unjust results, especially with respect to product
liability cases. 3V  Therefore, in an effort to provide an
adequate remedy and" to protect injured consumers, courts
have broadened the exemptions to the general rule by either
modifying or recasting the *de facto" and "mere continuation*
exemptions to include an element of public policy. ££/

     More recently, however, the general rule has been aban-
doned altogether by several jurisdictions and, in essence, a
new theory for establishing successor liability has evolved
based upon the similarity of business operations. 33/  The
new approach has been cast by one court in the following ways

           •[w]here...the successor corporation acquires
           all or substantially all of the assets of the
           predecessor corporation for cash and continues
!!/  See McKee v. Harris-Seybold Co., 109 N.J. Super. 555,
     264 A.2d 98 (Super. Ct. Law DIV. 1970), aff'd per curiam,
     118 N.J. Super. 480, 288 A.2d 565 (Super. Ct. App. Div.
     1972); Kloberdanz v. Joy Mfg, Co., 288 F.Supp. 817 (0.
     Colo. 1968).

     See N.J. Transp. Dep't v. PSC Resources, Inc., 175 N.J.
     Super. 447, 419 A.2d 1151 (Super. Ct. Law Div. I960):
     See also, Knapp v. North Are. Rockwell Corp., 506 F.2d
     361 (3d Cir. 1974), cert, denied, 421 U.S. 965 (1975);
     Cyr v. B. Of fen k Co., 501 F.2d 1145 (1st Cir. 1975)?
     Turner v. Bituminous Gas Co., 397 Mich. 406, 244 N.W.2d
     673 (1976)":

33/  The theory has also been referred to as the "product-
     line" approach.  In adopting this new approach to
     successor liability, some courts have abandoned the
     traditional rule of non-liability in asset acquisitions.
     See e.g., Ray v. Alad Corp., 19 Cal. 3d 22, 560 P.2d
     3, 136 Cal. Rptr. 574 (1977).  Other courts have con-
     sidered the new approach as an exemption to the general
     rule.  See e.g., Daweko v. Jorgensen Steel Co., 290 Pa.
     Super. Ct. 15, 434 A.2d 106 (1981)j Note, Torts - Product
     Liability, supra note, 26 at 418 n. 38.  And, a few
     jurisdictions have rejected the new approach.  See
     Travis v. Harris Corp., 565 F.2d 443 (7th Cir. 1977)?
     Tucker v. Paxson Mach. Co., 645 F.2d 620  (8th Cir. 1981).

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                              -14-


           essentially the same manufacturing operation
           as the predecessor corporation the successor
           remains liable for the products liability claims
           of its predecessor.* *4/

     This theory of establishing successor liability differs
from the *de facto* and 'mere continuation* exemptions in that
the new approach does not examine whether there is a continuity
of corporate structure or ownership (e.g., whether the predecessor
and successor corporation share a common director or officer).
Instead, according to the new theory, liability will be imposed
if th32, 431 A.2d 811 (1981).

£V  S5e_e Ray v. Alad Corp., 19 Cal. 3d 22, 560 P.2d 3, 136 Cal.
     Ilptr. 574  (1977); some form of acquisition, however, is
     utill required.  See Meisal v. Modern Press, 97 Wash.
     ;>d 403, 645 P.2d 693.

36/  175 N.J. Super. 447, 419 A.2d 1151 (Super. Ct. Law Div.
     1980);

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                              -15-


     A similar 'continuity of business operation* approach has
been used in cases involving statutory violations. "/  jne
Ninth Circuit, for example, held in a case involving~the Federal
Insecticide, Fungicide, and Rodenticide Act [FIFRA] 38/r that
"EPA's authority to extend liability to successor corporations
•terns from the purpose of the statute it administers, which is
to regulate pesticides to protect the national environment.* 39/
Furthermore, the court noted that *[t]he agency nay pursue the"
objectives of the Act by imposing successor liability where it
will facilitate enforcement of the Act." ££/  After establishing
that there had been violations of FIFRA by the predecessor
corporation, the court found that there was substantial continuity
of business operation between the predecessor and successor
corporations to warrant imposition of successor liability.

     Although CERCLA is not primarily a regulatory statute,
public policy considerations and the legislative history of
the Act clearly indicate that federal law would be applicable
to CERCLA situations involving successor liability. *v
Therefore, it is reasonable to assume that courts wouTd similarly
adopt the federal 'continuity of business operation approach"
in cases involving CERCLA.


Conclusion

     In establishing successor liability under CERCLA, the
     See Golden State Bottling Co. v. *NLRB, 414 U.S.  168,  94
     S.Ct. 414, 38 L.Ed2d 388 (1973); Slack v. Havens,  522
     F.2d 1091 (9th Cir. 1975).   v

     1 U.S.C. 5136'e^t se£.

     Oner II, Inc. v. Unitefl'sfates Environ. Protection
     Agency, 597 F.2d 1B4, 186 (9th Cir. 1979).
     See discussion, supra, n. 19;  One of Congress1  primary
     concerns in enacting CERCLA was to alleviate the vast
     national health hazard created by inactive and abandoned
     disposal sites.  See e.g. , Remarks of Rep. Florio,  126
     Cong. Rec. H. 9,154 (Sept. 19, I960), 126 Cong.  Rec.
     H. 11,773 (Dec. 3. 1980).

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                              -16-
Agency should initially utilize the "continuity of business
operation" approach of federal law.  However, to provide
additional support or an alternative basis for successor
corporation liability, the Agency should be prepared to apply
the traditional exemptions to the general rule of non-liability
in asset acquisitions.

ccs  A. Janes Barnes, General Counsel

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GM-29

-------
 ^^^ I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
V^""^/               WASHINGTON. D.C. 20460
                            JUN 15 1984
                                                       COMIUMS MOMTOMM6
  MEMORANDUM

  SUBJECT:  Guidance on Counting and Crediting Civil Judicial
            Referrals
   FROM:     Courtney M. Pric<
            Assistant Administrator for'Enforcement
               and. Compliance Monitoring

   TO:       Regional Administrators, Regions I - X
            Regional Counsels, Regions I - X
   PURPOSE
                  vj
       The purpose of  this memorandum  is  to provide guidance
   as  to what constitutes  a civil  judicial referral and as to
   which activities by  Regional offices  relating to judicial
   referrals will be  credited  for  accountability purposes.

       This guidance addresses issues  associated with the
   following types of referral situations:

       • multi-facility referrals;

       • adding counts to previously referred cases;

       • contempt actions;

       • modifying or  amending consent  decrees;

       • cases returned to Regions  and  re-referrals; and  .

       • the effective date of a  referral.

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                           -2-

BAC*GROUND

     For approximately three years, OECM and its predecessors
have rel-ied primarily on the use of the automated DOCKET
as the official Agency record of the number of referrals of
civil cases to Headquarters, the number of referrals to the
Department of Justice, and as the tracking system for the
current status of active judicial enforcement cases.  For the
most part, the DOCKET system has proved to be very satisfactory,
provided an effort is made to maintain the information in the
system up-to-date.  The system currently reflects the best
information available about our judicial enforcement system.

     The information in the DOCKET system also serves as a
measure used in the Strategic Planning and Management
System (SPMS) and, therefore, the crediting of certain
activities provides measures used to evaluate Regional
offices.  Because information in DOCKET is used for this
purpose, we must be certain we are properly crediting the
activities of the Regional offices, and that everyone with
responsibilities in these areas knows the ground rules for
the system.
                  MULTI-FACILITY REFERRALS

THE DOCKET SYSTEM WILL MAINTAIN BOTH A 'FACILITY' AND A
'CASE' COUNT, AND THE REGIONAL OFFICES WILL BE GIVEN CREDIT
FOR P.EFERRALS ON THE "FACILITY" BASIS.  THIS GIVES THE
AGENCY FLEXIBILITY IN ITS APPROACH TO COUNTING REFERRALS
AND AN ADDITIONAL DIMENSION IN QUANTIFYING THE EXTENT OF
OUR JUDICIAL ENFORCEMENT PROGRAM.

DISCUSSION;  Cases against multiple facilities owned or
opera ted by the sane defendant may be and frequently are
joined by the Regions into one referral, or if made the
subject of separate referrals, are frequently joined into
the name case by the Department of Justice or the courts.
The question then becomes whether those cases are to count
as one referral or multiple referrals, depending on the number
of facilities.

     There are several compelling and logical reasons for
counting such referrals on a facility basis, rather than
strictly on the case basis, at least insofar as internal
Agency record-keeping is concerned.  The resources required
to discover, develop and manage these cases must generally
be considered on the facility basis, since each facility is
usually separate and unique, and requires being addressed

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                           -3-

independently regardless of whether they are consolidated
into the sane proceeding because of commonality of the
parties.  In addition, the Regions can easily achieve
credit for a referral on each facility on the case basis
by preparing separate referrals for each facility.  This
procedure, however, would only achieve an expenditure of
additional time and paperwork, which should not be oncouraged.

     On the other hand, it would be impossible to use a
facility basis of counting referrals to the exclusion of
the case basis.  There are occasions when the number of
cases referred or pending by EPA are significant, and it
would be misleading to the public, Congress or other interested
persons to represent the Agency as having the number of
cases pending which are reflected by the number of facilities
involved.

     Since DOCKET currently maintains information on both a
case and a facility basis, it is a simple matter to continue
to utilize that information, and for internal purposes, to
credit the Regional offices with the number of referrals
represented by the number of facilities included in the
cases.  An additional advantage to maintaining this dual
system of counting is that it would give the Agency, the
public and Congress a more accurate picture of the extent
of the Agency's enforcement program.


         ADDING COUNTS TO PREVIOUSLY REFERRED CASES

THERE IS A PRESUMPTION THAT CREDIT FOR A NEW REFERRAL WILL
NOT BE GIVEN FOR THE ADDITION OF A NEW CAUSE OF ACTION TO
AN EXISTING CASE.  IF A REGIONAL OFFICE THINKS CREDIT FOR A
NEW REFERRAL IS APPROPRIATE IN SUCH A PARTICULAR SITUATION,
THEN THE BURDEN IS ON THAT REGIONAL OFFICE TO DEMONSTRATE:
(1) THAT THE NEW CAUSE OF ACTION IS SIGNIFICANTLY DISTINCT
AND DIFFERENT FROM THE ORIGINAL CAUSE(S) OF ACTION; (2) THE
EVIDENCE REQUIRED TO SUPPORT THE NEW CAUSE OF ACTION IS SO
DIFFERENT THAT SUBSTANTIAL ADDITIONAL RESOURCE REQUIREMENTS
ARE IMPOSED UPON THE REGIONAL OFFICE; AND (3) THAT THE NEW
CAUSE OF ACTION ARISES FROM CIRCUMSTANCES UNFORESEEN AT THE
TIME OF THE ORIGINAL REFERRAL.  THE ADDITION OF NEW CAUSES
OF ACTION UNDER 5107 OF CERCLA TO CASES WHICH WERE ORIGINALLY
FILED FOR INJUNCTIVE RELIEF UNDER RCRA OR CERCLA WILL
NORMALLY QUALIFY AS EXCEPTIONS.

DISCUSSION!  The issue of whether to allow an additional
referral due to the addition of a cause of action which was
not included in the original referral arises most frequently

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                           -4-

in hazardous waste eases which were initiated as suits for
injunctive relief under the "imminent and substantial endanger-
aent* provisions of RCRA and/or CERCLA, and which are subsequently
being converted to cost-recovery actions under S107 of CERCLA
due to cleanup of the site.

     Occasionally, however, causes of action are authorized
to be added to pending cases which were inadvertently
omitted in the initial referral, or which are intended to
merely fortify the legal basis for the Government's claims,
but.do not require significant additional evidence to support
thos« claims.

     It is difficult to expound a universal policy stating
that the addition of a cause of action to an existing suit
will or will not be counted as a new referral under all circum-
stances.  The test here should be: Is the new cause of action
so distinct and different from the original cause(s) of action,
and is the evidence required to support the new cause of action
so different, that in deference to the resource requirements
imposed upon the Region to support it, the Region should be
credited with a new referral?  In addition, the circumstances
under which the case was originally referred without the
new cause of action should be examined to determine whether,
in the exercise of good legal judgment and diligence, the
new cause of action should have been included at that time.

     Under the test set forth above, credit should usually
be given for the addition of a cause of action under $107
of CERCLA, since those normally change the objectives of
the case from those originally involved, and raise substantial
new legal and evidentiary requirements.

     Decisions as to whether the presumption has been
overcome for these cases will be made by the appropriate
Associate Enforcement Counsel in consultation with the
Regional Counsel.  If the AEC and RC cannot agree, the issue
should be raised to me and the appropriate Regional
Administrator for resolution.
                      CONTEMPT ACTIONS

THE REGIONAL OFFICES CURRENTLY RECEIVE AND WILL CONTINUE TO
RECEIVE CREDIT FOR A NEW REFERRAL FOR THE REFERRAL OF
CONTEMPT ACTIONS FOR VIOLATION OF CONSENT DECREES.

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                            -5-

DISCUSSION: There are several reasons why this activity
should be credited as a new referral.  First, the monitoring
of consent decrees to ensure compliance by the defendant is
an Agency priority, and should be encouraged.  To refuse to
credit the Regions with referrals for contempt of those
decrees discourages the assignment of resources to those
aonitoring efforts.

     Second, the amount of resources necessary to conduct
the monitoring of consent decrees nay be as substantial as
that required to determine the initial violation upon which
the decree is based.

     Third, from a 'bookkeeping" viewpoint, the original
case is removed from the active case docket when the consent
decree is entered, and placed on the consent decree docket.
Therefore, there is no problem of 'double counting" of such
cases on the active docket.  Zn any event, contempt cases
are usually so noted in the docket, and can be related to
the original cases if necessary for historical counting
purposes.


        AMENDMENT"OR MODIFICATION OF CONSENT DECREES

A PRESUMPTION EXISTS THAT MODIFICATION OR AMENDMENT TO AN
EXISTING CONSENT DECREE WILL NOT RESULT IN CREDIT FOR A NEW
REFERRAL.  BOWEVER, THE REGION CAN REBUT THAT PRESUMPTION
AND GAIN CREDIT FOR A NEW REFERRAL BY DEMONSTRATING (1)
THAT THE MODIFICATION OR AMENDMENT IS SIGNIFICANT AND
SUBSTANTIAL IN RELATION TO THE CASE AS A WHOLE; (2) THAT IT
AROSE FROM CIRCUMSTANCES WHICH WERE UNFORESEEN AT THE TIME
OF ENTRY OF THE ORIGINAL DECREE; AND (3) THAT IT REQUIRED
THE COMMITTMENT OF SUBSTANTIAL AND SIGNIFICANT RESOURCES TO
INVESTIGATE AND NEGOTIATE IN EXCESS OF THOSE WHICH WOULD RAVE
BEEN EXPENDED FOR TRACKING COMPLIANCE WITH THE ORIGINAL
DECREE.

DISCUSSION;  As in the case with the addition of a new cause of
action to a pending suit, it is difficult to state a simple
policy regarding the credit of a new referral for an amendment
to an existing consent decree.  The resources required to
determine or confirm the need for such amendments varies
from case to case, and with the complexity of the problem
giving rise to the necessity to amend the decree.  Some
amendments arise from circumstances which were unanticipated
at the time the original decree was entered, and can be very

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                           -6-

complex and resource-intensive.  Zn such cases, it would be
fair to encourage the Regional Offices in their tracking of
consent.decrees to allow then credit for a new referral for
an amendment to a consent decree.  However, most amendments
are merely to extend a deadline for completion of construction
or for other minor adjustments, and do not require a signi-
ficant committment of resources to negotiate or accomplish
over those which would be required to track the performance
of the original decree.

    . Decisions as to whether the presumption has been over-
come in these cases will be made by the appropriate Associate
Enforcement Counsel in consultation with the Regional Counsel.
If tihe AEC and RC cannot agree, the issue should be raised
to me and the appropriate Regional Administrator for resolution.


       REFERRALS RETURNED TO REGIONS AND RE-REFERRALS

REFERRALS ARE CREDITED IN THE QUARTER INDICATED BY THE DATE
SHOW ON THE COVER MEMORANDUM FROM THE REGIONAL OFFICE.
RETURNED REFERRALS WILL NOT BE DEDUCTED PROM REGIONAL
TOTALS.  THEREFORE, ADDITIONAL CREDIT WILL NOT BE GIVEN POR
RE-REFERRALS.  A SEPARATE CATEGORY OP CASES RETURNED TO THE
REGION WILL BE MAINTAINED BY DOCKET AND OECM WILL TRACK THE
NUMBER OF CASES RETURNED ON A QUARTERLY AND REGIONAL BASIS.
CASES RETURNED TO THE REGIONS AND NOT RESUBMITTED TO HEADQUARTERS
WITHIN 90 DAYS WILL BE RECLASSIFIED AS CONCLUDED CASES DECLINED
BY EPA.

DISC'JSSIONt  After a case has been referred from the
Regional Office to Headquarters or the Department of Justice
(depending on whether it is a regular or 'direct* referral),
that case may be returned by Headquarters or DOJ to the
Regional Office for a number of reasons, usually for addi-
tional development.

     At the present time, the DOCKET maintains data on a
category of cases designated as "Returned to Region*, so that
there is a record of returned referrals.  These cases are
counted as active enforcement cases because the category is
used for cases Headquarters expects will be pursued after
further development.  Therefore, we have never attempted to
deduct those returned eases from the Regional totals in
arriving at a net number of referrals.

      Deducting returned cases from the number of referrals
leads to many questions as to whether the case will be

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                           -7-

deducted from the total of referrals for the fiscal year
and/or quarter in which the ease was originally referred,
or the year in which the case was returned to the Region,
if those years are not the sane.  This could lead to a
constant readjustment of the number of referrals for any
given quarter.

     Due to the usual demand for specific and definite
numbers of referrals from within and without the Agency at
the conclusion of a quarter or a fiscal year, it is highly
desirable to have a relatively definite number of referrals
ascertained as soon as possible after the conclusion of the
quarter and fiscal year.  In order to achieve this, and for
simplicity in recordkeeping, it is preferable to maintain
on a regional and quarterly basis the number of referrals
and the number of cases returned to that Region.  This will
provide an indication of the number of cases a specific
Region has referred which required return for further
development, without requiring re-calculation of quarterly
and fiscal year referral numbers.

      However, we need to be certain that these cases do
not continue to be counted as active cases when they are
not resubmitted by the Regions.  Therefore, if a case
returned to the Region is not resubmitted to Headquarters
within 90 days, the case will normally be reclassified as a
concluded case which was declined by EPA.

             EFFECTIVE DATE FOR CASE REFERRALS

CASE REFERRAL PACKAGES (OR COPIES THEREOF, IN THE CASE
OF DIRECT REFERRALS) ARE CREDITED IN THE QUARTER AND FISCAL
YEAR ACCORDING TO THE DATE OF THE COVER MEMORANDUM FROM THE
REGION, PROVIDED THAT THE REFERRAL PACKAGE IS RECEIVED
BY HEADQUARTERS WITHIN FIVE CALENDAR DAYS FOLLOWING THE
CLOSE OF A FISCAL QUARTER.

DISCUSSION:  While this is admittedly a minor issue, it is
one which has proved troublesome in the past, particularly
at the end of fiscal years and quarters.  Some referral
packages dated immediately prior to the end of the fiscal
year or of a quarter have been received well into the
following months, necessitating a readjustment in the
number of referrals over a considerable time period.  Due to
the interest in these numbers within and without the Agency,
it is desirable that those numbers be fixed as soon as
possible following the end of a quarter.

     Use of the date on the package would not necessarily
resolve the concerns expressed above, and would still
require readjustment in referral numbers over a period of
time due to delays in the mail service.  Use of the date on

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                           -8-

whieh the package was received in Headquarters may not be
entirely fair to the regional offices due to delays in mail
service and to potential delays in internal Headquarters
mail distribution.  The allowance of a reasonable specified
time beyond the end of the quarter would allow for delays
in mail service, and seems fair to both Headquarters and
regional concerns.

     Regions do not receive credit for any referral unless
and until that referral is received and entered in the
DOCKET system.  This is particularly true of 'direct*
referrals, where a copy of the referral package must be
forwarded to Headquarters to be entered into the DOCKET.
              EFFECTIVE DATE OF THIS GUIDANCE

     THE PROCEDURES SET OUT ZN THIS GUIDANCE WILL BECOME
EFFECTIVE BEGINNING WITH REFERRALS RECEIVED IN THE FOURTH
QUARTER OF FISCAL YEAR 1984.
cc: Associate Enforcement Counsels
    OECM Office Directors

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GM-30

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                        WASHINGTON. D.C. 20460
                                                         IV jr ••%•»•.• *•„
                                                       erv*. *•> «
MEMORANDUM.
SUBJECT:  Policy and Procedures on Parallel Proceedings at the
            Environmental Protection Agency
F?DM:     Courtney K. Pric
          Assistant Administrator
          Office of Enforcement and
            Compliance Monitoring

TC:       Assistant Administrators
          Regional Administrators
          Regional Counsels
          Director, NEIC
Ee :kground

     Civil or administrative actions pjrsjed simultaneously with
criminal investigation or proserjticr, of the sane party(ies), and
relating to the same esser.tial sutject matter, are called parallel
proceedings.  Violations of oost of the environmental laws within
EPA's jurisdiction carry the potential of both civil and criminal
sanctions.  EFA's enforcement options therefore often include
administrative proceedings or referral to the Department of Justice
for civil or criminal litigation.  In addition, EPA will occasion-
ally seek to conduct a criminal investigation in a natter also
requiring a remedial response to eliminate environmental contamin-
ation or potential human health hazards.  In short, the potential
for parallel proceedings at EPA is high.

     In the face of due process arguments to the contrary, it has
been held unequivocally that parallel proceedings are constitu-
tional.  Recognizing that the government often must pursue bcth
civil and criminal routes to protect the public, the Supreme Court
in United States v. Kordel. 397 U.S. 1 (1970), established the
legality- of parallel proceedings.  This case involved an in rem
action for the seizure of certain misbranded drugs, as veil as a
criminal referral with respect to those responsible for the cis-
branding.  The Court pointed out that prompt action in both the
civil and the criminal courts can be necessary to protect the
public interest.  This same rationale can be used in the environ-
mental field, where misconduct may create a danger which can only
be addressed by a civil or administrative action for remedial
relief.  Proceeding civilly, however, does not foreclose pursuit of
other remedies, such as a criminal prosecution, where appropriate.

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                               - 2 -
                                                ,
                       ings pending the ultimate out cone
          crir.inal trial.

397 C'.S. »t 11.  Since Kordel. other courts have sanctioned paral-
lel proceedings barring "special circumstances".
                                civil proceedings without endan-
          gerir.j its criminal ease.  Thus, we should not block
          parallel investigations by these agencies in the absence
          of "special circumstances" in which the nature of the
          proceedings d'emonstrably prejudices substantial rights
          of the investigated party or of the government.

     . Dresser Industries, Inc.. 628 F.2d 136S, (&.C. Cir.Ker. bane)
      dene:, *-5 U.S. 993 (1980).

     Notwithstanding the legality of parallel proceedings, a number
cf circumstances militate in favor cf keeping such dual actions to
a minimum.  Inherent in the simultaneous pursuit of civil, •adminis-
trative and/or criminal sanctions is the possibility of legal chal-
lenges and administrative difficulties.  First, it would be an
inappropriate use of Agency resources, as well as a questionable
exercise of enforcement discretion, for EFA to seek criminal and
civil sanctions in every case where both are legally permissible.
Because of considerations discussed within this memorandum, separ-
ate staffs will often be usec1 for the civil/ administrative action
and the parallel criminal investigation.  The number of EPA staff
involved in an enforcement action against one party nay, therefore,
be doubled while not substantially changing the nature of the relief
obtained.

     Further, when parallel actions are initiated by the govern-
ment, _]_/ defense allegations of abuse often arise.  Whatever the
substance of the charges, the delay and effort occasioned by the
need to respond to and litigate these charges can counterbalance
the potential benefits of the dual actions.  Typical objections to
parallel proceedings include the allegation that the government
I/  Parallel actions may develop when a defendant in a criminal •
"case initiates a civil suit against the government or when an
individual or corporation who is the plaintiff in a civil action
becomes a defendant in a criminal case involving the sase matters
In such a situation, even though the government has net created
the dual actions, similar parallel proceedings issues arise.

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                              - 3 -


has acxed deceptively by seeking more than one type of relief
without promptly notifying the party involved, or that the
government is using one of the actions to assist the other.
Conversely, the government may find that the criminal defendant
seeks to obtain information about the prosecution of the criminal
case through the use of civil discovery devices.

    Because of the above stated resource and legal considerations,
parallel proceedings should be undertaken only when clearly warranted
by the facts of a given situation.

Issue

Under What Circumstances Are Parallel Proceedings Warranted?
                 «
Policy

     Zn light of the limited criminal investigative resources
available to the Agency, criminal investigations and referrals
are necessarily limited to situations of the most significant
and/or flagrant environmental misconduct.  Accordingly,  the
issue of parallel proceedings should arise in only a limited
number of cases.

     Within this limited category of cases, if the environmental
misconduct is ongoing, or if circumstances otherwise necessitate
irnunctive relief or remedial action, a parallel proceeding is
appropriate.  Where there is no need fo: injunctive or remedial
relief, and the purpose of a civil/administrative action would
be limited to the assessment of penalties for past misconduct,
pa:allel proceedings will normally be avoided and the civil
action held in abeyance while the criminal enforcement process
proceeds.  In such situations, Agency officials should monitor
the criminal case closely to ensure that it is developed as
expeditiously as possible.

Discussion

     This policy supports the use of parallel proceedings
in those situations in which the public interest necessitates
dual actions, i.e., cases involving significant and flagrant
environmental misconduct that also require injunctive/remedial
response through the civil enforcement apparatus.  However,
where the purpose of enforcement is limited to the assessment
of penalties, the simultaneous pursuit of civil as well  as
criminal sanctions through parallel proceedings is discouraged.

     By'so limiting the use of parallel proceedings, unnecessary
legal challenges as well as resource strains will be avoided.
In addition, the policy recognizes the reluctance frequently
manifested by Federal prosecutors to penalize a defendant through
both administrative/civil and criminal sanctions.

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Finally,  by deferring  the  civil proceedings  until  after  the  com-
•pletion  of the  criminal action  in penalty-only  cases,  the  government
will'be,able  to take advantage  of the doctrine  of  res  judicata.
That  is,' identical  issues  which have been  resolved in  the  govern-
ment's favor  in the criminal  case do not have to be  relitigated in
the civil action.   On  the  other hand, any  issues or  verdicts con-
trary to the  government's  position  in the  criminal case  will not
bind  the court  hearing the subsequent civil  case because of  the
lesser burden which the government  (if plaintiff)  must bear  in a
civil Actioh.


Issue

In Those Situations in Which  Parallel Proceedings  Are Necessary,
Wf.en  Should Notice  of  the  Existence of the Parallel  Proceeding Be
Given to the  Common Subjects?

Pol icy                  ....;/

      Notice that  a  criminal investigation  has commenced, or  that a
referral for  criminal  prosecution has been m?.de, is  not  a  legal
requirement.  A target does not have to be made aware of the en-
forcement steps that the Agency is pursuing  or  contemplating.  However,
the Agency should consider giving notice of  the potential  for a
criminal  prosecution to the common sutject(s) at the initiation of
every parallel  proceeding.  A statement advising the suriject(s)
that  "the Agency  is free to choose civil,  criminal or administra-
tive  enforcement  actions ani  taring one type of action does  not
preclude pursuing another  type  of action"  may be appropriate.
Whether  or not  the  Agency  elects to affirmatively  ma«e such  a
statement, this type of answer  should be given  routinely to  ques-
tions from targets  about the  existence of, or the  potential  for,
parallel  actions.   The Agency must be careful never  to affirm-
atively  misrepresent the potential for a criminal  case.

Discuss :,on

      Before a criminal investigation is initiated,  the Special
Agent from the  Off ice.of Criminal Investigations routinely contacts
the Regional  Counsel and the  regional program office in  the  region
where the investigation is to be conducted.  This  is to  discover
whe.the?  administrative/civil  enforcement action is pending or contem-
plated.   This initial  coordination  is meant  to  ensure  that a paral-
lel proceeding  does not occur without the  knowledge  of appropriate
Agency personnel.   When a  civil action commences,  it would likewise
be advisable  for  the Regional Counsel and/or regional program
offices  to check  with  the  Office of Criminal Investigations  if
there is  any  question  of the  existence of  a  criminal investigation.

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     Notice of the potential for parallel civil and criminal pro-
ceedings should be given to the subjeet(s), either orally or in
writing (depending upon the previous methods of communication in
the particular matter or upon the nature of the situation), when-
ever it i/ill not unduly jeopardize pursuit of the criminal inquiry,,
The timing, as well as the mechanics of how and who should give
the notice, should be decided jointly by the attorneys and agents
assigned to the criminal enforcement case and the Agency personnel
assigned to the civil/adir.inistrative action.  Unilateral notifica-
tion without coordination by personnel assigned to either case can
disrupt and confuse the parallel investigations and should not
occur*

     While not always legally mandated, this prophylactic measure
allows the comron subject to protect himself against self-incrimina-
tion by ooving the court for a stay, a protective order, or other
relief in the civil proceeding, while shielding the government
from subsequent charges of deception or abuse of the civil proceed-
ing.  In eases in which parties have testified or have' provided
incriminating information, courts have been critical of the govern-
ment where there have been previous misrepresentations or unfulfilled
promises of immunity.  See, e.g., SEC v. ESM Government Securities,
Inc., 64S F.2d 310 (5th Cir. 1981); United States v. Parrott, 248
T7~Supp« 196 (D.D.C. 1965); United States v. Guerina, 112 F. Supp.
126 (E.D. Pa. 1953); United States v. Rand, 308 F. Sup?. 1231
(N.D. Ohio 1970).

     If the Agency chooses not to notify the target of the start of
a criminal investigation, the execution of a criminal search warrant*
t'H- presentation of credentials by an EPA criminal investigator in
an  interview context, or the issuance of grand jury subpoenas'will
accomplish the same functior. by making the criminal focus obvious.
Sc  long as the Agency has net previously misrepresented the poten-
tial for a criminal action, it can not be accused of being deceptive
just because the targets have not been notified until the investi-
gation has become public knowledge.

     If directly asked whether a criminal investigation has been
undertaken or whether such an investigation (or prosecution) is
contemplated, an EPA employee may of course decline to reply.
However, in some circumstances a court may find that silence
constitutes a form of deception.  (See below).  An alternative
response would be a statement that "the Agency is free to choose
civil, criminal or administrative enforcement actions and taking
one type of action does not preclude pursuing another type of
action".  It is clear, however, that the government cannot deny
the existence of a criminal investigation or referral or mislead
the party into believing that cooperation with the civil action
will preclude a criminal case, if this is untrue.  SEC v» ESM
Government Securities, Inc., supra.  In United States v. Fields,
592 F.2d 638, 643  (2d Cir. 197fc), cert, denied, 442 U.S. 917 (1979),
the Court criticized the conduct of two SEC employees who  (while
negotiating a consent decree in a civil suit) failed to .disclose
that a criminal referral had been made.  The District Court con-
cluded that defense counsel had interpreted the SEC's silence

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                                - 6 -


 regarding  the  referral  as  an  agreement  not to make the referral.
 Perhaps  the  key  fact  in the case,  however, was that the defense
 had  rnade it  expressly known that it was entering  into the  decree
 to avoid a referral.  Although  the Second  Circuit  held that  dis-
 missilng  the  indictment  was too  severe a sanction,  it did chastise
 the  JiEC  for  its  conduct and warned against such misleading silence
 in the future.   Id. at  647.   See also United  States v.  Rodman,
 519  l\2d 1058  (1st Cir.  1975)1       " 	    	

     In  a  series of cases  involving the Internal Revenue Service,
 courUs have  held that,  in  the absence of affirmative misrepresen-
 tations, a taxpayer has not established that  information was
 obtained through deceit and trickery.   Specifically discounting
 silence  as per se fraud, one  court stated  that "silence can  only
 be equated withTraud where there  is a  legal  or moral  duty to
 speak or where an inquiry  left  unanswered  would be  intentionally
 ris loading".   United  Slates v.  Prudden,  424 F.2d 1021  (5th Cir.
 1970).   In United States v. Tonahill. 430  F.2d 1042,  1044  (5th Cir.
 1970), the Court found  that,  when  specifically asked whether  they
 were investigating a  crime, IRS Special  Agents did  not  engage in
 irrpe:rmissir.le  trickery  when they did not directly  answer that a
 "criminal  investigation" was  occurring  but  instead  stated  that
 "their function was to  reconcile the large  discrepancies to  see  if
 they were  the  result  of  innocent "errors".

     Where circumstances require that notice  of the potential
 f-:  ii criminal prosecution he delayed until the investigation
 (eitner  field  or grand  jury)  is cor.pleted,2/  then  not  only must the
 government be  extremely  careful not  to  mislead the  party but  infor-
 mation provided by the  ccr.ron subject in the  parallel  civil
 pioe^eding will generally  not be transferred  to the attorneys and
 agents involved in the  criminal inquiry.   The  transfer  of  infor-
 mation from  a  civil to  a parallel  criminal  enforcement  action
 when the party is unaware  that  he  may be the  subject of  a  criminal
 investigation  has not been directly  addressee;  and  condemned by the
 courts.2/  However, such a procedure would  invite  allegations of
 impropeT use of the civil  proceedings to further the criminal
 investigation.
2/  If-there is strong likelihood of evidence destruction, witness
intimidation, or ongoing criminal activity, reasons certainly
exis: to delay disclosure or notice of the potential for a criminal
investigation or referral.

2/  Where defendants have been aware of the parallel proceeding and
have objected in advance to their statements being transferred from
ar. a;ency to the Department of Justice, courts have nevertheless
apprsved such transfers.  SEC v. Dresser Industries, Inc., surra.

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Issue

Should Miranda-type Warnings Be Given Under Any Circumstances To
'Subjects *of Parallel Proceedings?
    Full Miranda warnings are unnecessary  in non-"custodial" set-
 tings.  However, modified warnings should  be given before a comr.on
 subject is required to provide evidence testimonial  in nature*/
 during civil proceedings.  That  is, warnings should  occur before
 a comnon subject is deposed* and before an administrative hearing
 or trial is held at which a party may testify.  An administrative
 request for business documents is not considered "testimony"
 and need not trigger a disclosure of a criminal investigation.
 Schmerber v. California, 384 U.S. 757 (1966).

 Discussion

     These warnin-s are separate and apart from the  "notice" dis-
 cussed earlier  in  this memorandum.  "Notice" pertains to a state-
 ment from the Agency that a natter Bay result in both criminal and
 civil action fry the Agency.  It  is issued  to avoid criticism that
 tf.*» Agency has  acted deceptively or that it has misrepresented the
 nature of its contacts with an individual  or company.  "Warnings",
 en the other hantj, are a response to the Fifth Amendment consider-
 ations which arise whenever an individual  is compelled by the
 government to provide information.  It informs the individual that
 his responses may  be used against him in subsequent  proceedings.

     Full Miranda  warnings, or acvice of rights, are not required,
 or advisable, in connection with the compulsion of testimony in
 the civil proceeding, since the  testimony  is not elicited in a
 "custodial" setting._5/  A warning which will adequately inform the
 party may consist  of~a simple statement that violations of environ-
 mental statutes may subject an individual  to both civil and crimi-
 nal sanctions and  that statements made by  the individual may be
 used against him in any further  proceedings.  Warnings are crucial
 when the subject is asked to give testimonial evidence and she/he
£'  "Testimonial evidence"  is that which  is communicative in nature
or'"from the witness's own  mouth."  Private papers  (such as a
diary) or oral testimony come within the  zone of privacy protected
by the Fifth Amendment but  ordinary documents or books which may
include Incriminating information do not.  United States v. Fisher,
425 U.S. 391  (1976).

$/ The Supreme Court in United States v. -Miranda, 384 U.S. 436 (1966)
"held that a suspect's Sixth Amendment right to  the  assistance of
counsel attaches as soon as government agents take  him into custody
or otherwise restrict his freedom of action in  any  significant way.

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                                -8-
is net!'represented by counsel.  The Court  in United States  v.
Kordel, supra,. expressly distinguished the facts  in tr.at  landmark
case .Iron the situation in which a party is unrepresented by coun-
sel in the civil proceeding, noted the Fifth Amendment considera-
tions at issue, and irrplied that it might have held differently if
the defendant had not had counsel.

Issue

Where Parallel Proceedings Are Initiated, When and How Should
Stafl:i Be Separatee?

Poliey

     If the defendant or target is on notice of the existence of
the parallel proceeding -and no grand jury work has begun, staffs
nay be interchanged.

     Once a grand jury investigation is initiated, personnel with
access to granc jury materials should have nc further involvement
in the parallel civil action in light of the statutory requirements
pfiteining to grand jury secrecy.  Because almost every environ-
mental criminal case will require grand jury investigation  prior'
tc indictment, and because at least partial separation of civil
an-; criminal staffs wjjl be required after the initiation of the
5.and jury investigation, it is usually best to -separate  staffs
a: the time of initiation cf tr.e parallel proceeding.


Piscussion

     The separation of staffs does not require a  separation of
supervisory personnel so long as grand jury material is not dis-
closed to any supervisor who is involved in supervising staff
working on the civil or administrative proceedings.^/  Supervisors
who are not involved in the civil/administrative  proceedings and
who believe it neces.sary to become familiar with  the grand  jury
investigation, should raise this issue with the Justice Department
prosecutor supervising the case.
_6/  Even the recent Supreme Court opinions  (United States v. Sells
Engineerinc, Inc., 	 U.S. 	, 33 Crim. L. Rep. 3243  (June 30,
19 63 ) ;  Unites States v. Escrct, 	 U.S. 	, 33 Crim.  L. Rep.
3259 (June  30, 1963)), whicn have directly discussed the  topic of
"grand  jury material" have not clarified what is meant by this
term.   Broadly interpreted, "grand jury material" wight be  consid-
ered to include not only the testimony of grand jury witnesses and
the documents subpoenaed by the grand jury but also any of  the
substantive matters which are the subject of the grand ju:y  investi-
gation.

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     Separating the staffs which are working on each action can also
negate the defense argument that one proceeding is being used to
develop the other.  Although the courts have approved parallel
proceedings, there must be a legitimate purpose for each proceeding.
A "legitimate purpose" is found where independent goals exist
for each action and neither action is being pursued solely to
advance or strengthen the other.  Public interest considerations
justifying parallel proceedings would disappear should the government
abuse its power to initiate both actions by interfering with the
independent integrity of either action.  A separation of staffs
avoids the conflict in roles that may be perceived if there is
involvement in both of the actions.  The appearance of a conflict
or of an abuse of the grand jury process (by assisting in a parallel
civil action) is also avoided by the early separation of staffs.
Issue

May Information Developed in Criminal Proceedings Be Provided for
Use in Parallel Civil Proceedings and Vice-versa?

Pol icy

     Grand jury material may never be passed to anyone working on
a parallel civil proceeding.  In fact, grand jury material may
never be discussed with anyone who is net on the so-call'ed "6(e)"
list.  Fed. R. Crim. P. 6(e).  Information developed in criminal
field investigations may be passed to civil staff for their use.
However, such information must be clearly documented to show where
and when the information was obtained so that allegations of grand
jury abuse may be countered at a sjbsequent date.  The Agency
should be prepared to demonstrate that the information passed to
the civil side from personnel working on the criminal case was not
oMained by the use of a grand jury.

     Information obtained in civil cases from subjects of a paral-
lel proceeding may be provided to personnel working on the criminal
case, if the subjects were on notice of the potential for a parallel
criminal proceeding when the information was provided by the subjects,
and if warnings were given prior to testimonial situations.  If
the subjects were not on notice or were not given warnings, then
information provided by them should not be turned over to personnel
working on the criminal case.

Discussion

     Where there has been no notice (of the potential for a crimi-
nal proceeding) or warnings (of the Fifth Amendment considerations)
or there are other indicia of potential unfairness to the target,

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 information obtained in a civil proceeding from the subject of a
'parallel  criminal  proceeding should be isolated and withheld.   See
 United States  v.  Kordel,  supra, 397 U.S.  »t 12.

      In SEC v.  Dresser  Industries,  Inc.f  supra, the Court  did  not
 object to the  transfer  of information from government  attorneys
 involved  in civil/administrative matters  to prosecutors on the
 criminal  side.   'Where  the agency has a legitimate  non-criminal
 purpose for the investigation,  it acts in good  faith under the
 [United States  v.  LaSalle National  Bank,  437 U.S.  298  (1978)]
 conetption even if it might use the information gained in  the
 investigation  for  criminal enforcement purposes as  well.'   628
 F.2d at 1387 (footnote  omitted).  Notice  was not an issue  in this
 case because the  company  records were subpoenaed simultaneously by
 both the  SEC and  the grand jury, placing  the company on notice of
 the  parallel proceeding.   Moreover, it would not be legitimate
 for  information to go in  the opposite direction (i.e., information
 obtained  through  a grand'',jury passing to  the civil/administrative
 enforcement authorities).^/

      Finally,  it  should be noted that the bar on exchange  of infor-
 mation from a  civil to  a  criminal proceeding pertains  only to
 information obtained (1)  from the common  target--corporate or  indi-
 vidual, ani (2) after the initiation of the parallel proceeding.
 Information in  the possession of the government prior  to the initi-
 ation of  a criminal investigation may be  freely exchanged.

      Information  sought by an agency which has  'already been subpoe-
 naei by a grand jury, while not available from  the  members of  the
 prosecution team,  can be  obtained by the  civil  side of the agency  '
 by  use of civil discovery devices,  if it  is sought  for its own
 sake and  not for  the purpose of uncovering what took place before
 the  grand jury.  United States  v. Interstate Dress  Carriers. Inc.,
 280  F.2d. 52,  54  (2c Cir. 1960), cited ±n SEC v. Dresser Industries,
 Inc.,  supra, 628  F.2d at  1382;  accord, Capitol  Indemnity Corp. v.
 First  Minnesota Construction Co., 405 F.  Supp.  929  (D. Minn. 1975);
 United States  v.  Saks and Co.,  426  F. Supp. 812 (S.D.N.Y.  1976);
 Davis  v.  Romney,  55 F.R.D. 337  (E.D. Pa.  1972). This  is consistent
 with the  general  proposition that,  so long as each  investigation
 and  proceeding  has it'own legitimacy, then the  tools available to
 each may  be used  accordingly.
2/  The  Federal  grand  jury  exists  for  and  can  satisfy  only  one
purpose—to  enforce  Federal  criminal  law.   Information  developed
in  the  course of  a grand  jury  proceeding  may  not  be made available
for use  in administrative  or civil  proceedings  absent a court  order.
Fed.  R.  Crim. P.  6(e).  A  "special  circumstance"  indicating  an im-~
proper  use of a parallel  proceeding is  the  use  of a grand  jury to
help a  civil or administrative case.  United  States v.  Proctor fc
GarrMe  Co. ,  356 U.S.  677,  683  (1956); United  States v.  John  Doe,
341 F.  Supp. 1350 (5.D.N.Y.  1972).

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                                -11-


Issue

To What Extent May the Government Use Civil Discovery Tools When
There Is a Pendinc Parallel Action?
     So long as the above stated policies on notice, warnings,
and separate staffing are pursued, the government may use
what«ver civil discovery tools are available to pursue legitimate
aims in the civil proceeding.  Civil discovery may not, however,
be used to pursue evidence solely relevant to the criminal
case.  At the court's discretion, stays or protective orders
may be granted upon a party's notion.

Discussion

     The presumption under the Federal Rules of Civil Procedure .is
that discovery s^culd be available to each party to the fullest
extent possible.  On the other hand, the Federal Rules of Criminal
Procedure limjt discovery to only that information specifically
covered within the rules.  Prior to trial, a criminal defendant
ha« the rig^t to obtain from the government any statements alleged
to have been made by the defendant to agents of the government,
the defendant's criminal record, and documents, tangible objects
ana any reports of examinations or tests which the government
intends to use as evidence in its case in chief.

     In a criminal action, t-.is difference (in discovery rules) can
leal to an unfair advantage be:ng gained, by either side, through '
the use of the more liberal civil discovery rules.  For example,
information about defense witnesses, strategy, and anticipated
testimony (otherwise unavailable prior to a criminal trial) can be
uncovered by the government through the use of interrogatories,
depositions and/or requests to produce.  Similarly, a defense
attorney, by initiating a civil suit against the government or as
a respondent in a civil suit, could take advantage of the civil
discovery rules to depose government witnesses and file interroga-
tories to reveal information normally unavailable to a criminal
defendant.  Therefore, courts have been sensitive to the need to
ensure the integrity of each branch of the parallel proceeding.

     In SEC v. Dresser Industries, Inc., supra, the Court held
that the limitations placed on the use of the IRS administrative
summons enunciated in United States v. LaSalle National Bank,
supra, are inapplicable to the SEC.  Accord, SEC v. First Financial
Group of Texas, 659 F.2d 660 (5th Cir. 1980).  UnderTTSalle, the
IRS is precluded from using its administrative summons authority
after a case has been referred to the Department of Justice for
criminal prosecution.  EPA, like the SFC but unlike the IRS, pos-
sesses .statutory authority to pursue investigations of both a
civil and a criminal nature.  Therefore, while the IRS has no prac-
tical authorized purpose for issuing a summons after a referral

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 to  Justice,  if  EPA  decides  to pursue  both  civil  «nd criminal  cases,
•its  summons  authority  continues  undiminished  even  after  referral,
 provide;!', that the purpose  is  to  develop  the civil  action.   SEC v.
 Dresser  industries,  Inc.,  supra,  628  F.2d  at  1381.J/ Many  of  the
 IRS  cases  can be viewed as  sui generis because of  The particular
 statutory  authority under  which  that  agency operates.

     Courts  historically have been  sympathetic to  claims by both   .
 the  government  and  individuals that civil  discovery rules are
 being • Jiplo'ited to  benefit  the party  in  the criminal proceeding.
 In deciding  the appropriate remedy, the  court will  weigh the public
 and  the  plaintiff's interest  in  the speedy resolution of the civil
 suit agjiinst the potential  for prejudice to the  defendant and  the
 interest; in  maintaining the procedural integrity of the  criminal
 justice  system.  S£C v. Control  Metals Corp., 57 F.R.D.  52  (S.D.N.Y,
 1972); Campbell v.  Eastland,  307 F.2d 478  (5th Cir. 1962),  cert.
 denied,"371  U.S. 953 (1963).   Both  the government  and individuals/
 corporations have successfully sought stays of civil proceedings.
 Unless fthe interests of justice  weigh against the  equitable relief
 of  a stay, cojrts generally will grant stays  of  the entire  civil
 proceeding,  or  at least of  the discovery process,  pending the  dis-
 position of  the criminal matter.  Protective  orders can  also be
 er.^loye<3 to  prevent the transfer of information  between  branches
 of  government or to limit  the scope of tne information transferred.

     Difficulties can  be anticipated  in  EPA-initiated cases when
 the  government  must oppose  a  stay because  of  its need to proceed
 civilly  and  criminally.  The  defendant will seek to use  civil  dis-
 covery to  depose government witnesses while resisting the govern-
 ment's attempts to  uncover  defenses.  If the  government  can negoti-
 ate  a stipulated injunctive relief  together with a  stay  of  the
 remainder  of the civil suit pending the  criminal disposition,  some
 of  thesr? difficulties  may  be  resolved.   Otherwise,  a mixture of
 partial  stays and narrowly  framed protective  orders may be  the
 only alternative.

     Protective orders or  stays  (Fed. R. Civ. P. 26(c),(d)) may be
 granted  at the  discretion  of  the trial judge.  At  least  one court
 has  found  it to be  violative  of  due process to force the defendant
 tc go forward in an administrative  hearing while a  criminal proceed-
 ing  is pending.  Silver v.  McCamey, 221  F.2d  873 (D.C. Cir. 1965).
 8/  This  is distinguishable  from  the  situations  discussed  in  the
TPA guidance  on  the  "Guidelines for  the  Use  of Administrative
 Discovery  Devices  in  the  Development  of  Potential  Criminal  Cases."
 In that guidance,  the  issues  were  presented  in the context  of
 cases which were going  to be  either  civil/administrative or criminal
 actions,  but  not both.   If an Agency  decision  is made  that  a  case
 should be  referred for  criminal prosecution  alone,  then  it  would
 be clearly improper  to  use administrative  discovery devices after
 such referral.

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However, there are other alternatives to a stay, such as a narrowly
framed protective order, sealing the responses to interrogatories,
or precluding the use of the products of civil discovery at crimi-
nal trials* which can be employed instead of an all-encompassing
       McSurely v. McClellan, 426 F. Supp. 664 (D.D.C. 1970).
     Claims of Fifth Amendment privilege are an oft-cited reason
for a request for a stay.  If a civil defendant is "compelled" to
testify, his testimony cannot later be used to incriminate him.
But a civil defendant is not compelled to testify merely because
the fact-finder may draw adverse inferences from his failure to
testify.  Baxter v. Palmioiano, 425 U.S. 308, 317-18 (1976).  Some
court! have granted stays where a defendant must either invoke the
Fifth Amendment, and thereby jeopardize his civil/administrative
case, or provide information which may be used against him in the
criminal case.  United States v. American Radiator and Standard
Sanitary Corp . , 2*72 F. Supp. 6 9 1 (w.D. Pa.), rev'd on other
383 F.2d 201 (3d Cir. 1967), cert, denied, 390 U.S. 922 (1961
Dienstag v. Bronser, 49 F.R.D. 327 (S.D.N.Y. 1970); Perry v.
HcGuire, 36 F.R.D. 272 (S.D.N.Y. 1964); Paul Harrigan and Sons v.
Enterprise Animal Oil Co., 14 F.R.D.  333 (E.D. Pa. 1953).

     Other courts have sympathized with the defendant but refused
tc grant protective orders, a stay or other relief despite Fifth
Amendment issues.  In SEC v. Rubinstein, 95 F.R.D. 529 (S.D.N.Y.
19-12), the Court cited a statutory authorization to»pass informa-
ticn from the SEC to the Department of Justice, and prior judicial
approval of such action in United States v. Fields, supra , and in
SEC v. Dresser Industries, Inc., supra, and denied the motion to
se«] discovery.

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GM-31

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I
I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
t.                 WASHINGTON. D.C. 20460
                                                            if 3i
                                   1984
                                                           CfFiCE Of
                                                         ENFORCEMENT AND
                                                       COMPLIANCE MONITOftlKG
  MEMORANDUM
  SUBJECT:
  FROM
  TO:
      Guidance for Implementing EPA's Contractor
      Listing Authority
      Courtney M.
      Assistant Administrator for Enforcement
        and Compliance Monitoring
      Assistant
      Assistant
      Assistant
      Assistant
Administrator for
Administrator for
Administrator for
Administrator for
               and  Evaluation
            General  Counsel
            Inspector  General
            Regional Administrators
Air and Radiation
Water
External Affairs
Policy, Planning
  I.  Purpose

       The purposes  of  this  document  are  to briefly describe:
  1) EPA's contractor  listing  authority,  2) the interim agency
  policy prior  to  final  promulgation  of  revisions to the listing
  regulations at 40  C.F.R. Part  15, and  3)  the proposed revisions
  to 40 C.F.R.  Part  15.   Further,  the document gives some general
  guidance on when to  bring  a  contractor  listing action, and
  explains how  the Agency's  Strategic Planning and Management
  System will account  for listing  actions as enforcement responses,
    i
  II •  Background

       The Clean Air^Act1 and  the  Clean Water^Act2, as implemented
  by executive  orcer^  and Federal  r3gulation, ** authorize EPA to
  I/  Clean Air Act,  Section  306,  42  U.S.C §7606.
  2/  Clean Water  Act,  Section 508,  42 U.S.C.  §1368
  V  Executive Order 11738,  September 12, 1973
  _4/  40 C.F.R. Part  15

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                              -2-

preclude certain facilities from obtaining government contracts,
grants, or loans, if the facility is violating pollution control
standards.  Commonly called "contractor listing", this program
assures that each Federal Executive Branch agency undertakes
procurement and assistance activities in a manner that will
result in effective enforcement of the air and water acts.
Contractor listing also ensures that owners of noncomplying
facilities do not receive an unfair competitive advantage in
contract awards based on lower production costs.

     In the past, EPA has seldom used contractor listing in
the enforcement program.  Currently, one facility (Chemical
Formulators, Inc., Nitro, West Virginia)5 is on the List of
Violating Facilities.  Contractor listing can be an effective
enforcement tool, and EPA policy calls for Regional Office
enforcement personnel;to actively consider the viability of
this option to obtain compliance with Clean Air Act and Clean
Water Act standards.

     With a view toward improving and streamlining the contractor
listing program, EPA has proposed revisions to 40 C.F.R Part 15
(copy attached).  The proposed revisions provide additional
procedural protections to facilities which are the subject of
listing recommendations and expand the range of situations which
may trigger the listing sanction.

Ill. Interim Listing Policy While Regulations Undergoing Revision

     A.  Grounds;  By statute, EPA must list a facility which
has c;iven rise to a person's conviction under Section 309(c)
of the CWA or Section 113(c)(l) of the CAA, and that person
owns, leases, or supervises such facility (mandatory listing).
Otherwise, prior to promulgation of the revised Part 15 regulations,
EPA nay list a facility only on the following grounds set forth
in the current Section 15.20(a)(l) (1979) (discretionary listing).
Specifically, EPA may list a facility only if there is continuing
or rocurring non compliance at the facility and

          0  The facility has given rise to an injunction,
             order, judgment, decree, or other form of civil
             ruling by a Federal, State, or local court issued
             as a result of noncompliance with clean air or
             clean water standards, or the facility has given
             rise to a person's conviction in a State or local
             court for noncompliance with clean air or clean
             water standards, and that person owns, leases, or
             supervises the facility.

          a  The facility is not in compliance with an order
             under Section 113(a) of the CAA or Section 309U)
             of CWA, or has given rise to the initiation of
5/  46 F.R. 16324, March 12, 1981

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                              -3-

             court action under Section 113(b) of the CAA or
             309(b) of the CWA, or has been subjected to
             equivalent State or local proceedings to enforce
             clean air or clean water standards.

     B.  Procedures;  Prior to promulgation of the revised
regulations, EPA will employ the procedures proposed in the
revised regulations for discretionary listing and the procedures
in the current regulations [Section 15.20(a ) (2)(1979)] for
mandatory listing, explained below.  EPA will use the procedures
proposed in the revised regulations for discretionary listing
because these regulations provide greater procedural protections
than the current regulations6.  Because the revised mandatory
listing regulations authorize less procedural protections than
the current procedures, however, EPA will continue to employ
the current regulations until the revised mandatory listing
procedures are legally effective.

     We recognize that some confusion may result during the
interim period, so you should not hesitate to contact the EPA
Listing Official7 to resolve any problems.  Upon promulgation
of the final rules, we will revise this guidance as necessary.

IV.  The Listing Program and the Proposed Revisions to Part 15

     Even under the revised regulations as proposed, the basic
framework for listing actions is substantially the same as
established by the present regulations.  The proposed revisions
to Part 15 clarify the distinctions between mandatory and
discretionary listing, and establish some different procedures
for each type of listing.**

     A.  Mandatory Listing

     If a violation at a facility gives rise to a criminal
conviction under Section 113(c)(l) of the CAA or Section 309(c)
of the CWA, listing of the facility is mandatory if the convicted
person owns, leases or supervises the facility.  Not only is
listing mandatory, but section 15.10 makes the listing effective
£/ One exception is that EPA will continue to use the Listing
   Review Panel to review decisions of the Case Examiner.  The
   Panel consists of the AAs for OECM and Policy, Planning and
   Evaluation, the General Counsel, and a representative from
   the Office of the Deputy Administrator who shall serve as a
   non-voting member.

2/ I have designated Edmund J. Gorman of the Office of Legal
   and Enforcement Policy (LE-130A) as EPA's Listing Official.
   Ke can be reached at  (FTS) 426-7503.

_8/ Hereinafter all citations are to the proposed revised Part 15
   regulations unless otherwise expressly stated.

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                              -4-
automatically upon a conviction.  As soon as o conviction occurs,
the Associate Enforcement Counsel for Criminal Enforcement
must notify the Listing Official.

       The Listing Official is responsible for sending written
notification to the facility and to the Federal Register.  Both
documents must state the basis for and the effective date of
the mandatory listing.

     Removal from the mandatory list may occur only if:  (1) the
Assistant Administrator certifies that the facility has corrected
the condition that gave rise to the criminal conviction under
Section 113(c)(l) of the CAA or Section 309(c) of the CWA, or
(2) a court has overturned the criminal conviction.

B.   Discretionary Listing

1.   Basis for Discretionary Listing

     Discretionary listing may occur if the recommending person
can show a "record of continuing or recurring noncompliancef"
and that a requisite enforcement action has been initiated or
concluded.  The proposed revisions broaden the discretionary
listing authorities by including additional statutory provisions
under which EPA can bring enforcement actions that can trigger
applicability.  Under the proposed regulations, any of the
following enforcement actions may serve as a basis for listing
if there is also a record of continuing or recurring nonccmpliance
at the facility:

          1.  A federal court convicts any person under Section
              113(c)(2) of the CAA, if that person owns, leases,
              or supervises the facility.

          2.  A State or local court convicts any person of a
              criminal offense on the basis of noncompliance
              with clean air or clean water standards if that
              person owns, leases, or supervises the facility.

          3.  A federal, state, or local court issues an injunction,
              order, judgment, decree, or other form of civil
              ruling as a result of noncoinpliance with clean air
              or clean water standards at the facility.

          4.  The facility is the recipient of a Notice of
              Noncomliance under Section 120 of the CAA.

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                              -5-

          5.  The facility has violated an administrative order
              under:

                  .  Section 113(a) CAA
                  .  Section 113(d) CAA
                  .  Section 167    CAA
                  .  Section 303    CAA
                  .  Section 309(a) CWA

          6.  The facility is the subject of a district court
              civil enforcement action under:

                  .  Section 113(b) CAA
                  .  Section 204    CAA
                    Section 205    CAA
                  .  Section 211    CAA
                  .  Section 309(b) CWA

2.   Initiating the Discretionary Listing Process

     The listing process begins with a recommendation to list
filed by a "recommending person" with the Listing Official.
Recommending persons include any member of the public, Regional
Administrators, the Assistant Administrator for Air and Radiation,
the Assistant Administrator for Water, the Associate Enforcement
Counsel for Air, the Associate Enforcement Counsel for Water,
and Governors.  The recommendation to list is a written request
that:  (1) states the name, address, and telephone number of
the recommending person, (2) describes the facility, and (3)
describes the alleged continuing or recurring noncompliance,
and the parallel enforcement action.  Section 15.11(b).

     The Listing Official must review the recommendation to
determine whether it meets the requirements of Section 15.1Kb).
If it does, the Listing Official then must transmit the
recommendation to the Assistant Administrator for Enforcement
and Compliance Monitoring who shall in his/her discretion,
decide whether to proceed with the listing action.  If he/she
decides to so proceed, the Listing Official then must notify
the facility of the filing of a recommendation to list.  The
facility then has 20 working days to request EPA to hold a
listing proceeding.  If the facility requests the proceeding,
the Listing Official must schedule it and notify the recommending
person and the facility of the date, time, and location of the
proceeding.  The Assistant Administrator must designate a Case
Examiner to preside over the listing proceeding.9
V If the facility does not make a timely request for a listing
   proceeding, the Assistant Administrator will determine whether
   to list the facility based upon the recorr.r.endation to list
   and any other available information.

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                              -6-
3.   The Discretionary Listing Proceeding

     The discretionary listing proceeding is informal, i.e.,
there are no formal rules of evidence or procedure.  The
recommending person and the facility may be represented by
counsel, present relevant oral and written evidence and, with
the approval of the Case Examiner, either party may call,
examine, and cross-examine witnesses.  The Case Examiner may
refuse to permit cross-examination to the extent it would:
(1) prematurely reveal sensitive enforcement information which
the government may legally withhold, or (2) unduly extend the
proceedings in light of the usefulness of any additional
information likely to be produced.  Section 15.13(b),  A trans-
cript of the proceeding along with any other evidence admitted
in the proceeding constitutes the record.  For the Case Examiner
to approve a recommendation to list, the recommending person
must persuade the Case Examiner that he/she has proved each
elemant of a discretionary listing by a preponderance of the
evidence.

     The Case Examiner must issue a written decision within 30
working days after the proceeding.  The Listing Official then
must notify the recommending person and the facility of the Case
Examiner's decision.  The party adversely affected may appeal
the decision to the General Counsel.  The appeal, which is
filed with the Listing Official, must contain a statement of
(1) <:he case and the facts involved, (2) the issues, and (3)
why <:he decision of the Case Examiner is not correct based on
the ::ecord of the proceeding considered as a whole.  The General
Counsel must issue a final decision, in writing, as soon as
practicable after reviewing the record.  The Listing Official
then must send written notice of the decision to the recommending
person and to the facility, and must publish the effective
date of the listing in the Federal Register if the General
Counsel upholds the Case Examiner's decision to list.

     Removal from the list of Violating Facilities can occur in
any of the following circumstances:

          1.  Upon reversal or other modification of the criminal
              conviction decree, order, judgment, or other
              civil ruling or finding which formed the basis
              for the discretionary listing, which reversal or
              modification removes the basis for the listing;

          2.  If the Assistant Administrator for OECM determines
              that the facility has corrected the condition(s)
              which gave rise to the listing;

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                              -7-
          3.  If, after the facility has remained on the
              discretionary list for one year on the basis of
              Section 15.11(a)(4) or Section 15.11(a)(5) and
              a basis for listing under Sections 15.11(a)(l),
              (2), or (3) does not exist, then removal is
              automatic; or

          4.  If the Assistant Administrator for OECM has
              approved a plan for compliance which ensures
              correction of the condition(s) which gave rise to
              the discretionary listing.

     The removal process begins with a request for removal
filed with the Listing Official by the original recommending
person or by the facility.  The Assistant Administrator for
OSCM then must review the request and issue a decision as soon
as possible.   The Listing Official then must transmit the
decision to the requesting person.

     If the Assistant Administrator for OECH denies a request
for removal, the requesting person may file a written request
for a removal hearing.  A Case Examiner designated by the
Assistant Administrator then conducts a removal hearing.  The
removal hearing is an informal proceeding where formal rules
of evidence and procedure are not applicable.  The parties to
the proceeding may be represented by counsel and may present
written and oral testimony.  In addition, with the approval of
the Case Examiner, the parties may call, examine, and cross-
examine witnesses to the extent that any further information
produced will be useful in light of the additional time such
procedures will take.  The Case Examiner must base his/her
written decision solely on the record of the removal hearing.

     VJithin 20 working days of the date of the Case Examiner's
decision, the party adversely affected may file with the Listing
Official a request for review by the Administrator.  The
Administrator will determine if the Case Examiner's decision
is correct based upon the record of the removal hearing considered
as a whole.  The Administrator then must issue a final written
decision.

V.   Increased Use of Discretionary Listing.

     We believe that the revisions to the discretionary listing
regulations are only the first step in the improvement of our
contractor listing program as an effective enforcement tool.
The second step, actually using the listing authority, will
gain for us the necessary experience in this area.  Note that
fov purposes of the Strategic Planning and Management System,
regions may show recommendations to list as er.forccn.ont actions
tuken in tracking regional progress toward bringing significant
violators into compliance.

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                              -8-

     Currently, our lack of experience in this area inhibits
our ability to offer explicit guidance based upon known formulas,
However, we believe that some general points are worth noting.

     Listing is a very severe sanction and, therefore, should
usually be reserved for the most adversarial situations.  If
such an adversarial situation already involves time consuming
litigation, however, recommending persons employed by EPA
should consider the additional resource requirements associated
with both the listing proceeding and the potential judicial
challenges to the administrative action.  When enforcement
litigation is in progress, recommending persons employed by
EPA should also consider whether the listing proceeding will
provide grounds for cpllateral attack against EPA's case, and
whether such attack v*6uld be a benefit or hindrance to successful
prosecution of the underlying judicial litigation.

     In some cases, listing may be an effective alternative to
litigation.  Note specifically that EPA has the option of using
listing as an enforcement response if a facility fails to
comply after being subject to an administrative or judicial
order.  Note further that EPA may bring a listing proceeding
based on present "recurring or continuing" violations and a
prior judicial or administrative judgment even if the prior
action did not address the present violations.  Specifically,
EPA should consider listing actions for violating facilities
for which previously concluded enforcement actions have not
stopped the violator from continuing practices constituting a
pattern of chronic noncompliance.

     Listing may be especially effective if the value of the
facility's government contracts, grants, and loans exceeds the
cost of compliance.  If the value of these assets is less than
the compliance costs, listing probably would not provide adequate
incentive to comply.  On the other hand, if the value of such
assets is considerably greater than the cost of compliance, a
listing proceeding could conceivably impede progress toward
resolving the environmental problem because the facility is
more likely to vigorously contest the listing both at the
administrative and Federal court levels.  Therefore, we believe
that listing will be most appropriate for "middle ground cases"
for which there is an ongoing parallel action, i.e., ones
where the government contract, grants and loans for the facility
in question exceed compliance costs but not considerably.

     Finally, a listing proceeding is likely to be more
efficient, and therefore more effective, if the continuing
or recurring noncompliance involves unambiguous and clearly
applicable clean air or clean water standards.  If the standards
are fraught with complications pertaining to the appropriate
compliance test method or procedure, for example, the listing
proceeding is probably ill-suited to handle such issues.

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                              -9-

     Prior to filing a recommendation to list, recommending
persons employed by EPA must consult with my office to ensure
that a recommendation to list comports with national policy
and priorities and is otherwise appropriate.  We expect that
experience, as usual, will prove to be the best teacher.  As
we gain experience and after final promulgation of the revisions,
we will provide further guidance.

Attachment

cc:  Assistant Attorney General for Land and Natural Resources
     Associate Enforcement Counsels
     OECM Office Directors
     Regional Counsel I-X —-~
     Steve Ramsey, Chief Environmental Enforcement Section, DOJ
     Director, Stationary Source Compliance Division ,
     Director, Enforcement Division, Office of Water

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ENVIRONMENTAL PROTECTION AGENCY



40 C.F.R. Part 15.



Administration of the Clean Air Act and the Clean Water Act with



Respect to Federal Contracts, Loans, and Grants.



AGENCY:  Environmental Protection Agency (EPA)



ACTION?  Proposed rule.             &53fi-3



SUMMARY:  EPA is responsible for implementing several suspension



and debarment programs.  This action is to revise 40 C.F.R.



Part IS, the regulation that establishes a special air and water



enforcement-related suspension and debarment program.  Commonly



referred to as the "contractor listing program", this program



makes a facility ineligible for contracts, grants, or loans



issued by an Executive Branch agency if the facility has a record



of poor compliance with Federal clean air or clean water standards



EPA is revising 40 C.F.R. Part .15 to ensure that the program



established by this regulation is consistent with existing legal



requirements and is more easily understood.



DATES:  Comments.  Comments must be received on or before (45 days



from publication in Federal Register).



ADDRESSEES:  Comments:  Comments should be submitted (in duplicate



if possible) to:   Central Docket Section (LE-131), Attention:



Docket Number G-54-01, U.S. Environmental Protection Agenry,



401 M St., S.W., Washington. D.C. 20460.

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                               -2-


Docket Number G-84-01, containing supporting information used in


developing the proposed standard, is available for public inspection


and copying between 8:00 a.m. and 4:00 p.m., Monday through Friday,


at EPA's Central Docket Section, West Tower Lobby, Gallery 1,


Waterside Mall, 401 H St., S.W., Washington, D.C. 20460.  A


reasonable fee may be charged for copying.


FOR FURTHER INFORMATION CONTACT: Edmund J. Gorman, Listing Official,


Office of Enforcement and Compliance Monitoring, Environmental


Protection Agency, Room 32191 (LE-130A), 401 M St. S.W.,

                                          4-1$- Wl*
Washington, D.C. 20460.  Telephone: (202) 4££"-7SC3.


SUPPLEMENTARY INFORMATION:  Section 306 of the Clean Air Act
                                   i
(42 U.S.C. §7401 et seq.) and Section 508 of the Clean Water Act


(33 U.S.C. S1251 et seq.), as implemented by Executive Order


11738 (38 F.R. 25161, September 12, 1973) authorise EPA to


establish procedures for ensuring that Executive Branch agencies


conduct their procurement and assistance programs in a manner


consistent with the President'^"responsibility of ensuring compliance


with the Clean Air Act (CAA) and the Clean Water Act (CWA).


     On April 16, 1975, EPA promulgated 40 C.F.R. Part 15 to


provide procedures for ensuring that Executive Branch agencies


conduct their procurement and assistance programs in accordance


with the President's responsibility for ensuring compliance .with


CAA and CWA standards.  40 C.F.R. Part 15 accomplishes this by


establishing the List of Violating Facilities, a list of facilities


which are ineligible for any nonexempt contract, grant, or loan


issued by an Executive Branch agency.  40 C.F.R. Part 15 provides

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                               -3-

procedtfres for placing a facility on this list because  of  a  criminal

conviction under section 113(c)(l) of the CAA or section  309(c)

of the CWA or because of a record of continuing or  recurring

noncompliance with CAA or CWA standards,  40 C.F0R.  Part  15  also

provides procedures for removing a facility from the  list  where

there is sufficient indication that the CAA or CWA  noncompliance

problems at the facility have been or are being corrected.

  The purposes of this revision to 40 C.F.R. Part 15  are:
                       "»'
     «>"• to conform the language of the regulation more  closely

        with statutory authority.

     "- to make even more certain that EPA provides adequate

        procedural due process for facilities which are candidates

        for placement on the discretionary List of  Violating

        Facilities.  The revision does not provide  for  a  formal

        evidentiary hearing.  Instead, it provides  for  fairness

        and flexibility through an informal proceeding.

     •"• to improve readability and make the regulatory  requirements

        easier to understand.

     -•• to reflect EPA organizational changes made  since  the

        regulation was promulgated.

   The> most noteworthy revisions  include:

     -<• frjklng flutoaat ic the  listing of facilities  that gave

        r:se tr> cr:mrv»l convict icns under section  113(c)(l) CAA

        .ind s«ct;on  3n^(c) CWA as required by  those statutes,

     -•• .idrting as a  basis fcr discretionary  listing facilities

        with continuing or recurring violations a-i—•f-r-6-i-L-i-t-:-O€a^/   ti'*
                                                                   •J
        which have been the subject of enforcement  actions under

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                                -4-

        sections  113(d),  120,  167,  204,  205,  211,  and  303  of the

        CAA, and

     — stating more explicitly the  procedural  opportunities

        which EPA will afford  facilities party  to  listing  or

        removal actions.

Executive Order 12291

    Under Executive Order  12291,  EPA is  required to  judge  whether

a regulation is "major" and  therefore  subject to the requirement

of a Regulatory Impact Analysis.  This is not a major  regulation

because it will not entail a major  increase  in  costs or  prices

for consumers, individual  industries,  Federal,  State,  or local

Government agencies, or geographic  regions.

Regulatory Flexibility Act

    EPA has determined, pursuant  to  the  Regulatory Flexibility

Act, that this regulation  will  not  have  a significant  economic

impact on a substantial number  of" small  entities because the

decision to "list" any facility is made  on a  case-by-case  basis.
                                             /s/ KIH-IA.V D
                                            William D. Ruckleshaus
                                             Administrator
  Date

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                               -1-
     PART 15—ADMINISTRATION OF THE CLEAN AIR ACT AND THE
      CLEAN WATER ACT WITH RESPECT TO CONTRACTS, GRANTS,
                          AND LOANS
     Subpart A—Administrative Matters
Sec.
15.1     Policy and Purpose
15.2     Scope
15.3     Administrative''responsibility
15.4     Definitions
15.5     Exemptions
     Subpart B—Procedures for Placing a Facility
                on the List of Violating Facilities
15.10    Mandatory listing
15.11    Discretionary listing
15.12    Notice of filing of recommendation to'list and
            opportunity to have a-listing proceeding
15.13    Listing proceeding
15.14    Review of the Case Examiner's decision
15.15    Effective date of discretionary listing
15.16    Notice of listing
     Subpart C—Procedures for Removing a Facility from
                the List of Violating Facilities
15.20    Removal of a mandatory listing
15.21    Removal of a discretionary listing
15.22    Request for removal from
           the List of Violating Facilities

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                               -2-



15.23  ,  Request for removal hearing
       t
       4

15.24    Removal hearing



15.25    Request for review of the decision of the



            Case Examiner



15.26    Effective date of removal



15.27    Notice of removal



                 Subpart D—Agency Coordination



15.30    Agency responsibilities



15.31    Agency regulations



15.32    Contacting the Assistant Administrator



15,33    Investigation by the Assistant Administrator



            prior to awarding a contract, grant, or loan



15.34    Referral by the Assistant Administrator to
                         *


            the Department of Justice



                  Subpart E—Miscellaneous



15.40    Distribution of the List of Violating Facilities



15.41    Reports



Authority: 42 U.S.C. 5 7401 et_ seq. ; 33 U.S.C. § 1251 e_t sea.;



Executive Order 11738 of September 10, 1973 (38 F.R. 28161).

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              SUBPART A—ADMINISTRATIVE MATTERS

5 15.1  " Policy and purpose.

(a) It is the policy of the Federal Government to improve and

enhance environmental quality.  Thic regulation is issued to

ensure that each agency in the Executive Branch of the Federal

Government empowered to enter into contracts for the procurement

of goods, materials, or services or to extend Federal assistance

by way of grant, loan, or contract undertakes such procurement

and assistance activities in a manner that will result in effective

enforcement of the Clean Air Act and the Clean Water Act.

(b) This regulation establishes the List of violating Facilities,

procedures for placing a facility on the List of Violating Facilities,

removing a facility from the List of Violating Facilities, and

procedures for ensuring that agencies in the Executive Branch of

the Federal Government undertake their procurement and assistance

activities in a manner that will result in effective enforcement

of the Clean Air Act and the Clean Water Act.

S 15.2   Scope

(a) This regulation applies to all agencies in the Executive

Branch cf the Federal Government which award contracts, grants,

or loans.  This regulation also applies to contractors and

subcontractors and to recipients of funds under grants and loans.

The debarirent or suspension that results from a mandatory or

discretionary listing is facility specific and does not apply to

other facilities of the same company.

(b) This regulation only applies to contracts, grants, or loans
                   <
involving the use of facilities located inside the United SLetet.

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                               -4-



(c) The rights and remedies of the Government hereunder are not
       «
exclusive and do not affect any other rights or remedies provided

by law.


5 15.3   Administrative responsibility.


(a) Except for the power to issue rules and regulations* the


Assistant Administrator for Enforcement and Compliance Monitoring

and the General Counsel are delegated authority and assigned

responsibility for carrying out the responsibilities assigned to

the Administrator of the Environmental Protection Agency under

Executive Order 11738.

[(b) The Assistant Administrator and the General Counsel are

authorized to redelegate the authority conferred by this regulation.]

5 15.4   Definitions.
                         f
     Administrator means the Administrator of the United States

Environmental Protection Agency or his or her designee.


     Agency means any department, agency, establishment, or

instrumentality in the Executive Branch of the Federal Government,

including corporations wholly owned by the Federal Government

which award contracts, grants, or loans.



     Air Act means the Clean Air Act, as amended (42 U.S.C.


5 7401 e£ sec. ).

     Air Pollution Control Agency means any agency which is

defined in section 302(b) or section 302(c) of the Air Act. .


     Applicant means any person who has applied but has not yet

received a contract, grant, or loan and includes a bidder or


proposer for a contract which is not yet awarded.

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                                -5-

     Assj.stant Administrator means the Assistant Administrator
 for Enforcement and Compliance  Monitoring, United States
 Environmental Protection Agency, or his or her successor.
     Borrower means any recipient of a loan as defined below.
     Case Examiner means an EPA official familiar with pollution
 control  issues who is designated by the Assistant Administrator
 to conduct a listing or removal proceeding and to determine
 whether  a facility will be placed on the List of Violating
 Facilities or removed from such list.
     Clean air standards means  ar.y enforceable rules,, regulations,
 guidelines, standards, limitations, orders, controls, prohibitions,
 or other' requirements which are contained in, issued under, or
 otherwise adopted pursuant to the Air Act or Executive Order
 11738,  c,n applicable implementation plan as described in section
 110(d)  of the Air Act, an approved implementation procedure or
 plan under section lll(c) or section lll(d), respectively, of
 the Air Act or an approved implementation procedure under section
 112(d)  of the Air Act.
     Clean water standards means any enforceable limitation,
 control, condition, prohibition, standard, or other requirement
v.'hich i;; established pursuant to the Water Act or contained in a
permit issued to a discharger by the United States Environmental
Protection Agency, or by a State under an approved program, as
authorized by section 402 of the Water Act, or by a local government
to ensure compliance with pretreatment regulations as required
by section 307 of the Water Act.

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                               -6-



     '"ompl iance means compliance with clean air standards or
      «

clean Water standards.  For the purpose of these regulations,


compliance also shall mean compliance with a schedule or plan


ordered or approved by a court of competent jurisdiction, the


United States Environmental Protection Agency, or an air or


water pollution control agency, in accordance with the requirements


of the Air Act or the Water Act and regulations issued pursuant


thereto.


     Contract means any contract or other agreement made with an


Executive Branch agency for the procurement of goods, materials,


or services (including construction), and includes any subcontract


made thereunder.


     Contractor means any, person with whom an Executive Branch


agency has entered into, extended, or renewed a contract as


defined above, and includes subcontractors or any person holding


a subcontract.


     Facility means any bui-lding,- plant, installation, structure,


mine, vessel or other floating craft, location or site of operations


owned, leased, or supervised by an applicant, contractor, grantee,


or borrower to be used in the performance of a contract, grant,


or loan.  Where a location or site of operations contains or


includes more than one building, plant, installation, or structure,


the entire location or site shall be deemed to be a facility,


except where the Assistant Administrator determines that independent


facilities are co-located in one geographic area.

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                               -7-


     General Counsel means the General Counsel of the U.S.

Environmental Protection Agency, or his or her designee, and

successor.

     Governor means the governor cr principal executive officer

of each State.

     Grant means any grant or cooperative agreement awarded by

an Executive Branch agency including any subgrant or subcooperative

agreement awarded thereutider.  This includes grants-in-aid,

except vhere such assistance is solely in the form of general

revenue sharing funds, distributed under the State and Local

Fiscal Assistance Act of 1972, 31 U.S.C. S 1221 et. sec.
                                   i
     Grantee means any person with whom an Executive Branch

agency has entered into, extended, or renewed a grant, subgrant,

or other assistance agreement defined under "grant" above.

     List of Violating Facilities neans a list of facilities

which are ineligible for any agency contract, grant or loan.

     Listing Official m>  is an "E?A 'of f icial designated by the

Assistant Administrator \.o maintain the List of Violating

Facilit ies.

     Listing proceeding means an informal hearing conducted by

the Casie Examiner held to determine whether a facility should be

placed on the List of Violating Facilities.

     Loan means an agreement or other arrangement under which

any portion of a business, activity, or program is assisted

under 
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                               -8-

     Person means any natural person, corporation, partnership,
unincorporated association, State or local government, or any
agency, instrumentality, or subdivision of such a government or
any interstate body.
     Recommendation to list means a written request which has
been signed and sent by a recommending person to the Listing
Official asking that EPA place a facility on the List of Violating
Facilities.
     Recommending person means a Regional Administrator, the
Associate Enforcement Counsel for Air or the Associate Enforcement
Counsel for Water (or their successors), the Assistant Administrator
for Air and Radiation or the Assistant Administrator for Water
(or their successors), a Governor, or a member of the public.
     State means a State, the District of Columbia, the Commonwealth
of Puerto Rico, the Virgin Islands, Guam, American Samoa, the
Commonwealth of the Northern Mariana Islands, or the Trust
Territories of the Pacific-Islands.
     Water Act means the Clean Water Act, as amended (33 U.S.C.
5 1251 et_ seq. ).
     Water pollution control agency means any agency which is
defined in section 502(1) or section 502(2), 33 U.S.C. S5 13C2
(1), (2), of the Water Act.
S 15.5   Exemptions
(a)(l) Transactions of $100,000 and under.  Except as provided
in section 15.5(b) below, contracts, grants, and loans not exceeding
$100,000 are exempt from these regulations.  This exemption

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                               -9-


includes contracts for indefinite quantities as long as the

purchaser has reason to believe that the amount to be ordered in

any year under such an agreement will not exceed $100,000.

(a)(2) Assistance to abate, control, or prevent environmental

pollution.  Except as provided in section 15.5(b) below, a contract,

grant, or loan will be exempt from these regulations when the

principal purpose of a contract, grant, or loan is to assist &

facility or facilities to comply with any Federal, State, or

local law, regulation, limitation, guideline, standard, or other

requirement relating to the abatement, control or prevention of

environmental pollution.

(b) The exemptions in section 15.5(a) do not apply where work

under the contract is to be performed at a facility that has
                         *
been placed on the List of Violating Facilities on the basis of

a criminal conviction under section 113(c)(l) of the Air Act or

section 309(c) of the Water Act, and the person convicted owns,

supervises, or leases the facility.

(c) Authority of Agency Head to Grant Exemptions.

(1) Individual exemptions.  Where an Agency head determines that

it is in the paramount interest of the United States to enter

into, renew, or extend a contract, grant, or loan in connection

with any facility that is on the List of Violating Facilities, he

or she may exempt the agreement from the provisions of this

regulation for a period of one year.  The Agency head granting

the exemption shall notify the Assistant Administrator of the

exemption as soon before or after granting- the exemption as may

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                               -10-
•• - ;ricticable.  The justification for such an exemption, or any
renewal thereof, shall fully describe the purpose of the contract,
grant, or loan and shall show why the paramount interest of the
United States requires the exemption.
(2) Class exemptions.  Where an agency head determines that it
is in the paramount interest of the United States for the agency
to enter into, extend, or renew any class of contracts, grants,
or loans, he or she may exempt the class of agency contracts,
grants, or loans from the provisions of this regulation by rule
or regulation after consultation with the Administrator.

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                               -11-



      SUBPART B-PROCEDURES FOR PLACING A FACILITY ON THE

                 LIST OF VIOLATING FACILITIES

§ 15.10  Mandatory listing.

The Listing Official must place a facility on the List of Violating

Facilties if the facility which gave rise to the conviction is

owned, leased, or supervised by any person who has been convicted

of a criminal offense under section 113(c)(l) of the Air Act or

section 309(c) of the Water Act.  The mandatory listing is

automatically effective .upon conviction.
                        ' '•! '
5 15.11  Discretionary listing.

(a) The Listing Official must place a facility on the List of

Violating Facilities if there is a final agency action under

section 15.12(d), 15.14(c), or 15.14(d) which determines that
                         *
there is a record of continuing or recurring noncompliance with

clean air standards or clean water standards at the facility

recommended for listing and tha't:

(1) A federal court has convicted any person under section

113(c)(2) of the Air Act if that person owns, leases, or supervises

a facility recommended for listing;

(2) A state or local court has convicted any person of a criminal

offense on the basis of noncompliance with clean air standards

or clean water standards if that person owns, leases, or supervises

a facility recommended for listing;

(3) A faderal, state, or local court has issued an injunction,

order, judgment, decree, or other form of civil ruling as a

result Df noncompliance with clean air or clean water standards

ct a facility recommended for lifting;

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                               -12-



 (4) The facility has violated any administrative order issued under



section 113(a), 113{d), 167, and 303 of the Air Act or section



309(a) of the Water Act has been violated, if the violator owns,



leases, or supervises a facility recommended for listing;



(5) EPA has issued a Notice of Nonconpliance under Section 120 of



the CAA as a result of noncompliance at the facility; or



(6) EPA has filed an enforcement action in court under sections



113(b), 167, 204, 205, or 211 of the Air Act or section 309(b)



of the Water Act due to noncompliance with clean air standards



or clean water standards at the facility recommended for listing.



(b) A recommendation to list from a recommending person initiates



the process for discretionary listing.  A recommendation to list



must contain:



(1) The name, address, and telephone number of the person filing



the recommendation;



(2) A description of the facility alleged to be in noncompliance



with clean air standards or clean water standards, including the



name and address of the facility;



(3) A description of the alleged continuing or recurring non-



compliance, including any available data and any other pertinent



information supporting the allegation of ncncompliance; and



(4) A description of the criminal, civil, or administrative



action or conviction under section 15.11(a)(l), (a)(2),  (a)(3)»



(c)(4), or (a) (5) which is pertinent to the facility and the



alleged continuing or recurring noncornp].iance.

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                               -13-



(c) Thei Listing Official shall review each recommendation to list



to ensiire it complies with all of the requirements under section



15.1Kb).  If there is a deficiency in a recommendation the



Listing Official must return it to the recommending person for



correction.  If there is no deficiency in the recommendation



to list;, the Listing Official shall transmit the recommendation



to the Assistant Administrator.  The Assistant Administrator, in



his or her discretion, may



    (i) decline to proceed, or



    (i:L) designate a Case Examiner in accordance with section



    15..12U), or



    (i:Li) decide to list the facility in accordance with section



    15,12(d).



(d) A recommending person may withdraw a recommendation to list



at any time before the conclusion of the listing proceeding.



The recommencing person should withdraw the recommendation to



list if the conditions which gave rise to the recommendation tc



list have been corrected or if the fccility recommended for



listing is on a plan for compliance which has been approved by



either the Assistant Administrator or the recommending person



and which will ensure that the conditioner,) which gave rise to



recommendation to list will be corrected.



§ 15.12  Notice of filing of recommendation to list and opportunity



         to have a listing proceeding.



(a) The Listing Official shall send to the facility nenierj in the



recommendation to list written notice that a recommendation that



the facility be pieced on the List of Violating Facilities has

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                               -14-



been filed with the Listing Official and has been transmitted to
        t


the Assistant Administrator.  Within twenty (20) working days of



the receipt of the notice, any person who owns, leases, or



supervises the facility may request the Assistant Administrator



to designate a Case Examiner to hold a listing proceeding to



determine the propriety of the proposed listing.



(b) If a listing proceeding is requested, the Listing Official



shall schedule a listing proceeding and notify in writing the



recommending person and the person requesting the listing proceeding



of the date and time of the listing proceeding.



(c) The Listing Official shall respond to any requests from the



recommending person and the person requesting the listing proceeding
                                  •


concerning the procedures for discretionary listing.



(d) If there is no timely request for a listing proceeding under



section 15.12(b) above, the Listing Official will place the



facility named in the recommendation to list on the List of Violating



Facilities on the basis of discretionary listing if, upon reviewing



the recommendation to list and any other available information,



the Assistant Administrator determines that there is a record of



continuing or recurring noncompliance with clean air standards



or clean water standards at the facility recommended for listing



and the requisite criminal, civil, or administrative enforcement



action has been taken or criminal conviction has occurred.  Such



a determination by the Assistant Administrator constitutes final



agency action.

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                               -15-


§ 15.13  Listing proceeding.


(a) No listing proceeding for mandatory listing.  Mandatory


listing is effective upon conviction and no listing proceeding


will b<5 provided when a facility is listed on the basis of mandatory


listing.  For purposes of updating the List of Violating Facilities,


the Associate Enforcement Counsel for Criminal Enforcement shall


notify the Listing Official of the conviction as soon as it


occurs.


(b) Listing proceeding for discretionary listing.


(1) A listing proceeding for discretionary listing shall be


conducted in an informal manner without formal rules of evidence
                        *

or procedure.  The recommending person and the person requesting


the listing proceeding under section 15.12(a) above may be


represented by legal counsel, present oral and written evidence


relevant to the proposed listing/ and, with the approval of the


case examiner, may call, ask questions of, and cross-examine


witnesses, except to the extent any testimony would prematurely


reveal, sensitive enforcement information which the government


may legally withhold or would unduly extend the proceedings irj


light of the usefulness of any additional information likely to


be produced.  The Case Examiner may take official notice of


facts, law, and any other information availaole to him or her,


The Case Examiner may also request any party to supplement the


record by submitting additional information,


(2) The listing proceeding shall be transcribed, and EPA. r;hall


make .available a transcribed record of the oi'cccccinc to r.r.y


person, at cost upon request.

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                               -16-



 (3) To demonstrate an adequate basis for listing a facility, the



 recommending person must show by a preponderance of the evidence



 that there is a record of continuing or recurring noncompliance



 at the facility named in the recommendation to list and that the



 requisite enforcement action has been taken.



 (c) Case Examiner's decision.  Not later than thirty  (30) working



 days after conclusion of the listing proceeding and any



 supplementation of the record, the Case Examiner shall issue a



written decision on whether or not to list the facility based on



 the record of the listing proceeding and shall file that decision



with the Listing Official.



 (d) Notification of Case Examiner's decision.  The Listing Official



shall notify in writing the recommending person and the person



who requested the listing proceeding under section 15.12(a) of



 the Case Examiner's decision and of the opportunity to request



 the General Counsel to review the Case Examiner's decision under



section 15.14.



 S 15.14  Reviev,- of the Case Examiner's decision.



 (a) Within twenty (20) working days after the Case Examiner's



decision, the party adversely affected may file with  the Listing



Official a written request asking the General Counsel to review



the Case Examiner's decision.  The request to review  the Case



 Examiner's decision must contain:



 (i) «?. statement of the case and the facts involved in the



rccor-v.cndation to list;



 (2) c statement of the issues presented by the recont-or.dat.ion tc



list; and

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                               -17-

(3) a statement showing why the decision of the Case Examiner is

"^t correct based on the record of the listing proceeding

considered as a whole.

(b) The party adversely affected may raise on review only those

issues raised before the Case Examiner, unless the General Counsel

determines that there is good cause to include consideration of

any new issues.

(c) If the Listing Official receives a timely request for review

of the Case Examiner's decision, the General Counsel shall review

the record of the listing proceeding to determine if the decision

of the Case Examiner is correct based on the record of the listing

proceeding considered as a whole.  As soon as practicable after

receiving the request for review, the General Counsel shall
                        *
issue a final decision in writing which is based on this

determination and explains the basis for the final decision.

The General Counsel's decision shall constitute final agency

action.  The General Counsel shall file the decision with the

Listing Official.             	••• •

(d) The Case Examiner's decision constitutes a final agency

action for purposes of discretionary listing unless a timely

request for review of the Case Examiner's decision ic filed with

the Listing Official in accordance with section 15.14(2).

5 15.15  Effective date of discretionary listing.

(a) Discretionary listing is effective immediately upon the

issuance of a final agency action filed with the Listing Official

to place the facility recommended for listing on the List of

Violating Facilities, or upon the- failure to file a timely written

rsqucct for a listing proceeding I'.ndcr notion l!3.12(d).

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                               -18-

        *
 ;L/, Discretionary listing remains effective until a removal

occurs under section 15.26

§ 15.15  Notice of listing.

 (a) Mandatory listing.  The Listing Official chall send written

notice to the facility which shall state that the facility has

been placed on the List of Violating Facilities on the basis of

mandatory listing and the effective date of such listing.

(b) Discretionary listing.  The Listing Official shall send

written notice to the recommending person and any person who

requested a listing proceeding informing them of the effective

date of the discretionary listing.  The Listing Official shall

send written notice to the facility if no listing proceeding was

requested.

(c) Federal Register notice.  The Listing Official shall publish

the effective date of the placement of the facility on the List

of Violating Facilities in the Federal Register"in accordance

with section 15.40.

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                               -19-
         SUBPART C—PROCEDURES FOR REMOVING A FACILITY

            FROM THE LIST 0? VIOLATING FACILITIES

§ 15.20  Removal of a mandatory listing.


    Whon the Listing Official has placed a facility on the List

of Violating Facilities. >
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                               -20-
(b) The Listing Official shall remove a facility from the List of
Violating Facilities at the direction of the Assistant Administrator
if the facility is on a plan for compliance which has been approved
by the Assistant Administrator and which will ensure that the
condition(s) which gave rise to discretionary listing will be
corrected.
§ 15.22  Request for removal from the List of Violating Facilities.
(a) The original recommending person or any person who owns, leases,
or supervises a facility that is on the List of Violating Facilities
nay file with the Listing Official a request to remove the facility
from the List.  This request must set forth the proposed basis
for removal from the List under section 15.20 or 15.21.
(b) The Assistant Administrator shall review the request for
removal and shall issue a decision as expeditiously as practicable
after receiving the request as to whether the facility will be
removed from the List of Violating Facilities.
(c) The Listing Official shall send written notice to the person
requesting removal informing that person of the Assistant
Administrator's decision concerning removal and of the opportunity
to request a removal hearing under section  15.23 if the Assistant
Administrator denies the request for removal.
5 15.23  Request for removal hearing.
(a) Within twenty (20) working cays after the Assistant Administrator
Denies £ request for removal frorr. the List  of Violating Facilities,
the facility or the original recommencing person r.r.y  file with
f.ho Listing Official a written request  for  a removal  hearing
under section 15.24.

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                               -21-

(b) Ii: a timely request for a removal hearing under section

15.23[a) is not filed, any person who may make a request for

removal under section 15.22(a) may file a new request for removal

under section 15.22(a) if a new basis for removal under section

15.20 or 15.21 arises at a later date.

§ 15.24  Removal hearing.

(a) A removal hearing shall be conducted by a Case Examiner

designated by the Assistant Administrator.  The person requesting

the removal hearing must demonstrate at the removal hearing by a
                                  i
preponderance of the evidence that a basis for removal is present.

(1) "he person requesting the removal hearing and the Agency may

be represented by legal counsel, present oral and written evidence

rele/ant to the proposed removal, and, with the approval of the

Case Examiner, call, ask questions of, and confront witnesses to

the extent it is relevant to the issue of removal and to the

extent that any additional information produced will be useful

in light of the additional time such procedures will take.

(2) The removal hearing shall be transcribed and a transcribed

record of the proceeding shall be made available to the owner,

operator, or lessee of the facility or to any person represented

£t 1;he hearing at cost upon request.

(b) The Federal, State, or local authority responsible for the

enforcement of clean air standards or clean water standards with

respect to the listed facility may participate in the removal

hearing.

(c) The Case Examiner's decision concerning removal shall be

based solelv uoon the record in the removal hearinc.

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                               -23-

The decision shall constitute final agency action.

(c) If a timely request asking the Administrator to review the

Case Examiner's decision under section 15.25(a) is not filed,

the Case Examiner's decision constitutes final agency action at

the expiration of such period.

(d) If the request for removal is denied upon review, any person

who may file a request -for removal under section 15.22(a) may

file a new request for removal under section 15.22(a) if a new

basis for removal under section 15.20 or 15.21 arises at a later

date.  The new request shall set forth the new basis claimed for
                                   i
removal.

S 15.26  Effective date of removal.

(a) Mandatory listing.  Removal of a facility placed on the List

of Violating Facilities on the basis of mandatory listing shall

be effective immediately upon the certification by the Assistant

Administrator that the conditibn(s) which gave rise to the mandatory

listing under section 15.10 has been corrected, or upon the issuance

of a Zinal agency action filed with the Listing Official to remove

the listed facility from the List of Violating Facilities under

Sections 15.24 or 15.25.

(b) Discretionary listing.  Removal of a facility placed on the

List of Violating Facilities on the basis of discretionary listing

shall be effective immediately upon the expiration of one year

under 15.21(a)(3) or upon U>4 the Assistant Administrator's

decision to remove the listed facility based upon a  timely written

request for re-oval under section  15.22(a), or upon  the  issuance

of a final agency action filed with the Listing Official to remove

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                                -22-

 (d) The  Listing  Official shall  send written  notice  to  the person
 requesting  the removal hearing  and the  Federal, State,  or local
 authority responsible for the enforcement of  clean  aix*  standards
 or clesin water standards with respect to the  listed facility,
 informing them of the decision  of the Case Examiner and of the
 opportunity to request the Administrator to  review  the Case
 Examiner's  decision under section 15.25.
 S 15.25  Request for review of  the decision  of the  Case Examiner.
 (a) Within  twenty (20) working  days of  the date of  the Case
 Examiner's  decision under section 15.24, the  party  adversely
 sffeeted by the Case Examiner's decision may  file with the Listing
 Official a  request for the Administrator to  review  the Case
 Examiner's  decision.  The, request shall contain:
 (1) a statement of the issues presented by the request for removal;
 (2) a statement of the case and the facts involved  in the request
                                               -~j
 for romoval; and
 (3) a statement showing why the decision of  the Cr.se Examiner is
 not correct  based upon the record of the removal hearing considered
 as a.whole.
 (b) Upon receiving a timely request for review of the removal
hearing, the Administrator shall review the record  of the removal
hearing to  determine if the decision of the Case Examiner is
correct based upon the record of the removal  hearing considered
as a whole.  As soon as practicable after receiving  the request
 for review,  the Administrator shall issue a final decision in
writing which shall be based on this determination  and shall set
fort.i -he reasons for the decision.

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                               -25-





                  SUBPART D-AGENCY COORDINATION



5 15.30  Agency responsibilities.



  ,  Each agency shall take appropriate steps to ensure that all



officers and employees whose duties include ensuring that all



agency contracts, grants, and loans are in compliance with



applicable requirements are familiar with the requirements set



forth in Executive Order 11738, this regulation, 48 F.R. 42102



(September 19, 1983), and 49 F.R. 8834 (March 8, 1984).



S 15.31  Agency regulations.



(a) Any agency responsible for promulgating contract, grant, and



loan regulations, shall ensure that its regulations require



every non-exempt .agency contract, grant,  and loan and every



subagreement issued thereunder to include the following provisions:



(1) A promise by the contractor, grantee, or borrower that he or



she will not use any facility on the List of Violating Facilities



in the performance of any nonexempt contract, grant, or loan.



(2) A promise by the contractor, grantee, or borrower that he or



she will notify the awarding agency if a facility he or she



intends to use in the performance of the contract, grant, or



loan is on the List of Violating Facilities or has been recommended



to be placed on the List of Violating Facilities.



(3) A promise by the contractor, grantee, or borrower that in



the performance of the contract, grant, or loan, he or she will



comply with all requirements of the Air Act and the Water Act,



including the requirements of section 114 of the Air Act and



section 308 of the Water Act, and all applicable clean air standards



end clean water standards.

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                               -24-





the listed facility from the List of Violating Facilities under



sections 15.24 or 15.25.



(c) Federal Register notice.  The Listing Official shall publish



the effective date of the removal of the facility from the List



of Violating Facilities in the Federal Register in accordance



with section 15.40.



5 15.27  Notice of removal.
                        • :,f


    The Listing Official shall send written notice to the



recommending person and any person who made a timely written



request for removal under section 15.22(a) informing them of the



effective date of the removal of the facility from the List of



Violating Facilities.  The Listing Official shall publish the



effective date of the removal in the Federal Register in accordance



with section 15.40.

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S 15.32  Contacting the Assistant Administrator.
(a) Any} agency employee whose duties include ensuring that all
agency contracts, grants, and loans are in compliance with applicable
requirements, shall promptly report to his or her agency head,
or the designee of the agency head, any condition which may
involve noncompliance with clean air standards or clean water
standards at any facility that is being used, or will be used in
an agency contract, grant, or loan.  The report shall include at
a minimum the following information:
(1) The name, telephone number, and agency of the employee
discovering the condition.
(2) The name of the facility at which the condition exists.
                                   i
(3) A description of the condition.
(4) The contract, grant, or loan the agency has issued or may
issue, extend, or renew to the facility at which the condition
exists.                                       	
(b) The agency head, or his or her  designee, shall transmit any
reports made under section'15.32(a) to the Assistant Administrator
as Gccn as practicable, after he or she receives the report.  In
response to the report, the Assistant Administrator shall take
any action that is consistent with the policy and purpose of
this regulation.
S 15.33  Investigation by the Assistant Administrator prior to
         awarding a contract, grant, or loan.
(a) If the Assistant Administrator is notified under section 15.32(b)//r

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                               -27-

 iw/ that.a condition which may involve noncompliance with clean
 air standards or clean water standards exists at  a  facility that
 is or may be used  in the performance of any  nonexeir.pt agency
 contract, grant, cr loan, the Assistant Administrator may, after
 consultation with  the awarding agency involved, request that the
 award, extension,  or renewal of the nonexempt contract, grant, or
 loan t>e withheld for fifteen (15) working days to determine if a
 basis exists for placing the facility on the List of Violating
 Facilities under sections' 15.10 and 15.11.
 (b) If the Assistant Ac.  -.istrator requests  that an award,
 extension, or renewal of a contract, grant,  or loan be withheld
 under section 15.33(a), the awarding agency  shall comply
with the Assistant Administrator's request unless it determines
 that the delay is  substantially contrary to  the best interests
 of the government.  The awarding agency shall promptly notify
 the Assistant Administrator of any such determination.
 (c) At the end of  the fifteen (15) day working period, the
Assistant Administrator shall notify the awarding agency and tho
applicant of the results of any investigation undertaken under
section 15.33(a).
 S l.fi. 34  Referral  by the Assistant Administrator to the Department
         of Justice.
    The Assistant Administrator msy recommend to the Department
of Justice or other appropriate agency that  legal proceedings be

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                               -28-

brought or other appropriate action be taken whenever the Assistant
Administrator becomes aware of a breach of any provision required
to be included in a contract, grant, or loan under section 15.31.

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                                -29-





                 SUBPART E-MISCELLANEOUS



 §  15.40   Distribution of the  List of  Violating  Facilities



 (a) Ths  List of Violating  Facilities  shall  be transmitted to  the



 General  Services Administration and published in  the Federal



 Register on or about February  1 and August  1 of each year, and



 updatod  in the Federal Register as necessary to reflect changes



 to the list as they occur.  The list  shall  contain the following



 information:



 (1)  the  name of each facility on the List;



 (2)  the  location of the facility;



 (3)  the  basis for the listing;



 (4)  the  effective date of the listing; and



 (5)  any  removal of any facility from the List.



 5 1!>.41   Reports.



 (a) Agency reports.  Each Agency head will  report each exemption



 granted  under §15.5(b) to the Administrator.  Reports should  be



 mace by  November 1 c  each .year.-and should  indicate all exemptions



 granted during the p  vious fiscal year.



 (b) Reports by the A ..-inistrator.



 (1) The Administrator shall report annually to the President  on



 the measures he or she has taken toward implementing the purpose



 and intent of section 306 of the Air Act, section 508 of the



Water Act, Executive Order 11738, and this  regulation, including



 tut not limited to the progress and problems associated with



 Siuch implementation.

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                               -30-
m The Administrator shall notify the President  and  the  Congress
annually of all exemptions granted or in  effect under section
15.5 during the preceding year.

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GM-32

-------
       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                      WASHINGTON. D.C. 20460
                                 08 1884
                                                          #32
                                                         OFFICE OF
                                                       ENFORCEMENT AND
                                                     COMPLIANCE MON.TOHING
MEMORANDUM

SUBJECT:  Implementation  of JJandatory  Contractor  Listing

FROM:     Courtney M.  Pric
          Assistant Administrator  for  Enforcement
            and Compliance Monitoring

TO:       Assistant Administrator  for  Air  and  Radiation
          Assistant Administrator  for  Water
          Associate Enforcement Counsel  for Air Enforcement
          Associate Enforcement Counsel  for Water  Enforcement
          Associate Enforcement Counsel  for Criminal  Enforcement
          Assistant Attorney General for Land  and  Natural
            Resources
          Regional Counsels I-X

Introduction and Purpose

     Pursuant to statutory requirements, the proposed revisions-
to 40 CFR Part 15 require that the  List  of Violating  Facilities
("the List") automatically include  any facility which gives rise
to a criminal conviction  of a person under Section 113(c)(l) of
the Clean Air Act or Section 309(c) of the Clean Water Act.
Any facility on the List  is ineligible to  receive  any non-exempt
Federal government contract, grant, or loan.   Removal of a
facility from the List occurs only  if  I  certify that  the condition
giving rise to the conviction has  been corrected or if a court
reverses or vacates the conviction.  This memorandum  establishes
the procedure to implement the mandatory portion of the contractor
listing program. V
£/ Guidance on implementation of the discretionary listing
authority issued on July 18, 1984.

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                                -2-

  Procedure for Mandatory Listing

  I.  A federal district court must enter a guilty verdict or
      guilty plea of a person under Section 113(c)(l) of the
      Clean Air Act or Section 309(c) of the Clean Water Act.
      The convicted person must own, operate, lease,  supervise
      or have a financial interest in the facility which gave
      rise to the conviction.  Note that criminal convictions
      under Section 113(c)(2) of the Clean Air Act and criminal
      convictions entered by a State or local court do not qualify
      a facility for mandatory listing.

 II.  Upon notification of an entry of a guilty verdict or guilty
      plea by the clerk of the district court, the Department of
      Justice must immediately notify the Associate Enforcement
      Counsel for Crimir.-;! Enforcement (LE-134E).  This notification
      must occur even if the defendant still awaits sentencing,
      has moved for a nev trial or a reduced sentence, or has
      appealed the conviction.

III.  The Associate Enforcement Counsel for Criminal Enforcement
      must independently verify that the court has entered the
      guilty verdict or guilty plea.

 IV.  Upon such verification, the Associate Enforcement Counsel
      for Criminal Enforcement shall notify EPA's Listing Official  '
      (LE-130A) in writing,  of the name and location of the facility
      and of the condition giving rise to the guilty verdict or
      guilty plea.

  V.  The Listing Official shall then update the List by publishing
      a notice in the Federal Register, and shall notify the
      Associate Enforcement Counsel for Air or Water; the appropriate
      Regional Counsel; the Compliance Staff, Grants Administration
      Division, Office of Administration and Resource Management;
      the General Services Administration, and the facility.  A
      facility remains on the mandatory List indefinitely until
      it establishes a basis for removal.

  Procedure for Removal from the Mandatory List

   I.  Any person who owns,  operates, leases, supervises, or has
       a financial interest in the listed facility may file with
       the Listing Official a request to remove that facility from
       the List.  The request must establish one of the following
       grounds for removal:

       A.  The condition at the facility that gave rise to the
           conviction has been corrected.

       2.  The conviction (not just the sentence) was reversed or
           vacated.

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                               -3-

 II.  The Listing Official must transmit the request for removal
      to the Assistant Administrator for OECM.

III.  The Assistant Administrator for OECM, or her or his tiesignee,
      shall review the request for removal and shall consult the
      appropriate Regional Counsel to determine whether the
      condition at the facility giving rise to the conviction
      has been corrected, or if the conviction has been reversed
      or vacated.

 IV.  The Assistant Administrator for OECM shall determine as
      expeditiously as practicable whether to remove the facility
      from the list.

  V.  If the Assistant Administrator for OECM decides to remove
      the facility from the list, a written notification of
      such determination shall be sent to the facility and to
      the Listing Official who shall promptly publish a notice
      of removal in the Federal Register.

 VI.  If the Assistant Administrator for OECM decides not to
      remove the facility from the List, the Listing Official
      shall send written notice of the decision to the person
      requesting removal.  The notice shall inform the person
      owning, operating, leasing, supervising or having a
      financial interest in the facility of the opportunity
      to request a removal hearing before a Case Examiner
      (See 40 CFR Part 15 for the selection and duties of the
      Case Examiner).

VII.  If the Case Examiner, or the Administrator upon appeal of
      the Case Examiner's decision, decides to remove the facility
      from the List, the Listing Official shall be notified.
      The Listing Official shall then promptly remove the facility
     'from the List.  If the Case Examiner or the Administrator
      upon appeal, decides not to remove the facility from the
      list,  then the Listing Official shall send written notice
      of the decision to the person requesting removal.

      It is important to note that any decision regarding the
 listing or removal of a facility from the List does not affect
 any other action by any government agency against such a facility,
 including debarment from government contracting.

      I believe these procedures will enable us to conduct the
 mandatory listing program in an efficient manner.  If you have
 any questions, please contact EPA's Listing Official, Allen J.
 Danzig, at (FTS) 475-8777.

 cc:  Stephen Ramsey,  DOJ
      Belle Davis, GAD/OARM
      Judson W. Starr,/DOJ

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GM-33

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 I       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
 f                     WASHINGTON, D.C. 20460
                                5BS4
                                                       ANDCOMPUANCZ
                                                        MONTTOIUNG
MEMORANDUM

SUBJECT:  Guidance for Calculating ths Econoaic Benefit of
          Noncoapliance for  & Civil Penalty Assessment
                            f\   _^
PROM;     Courtney M. Price \J£jAjU^ *
          Assistant Administrator for Enforcement
            and Ccapliance 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 nonconpiiance as part of
developing a civil penalty.  A new computer model, BEN, is a
refinement of the methodology for calculating the econccic
benefit of nonconpiiance. •

     By refining the aethodc by which we calculate the economic
benefit cf noncompliance, wo will:

     1.  Respond to th9 probleas that enforcement and nrogrcs
officer identified ccncerr.ir.c; methods for .i-lculctir.g th«
econoaic benefit coapcnent of a civil penalty;

     2.  Ensure among ihe mwdia progress appropriate consistency
in calculating the economic benefit component cf z civil penalty;

     3.  Ensure that the occnonic benefit cf noncoaplitnce con-
tinues to be a fairly valued, reasonable component of a :ivil
penalty; end

     4.  Ensure that the assumptions and data used in BEN to
calculate the econoaic benefit component can be def?nded at
cither an administrative hearing or a judicial proceeding.

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                              -2-
II.  jiCOPE

     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 the
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 BEN 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
statuto-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 for these types of
violations.

     OFPE is considering the feasibility of developing a second
computer model or rule of thunb 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 noncocipliance,
the more the rule cf thumb underestimates the economic benefit
of nonccBJpliance.

     If EPA proposes and a violator accepts the rule of thunb
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 thumb, a more sophisticated method to develop the economic
benefit component of the penalty is required.

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                               -3-

      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.   PSING 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 SEN
 instead  of  the 8  standard  values.  If a violator agrees to
 supply financial  data,  the violator must supply data fcr 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.
JL/ Although the general penalty policy cut off point is $10,000,
each program office may establish a cut off point for the
progress's medium-spocific 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 nonccmpliance.  Regional personnel
hove 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 nodes:
    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 fine 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 principle:.*

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GM-34

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       I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
       *               WASHINGTON, D.C. 20460
                               16(964


                                                          Of FICt Of
                                                        CNFORCEMENTANO
                                                       COMPLIANCE MONITORING
MEMORANDUM
SUBJECT:  Policy Against "No Action" Assurances
FROM:     Courtney M. Price
          Assistant Administrator for Enforcement
            and Compliance Monitoring

TO:       Assistant Administrators
          Regional Administrators
          General Counsel
          Inspector General


     This memorandum reaffirms EPA policy against giving
definitive assurances (written or oral) outside the context of
a formal enforcement proceeding that EPA will not proceed with
an enforcement response for a specific individual violation of
an environmental protection statute, regulation, or other
legal requirement.

     "No action" promises may erode the credibility of EPA's
enforcement program by creating real or perceived inequities
in the Agency's treatment of the regulated community.  This
credibility is vital as a continuing incentive for regulated
parties to comply with environmental protection requirements.

     In addition, any commitment not to enforce a legal
requirement against a particular regulated party may severely
hamper later enforcement efforts against that party, who may
claim good-faith reliance oh that assurance, or against other
parties who claim to be similarly situated.

     This policy against definitive no action promises to
parties outside the Agency applies in all contexts, including
assurances requested:

     0  both prior to and after a violation has been committed;

     0  on the basis that a State or local government is
        responding to the violation;

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     0  on the basis that revisions to the underlying legal
        requirement are being considered;

     0  on the basis that the Agency has determined that the
        party is not liable or has a valid defense;

     0  on the basis that the violation already has been
        corrected (or that a party has promised that it will
        correct the violation); or

     9  on the basis that the violation is not of sufficient
        priority to me.rit Agency action.
                     '••*'.''
     The Agency particularly must avoid no action promises
relating either to violations of judicial orders, for which a
court has independent enforcement authority, or to potential
criminal violations, for which prosecutorial discretion rests
with the United States Attorney General.

     As a general rule, exceptions to this policy are warranted
only

     "  where expressly provided by applicable statute or
        regulation (e.g., certain upset or bypass situations)

     e  in extremely unusual cases in which a no action
        assurance is clearly neccessary to serve the public
        interest (e.g., to allow action to avoid extreme risks
        to public health or safety, or to obtain important
        information for research purposes) and which no other
        mechanism can address adequately.

Of course, any exceptions which EPA grants must be in an areo
in which EPA has discretion not to act under applicable law.

     This policy in no way is intended to constrain the way in
which EPA discusses and coordinates enforcement plans with
state or local enforcement authorities consistent with normal
working relationships.  To the extent that a statement of EPA's
enforcement intent is necessary to help support or conclude an
effective state enforcement effort, EPA can employ language
such as the following:

     *EPA encourages State action to resolve violations of
the	Act and supports the actions which   (State)
is taking to address the violations at issue.  To the extent
that the'state action does not satisfactorily resolve the
violations, EPA nay pursue its own enforcement action."

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     I am requesting that any definitive written or oral no
action commitment receive the advance concurrence of my office*
This was a difficult decision to reach in light of the valid
concerns raised in comments on this policy statement; neverthe-
less, we concluded that Headquarters concurrence is important
because the precedential implications of providing no action
commitments can extend beyond a single Region.  We will attempt
to consult with the relevant program office and respond to any
formal request for concurrence within 10 working days from the
date we receive the request.  Naturally, emergency situations
can be handled orally on an expedited basis.

     All instances in which an EPA official gives a no action
promise must be documented in the appropriate case file.  The
documentation must include an explanation of the reasons
justifying the no action assurance.

     Finally, this policy against no action assurances does not
preclude EPA from fully discussing internally the prosecutorial
merit of individual cases or from exercising the discretion it
has under applicable law to decide when and how to respond or
not respond to a given violation, based on the Agency's normal
enforcement priorities.

cc:  Associate Enforcement Counsels
     OECM Office Directors
     Program Compliance Office Directors
     Regional Enforcement Contacts

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            UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

                        WASHINGTON. 0 C. 20460
                                                               or
MEMORANDUM

SUBJECT;  Implementing Nationally Managed or Coordinated
          Enforcement Actions:  Addendum to Policy Framework
          for State/EPA Enforcement Agreements
FROM:     Aivin L. Aim
          Deputy Administrator

TC:       Assistant Administrators
          Regional Administrators
          Regional Enforcement Contacts
          Steering Committee on the State/Federal Enfcrceme
            Relationship
          Associate Administrator for Regional operations
     I am pleased to transmit to you a copy of EFA's policy
statement on Implementing Nationally Managed or Coordinated
Enforcement Actions, as an addendum to the Agency's Policy
Framework for 5tate/E?A Enforcement Agreements, issued on
June 26, 1934.

     The policy statement was developed at the request of
Courtney price and myself by an OECM work group with repre-
sentatives from the Headquarters Program Offices and Regions.
The draft policy statement was reviewed by the Steering
Committee on the State/Federal Enforcement Relationship.
This final policy statement reflects the Steering Coirjn it tee's
comments.

     I think this policy is an important sedition to our
efforts to build both a more effective national enforcement
program and a strong working relationship with the States.
Coordinated case preparation will have an increasingly
important role in establishing precedent for cur new programs/
in creating a greater deterrent effect when dealing with
numerous small sources and in addressing recurring patterns

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                            - 2 -


of noncorcpliance within regulated entities.  This policy
clarifies not only the circumstances under which nationally
managed or nationally coordinated cases are appropriate, but
most important, it clarifies the roles and relationships
among EPA headquarters, Regions and State or local governments
with delegated programs.

     This additional policy guidance, in concert with the
recently completed State/EPA Enforcement Agreements, should
provide a consistent framework for enhancing our joint Federal
and State efforts to achieve a strong and effective national
enforcement presence.

Attachment

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                                                             12/2«/«4
       EPA POLICY ON IMPLEMENTING NATIONALLY MANAGED OP
               COORDINATED ENFORCEMENT ACTIONS
     This policy addresses how EPA will handle the small
subset of federal civil enforcement cases, both administrative
and judicial, which are managed or coordinated at the EPA
Headquarters level.  The policy was developed to ensure these
actions are identified, developed and concluded consistent
with the principles set forth in the Policy Framework for
State/EPA Enforcement "Agreements."  It covers the criteria
and process for deciding what cases might best be managed or
coordinated nationally; the roles and relationships of EPA
Headquarters and regional offices and the States; and protocols
for active and early consultation with the involved States
and Regions.

A.  Criteria for Nationally Managed or Coordinated Enforcement
    Cases

     !*ost enforcement cases are handled at the state, local
or EPA regional level for reasons of efficiency and effectiveness
and in view of the primary role that States and local governments
have in enforcement under most of the major environmental
statutes.  The Policy framework identifies several instances
in which direct enforcement actions may be taker, by EPA, which
in most instances will be handled by EPA Regions pursuant tc
the State/EPA Enforcement "Agreements."  However, some of
those cases may most appropriately be managed or coordinated
at the national level by F?A Headquarters.

     In addition to instances in which en EPA Regicr: requests
Headquarters assistance or lead in an enforcement case, these
"national" cases will usually arise within the context of
three of the criteria for direct EPA action mentioned in the
Policy -Framework:

         National Precedent (legal or program precedent): th-e
         degree to which the case is one of first impression
         in law or the decision is fundamental to establishing
         a basic element of the national compliance and
         enforcement program.  This is .particularly important
         for early enforcement cases under a new program or
         issues that atfect implementation of the program on
         a national baris.

                Patterns of violations and Violators; the
         degree to which there are significant patterns of
         repeat violations at a given facility or type of
         source or patterns of violations within multi-facility
         regulated entities.  The latter is of particular
         concern where the nonconpliance is a natter of national
         (e.g., corporate) policy or the lack of sound environ-
         mental manacenent policies snd practices at a national

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         level which can best be remedied through settlement
         provisions which affect such national policies and
         practices.

         Interstate issues (multiple States or Regions): the
         degree to which a case may cross regional or state
         boundaries and requires a consistent approach.
         This is particularly important where there nay be a
         potential for interregional transfers of pollution
         problems and the case will present such issues when
         EPA Regions or States are defining enforcement remedies.

     SPA's response to any of these circumstances can range
from increased headquarters oversight and legal or technical
assistance/ to close coordination of State and Regional
enforcement actions, td' direct management of the case by
Headquarters.

     "here are essentially two types of "National" cases.  A
nationally managed case is one in which EPA Headquarters has
tne responsibility for the legal and/or technical development
and raeinagenent of the case(s) from the time the determination
is mace that the case(s) should be nationally managed ir.
accordance with the criteria and process set forth in this
policy.  A nationally coordinated case(s) is one which preserves
responsibility for lead legal and technical development and
management of the cases within the respective EPA regions
and/or state or local governments,  This is subject, however,
to the oversight, coordination and management by a lead
Headquarters attorney and/or program staff on issues of
national or programmatic scope to ensure that all of the
esses vithirvthe scope cf the nationally coordinated case are
resolved to achieve the sa~e or compatible results ir. furtherance
cf TPA's national program and enforcement goals.

     Soction C below describes mere fully the roles and
relationships of E?.a headquarters and regional and state
personnel, both legal and technical, in either nationally
managed or nationally coordinated cases.

     There are several factors to apply to assess whether, i-
addition to the normal Headquarters oversight, a case should
be handled as:  (I) nationally managed; or (2) nationally
coordinated.  None of these factors may necessarily be sufficient
i.n themselves hut should be viewed as a whole.  These factors
will ir elude:

         availability or most efficient use cf ?tate or EPA
         Regional or Headquarters resources.

         ability of the agency to affect the outcome through
         alternative means.  One example is issuance of
         timely policy guidance which would <=rn = bl«/ the States,
         local ccvernrr.ents cr ,~?A Pec ions tc
         appropriate precedent through independent action.

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                            - 3 -
         favorable venue considerations.

     —  environmental results which could be achieved through
         discrete versus concerted and coordinated action,
         such as potential for affecting overall corporate
         environmental practices.

         location of government legal and technical expertise
         at EPA Headquarters or in the Regions, recognizing
         that expertise frequently can be tapped and arrangements
         be made to make expertise available where needed.

     To the extent possible, where cases warrant close national
attention, EPA Headquarters will coordinate rather than
directly manage the case on a national basis thereby enabling
Regions and States to better reflect facility-specific enforcement
considerations.

B.  Process for Identifying Nationally-Managed or Coordinated
    Cases — Roles and Responsibilities

     EPA recognizes the importance of anticipating the need
for nationally managed or coordinated esses to help strengthen
our national enforcement presence; and of widely sharing
information both on patterns of violations and violators and
on legal and program precedent with EPA Regions and States.
To do this:

     Headquarters program offices,  .n cooperation with the
     Officeof Enforcement and Compliance Monitoring should
     use the Agency's Strategic planning process to help
     identify upcoming enforcement cases of national precedence
     and importance.  They also should develop and disseminate
     to Regions information on anticipated or likely patterns
     or sources of violations for specific industries and
     types of facilities.

     Regional offices are responsible for raising to Headquarters
     situations which pose significant legal or program
     precedent or those in which patterns of violations are
     occurring or which are likely to be generic industry-
     wide or company-wide which would make national case
     management or coordination particularly effective.

     State and local officials are encouraged to raise to EPA
     Regional offices situations identified above which would
     make national case management or coordination particularly
     effective.

     Whether a case will be managed or coordinated at the national
level vill be decided by the Assistant Administrator for Enforce-
ment anc Compliance Monitoring after full consultation with the
affected program Assistant Administrators, Regional Administrators
and state or local governments with approved or delegated programs
in whet is intended to be a consensus building process.  There
will be a full discussion among all of the parties of all of

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the ramifications for the program and a review of all of the
important criteria involved in the decision.  in the event of
a lack of consensus as to whetner the case should be managed
or coordinated at the national level, the AA for OECM shall
make the determination, with an opportunity for a hearing
and fiimely appeal to the Administrator or Deputy Admini-
stracor by the Regional or other EPA Assistant Administrator.

     The Regions will be responsible for communicating with
any a.ffected States using mechanisms established in the State/
EPA Enforcement "Agreements/" to raise the possibility of
natimal case management or coordination and to ensure that
timely information on the status of any independent state,
local or regional enforcement actions can and would be factored
irito the decisions regarding:  (1) whether to manage the case
nationally; (2) whether to coordinate the case nationally; (3)
what legal and technical assistance might be provided in a State
lead case; and (4) what facilities to include in the action.

C.  Case Development -- ?oles and Pesponsabilities

     Nationally managed cases are those that are managed out
of EPA Headquarters wit.", a lead headquarters enforcement
attorney and' a designated lead headquarters program contact.
Mctwit.hstandir.g headquarters lead, in most instances, timely
and responsive Regional office legal and technical support
ar.d assistance is expected in developing and manacir.g the
case.  In tnese instances, the pec ions will receive credit
for a case referral ,'on a facility basis) for this effort.
The cecisicr. en the extent of Pegicnal office involvement
?,nc case referral credit will be r^ace at the time of decision
that the case should oe nationally managed.  Regions which
play a significant role in the development and/or prosecution
of a case will be involved in the decision-making process in
any case settlement proceedings and the Regional Administrator
will h.jve the opportunity to formally concur in ar.y settlement.

     Rationally coordinated cases are those that are coordi-
nated out of EPA Headquarters with lead regicnal and/or state
or local attorneys and associated program office staff.  The
headquarters attorney assigned to the case(s) and designated
headquarters program office contact have clear respons ioii •• ty
for ensuring national issues involved in the case which
require national coordination are clearly identified and
developed and in coordinating the facility-specific actions
of the regional offices to ensure that the remedies and
policies applied are consistent.  This goes beyond the normal
headquarters oversight role.  The headquarters officials have
both a facilitator role in coordinating information exchange
and a policy role in influencing the outcome for the identified
issues of national concern.

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                            - 5 -
     Whether a case is nationally managed or nationally
coordinated, as a general rule if SPA is managing a case,
States will be invited to participate fully in case develop-
ment and to formally join in the proceedings if they so
desire by attending meetings and planning sessions.  States
will be consulted on settlement decisions but will be asked
to formally concur in the settlement only if they are parties
to the litigation.

     On a case-by-case basis, the National Enforcement and
Investigations Center (MEIC) may be asked to play a role in
either type of national case to coordinate evidence gathering,
provide needed consistency in technical case development
and policy, witnesses and chain of custody, and/or to monitor
consent decree compliance.

D.  Press Releases and Major Conmui'C&ations

     A communications plan should be developed at an early
stage in the process.  This should ensure that all of the
participating parties have an opportunity tc communicate
their rcle in the case and its cutcome.  Most important, the
communications plan should ensure that the essential message
from the case, e.g., the anticipates precedents , -gets sufficient
puslic attention to serve as a deterrent for potential future
violations .
                                                       ose
     It is particularly important that the agencies get
maximum benefit from the deterrent effect of these significant
national cases through such mechanisms as:

         more detailed press releases to trade publications
         i.e., with background information and questions and
         answers
         development of articles
         interviews with press for development of more in-
         depth reporting
     —  press conferences
         meetir.ns with public/environmental groups — including
         meetings on the settlement of national cases which
         have generated intense local or national interest
         speeches before industry groups about actions
         communications with congressional committees
s imultanecusiy , if possible.

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GM-36

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       "     UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
       '                   WASHINGTON, DC 20460
                                                          OFFICE OF
                                                      ENFORCEMENT COUNSEL,
MEMORANDUM

SUBJECT:  The Use of Administrative  Discovery  Devices  in  the
          Development of Cases Assigned  to  the Office  of
          Criminal  Investigations     ^   ^

FROM:     Courtney  M. Price  V^J&V*V/^~V
          Assistant Administrator
          Enforcement and Compliance  Monitoring

TO:       Assistant Administrators
          Regional Administrators
          Regional  Counsels
Introduction
     Most of the environmental statutes  for which  the  U.S.
Environmental Protection Agency  (EPA) has  responsibility  contain
one or both of the following  information-gathering provisions:
(1) previsions which empower  EPA  to  require responses  to  requests
for information; and (2) provisions  conferring  upon EPA the
right to enter and inspect .physical  premises.   This document  has
been prepared to provide guidance concerning  the use of these
provisions in the investigation of cases assigned  to EPA's Office
of Criminal Investigations.   This guidance supersedes  any previous
EPA document whic:. addresses  the  issues  arising from the  use  of
administrative discovery devices  in  the  development of a  criminal
case.

     This guidance was developed  through an examination of the
use of administrative discovery devices  in cases that  have
resulted in criminal prosecutions.   Because there  is currently
very little case law concerning such provisions in environmental
statutes, a review was made of cases under similar statutory
schemes.  The guidance is a rather conservative application of
the broad principles established  in  these  decisions.

     The use of administrative discovery devices in parallel
proceedings—that is, instances in which both a criminal  investi-
gation and a civil or administrative proceeding concerning the
r.a-r.e circumstances take place simultaneously — ic not addressed  in
this document.  This issue is addressed  in separate guidance  on
parallel proceedings.

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     The importance of this guidance cannot be over-stated.
Where the use of administrative discovery devices is found to
be improper, the ultimate remedy may be suppression cf evidence
in th,e- subsequent criminal prosecution.

     This guidance is strictly advisory in nature.  It is not
intended to create or confer any rights, privileges or bene-
fits,  This policy is not intended to, does not, and may not be
reliod upon to create any rights, substantive or procedural,
enforceable at law by any party in any matter, civil and criminal.
Any attempts to litigate any portion of this guidance1should be
brought to the attention of the Criminal Enforcement Division,
Office of Enforcement and Compliance Monitoring, EPA Headquarters.

I.  USE OF EPA'S INFORMATION REQUEST AUTHORITY

Background

     For purposes of tlj'i;S guidance, the term "information request
authority" will be used'to describe these provisions contained in
EPA-adninistered statutes which provide the Agency with the
authority to compel the production cf information.  Sections 30S
of the Clean Water Act and 11(e) of the Toxic Substances Control
Act are typical of such provisions.  Courts have upheld the use
of such provisions both in cases where the information sought is
relevant to investigations into pending charges and where it is
relevant to investigations into whether charges should issue.I/
Information requests pursuant to these provisions are enforce^
able upon a showing that the information is relevant to a
purpose properly authorized by Congress.2/

     The enforcement provisions of environmental statutes contain
both civil and criminal provisions.  Therefore, evidence obtained
through the use of such information request authority may subse-
quently be usec in a criminal prosecution.  This fact raises
concerns that such summons authority will be used, in some instances,
solely for purposes of gathering evidence for a criminal prosecution;
such a use has been viewed as infringing upon the role of the
grand jury.

Issue

     Tc what extent can the information request authority
granted to EPA under the environmental statutes be utilized to
gather evidence of statutory violations in cases under develop-
ment by EPA's Office of Criminal Investigations?
I/  Oklahoma Press Publishing Company v. Wa11ing,  327 U.S.
186 (1946.).

?./  United States v.  Morton Salt Company, 338 U.S. 632 (.1950).

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 Guidance
 cases
 until
                                                        .
 decision  to  refer  a  case,  however,  may  not  be  artificially  delayed
 solely  to pursue further evidence  through the  use  of  this'authorit
 Where an  investigation  is  being  directed  by the  Justice Departoent
 even though  no  formal referral from EPA has been made, EPA's
 information  request  authority should .not  be used a§ an investigative
 tool. -This  situation,  however,  should  be' distinguished from  the
 situation where the  Justice Department  has  merely  been advised
 of an investigation  and has not  exhibited any  control over  its
 course.

     The  various environmental statutory provisions which grant
 authority to request information from members  of the  regulated
 community also  contain  limitations  on the type of  information
 which may be obtained through the  use of  this  authority.  Care
 should  be taken to draft any request to conform to these limita-
 tions.  In addition, it should be  noted that a request based  on
 this statutory  authority may only  be made by an Agency employee
 to whom the  authority has  been delegated by the Administrator.
 Reference  should be  made to a properly updated EPA Delegations
 Manual  to ensure that any  request  is made by an employee with
 proper authority.  Finally, each such request  should  contain a
 notice  indicating  that  violations  of the particular statute nay
 be the subject  of either civil or  criminal  .penalties.

 Discussion

     The  starting point for a discussion on the proper use  of
 information  request  provisions is  a  review  of  instances where
 the Courts have found the  use to be  absolutely improper.  The
 Supreme Court has made  it  clear  that information requests may not
 be used to gather evidence in a  criminal investigation once the
 case has  been referred  to  the Department of Justice for criminal
 prosecution. 3/  'La, Salle involved  the use of an administrative
 summons in a  tax fraud  investigation by a Special  Agent of  the
 IRS Intelligence Division.  Although the statute provides both
 civil and  criminal remedies for  violations, the agent testified
 that the  purpose of  his investigation was to uncover any criminal
 violations of the IRS code.  During  the course of  his investiga-
 tion and  prior  to referral of the  case to the Department of
 Justice,  the  agent issued  an administrative summons for records.
 The bank  challenged  the use of the  summons  as improper claiming
 that the  summons was issued solely  to aid in a criminal
 investigation.
y  United States v. Le Salle National Bank, '!37 U.S. 296
U97~£";.

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     Although the Supreme Court held  that the suraracr.s  should  be
enforced, it used this case as an opportunity to elaborate on the
bounds of such summons authority.  An administrative summons
must be used in good faith and for a  Ccngressionally authorized
purpose.  Use solely to pursue a criminal investigation is not  '
good faith.  However, a case nay not  be considered criminal
until an "institutional decision" is  made to prosecute criminally.
The intent of the individual agent is not dispositive of this
issue.  Th,is institutional decision generally occurs at the
point of referral to the Department of Justice.  However, the
Court made it clear that a delay in submitting a case  to the
Department of Justice merely to gather additional evi'dence for
the prosecution through use of administrative discovery devices
would not be tolerated.  The Court also indicated the Agency cannot
use this administrative authority merely to become an information
gathering tool for other agencies regardless of the referral status
of the criminal case.

     Although the wisdom of the la Salle decision has been ques-
tioned,, the results have been followed in all other cases addressing
this isisue succeeding that decision.  Therefore, the "institutional
decision" to prosecute criminally should signal the end to a use
of all administrative discovery devices in any SPA case.  As a
matter of policy, no use of administrative discovery devices to
secure evidence should be made once a case has been referred to
the Department of Justice.

     A sore difficult issue, within EFA's context, is whether
an "institutional decision" to use cricinal sanctions may occur
at a point before referral to the Department of Justice.  It is
clear that merely bringing an allegation of misconduct to the
attention cf the Office of 'Criminal Investigations for investi-
gation does not constitute an "institutional decision" in favor
of criminal prosecution.  Many of these investigations will, in
fact, become the basis for administrative or civil sanctions,
where initial allegations cannot be substantiated, or where the
case is otherwise lacking in prosecutcrial merit.  Further,
EPA's referral procedure for criminal cases requires review at
Headquarters before a case is referred.  The final decision
rests with the Assistant Administrator for Enforcement, and
Compliance Monitoring.  Until that point is passed, the Agency
may yet choose to proceed by civil action.  Accordingly, this
policy adopts the La Salle holding that an "institutional decision"
occurs a4; the point of criminal referral, not before.

     Information request authority may not be used in situations
where th€! Agency is perceived as merely an information gathering
tool for another agency.  The Supreme Court in La Salle has made
it clear that where this is the case, evidence obtained may be
suppressed at trial.  Of particular concern are those  instances
where EPA has beer, requested to assist in an ongoing criminal
.investi^aticr. by the Justice Department.  Accordingly, a decision
by SP/. tc participate in such an investigation constitutes an

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                               -5-

 "institutional  decision"  to  proceed  criminally  that  requires
 approval by  the Assistant Administrator for Enforcement  and
 Compliince Monitoring, and precludes  thereafter any  use  of
 information  request authority in that case.

      Justice  Department involvement  in an investigation  prior  to
 referral does net necessarily negate  the Agency's a.bility to use
 administrative  discovery  devices.  Where the Justice Department
 has merely been advised of the investigation and exhibits no
 control over  it, administrative discovery devices may  be used.
 However, where  the Justice Department attorney  has assumed the
 role  of prosecutor and is directing  the investigation, EPA
 should refrain  from making use of these tools.   This will b.e the
 case  whether  the investigation is initiated by  EPA or  whether
 the Justice Department requests assistance with  an ongoing
 investigation.

      It is necessary to remember that the character of the
 information  request authority does not charge when utilized to
 gather evidence ir. cases assigned to EPA's Office of Criminal
 Investigations.  Any limitations on  the use of.  this authority.
 and the type of information which may be sought  continue to
 apply.  The individual statute and Agency guidance on  the use of
 such  authority should be consulted before information  request
 authority is utilized.

      Additionally, most environmental statutes  grant such authority
 directly to the Administrator. • The Administrator has  delegated
 this  authority to various Agency employees.  Reference should be
 made  to a properly updated EPA Delegations Manual to ensure
 that  any request is made by an Agency employee  with appropriate
 authority.

      Finally, each information request cade in  a case being
.developed by the Office of "Criminal Investigations should
 contain a notice indicating that the statute under which the
 request is made contains both civil and criminal sanctions for
 violations.  Such notice will negate any argument that the
 individual receiving the request was misled into believing that
 only  civil or administrative sanctions could be  imposed.

 II.   USE OF ADMINISTRATIVE INSPECTIONS AND ADMINISTRATIVE SEARCH
      WARRANTS

 Background

      Each of the statutes enforced by EPA provides the Admini-
 strator with the authority to conduct inspections to determine,
 inter alia, the state of compliance with statutory requirements.
 Statutory inspection authority is enforceable,  where consent
 is withheld,  through the use of an administrative search warrant.

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                               -6-


     4The Supreme Court has deternined  that  the  Fourth  Amendment
guarantee against unreasonable searches and seizures hss  equal
force for searches authorized by  such  regulatory  schemes  as  for
those necessary to obtain evidence of  a crime.j?/  In caking  this
determination, however, the Court has  else  recognized  the inherent
differences between criminal searches  and regulatory inspections
of cocmercial enterprises.  The enforcement of  regulatory schemes
such as those created by environmental statutes require regular
inspections.  These inspections are liaited i.n  scope,  and involve
business precises rather than private  hones.  Therefore,  compliance
inspections are considered to pose a lesser threat  to  expectations
of privacy.  To require a showing of probable cause in the tradi-
tional criminal law sense for an administrative warrant would
frustrate the enforcement of these systems.

     As a result, the Supreme Court established a new  standard
for administrative warr'ants, which can best be  termed  "administra-
tive probable cause."  This standard requires a balancing of
interests.  "If a valid public interest justifies the  intrusion
contemplated then there is probable cause to issue  a suitably
restrictive warrant. "_6/  The issuance  of an administrative
warrant can be justified upon a showing that the  premises
to be inspected were selected on the basis of a "...general
administrative plan for the enforcement of  the  [statute in ques-
tion]," or upon specific evidence of an existing  violation of
regulatory requirements._?/  The Supreme Court was also willing
to create an exception froc the need for even an  administrative
warrant in the case of certain "pervasively regulated" industries
such a,5 mining, firearms and liquor.8/  That exception, however,
is very narrow.

     The issues addressed by this guidance arise  from  the
fact that most enforcement provisions  of environmental statutes
contuir. both civil and criminal penalties for violations.
Therefore, most inspections conducted  to determine  compliance
with a particular statute or regulation may result  in  the discovery
of evidence subsequently offered in a  criminal  prosecution.
Because inspections may be conducted pursuant to  an administrative
warrant requiring a less demanding showing of probable cause,
there i,s concern that such inspections will be  used to circumvent
ths traditional standards for criminal search warrants.
5/  Camera v. Municipal Court. 367 U.S. 523 (1967); See v. City
of Seattle, 387 U.S. 541 (19o7).

_6/  Camera v. Municipal Court, supra at 539 (1967).

y  Marshall v. Earlow's Inc. , 436 U.S. 306 (1976).
6/  DOJ^OV^TI v. Dewqv, ^$2 U.S. 5?^ (19£l); golonnac'5 Catering
'Coro.'v. Unitec States, 397 U.S. 72 (1970) and United
StctVs v. risweli ,  vJo U.S. 311 (1972).

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                               -7-


Issue

     To what extent may administrative search warrants, based on
EPA's statutory inspection authorities, be used to gather evidence
in cases developed by the Office of Criminal Investigations?

Guidance

     Administrative inspections may be conducted to gather
evidence of statutory violations until probable cause exists to
believe that a crime has been committed and it is clear that the
predominant purpose of such an inspection is to gather evidence
of a crime.  This does not preclude the use of such inspections
to substantiate allegations.  Rather, it limits the use of this
administrative discovery device once there is actual evidence of
a crime rising to the level of probable cause and further use of
inspections are for purposes of developing various aspects of
the government's criminal case.  Once this point is reached,
entry must be gained only through pure consent (i.e. consent '
gained without the assertion of statutory inspection authority)
or a criminal warrant.

     Administrative inspections and warrants should not be used
to gather evidence for a criminal inquiry directed by the Depart-
ment of Justice even though no formal referral of the case has
been made by EPA.

Discussion

     Although the La Salle decision (see discussion in previous
section concerning Information Request Authority) deals with the
administrative summons authority of the IRS rather than inspection
authority, the rationale of that case is of value in inspection
situations as well.  This position appears to have support in
case law regarding statutory schemes similar to the environmental
statutes.   Although most of the cases examined were decided
prior to La Salle,  evidence gathered during administrative
inspections has been found to be admissible in criminal trials
only where the inspections were properly conducted prior to the
referral decision by the Agency.  Thus, as a starting point, the
guidelines adopted for use of information request authority as a
result of the La Salle decision also apply to administrative
inspections.  At a minimum, administrative inspections--either
by consent or under administrative warrants—should not be conducted
once a case has been referred to the Department of Justice with
a recommendation for criminal prosecution.  Similarly, if a
criminal investigation is being directed by an attorney from the
Department of Justice, administrative inspections should not bs
conducted to gather evidence for the case even though the case
hcs not yet officially been referred to the Department.

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                              -8-
     'tfhere the institutional decision to prosecute has not yet
been made—i.e., where the case is under development by the
Office of Criminal Investigations prior to the initiation of
the referral process--courts have permitted the use of adminis-
trative inspections within particular parameters.  Evidence
gathered during the execution of an administrative warrant say
be admissible during a cricinal trial provided that the inspec-
tion under the warrant was properly limited to the scops of
authority provided by the statute.£/  This has been the case
even though the administrative inspection was conducted as a
result of allegations of criminal nisconduct.JLC)/  However, where
the evidence in question could not be discovered in a properly
limited inspection, these cases require the government to obtain
the informed consent of the facility or a criminal warrant based
on traditional criminal., probable cause, prior to conducting a
search.

     Eoth Goldfine and Consolidation Coal were decided prior
to La Salle.  These cases each involve the admissibility of
evidence gained during searches conducted pursuant to an adninis
trative warrant based on administrative inspection authority and
administrative probable cause.  Each search occurred prior to
referral to the Justice Department for criminal prosecution.  In
Gcldfine, the broader of these cases, the evidence was obtained
during an audit by a DEA Compliance Officer.  The defendants,
owners of a pharmacy, were not informed at the time of the audit
that their activities were under investigation,  The investigation
at that point included reports of large orders cf controlled
substances, surveillance of the pharmacy and arrests of come of
its customers.

     Consolidation Coal involved the validity of an inspection
based on an administrative warrant supported by an affidavit
which recited an allegation by an unnamed ex-employee that the
company was systematically evading the respirable coal dust
concentration standards.   The company claimed that the criminal
standard cf probable cause should have been used to judge the
affidavit.   The company was indicted 16 months after this inspec-
tion for violations of the Coal Mine Health and Safety Act of
1969.
                               538 F2d 815 (9th Cir.) cert.
9''  United States v. Goldfine,
ceniFcT.sc U.S. 1069 ( 1977).

107  United States v. Consolidation Coal Company, 560 F2d 2U
Toth Cir.  1977) vacated ant remanc'ed 43b U.S. 9^"2 [for further
consideration in lignt of Marshall v. Barlow's I_n_Q» » supra j
jndrrcor.t reinstated 579 F2d 1011 T6th Cir.  1976; cert, denied
^59 "U.S. 1009 (1979).

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                               -9-


     IA these cases, each court concluded that the inspections
were sanctioned by the statutes pursuant to which they were
undertaken.  The fact that these inspections were based upon a
suspicion -of criminal misconduct did not erase their regulatory
character.  Each statute, like environmental statutes, contained
both civil and criminal sanctions and no final decision had been
made to choose one type of sanction over another. 'The real
issue was the scope of the search.  Thus, the courts concluded
that, in order for the evidence to be admissible, the search
must retain the character of an administrative inspection.  It
cannot extend beyond the bounds authorized by the statute.  This
result has been supported in at least one case since the La Salle
decision.11/

     An administrative inspection may not change in character
when it is conducted in support of an investigation assigned to
the Office of Criminal Investigations.  The authority granted is
that belonging to any EPA inspector conducting a complisnce
inspection.   The person conducting the inspection must have
properly delegated authority.  Care should be taken to follow
the Agency procedures for administrative inspections.  This
includes such practices as the splitting of samples.  Finally,
if a criminal investigator accompanies the inspection team,
credentials will be presented so that the facility is aware of
the participation of the Office of Criminal Investigations.

     The next case which has impact on this issue is Michigan v.
Tyler.12/  This case raises the issue of whether a criminal
warren! is required once an investigation has progressed to" the
point where  probable cause to obtain such a warrant has been
gained.  It  does not address the use of administrative inspections
and administrative search warrants in criminal investigations.
It is included here because other courts have referred to this
opinion in cases involving the administrative inspection issue.

     Michigan v. Tyler involves the adsissibility of evidence
of arson gained during £ number of warrantless,  non-consensual
searches of the burned precises both curing and after th-3 fire.
The Supreme  Court concluded that while in the building to put
out the blaze, firefighters nay seize any evidence of arson which
n/  In United States v.  Prendergast. 585 F2d 69 (3d Cir. 1978),
the Court considered its  decision in light of L?. Salle.  It
concluded that no violation of the La Salle standard had occurred
bucausc DEA had net made  a commitment to a criminal prosecution
prior to obtaining a warrant.   585 F2d at 71 n.l.

12/  436 U.S.  1:99 (1976).

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                               -10-

 is  in  plain view.  Officials may  remain  in  the  building  for  a
 reason^Me period after the fire  has  been extinguished to
 investigate the cause.  However,  if  during  the  investigation
 they discover probable cause to believe  that  arson  was committed
 and they wish further entry after the fire  has  been extinguished
 to  gather evidence, a warrant upon a  showing  of  traditional
 criminal probable cause must be obtained. 13/

     The Supreae Court's decision  was  based on  its  view  of the
 privacy expectations of an owner  of  a burned  building.   Initially,
 the owner's expectation of privacy must  give  way  to a need of
 entry  by firefighers to fight a blaze.   However,  once the fire
 is  extinguished an expectation of  privacy returns despite the
 condition of the building.  From  that point on,  the Court concluded,
 a search warrant is required for  further entry  onto the  premises.

     In Ur.ited States v.J'-Lavson, IV  the  District  Court for Maryland
 turned to Michigan v. Tyler while  reviewing the  adnissibility of
 evidence gained curing an administrative search  conducted by DEA
 agents.  The Court found that the  agent  applied  for the  warrants
 at  the request of the Assistant United States Attorney after the
 Agency had cade an "institutional  commitment" to  a  criminal
 prosecution.  In -reviewing the case  law  on  use  of administrative
 warrants, the Court cited Michigan v.  Tyler as  requiring a criminal
 search warrant for entry whenever  "the purpose  behind the search
 shifts from administrative compliance  to a  quest  for evidence to
 be  used in a criminal prosecution. "1_5/   Clearly,  once a  case has
 been referred tc the Department of Justice  for  £  criminal prose-
 cution, this point has been reached.   However,  the  Lawson Court
 left open the question of whether  this point  can  be reached  at
 an  earlier stage in the investigation prior to  the  institutional
 decision to refer the case for criminal  prosecution.

     In United States v. Jamieson-McKanes Pharmaceuticals,l6/
 the Eignth Circuit also reviewed  the  application  of Michigan v.
 Tyler.   This case concerned regulatory inspections  by DEA agents
 prior tc referral of the case for  prosecution.  The Court concluded
 that Tvler did net have application  to a pervasively-regulated
13/  Michigan v. Tyler, supra at 508.

Jj[/  50;? F. Supp. 158  (I'D, 1980).

J_5/  Un:.ted States v. Lawson, supra at  165.

16/  65' F2d 532 (8th Cir. 1981).

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                                -11-

       y
 industry  such  as  drug  manufacturing.3J/   In  a  pervasively-regulated
 industry,  there is  a limited  expectation  of  privacy.   Therefore,
 the  rationale  for the  Tyler decision  was  inapplicable.   The
 Court  concluded that a  criminal warrant was  not  required despite
 the  fact  that  evidence  was available  prior to  the  inspection  to
 indicate  that  a criminal  violation may have  occurred.   The Court
 returned  to  the rationale of  Goldfine and Consolidation Coal  and
 held that  the  warrants  based  on administrative probable cause
 were valid in  this  situation  as long  as the  intrusion  was limited -
 to the purpose specified  in the statute.  This result  has also
 been supported by the Sixth Circuit.18/

     The  full  impact of Michigan v. Tyler on administrative
 inspection cases  is not yet clear.  Although La  Salle  seems to
 limit use  of administrative discovery devices in investigations
 of criminal misconduct  only after an  institutional  decision to
 prosecute  is made, Michigan v. Tyler  can be  read as a  limit on
 the use of these  devices  prior to referral,  at that point where
 probable  cause exists to  believe a crime has been committed.

     Where an  investigation focussing on potential  criminal violations
 has'progressed to a stage where there is probable cause  to believe
 that a crime has  been committed and the predominant purpose for
 an inspection is  to gather evidence of the crime, administrative
 inspection authority should not be utilized.  Rather,  entry
 should be  obtained by pure consent (i.e., consent obtained without
 the assertion of  statutory inspection authority) or by  use of a
 criminal search warrant obtained under Rule  41 of the  Federal
 Rules of Criminal Procedure.

 Ill-   WARRANTLESS INSPECTIONS

 Background

     The language of the inspection provisions of environmental
 statutes can be read to grant authority to conduct inspections
 without a  warrant where entry is denied.  Although the  Supreme
17/ The Eighth Circuit in this case determined that the drug
manufacturing industry falls within the exception to a warrant
requirement created in Colonnade Catering Corp. v. United States,
supra and United States v. Eiswell, supra.  This is not
necessarily the case with environmental statutes.  See discussion
on warrantless inspections, infra.

.!§/  United States v.  Acklen, 690 F2d 70 (6th Cir. 1982).

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                                -12-
 Court  has  sanctioned warrantless  inspections  for  certain
 pervasively-regulated industries ,_19/  this has  not  been  the  case
 for  every  regulatory program.   In  Marshall  v.  Barlow's  Inc. ,  the
 Supreme  Court held that an OSHA  inspector was  not  entitled  to
 enter  the  non-public.portions  of  a work  site  unless  he  received
 the  owner's consent or possessed  a warrant.   The  Court  indicated
 that warrantless entry would be  upheld only in very  rare  cases--
 pervasively-regulated industries  with a  long  history  of goverhcent
 regulation or where the government could demonstrate  that a
 warrant  requirement would substantially  impair the regulatory
 scheae.

 Issue

     Are warrantless inspections  authorized under  environmental
 statutes where entry is denied  following the  assertion  of statutory
 inspection authority?

 Guidance and Discussion

     At  least one Court has indicated that  the  result of  the
 Barlow 's decision was equally  applicable tc environmental
 statutes._2Cy  The Court commented  that in light of Barlow's
 a warrant was required for entry  pursuant to  the  Clean  Air  Act
 absent consent by an authorized individual.   The  Agency has also
 taken  this position in guidance  to Agency inspectors  after  the
 Barlow's decision.2J/  We will not deviate  from the  that  guidance.
 Where  consent to inspect is not  granted, an administrative  warrant
 should be sought.  This applies to all statutes including the
 Federal  Insecticide, Fungicide and Hodenticide  Act.
.I!/  Donovan v. Dewey, supra (mining facilities), United States
v. Biswell,  suora (firearms) , and Colonnade Catering Corp.
v- United States, supra (liquor).

,207  Public Service Company v.  EPA, 509 F. Supp. 720 (S.D. Ind.  1961)

21 /  One possible exception recognized in Agency guidance  is
en inspection conducted pursuant to authority under the Federal
Insecticide, Fungicide and Rodenticide Act (FIFRA).  There is
a long history of federal regulation concerning pesticide
aanufacture.  The first federal statute in this area was
enacted in 1910.  In addition,  these regulations are limited
to ore industry rather than applying a set of regulations  to
industry across the board.  Finally, in an administrative
case decided after Barlow's, a civil penalty was assessed
Egainst the owner of a FIFRA regulated establishment for
refusal to allow a warrantless inspection, N. Jones & Co.
Inc.. I.F.cF. Docket No. II1-121C (July 27, 1978}.  Despite
this fact, the Agency has taker, the position that, inspections
under r.IFr.A .should be conducted pursuant tc r. vr.rrant where
ccns-jr.t, is not giver:.

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                                -13-


 IV.  APPLICATIONS  FOR  ADMINISTRATIVE WARRANTS  IN  CASES  ASSIGNED
     TO THE OFFICE OF  CRIMINAL  INVESTIGATIONS                 ~"

 Background

     As indicated in the previous section, unless consent is
 granted, an administrative warrant will  be necessary  in  order
 to gain entry to conduct an administrative inspection under any
 of EPA's statutes.  The Suprezae Court in Marshall v.  Barlow's
 Inc. offered guidance  on the type of showing necessary  to'
 justify the issuance of an administrative warrant.  Probable
 cause to support the issuance of an administrative warrant
 nay be based upon a showing either (1) that there is  specific
 evidence of an existing violation of regulatory requirements
 or (2) that the decision to inspect is based on a neutral
 inspection scheme._22/  This showing must demonstrate  that
 the public interest in conducting the inspection  outweighs
 the invasion of privacy which the inspection may  entail.23/

 Issues

     When should such warrant be obtained?  What  type of
 showing must be made in order to obtain an administrative
 search warrant?  How should the inspection be  characterized?

 Guidance

     On routine inspections, EPA generally has not sought an
 administrative warrant until an inspector has  been refused entry.
 The leu,  however,  does not preclude the Agency from seeking
 a warrant before entry is 'denied.  Where surprise is  crucial
 to the inspection or prior conduct makes it likely that
 Warrantless entry will be refused, a warrant should be  sought
 prior to inspection.

     Neutral inspection schemes should be used as a basis for
 administrative warrants only where there is no evidence  of an
 uxisting violation.  Since cases assigned to the Office  of
 Criminal Investigations will almost invariably involve  specific
 allegations of misconduct, the neutral inspection scheme rationale
 will normally be inapplicable.  Once evidence  of  a potential
 violation has been discovered, this evidence should be used as
22 /  Neutral inspection schemes are those which are non-discri-
minatcry, such as a scheme which requires the inspection of every
third facility on the list of facilities with NPDES permit.

•£•_$'' >r.E_er_a v« Municipal Court, supra.

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                               -1D-
the basis for obtaining a warrant.  The evidence available should
be described with specificity in the affidavit supporting the •
warrant.  For example, if the warrant is sought on the basis of
an employee's complaint, the affidavit should set forth in detail
the substance of the complaint, the circumstances in which the
complziint was provided and the relationship of the complainan.t
to the facility to be inspected.  In a-ddition, the application
shoulc' include all corroborative evidence available.  The applica-
tion oust also describe the alleged violation.  Simply stating
that there are reasonable grounds to believe that some violation
of an environmental statute had occurred will not be sufficient.
Both potential civil ancj criminal violations should be listed.
                      "••:<'
     Finally, the application should also state with specificity
the objects of the search.  This should be done with the same-
degree of detail that would be used if applying for a criminal
warrant.  However, the scope of the search described must be
limited to the traditional scope of an admini:;' rative inspection.
The objects of the search may not be outside o-  that authority.
In addition, where an alleged violation is the basis for a warrant,
the objects of the search must relate to that violation.

     The use of administrative discovery devices in investigations
assigned to the Office of Criminal Investigations also raises an
issue regarding the appropriate characterization of the investi-
gation.  Because an institutional decision to refer the case for
criminal prosecution has not been cade, the case is not exclusively
criminal in nature.  However, care must be taken net to mislead
the individual to believe that criminal charges will not be
contemplated.  If the issue is raised, EPA officials should
indicate that environmental statutes contain both criminal and
civil penalties,  and that the Agency considers all enforcement
options cper..

Discussion

     Recent cases concerning administrative inspections under
OSHA have raised issues concerning the standard of probable
cause required for the issuance of administrative warrants
2nd the scope of an inspection where the warrant is based on a
conplaint rather than a neutral inspection .scheme.  The
rationnle used by the courts in these decisions arguably also
has application in the area of inspections under environmental
statutes.

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                               -15-


     Several circuit courts have concluded that where a complaint
alleging a violation is the basis for an administrative warrant,
the information necessary to establish probable cause for such a
warrant will be more extensive than that required for a warrant
based upon a neutral inspection scheme.jNj/  This showing, however,
is still significantly less than that necessary to establish
probable cause for a criminal search warrant.  These decisions
are based on the view that questions of reliability of evidence
and probability of violation are not raised when a warrant is
issued pursuant to a neutral inspection scheme since the subject
of the inspection is chosen through the application of neutral
criteria.  The magistrate need only ensure that the inspection
comports with the legislative or administrative guidelines con-
cerning such inspections.

     Where the inspection is based upon evidence of a violation,
there are no assurances that the target was not chosen for purposes
of harassment.  Therefore, these courts require that the affidavit
contain sufficient information to allow the magistrate to make an
independent assessment of the reliability of the claim that a
violation exists.  For example, in cases involving employee
complaints, the ideal affidavit would indicate the person who
had received the complaint,  the relationship of the complainant
to the target facility—i.e., employee, customer, competitor—the
underlying facts and any steps taken to verify the complaint.25/
If the complaint was made in writing, a copy should be attached.

     Although this requirement has not yet been adopted in all
circuits or by the Supreme Court,  it may be assumed that such a
requirement may be placed 'on EPA in a number of jurisdictions.
Therefore,  affidavits for administrative warrants issued in.
conjunction with a case assigned to the Office of Criminal
Investigations should set forth in detail the substance of the
2*i/  Donovan v. Sarasota Concrete Co., 693 F2d 1061 (llth Cir.
     1962); Marshall v. Horn Seed Co., Inc., 6^7 F2d 96 (10th
     Cir. 1961);"Burkart Randall Division of Textron Inc. v.
     Marshall, 625 F2d 1313 (7th Cir. 19bO;.

25/  Marshall v.  Horn Seed Co.,  Inc. , supra at 103.

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                            -16-

violation and provide all corroborative evidence available.
The application should also specifically describe the alleged
violation.26/

     The scope of an administrative inspection also presents an
issue.  As previously noted, such inspections do not lose their'
administrative character simply because their purpose is, in
part, to corroborate an allegation that nay become part of a
crininal prosecution.  Any limitations contained in the statutes
apply with equal force and must be observed.

     A further issue is raised where inspections are conducted
pursuant to an administrative warrant issued as a result of an
allegation of a violation.  The Eleventh Circuit, in an OSHA
case, concluded that where an administrative warrant was obtained
as a result of a complaint regarding a localized condition at
the facility, the search should be limited to that localized
area.2_7/  The thrust of this opinion is that the scope of the
inspection should be limited to what is reasonably related to
the violation which is the basis for the warrant.  Although
there are other decisions to the contrary ,_28/ as a matter of
policy such inspections should be limited to those areas which
bear a relationship to the violation alleged.
26/  Weyerhaeuser v.  Marshall, 592 F2d 373, 378 (7th Cir. 1979)
In that case the Court concluded that a showing of probable
cause had not been aade where the warrant application contained
the following language:

     "2.,   Or. June 24,  1977,.the Occupational Safety and
      Ke;alth Administration' (OSHA) received a written
      complaint fron  an employee of Weyerhaeuser Company,
      a corporation.   This complaint alleged, in pertinent
      pert,  that violations  of the Act exist which threaten
      physical harn or injury to the employees, and an
      inspection by OSHA was requested.  Based on the
      information in  the complaint, OSHA has determined
      that there are  reasonable grounds to believe that
      such violations exist, and desires to make the
      inspection required by Section 8(f)(l) of the Act."
      592 F2d at 378  n.l.

27/  Donovan v. Sarasota Concrete Co., supra at 1069.  The
complaint, dealt with  improper maintenance of cement-mixer
trucks.  However, OSHA inspectors used the administrative
warrant issued on the basis  of this complaint to inspect
the entire facility including the trucks.

2_6/  See, e.g. , Hern  Iron Works, Inc. v. Donovan, 670 F2d 836 (9th
Cir.  1955);  Ir. re Establishment Inspection of Seaward International
v. Marshall, 5 TO r. Supp. 3^ (V.'.D. Va.  I960) aff'd without opinion
   ~"           1981).

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GM-37

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  *       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       WASHINGTON, D.C. 20460
                                 .  _^_
                           MAR I  2 1985                   •*«"»»«
MEMORANDUM

SUBJECT:  The Role of EPA Supervisors During Parallel Proceedings
FROM:     Randall M.
          Director, Office of Criminal Enforcentent

TO:       General Distribution


     Attached is a copy of the recently issued guidance
explaining the role of EPA supervisors during parallel civil
and criminal proceedings.  All supervisors and staff who may
become involved in matters that have both criminal and civil
enforcement potential should become familiar with the guidelines
set forth in the memorandum.

     Although the concepts in the guidance may appear difficult
upon a first reading, it is necessary to have a full understanding
of the issues in order to make an informed decision about whether
the supervisor should remain on the civil side of the case or
the criminal side (or in rare circumstances, on both sides).

     Questions concerning the guidance should be directed to
Peter Murtha or myself (FTS 557-7410, 703-557-7410).

Attachment

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          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON, D.C. 20460
                             I 2385
                                                      OfFlCf OP IMKMCIMOT
                                                        ANDCOMnJANCt
                                                         MOMTOUNO
MEMORANDUM
SUBJECT:   The Role of EPA Supervisors During^Parallel Proceedings
PROM:      Courtney M. Price
           Assistant AdministrWorfoP Enforcement
             and Compliance Monitoring

TO:        Assistant Administrators
           Office Directors
           Regional Administrators
           Regional Counsels
           Inspector General
           Director, NEIC

J.  Introduction

     The Agency's mission is on occasion best served by the
pursuit of simultaneous civil/administrative enforcement actions
and criminal investigations and prosecutions of the sane party(ies)
and relating to the same essential subject matter, i.e., parallel
proceedings.!/  Parallel proceedings are applicable, for example,
where a person's willful environmental misdeed both merits a
criminal sanction and requires a "cleanup* response.  Such
proceedings require special caution by both supervisors and
staff in their use.  Failure by Agency personnel to recognize
and understand the unique problems raised by parallel proceedings
could delay or otherwise jeopardize both the civil/administrative
and criminal proceedings.  This guidance establishes supervisory
procedures for persons whose responsibilities involve management
of staff who work on both sides of the parallel proceedings.
I/ Supervisors who do not exercise such dual responsibilities
a"re not covered specifically in this document.  These individ-
uals, as well as non-supervisory personnel who could be poten-
tially involved in parallel proceedings, should refer to the
memorandum entitled "Policy and Procedures on Parallel Proceed-
ings at the Environmental Protection Agency," issued on
January 23, 1984 ("General Parallel Proceedings Guidance")
(Attachment).

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                              -2-


      This  guidance  is  designed  to avoid two primary pitfalls
 associated with parallel proceedings.  First, for a variety of
 reasons, _2/  care must  be taken  to ensure that each side of parallel
 proceedings  has a legitimate and independent basis.  Second,
 safeguards must be  employed to  guarantee that grand jury proceedings*
 and  the information developed therein, are devoted exclusively
 (except as noted at Section (V)(A), pp. 6-7 note 10; and Section
 (V)(D), pp.  9-10, infra) to their sole intended use:  prosecution
 of criminal  cases.

      Each  supervisor subject to this guidance is responsible
 for  ensuring that staff are aware of and conform to the procedures
 set  forth  below.  Particular care should be taken to note the
 evolving nature of  these requirements as the criminal matter
 proceeds from a mere allegation made to the Agency to an active
 grand jury investigation.  Supervisors are encouraged to supple-
 ment  this  guidance  by  developing policies and practices for
 individual cases as needed to achieve its objectives.

 II.  The Supervisory Role Prior to the Active Involvement of
      the Department of Justice  (DOJ)

     Prior to the active involvement of DOJ V *n tne criminal
 case, the  Agency supervisor generally may continue managing
 his/her staff on both  sides of  the parallel actions.4/  The
 degree of  permissible  involvement by the supervisor Tn the
 criminal investigation is not dependent upon the course or
 the  stage  of  the civil/administrative action.
2/ See General Parallel Proceedings Guidance at  1-4.

3/ In this context, "DOJ" refers to any United States Attorney's
Office, as well as to DOJ Headquarters, but does not include
the Federal Bureau of Investigation.

_4/ This guidance presumes that ordinarily DOJ would become
actively involved in a case soon after EPA became aware that
there was probable cause to believe that a particular individual
or entity had committed a potentially criminal violation.  This
will be the case whether DOJ's involvement is initiated by
informal contacts, e.g., by the case agent from  EPA's Office
of Criminal Investigations, or through the formal referral
(continued)

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                             -3-
     At no point may a supervisor request that any personnel
working on the criminal case use any criminal investigative
or discovery tools for the primary purpose of benefitting the
Agoncy's position in the civil/administrative natter or vice
versa.  Strictly as a matter of law, information obtained by
th«) criminal and the civil/administrative staffs ordinarily
may be freely exchanged at this stage, assuming that each
proceeding is designed to meet its own distinct and legitimate
goal.  (In many cases, however, preserving the secrecy of the
criminal investigation and preventing the disclosure of documents
to the defendant through the liberal civil/administrative
discovery process would militate against the use by the civil/
administrative staff of documents or other information produced
by the criminal investigation team.)  Nonetheless, supervisors
may wish to consider.-withdrawing from their case supervision
duties S/ on one side of the parallel proceedings to minimize
the possibility that abuse of either process is alleged later.

     Even prior to criminal referral a defendant/respondent in
a civil/administrative proceeding may not be misled into believing
that information he/she/it supplies will not be used in a criminal
proc^eding.^/  Moreover, individuals who are not aware that they
are !:argets*~of the parallel criminal investigation and who give
testimonial evidence at an administrative hearing, a civil trial,
or in the form of interrogatories or depositions, may have a
Fifth Amendment privilege which, arguably, has not been waived.
In such a situation, DOJ will evaluate the matter in a effort
process.  Generally, the assignment of a DOJ prosecutor to a
criminal matter at any stage, e.g., to obtain a criminal search
warrant, would constitute "active involvement."  In any event,
ordinarily DOJ will be presumed to be "actively involved" no
later than the date of its receipt of the criminal referral
from the Assistant Administrator for Enforcement and Compliance
Monitoring.

_5/  Case supervision, in this context, includes the supervisor
advising the staff about such matters as strategy, investigative
procedures, legal issues and the course of the case development
for a specific case.

J6/ If ':he Agency attempted to use information in a criminal
proceeding that was gained through such misrepresentations, the
defendant could argue that the evidence should be suppressed,
or (in extreme cases) that the indictment should be dismissed,
due to violation of the right to due process-and (in the case
of individuals) the right against self-incrimination.   (Corpora-
tions, in contrast to individuals, are not protected by the
Fifth Amendment's self-incrimination clause.)  See General
Parallel Proceedings Guidance at 4-6.

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                               -4-
 to  determine  whether  or  not  it  is  appropriate  to transmit such
 evidence  to members of the criminal enforcement team.7/  Where
 the criminal  target has  been made  aware of  the existence or
 potential  for parallel criminal action, however/ such information
 may be  freely exchanged.

     Staff members working on the  parallel  civil/administrative
 case oust  document when  and  under  what circumstances any testi-
 monial  information from  a current  or potential criminal individual
 target—who has not been made aware of the  potential for criminal
 enforcement—was obtained before transmitting  that information
 to  a supervisor who has  not withdrawn from  the criminal action.
 Such material should  be  specially  marked to prevent inadvertent
 disclosure.   This will alert the supervisor to consult with
 DOJ  prior  to  reviewing such material or disseminating it to
 Agency  personnel pursuing the criminal matter.

 III.  After the Active DOJ Involvement:  The Supervisor's
      Decision Whether to Withdraw from the Criminal (or the
      Civil)  Matter

     Prior to the commencement of  the grand jury, there is no
 strict  legal  bar to an Agency supervisor being a member of the
prosecution team and  directing the civil/administrative matter.
Once DOJ begins to direct the day-to-day investigative activities
of the prosecution team, the Agency supervisor who has been
performing case supervision activities on either side of a
parallel investigation or prosecution should re-evaluate his/her
 continuing role in the investigations.  To  avoid any appearance
that one proceeding is being used  to impermissibly bolster the
other,  it  is  generally the better  practice  for a supervisor to
withdraw from one side of the parallel proceeding or the other.
Discretionary withdrawal will reduce the possibility that the
Agency will need to defend its position regarding the conduct
of an investigation or prosecution.

     An Agency supervisor who chooses to retain case super-
 visory  responsibilities  and become a part of the prosecution
 team will work under  the direction of the prosecutor(s) B/ in
designing  and conducting the investigation  and prosecution.
2/  See General Parallel Proceedings Guidance at 6, 9-10.

j}/  Often, there will be one prosecutor from the Environmental
Crimes Unit of the Land and Natural Resources Division of DOJ
Headquarters and another from the United States Attorney's
Office where the prosecution is being brought, in which case
joint guidance to the prosecution team would be provided.

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                              -5-
    A supervisor who has chosen to withdraw from case supervision
duties associated with one side of parallel proceedings is not
precluded from being informed about non-sensitive information
concerning the proceeding from which he/she has withdrawn
necossary for the performance of his/her routine management
functions.  Supervisors can know the amount of staff and labora-
tory support required, the need for outside consultants, the
dates and expense of travel, the duration of the investigation,
and the facilities and individuals being investigated except as
precluded by Fed. R. Crim. P. 6(e) (see pp. 6-7, infra), etc.

IV. The Role of the Agency Supervisor in Parallel Proceedings
    After the Active Involvement of DOJ in the Criminal Matter
    but Prior to the Commencement of a Grand Jury Investigation

    A.  Peraited Communications and Decision-making

    An Agency supervisor may generally be privy to all  inform-
ation about both cases (except that supplied by an individual
unaware of a parallel criminal investigation, see Section II,
at 3-1, supra) and may fully participate in all Agency  decision-
ma king concerning them.  Notwithstanding this rule, it  is wise
for a supervisor to consider whether his/her involvement in the
case supervision of both sides of parallel proceedings  is truly
desirable, given the possibility that allegations of abuse of
either process could arise.

     Where the Agency supervisor is both part of a prosecution
team and involved in the case supervision of the civil/admini-
stration matter, the following rules must be adhered to;

      :i.  With Respect to the Criminal Investigation.   Communi-
cation!; by the supervisor pertaining to the criminal case must
be directed only to members of the prosecution team or  to those
Agency or DOJ units devoted exclusively to criminal investigations
and prosecutions, i.e., the Criminal Division of the local
United States Attorneys' Offices, DOJ's Environmental Crimes
Unit, EPA's Office of Criminal Investigations and EPA's Criminal
Enforcement Division.

      2.  With Respect to the Civil/Administrative Investigation.
Communications by the supervisor pertaining to the civil/admini-
strativ«> matter must be directed only to Headquarters,  Regional
program and/or NEIC staff involved in the civil/administrative
matter.  Such communications shall be withheld from all Agency
personnel on the prosecution team and those Agency units devoted
exclusively to criminal investigations and prosecutions.

      3.  Staff Meetings and Documents.  Supervisors should hold
separate staff meetings for the personnel working on the respective
sides of parallel proceedings to the extent that the case will
be discussed.  Supervisors must not allow distribution  of infor-
mation, documents, memoranda or other writings which should be
withheld from respective parts of their staffs.

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                              -6-
     B.  Alerting Supervisors to Commencement of Grand Jury
         Proceedings

    Supervisors directly involved in the management (but not
case supervision) of a criminal matter must be aware of exactly
when a grand jury proceeding is commenced to assure that he/she
will not inadvertently learn about grand jury information.
In situations in which the supervisor is not integrally involved
with the prosecution team and therefore might not automatically
be informed of such event, his/her staff pursuing the criminal
matter should be alerted to immediately so inform (or request
the DOJ prosecutor(s) to so inform) him/her.  This notification
must be limited solely to the fact that the grand jury will
investigate the same essential matter being pursued in the
civil/adminstrative proceeding, and must not include what has
transpired in the grand jury.9/

    In most cases, once a case is referred to DOJ for investi-
gation or prosecution, a grand jury will be initiated soon
thereafter.  Thus, the guidance presented in this section
regarding the supervisor's role during parallel proceedings
usually will quickly be supplanted by the even more stringent
guidance pertaining to the period after the initiation of the
grand jury decribed below.

V.  The Role of the Agency Supervisor After the Commencement
    of a Grand Jury Investigation

     A.  Access to Grand Jury Material under Rule 6(e)

     An Agency supervisor is not allowed to have access to grand
jury material 10/ unless specifically authorized (see below)
due to the limitations on disclosure found in Rule 6(e) of the
Federal Rules of Criminal Procedure.  A limited exception to
9/   Alerting such supervisors to the commencement of the grand
jury is intended solely as a prophylactic measure to prevent
disclosure of priviledged material.  Supervisors who have been
so alerted must not  inform anyone of the existence of a grand
jury and, if pressed on the matter, should refer the person
requesting the information to the DOJ prosecutor(s).

10/  To prevent unauthorized dissemination of grand jury material,
Tt is necessary to define "grand jury material."  The broadest
view of this term would include:  all witness testimony, the
names of grand jury  witnesses, the subject matter of the grand
(continued)

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                              -7-

t,1e. general rule of nondisclosure, Rule 6(e) (3) (C) (ii), specif!
that only "such government personnel as are deemed necessary
by an attorney for the government  [i.e., the DOJ prosecutor(s)
and Agency attorneys that have been designated as Special
Assistant United States Attorneys  for particular cases]* to
as.sist in the enforcement of federal criminal law are to be
granted such access (emphasis supplied).  Rule 6(e) has two
primary purposes:  to preserve grand jury secrecy and to prevent
prosecutorial abuse.  Thus, some courts have narrowly construed
this provision to allow only agents and experts actively involved
in the investigation to have access to grand jury material.  It
is the policy of DOJ not to place an individual on the so-called
"6(e) list,"H/ allowing access to grand jury material, merely
because thatTndividual supervises a person who is on the
liist.
jury investigation, sununarizations of grand jury testimony,
documents submitted to the grand jury, the direction and focus
of the grand jury investigation, conclusions reached as a
result of the grand jury investigation, and information obtained
as a result of grand jury testimony.  See, e.g. , Fund for
Constitutional Government v. National Archives  and Records
Service, 656 F.2d 856 (D.C. Cir. 1981).However, documents
which are obtained by means independent of the  grand jury or
created for a purpose independent of the grand  jury are typically
not within the scope of Rule 6(e).  See, e.g.,  United States
v. Interstate Dress Carriers, Inc., 280 F.2d 52, 54 (2d Cir.
1960).  (To be prudent, it is best to check with the DOJ prose-
cutor(s) to ascertain what precisely constitutes "grand jury
material" under the interpretation of a particular federal
district court.)  Therefore, documents and records which would
be otherwise available as part of a civil/administrative proceeding
can generally (depending upon the prosecutor's  evaluation of
the law of the relevant court) continue to be available to the
civil/administrative staff (and the supervisor  if he/she has
withdrawn from the criminal matter) even if the grand jury has
been presented with copies of these same records and documents.
Such "otherwise available" documents could include, for example,
information produced pursuant to an administrative letter audit
or inspection or materials produced by the criminal investigations
team prior to the convening of the grand jury,  such as interview
reports, sampling results, audits, etc. (however, see caveat
concerning sharing of criminal and civil information at
Section II, p. 3).  Additionally, grand jury material used in
open court or contained in the public court papers in the
criminal case may then be utilized in the civil/administrative
proceeding.

ll/  The DOJ prosecutor(s) are required under Rule 6(e) to prompt.
disclose to the court a list of the names of the government person-
nel assisting in the prosecution to whom grand  jury material
has been disclosed.

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                              -8-


    B.   Mandatory  Withdrawal  from  the  Civil/Administrative
         Action by  a Supervisor on  the  6(e) List

      When  a  supervisor believes  that it  is necessary to have
 access  to  grand jury material, it  may  be appropriate for him/
 her to  join  the criminal prosecution team (if he/she has not
 already done so).  In such a  case/ a request together with the
 reasons therefor should be made  to the DOJ prosecutor{s) for
 the supervisor to  be placed on the 6(e) list.

      After a grand jury has been convened, if a supervisor is
 part  of  the prosecution team  then  he/she must without exception
 withdraw completely and immediately from all responsibilities
 involving  the parallel civil/administrative action other than
 routine  management functions.

      Note  that failure to conform  to the nondisclosure require-
ments of Rule 6(e) may lead to a variety of court sanctions
which could have significant  adverse effects on the Agency's
criminal case, the individuals involved and the Agency's
entire criminal enforcement program.   These potential sanctions
include  contempt citations, the  removal of the prosecuting
attorney(s) from the case, disclosure  of the grand jury material
to the opposing party, and, in extreme cases, dismissal of the
indictment.

    c*.   Requests for Information by a  Supervisor Not on the
         6(e) List

     It  is essential that substantive  information about a parallel
criminal case released to a supervisor who is not on the 6(e)
list be within permissible bounds.  Where the supervisor
anticipates that he/she will  make  numerous inquiries regarding
the criminal matter, the supervisor should request routine
briefings by the DOJ prosecutor(s), who would determine what
information may be revealed.

     Alternatively, once a grand jury  proceeding has begun, all
communications concerning the transfer of information potentially
subject  to Rule 6(e) between  such  a supervisor and his/her
staff who are on the 6(e) list should  be made only in writing.12/
12/  The disclosure of management-related information clearly
not within the purview of Rule 6(e) (see discussion at
Section III, p. 5, supra) would not need to be so documented*
If the "in writing" approach is taken, it would be useful for
the supervisor to maintain a log for each such parallel proceeding
indicating, with respect to each such request for information:
the date of the information request, to whom the request was
made, a brief indication of the response to the request, and,
if information was disclosed, the reason it was not privileged.

-------
                              -9-
Th'i-s procedure allows the staff member responding to the reques
to determine carefully (if necessary, after consultation with
the prosecutor(s)) which material (for example, because of its
pre-grand jury genesis or because of its independent source)
may be properly disclosed.  However, this procedure would
probably prove more cumbersome than briefings by the prosecutor(s)
and could have the added cost of possibly creating material
which arguably could be required to be turned over to the
defense under the Brady doctrine.13/

     Under rare circumstances, a supervisor might not anticipate
that a question to Agency personnel could elicit grand jury
material.  To avoid inadvertent transfer of improper information,
the Agency will consider both the supervisor and the respective
staffs to be responsible for ensuring that privileged information
is not disclosed.  A;staff member must decline to respond to a
supervisor's information request which would disclose grand
jury information.  Similarly, a supervisor must decline to
respond to a staff member's information request that would
disclose any information revealed by the defendant/respondent
in the civil/administrative proceeding which (as discussed at
Section II, pp. 3-4, supra) might be inappropriate to disclose.
(In either case it would also be appropriate to refrain from
disclosing information and to refer the person requesting the
information to the DOJ prosecutor(s) concerned with the matter.)
The supervisor must rely upon the judgment of the staff member,  i
and vice versa, in withholding the requested information when
necessary.

     D.  Request by Agency Supervisor on the 6(e) List to
         Disclose Grand Jury Information to Agency CiviI7
         Administrative Personnel

     Supervisors on the 6(e) list who believe that there exists
a "particularized need" for grand jury material to be disclosed
to their staff working on a pending (or anticipated) parallel
civil suit may not release, directly request the court to release,
or request their staff to seek the release of, that material.14/
13/   The Brady doctrine, in essence, requires that upon specific
request by a criminal defendant, a prosecutor must disclose
evidence favorable to the accused that is material to guilt or
punishment.  Brady v. Maryland, 373 U.S. 83 (1963).

14/  It is DOJ policy that only "attorneys for the government"
may request the disclosure of grand jury material.  Moreover,
if a supervisor were to disclose to his/her staff  (not on the
6(e) list) the existence of such material so that  they might
then seek it, it is probable that such disclosure, in and of
itself, would violate Rule 6(e).

-------
                              -10-
However, the  supervisor may request the DOJ prosecutor(s) to
seek the release of such material.  See United States v. Sells
Engineering,  Inc., 	 U.S.	, 103 S. Ct. 3133, 3168-69 (1963).
DOJ prosecutors who through a grand jury investigation became
aware of information which is unknown to the Agency and for
which the Agency has a "particularized need"—for example*
evidence of a serious public health hazard—nay initiate appro-
priate action through the courts to seek disclosure.IS/

VI.  Communications with DOJ

     If a supervisor wishes to communicate with DOJ with respect
to a particular investigation or litigation in connection with
the practices set forth herein, but has not yet established a
DOJ contact for that particular matter, he/she should use
generally the following procedures.  Headquarters and other
non-Regional supervisors should contact the Office of Criminal
Enforcement {FTS 557-7410) and request the assistance any of
the staff attorneys.  Regional supervisors should request the
assistance of the Criminal Enforcement Contact within the
Regional Counsel's Office for his/her Region.  These attorneys
will help ensure that necessary contacts with the appropriate
DOJ prosecutor(s) are expeditiously made.

VII.   Reservations

     The policies and procedures set forth herein, and internal
office procedures adopted pursuant hereto, are not intended* do
not, and may not be relied upon to, create a right or benefit*
substantive or procedural, enforcible at law by a party to
litigation with the United States.  The Agency reserves the
right to take any action alleged to be at variance with these
policies and procedures or not in compliance with internal
office procedures that may be adopted pursuant to these materials*
15/  Ordinarily, DOJ should designate the lead EPA attorney on
the pending civil litigation  (generally the Regional Attorney
assigned to the case), if one has been established, to receive
such information.  However, if no lead attorney has been
established, the information may be transferred to the appro-
priate Regional Counsel.

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GM-38

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          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON, D.C. 20460                   (/
                         APR 151985
                                                            ,\     •  i
                                                            CJp/1/ '   /
                                                                  ' *
                                                      OFFICf Of rsFOUrt MF\T
                                                        ANDCOMPLUSCI
                                                         MOMTOftlVG.
MEMORANDUM
SUBJECT:  Remittance of Fin
                              and Civil Pena
FROM:     Courtney M. Pric<
  .       Assistant Administrator for Enforcement
            and Compliance Monitoring (LE-133)

TO:       Associate Enforcement Counsels
          Director, Office of Compliance Analysis and
            Program Operations,
          Regional Counsels


     This is to inform you of a new Agency remittance procedure
instituted by the EPA Office of the Comptroller.  The procedure
applies to payments on all debts owed EPA, including civil
penalties assessed by the Agency.

     All EPA orders requiring payment of fines or civil penal-
ties—or letters transmitting those orders—will include language
consistent with the new procedure, which is described below.

     EPA has adopted the Department of Treasury's Nationwide
Lockbox System for receipt of payments on debts owed to the
Agency.  Under the Lockbox System, debtors are directed to remit
payments to the Post Office Box address used by the designated
EPA lockbox bank.  Payments received at that "lockbox" are
deposited immediately by the responsible bank, and the Agency
receives a copy of the remittance and all accompanying documents
within one working day.  Users of the system have found that
the lockbox has several benefits:  Improved cash management,
increased physical security for the checks, stronger internal
controls, and a reduced administrative burden.

     For your information, I have attached a listing that shows,
for each region and for EPA Headquarters, the lockbox address
to which payments of penalties owed the Agency will be sent.
(Remittances for Superfund billings nationwide are sent to a
single lockbox address.)

-------
                              -2-


     Chief Administrative Law Judge Edward Finch is directing
all Agency administrative law judges and hearing clerks to
implement this new procedure.

     The new procedure supersedes the requirement in the Consol-
idated Rules of Practice (CROP), 40 CPR $22.31(b), that payment
is to be forwarded directly to the regional hearing clerk.
This paragraph in the CROP will be formally revised in the
near future.  Because this revision is procedural only, it nay
be implemented prior to the completion of formal rulemaking.

     Under the new procedure, the servicing financial management
offices will contact the appropriate hearing clerk as soon as
they receive notification of a remittance, and will provide
the hearing clerk with a' copy of the check and accompanying
documents.  Accordingly, questions concerning the status of a
civil penalty may be directed to either of those offices.  In
addition, the headquarters Financial Reports and Analysis
Branch (FTS 382-5131) maintains a computerized record of civil
penalty receivables and collections nationwide.

     More detailed procedures for penalty collections are being
developed by EPA's Office of the Comptroller.  In the meantime,
any questions concerning the lockbox procedure should be directed
to your financial management office.

Attachment

cc:  General Counsel
     Edward B. Finch, Chief Administrative Law Judge
     Assistant Administrators
     Associate Administrators
     Regional Administrators
     C. Morgan Kinghorn, Comptroller

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                      LOCKBOX DEPOSITORIES
REGION
LOCKBOX BANK
   ADDRESS FOR
 REMITTING PAYMENT
Region 1
 Boston
Region 2 -
 New York
Region 3 -
 Philadelphia
Region 4 -
 Atlanta
Region 5
 Chicago
Region 6
 Dallas
Region 7 -
 Kansas City
Region 8 -
 Denver
Mellon Bank
Mellon Bank
Mellon Bank
The Citizens and
Southern National
Bank
The First National
Bank of Chicago
Mellon Bank
Mellon Bank
Mellon Bank
EPA - Region 1
(Regional Hearing Clerk)
P.O. Box 360197M
Pittsburgh, PA 15251

EPA - Region 2
(Regional Hearing Clerk)
P.O. Box 36018BM
Pittsburgh, PA 15251

EPA - Region 3
(Regional Hearing Clerk)
P.O. Box 360515M
Pittsburgh, PA 15251

EPA - Region 4
(Regional Hearing Clerk)
P.O. Box 100142
Atlanta, GA  30384

EPA - Region 5
(Regional Hearing Clerk)
P.O. Box 70753
Chicago, IL 60673

EPA - Region 6
(Regional Hearing Clerk)
P.O. Box 360582M
Pittsburgh, PA 15251

EPA - Region 7
(Regional Hearing Clerk)
P.O. Box 360748M
Pittsburgh, PA 15251

EPA - Region 8
(Regional Hearing Clerk)
P.O. Box 360859M
Pittsburgh, PA 15251

-------
 Region 9 -
  San Francisco
 Region 10 -
   Seattle
Headquarters -
 Washington, D.C.
All Superfund
 Billings
 Mellon Bank
 Mellon  Bank
Mellon Bank
Mellon Bank
 EPA - Region 9
 (Regional Hearing Clerk)
 P.O.  Box 360863M
 Pittsburgh,  PA 15251

 EPA - Region 10
 (Regional  Hearing Clerk)
 P.O.  Box 360903M
 Pittsburgh,  PA  15251

 EPA - Washington
 (Hearing Clerk)
 P.O. Box 360277M
 Pittsburgh, PA  15251

 EPA - Superfund
P.O. Box 371003M
Pittsburgh, PA 15251

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GM-39

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        t'NITED STATES ENVIRONMENTAL PROTECTION AGENCY
                      HASHINCTON.D.C. 20460
                                                       (»( I S»
-------
                              -2-
     ,A primary purpose of OECM review is to ensure that Agency
policies and guidelines are being followed,  it is not our
purpose or desire to substitute our judgment for that of the
Region or to "nitpick" the Region's product when it follows
Agency policy.  OECM will approve an Agency settlement position
or draft decree that falls within existing, broad policy
boundaries.  In the absence of existing policy on a particular
issue, OECM will approve a position that will promote — or
not hinder — the Agency's enforcement efforts in other cases.

     The vast majority of Regional recommendations conform to
Agency guidance and are approved.  Nevertheless, in the recent
past a number of Regional settlement positions that had already
been communicated to and tentatively agreed upon with the
defendant have been presented to our office, placing OECM and
the Region in a potentially embarrassing position.  These cases
are appearing with increasing frequency, and it is clear that
they can interfere with the effectiveness of the Agency's
enforcement effort, and create inconsistent results and
precedents.

     Consequently, OECM will not assign any weight to Regional
recommendations that Headquarters should approve a settlement
position made without prior authorization because it already
had been communicated to the defendant.  If such a proposed
settlement contravenes Agency policy, if it would establish
bad precedent for future cases, or if it would produce results
inconsistent with those obtained in previously-approved
settlements, it will be returned to the Region for further
negotiations.


cc: Courtney M. Price, Assistant Administrator, OECM
    Deputy Regional Administrators
    Associate Enforcement Counsels
    Regional Water Program Division Directors
    Regional Waste Program Division Directors
    Regional Air Program Division Directors
    Headquarters Program Compliance Office Directors
    David Buente, Department of Justice
    Linda Fisher, Office of the Administrator
    LaCuana Wilcher, Office of the Deputy Administrator

-------
GM-40

-------
         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       WASHINGTON, D.C. 20460
                            AY 3 0 1985
                                                     wrier OF IVFOHCIMIM
                                                       ANDroMPii«\rt
                                                        MOMTORISb
 MEMORANDUM
 SUBJECT:   Revised  Regional  Referral  Package  Cover Letter
           and  Data Sheet     s\             "*)

 FROM:      Courtney M.  Price \^L*~)—^  l^
           Assistant Administrator  for  Enforcement
             and  Compliance  Monitoring  (LE-133)

 TO:        Regional Administrators
           Regional Counsels
           Associate Enforcement  Counsels
     As part of  our  on-going efforts  to  improve  the  civil
judicial case  referral process,  I  have requested my  staff  to
formulate a standard referral package cover  letter and  data
sheet  (see attached  outline).  The  new cover letter  has been
substantially  streamlined.  Most of the  case information will
now be contained  in  the  data sheet.   This  approach is the
result of discussions held at the  Regional Counsel?' meeting
last January in  Denver and is designed to  aid my s.aff  in
tracking referrals.  This memorandum  supersedes  all  previously
issued guidance  concerning referral package  cover letters.

     The letter and data sheet with its  11 critical  elements
have been designed to facilitate ease of preparation and
to give a very brief capsule description of  the  case to
the reviewer.  In short, once the  system is  in place, anyone
who reads the  letter and data sheet will get an  excellent
summary of the case's major elements.

     Please put this standard referral cover letter  and  data
sheet  into effect by June 14, 1985.   I suggest you implement
this approach  by drawing up forms  listing  these  11 elements.
We have attached a suggested model data  sheet.   If you  have
any Questions  please contact Bill  Ouinby of  the  Legal
Enforcement Policy Division at FTS-475-8781.


cc:  Program Office Directors
     Chief, Environmental Enforcement Section,
     Land and  Natural Resources Division,  DOJ

-------
       CONTENTS OF REGIONAL COVER LETTER AND DATA SHEET
                    FOR REFERRAL PACKAGES

      The cover letter itself should be signed by the Regional
 Administrator and consist of one short paragraph reouesting  EPA
 Heac'ouarters to review the attached litigation report and
 refer it to the Department of Justice, or in the case of
 direct referrals reauesting DOJ to file a civil action.

      Attach to this cover letter a very brief description of
 the following in a data sheet.  Certain items may not be
 appropriate in every case.


 1.  The statute(s) and repulation(s)  which are the basis  for the
     proposed action, including state  regulations, if applicable.

 2.  The name and location of the defendant(s).

 3.  T.ie violation(s) upon which the action is based.

 4.  The proposed relief to be souoht, including injunction,
     and proposed amount of penalty to be sought at settle-
     ment, if applicable.

 5.  The recent contacts with the defendant(s), including  any
     previous administrative enforcement actions taken, and
     neootiat ions, if any.

 6.  The sianificant national or precedential legal or factual
     issues.

 7.  Dat.e of inspection, information response, or receipt  of
     evidence of violation which led to decision to initiate
     enforcement proceedings.

 8.  Date, if applicable, that the technical support documents
     froTi the program, or support documents necessary for
     preoaration of a referral reach the Regional Counsel's
     office.

 9.  Pate referral is signed by Regional Administrator.

10.  Any other aspect of the case which is significant or  should
     be Mohlighted including any extraordinary resource demands
     which the case may reouire.

11.  The identity of lead regional legal and technical personnel.


             [PLEASE SEE ATTACHED MODEL DATA SHEET]

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                      MODEL DATA SHEET
1.  The statute(s) and requlation(s) which are the basis for the
    proposed action, including state regulations, if applicable.
2.  The name and location of the defendant(s).
3.  The violation(s) upon which the action is based.
4.  The proposed relief to be sought, including injunction,
    and proposed amount of penalty to be sought at settlement,
    if applicable.

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                             -2-

       *^ata Sheet - Cont.
     The recent contacts with the defendant(s),  including any
     previous administrative enforcement actions taken,  and
     v*A**«A^{»^«AV*0>  4 £ m w* t t
s.

    neootiations, if any
     The sinnificant national or precedential leqal or factual
     issues.
 7.  nate of inspection, information response, or receipt of
     evidence of violation which led to decision to initiate
     enforcement proceed!nns.
 P.  nate, if applicable, that the technical support documents
     from the prooram, or support documents necessary for
     preparation of a referral reach the Regional Counsel's
     office.
 9.  Pate referral is sianed by Pegional Adminstrator.
in.  Anv other aspect of the case which is significant or should
     be hiahliahted including any extraordinary resource demands
     which the case may reouire.
11.  The identity of lead regional legal and technical personnel

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GM - 41, was revised on August 25, 1986.   The 1984
version has been replaced with the 1986 version.
Appendix A from the 1986 version is attached to the
policy as part of GM-41.  Appendix B, EPA Policy on
Implementing Nationally Managed or Coordinated
Enforcement Actions is already contained in this
Compendium as GM-35.  Appendix C, Division of Penalties
with State and Local Governments is  already contained
in this Compendium as GM-45.

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GM-41

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,>tT
f j£Li
 \        UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
wj                    WASHINGTON 0 C 20460


                           AUG 2 5 1986
   MEMORANDUM

   SUBJECT:   Revised  Policy Framework  for  State/EPA  Enforcement
             Agreements             ,

                                   1
   PROM:      A.  James  Barnet       /
             Deputy Administrators/A/

   TO:        Assistant Administrators
             Associate Administrator for Regional Operations
             Regional  Administrator*
             Regional  Counsels
             Regional  Division  Directors
             Directors,  Program Compliance Offices
             Regional  Enforcement  Contacts


       I am  pleased to  transmit to you a  copy of the Agency's
   revised Policy  Framework for State/EPA  Enforcement Agreements.
   The Policy Framework,  originally developed in 1984, along with
   program-specific implementing guidance,  will continue to serve as
   the blueprint for our State/EPA enforcement relationship.  The
   revised Policy  Framework integrates new guidance  developed since
   its original  issuance.   It reinforces the Guidance for the FY
   1987 Enforcement Agreements  Process which 1 transmitted to you on
   April 15,  1986  and  should serve as  your guide for negotiations
   and implementation  of the Enforcement Agreements.

       Although the intent of  the revisions was to  incorporate new
   policy, the process gave the Agency, with the assistance of the
   Steering Committee  on the State/Federal Enforcement Relationship,
   an opportunity  to reassess with the States our original approach.
   This process has clearly reaffirmed that the basic approaches we
   put in place  in 1984  for an  effective working partnership are
   sound and  that  all  parties continue to  be committed to its effective
   implementation.

       The revisions  incorporate  into the Policy Framework adden.H
   developed  over  the  past  two  years in the areas of oversight of
   State civil penalties, involvement  of the State  Attorneys General

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                               -2-


in the Enforcement Agreements process, and implementation of
nationally managed or coordinated cases.  The revisions also
reflect, among other things, some of the points that have been
emphasized in my annual guidances on the Enforcement Agreements
process, the Evaluation Report on Implementation of the Agreements,
and the Agency's Criminal Enforcement and Federal Facilities
Compliance draft strategies.

     1 am firmly committed to full and effective implementation
of tht Policy Framework and am relying on your continued personal
attention to this important effort.  1 plan to review the Region's
performance in implementing the revised Policy Framework ami the
program-specific guidance, particularly the "timely and appropriate"
enforcement response criteria, as part of my semi-annual regional
visits.

     1 encourage you to share the revised Policy Framework with
your State counterparts.

Attachments

cc:  Steering Committee on the State/Federal Enforcement
       .Relationship

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POLICY FRAMEWORK FOR STATE/EPA
    ENFORCEMENT AGREEMENTS
                       August 1986
               (originally issued June 1934)
              OFFICE  OF  ENFORCE.MENT
                AND COMPLIANCE  MONITORING

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      POLICY  FRAMEWORK  FOR  STATE/EPA ENFORCEMENT AGREEMENTS1/
     Achieving  and maintaining a high  level of compliance with
environmental laws and  regulations  is  one of the most important
goals of  Federal and State environmental agencies, and is an essantial
prerequisite to realizing the benefits of our regulatory programs.
While States and local  governments  have primary responsibility for
compliance and  enforcement actions  within delegated or approved
States, EPA retains responsibility  for ensuring fair and effective
enforcement of  Federal  requirements, and a credible national deterrence
to noncompliance."  An effective State/Federal partnership is critic*!
to accomplishing these  goals, particularly given limited State and
Federal resources.  The task is difficult and one of the most sensi-
tive in the EPA/State relationship, often compounded by differences
in perspectives on what is needed to achieve compliance.

     To establish an effective partnership in this area, and
implement the State/Federal enforcement relationship envisioned
in the Agency Oversight and Delegation policies, EPA called for
State-specific  enforcement agreements  to be in place beginning
FY 1985 which will ensure there are:   (1) clear oversight criteria,
specified in advance, for EPA to assess good State --or Regional--
compliance and  enforcement program  performance; (2) clear criteria
for direct Federal enforcement in delegated States with procedures
for advance consultation and notification; and (3) adequate State
reporting to ensure effective oversight.
                                     »
     This document is the Agency's  policy framework for implementing
an effective State/Federal enforcement relationship through national
program guidance and Regional/State agreements.  It is the product
of a Steering Committee effort involving all major national EPA
compliance and  enforcement program  directors, State Associations,
State officials from e&<"'••; of the media programs, and the National
Governors' Association.  EPA anticipates that the relationship, and
the use of. the  agreements first established in FY 1985, will evolve
and improve over time.  They will be reviewed, and updated where
necessary, on ajj annual basis.  The Policy Framework will be subject
to periodic review and  refinement.  Originally issued on June 26,
1934, the Policy Framework has been updated to reflect additional
guidance d«v«loped since that ti>ne.
   The term Enforcement Agreement  is  used  throughout to describe  the
   document(s), be  it an  existing  grant, SEA,  MOU,  or separate
   Enforcement Agreement, which  contains the provisions outline.?  i~.
   the Policy Framework and  related media-specific  guidance.   (See
   p.4 for description of form of  agreement.)

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Policy Framework Overview

     The Policy Framework applies both to Headquarters program
offices in their development of national guidance and to Regions
in tailoring program guidance to State-specific needs and agreements.
Although enforcement agreements are not required for States which
do not have delegated or approved programs, Regions are encouraged
to apply to these States certain policies anJ provisions where
relavant, particularly advance notification and consultation
protocols.  The Policy Framework is divided into six sections, to
address the following key areas:

A.  State/Federal Enforcement "Agreements":  Form,  Scope and
    Substance (pages 4-7)

    This section sets forth for Regions and States developing
    enforcement agreements, the areas that should be discussed,
    priorities, and the degree of flexibility that Regions have in
    tailoring national guidance to State-specific circumstances,
    including the form and scope of agreements.

B.  Oversight Criteria and Measures:  Defining Good Performance
    "i[ pages 8-17)

    This section it primarily addressed to EPA's national programs,
    tetting forth criteria and measures for defining good performan<
    generally applicable to any compliance and enforcement program <
    whether administered by EPA or a State.  It forms the basis for
    EPA oversight of State programs.  A key new area that should
    receive careful review is the definition of what constitutes
    timely and appropriate enforcement response/ Section B, Criterion
    05, pages 11-13.

C.  Oversight Procedures and Protocols (pages 18-20)

    This section sets forth principles for carrying out EPA's
    oversight responsibilities, including approach, process and
    follow-up.

D.  Criteria for Direct Federal Enforcement in Delegated states
    Tpages 2J.-25)

    This ••etion sets forth the factors EPA will consider before
    taking direct enforcement action in a delegated  State and
    what States may reasonably expect of EPA in this  regard
    including the types of cases and consideration of whether a
    State is taking timely and appropriate enforcement  action.
    It also establishes principles for how EPA should take enforce-
    ment action so that we can be most supportive of strengthening
          programs.
E.  Advance Notification and Consultation  (pages  26-30)

    This section sets  forth EPA's  policy of  "no surprises"  and
    what arrangements  must be  made with each State to ensure  the

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    policy is effectively carried out by addressing planned
    inspection*, enforcement actions, press releases, .-JiSpute
    resolution and assurances that publicly reported performance
    data is accurate.

F.  State Reporting  (pages 31-35)

    This section sets forth seven key measures EPA will use, at a
    minimum, to manage and oversee performance by Regions and
    States.  It summarizes State and regional reporting requirements
    for:  (1) compliance rates;  (2) progress in reducing significant
    non-compliance:  (3) inspection activities; (4) formal adminis-
    trative enforcement actions; and (5) judicial actions, at
    least on a quarterly basis.  It also discusses required
  .  commitments for  inspections and for addressing significant
    non-compliance.

    In addition, it  sets forth State and regional requirements for
    recordkeeping and evaluation of key milestones to assess the
    timeliness of their enforcement response and penalties imposed
    through those actions.

Appendices

    Appendix A:  Annual priorities and implementing guidance
    provides a list of the annual priorities for implementing the-
    enforcement agreements and a summary index of what national
    program guidance has been or will be issued by programs to
    address the areas covered by the Policy Framework for State/EPA
    Enforcement Agreements.

    Appendix B:  Addendum to the Policy Framework on "Implementing
    Nationally Managed or Coordinated Enforcement Actions,"
    issued January 4, 1985.

    Appendix C:  Guidance on "Division of  Penalties with  State
    and Local Governments," issued October 30, 1985.

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A. STATE/FEDERAL  ENFORCEMENT AGREEMENTS:  FORM, SCOPE, AND SUBSTANCE
     This section  sets  forth  the form, scop* and substance of the
State/Federal Enforcement Agreements as well as the degree of
flexibility Regions have in tailoring national policy to
States.

1.  What Form Should the Agreements Take?

     We do not anticipate the need for a new vehicle or document
for. the State/Federal enforcement agreements.  Wherever possible,
State/Federal agreements should be set forth in one or more of
a number of existing formats:  grant agreements, State/EPA Agreements
Memoranda of Agreement  or Understanding or a statement of Regional
Office operating policy.  Where there are new documents the
appropriate linkage should be made to grants and SEA's as applicable.
To the extent the  areas covered by this Policy Framework translate
into specific output commitments and formal reporting requirements,
they may belong in the  grant  agreements as specified in national
program grant guidance.  Regions should discuss with the States
at an early stage  in the planning process their views on both the
form and substance of the agreements.  Once the basic agreements.
are in place, Regions should  consider most aspects of the written
agreements as multi-year, minimizing the need to renegotiate the
agreements each year.   Regions should conduct an annual review
with the States to identify needed revisions and additions to the
agreements to address identified problems or reflect further national
guidance.

2.  What is the Scope of the  Agreements?

     This guidance and  the State/EPA agreements cover all
aspects of EPA's civil  compliance and enforcement programs,
including those activities involving Federal facilities.  The
criminal enforcement program  is not included and will be addressed
elsewhere.

     Discussions between EPA  Regions and States should cover the
minimum area* listed below:

     o  Overfight  Criteria and Measures?  Good  Performance Defined
        --See Section B.

     o  Oversight  Procedures  and Protocols — See Section C.

     o  criteria for Direct EPA Enforcement  —  See Section D.

     o  Procedures for  Advance Notification  and Consultation  —  See
        Section E.

     o  Reporting  Requirements — See  Section F.

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 However, Regions and States are not expected to duplicate nationa
 Program guidance in their agreements — we are not looking for
 lengthy documents.  Written agreements resulting from these
 discussion* could cover  topics which are not clearly specified
 elsewhere.  If not otherwise specified, national policy will apply
 and  should be so stated  in the state agreements.  Although not
 required for non-delegated or unapproved programs, Regions are
 encouraged to apply certain policies and provisions where relevant,
 particularly advance notification and consultation protocols.

     This Policy Framework and the resulting State/EPA Enforcement
 Agroements are intended  to enhance enforcement of State and
 Federal environmental laws.  Each agreement should be careful
 to note that nothing in  them or this Policy Framework constitutes
 or creates a valid defense to regulated parties in violation of
 environmental statutes,  regulations or permits.

 3.   Parties to the Agreements and Participants in the Process.

     It is important to  involve the appropriate State and regional
personnel early in the agreement* process.  In the Regions, this
meanti involving the operating level program staff and the Regional
Counuel staff along with top management; and in the States it
mean)! the participation  of all the organizational units responsible
 for naking enforcement work, e.g., State program staff, those
responsible for oversight of field operations, staff attorneys,
and the State Attorneys  General (AG).  The State agency should
have the lead in establishing effective relationship* with the
State AG or State legal  staff, as appropriate.  The Regions
should ensure that there is adequate communication and coordination
with these other participants in the enforcement process.  States
are strongly encouraged  to commit advance notification and
consultation procedures/protocols between the State agency and
the State AG (or State legal staff, as appropriate) to writing.
The Region should seek to incorporate these written protocols
into the State/EPA Enforcement Agreements (See discussion on
pages 17 ^.;d 26-27).
         *
4.  What Flexibility do  Regions Have?

     Region* must be allowed substantial flexibility to tailor
agreements to each State, as the agreements process is intended
to be based upon mutual  understandings and expectations.  This
flexibility should be exercised within the framework of national
program policy and the Agency's broad objectives.  Specifically,

     a. Oversight Criteria:

Oversight criteria would generally be provided  in national
program guidance but Regions should tailor their general  oversight.
to address environmental and other priorities  in the Region  or
State,  and other specific areas of concern that are unique  to
an individual State, including any issues raised by the  scope
of State enforcement authorities, unique technical problems  anJ
available expertise, and areas targeted  for  improvement.

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     In addition, Regions and States should adapt national
timely and appropriate enforcement response criteria  to State-
specific circumstances to fit State authorities and procedures
A a 4? ^ 1 1 **t^jM •
as follows:
     (i) Timeliness;  The national program guidance on key
     milestones and timeframes should be applied to all States
     with adjustments to accommodate each State's laws and legal
     procedures.  Such adjustment can be important particularly
     where the proposed enforcement action cannot possibly take
     place within the proposed timeframes or where a State
     chooses to address problems more expeditiously than the
     Federal guidelines.  The trigger points should be realistic
     expectations, but within modest variance from the national
     goals.   Other adjustments should not be made solely because
     a State program consistently takes longer to process these
     actions due to constraints other than procedural require-
     ments,  e.g., resources.  However, if this is tNe case the
     timeframes should serve as a basis for reviewing impediments
     with the State to identify how problems can be overcome  and
     to explore ways over time for the State program to perform
     more efficiently.  (See discussion in Section B, p.13)

     The timeframes are not intended to be rigid deadlines for
     action, but rather are:  (1) general targets to strive for
     in good program performance; (2) trigger point* that EPA
     and States should use to review progress in individual
     cases;  and (3) presumptions that, if exceeded, EPA may
     take direct enforcement action after consideration of all
     pertinent factors and consultation with the State.  It is
     not the Agency's intention to assume the major enforcement
     role in a delegated State as a result of these timeframes.
     The trigger points should be realistic expectations, but
     within modest variance from the national goals.  It must
     also be realized that in some programs we need experience
     with the timeframes to assess how reasonable and workable
     they^really are and further, that judgments on what is a
     reasonable timetable for action must ultimately be case
     specific.  For example, complex compliance problems may
     require longer-term studies to define or achieve an appro-
     priate remedy.

     (ii) Appropriate Enforcement Response:

     (a) Choice of response;  National medium-specific program
     guidance applicable to State programs on appropriate
     enforcement response should b« followed  (See Appendix A).
     There is usually sufficient flexibility within  such
     guidance to allow the exercise of discretion on how best
     to apply the policies to individual cnses.  The Agency  is
     making every effort to set  forth a consistent  national
     oolicy on enforcement response for each program.   It  is
     therefore essential that in setting  forth  clear expectations
     with States this guidance not be altered.

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     ',(b) Definitions of  formal enforcement actions;  Regions
      should  reach agreement with States as to how certain St*te
      enforcement actions will be reported to and interpreted by
      EPA.  This should be based upon the essential characteristics
      and impact of State enforcement actions, and not merely
      upon what the actions are called.  National program guidance
      setting  forth consistent criteria for this purpose should
      be followed, pursuant to the principles listed in Section 3,
      pages 11-12.

      (c) Civil Penalties and Other Sanctions:  Program guidance
      must also be followed on where a penalty is appropriate.
      Regions  have- the flexibility to consider other types of state
      sanctions that can be used as effectively as cash penalties
      to create deterrence, and determine how and when it might be
      appropriate to use these sanctions consistent with national
      guidance.  Region's and States should reach understanding on
      documentation to evaluate the State's penalty rationale.
      Maximum  flexibility in types of documentation will be
      allowed  to the State.

5.  Procedures and Protocols on Notification and Consultation:

      Regions  and States should have maximum flexibility to fashion
arrangements  that are most conducive to a constructive relationship,
following the broad principles outlined in this document.

6.  State-Specific Prioritiesi
                                     •
      In addition, while of necessity EPA must emphasize commit.~ner.ts
by Stages to  address significant noncompliance and major sources
of concern, Regions should be sensitive to the broad concerns of
State Programs including minor sources and the need to be responsive
to citizen complaints.  Regions should discuss the State's perspective
on both its own and national priorities, and take into account
State priorities to the extent possible.

7.  What Does it Mean to Reach Agreement?

      To the txVtent possible, these agreements should reflect mutual
understandings and expectations for the conduct of Federal and
State enforcement programs.  At a minimum, EPA Regions must:   (1)
be clear and  ensure there are "no surprises"; (2) make arrangements
with  th* States so that  actions taken are constructive and  supportive:
and (3) tailor the application of the national program guidance
to the States' programs and authorities.  Where mutual agreement
cannot be achieved, clear unilateral statements of policy will
have  to suffice, with commitments to try to seek  further agreener.ts
over  time.  Areas where  agreements have not been  reached should
be clearly identified for senior Agency management attention.

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 B.   OVERSIGHT  CRITERIA  AND  MEASURES:  DEFINING GOOD PERFORMANCE
     The  first  step  to  achieving  strong and effective national
 compliance  and  enforcement programs  i» a clear definition of
 what constitutes good performance.   Because e*ch of EPA's programs
 embodies  unique requirements and  approaches, good performance
 must be defined on a program-specific basis.  Adjustments also
 must be made  in applying criteria and measures to the States
 and Regions,  bas«d upon their environmental problems and
 authorities.  Nevertheless, there are several basic elements
 which will  generally be applicable to a good compliance and
 enforcement program  in  any of our medium-specific programs.
 The following outlines  the criteria  and measures that form
 the common  framework for defining a  quality program.  The
 framework is  to serve as a guide  to  the national programs as
 they develop, in cooperation with Regions and States, the
 criteria  they will use  to assess  their performance in implementing
 national  compliance and enforcement  programs.

     The  framework is not intended to be adopted word-for-word
by the programs, nor is there any format implied by this list.
What is important are the concepts.  This section addresses
only the  elements of a  quality program.  Issues such as how
oversight should be conducted are addressed in Section C.  Each
national program may choose to focus on certain elements of
performance in  a given  year.

     These  criteria and measures  are intended to apply to the
implementing agency, that is, to  an  approved or delegated
State or  to an  EPA Region in the  event a program is not
 "delegated."  Our philosophy is that EPA should be held to
the same standards as we would apply to the States if they
were implementing the program.  Portions may also apply to
those non-approved or non-delegated  States which are adminis-
tering portions of the programs under cooperative agreements.

CRITERION »1  Clear Identification of and Priorities for
the Regulated Community

     A quality  compliance and enforcement program is based
upon an inventory of regulated sources which is complete,
accurate and current.   The data should in turn be accessible,
preferrably in  automated data systems which are accurate, and
up-to-date.  The scope  of coverage for the  inventory should
be appropriately defined by each  program as  it is probably
not feasible to identify every person or facility subject  to
environmental laws and  regulations,  especially when they are
numerous  small  sources.  Those priorities should be clearly
established in  national program guidance and tailored to
State-specific  circumstances as appropriate.

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     The inventory of sources or other relevant information on
sources should be utilized as a basis for a priority-setting
system established by the administering agency.  These priorities
should reflect and balance both national priorities and state-
specific priorities.  A quality program uses those priorities
as a basis for program management.  National priorities are
generally set forth in EPA's Operating Year Guidance and program-
specific compliance and enforcement strategies.  State-specific
priorities should address not only efforts to achieve broad
basod compliance but also should assess the expected environmental
impact of targeting enforcement and compliance monitoring to
specific geographic areas or against certain source types.
Ambient monitoring systems can provide an important point of
departure for priority-setting.

CRITERION »2  Clear and Enforceable Requirements

     Requirements established through permits, administrative
orders and consent decrees should clearly define what a
specific source must do by a date certain, in enforceable
terrrM.  It is not EPA's intention in this policy framework to
suggest that EPA conduct a top down review of a State or
Regional program's entire regulatory program.  However,
area* where provisions cannot be enforced due to lack of
clarity or enforceable conditions should be identified and
corrected.

CRITERION 13  Accurate and Reliable Compliance Monitoring

     There are four objectives of compliance monitoring:

          reviewing source compliance status to identify
          potential violations;

       -  helping to establish an enforcement presence;

       -  collecting evidence necessary to support enforcement
          'actions regarding identified violations; and

       -  developing an understanding of compliance patterns
          of the regulated community to aid in targeting
          activity, establishing compliance/enforcement
          priorities, evaluating strategies, and communicating
          iffformation to the public.

     The two factors in assessing the success  of a compliance
monitoring program are coverage and quality.

Coverage;  Each program's strategy should  reflect a  balance
between coverage:   (1) for breadth, to substantiate  the  reli-
ability of compliance statistics and establish an enforcement
presence; and (2) for targeting those sources  most  likely  to
be out of compliance or those violations presenting  the  most
serious environmental or public health risfc.

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                                                            10


      Inspections;   Each  administering agency should have a
      written  and  reviewable  inspection strategy, reviewed and
      updated  annually* as  appropriate:  in some programs a
      multi-year strategy may be preferable.  The strategy
      should demonstrate  the  minimum  coverage for reliable
      data gathering and  compliance assessment set forth in
      national program guidance and meet legal requirements
      for a "neutral inspection scheme."  The strategy should
      also address how the  inspections will most effectively
      reach priority concerns and potential noncompliers including
      the use  of self-reported data,  citizen complaints and
      historic compliance patterns.   The strategy will be
      assessed on whether it  embodies the appropriate mix of
      categories of  inspections, frequency and level of detail.
      Inspections should  then be carried out in a manner
      consistent with the inspection  strategy.

      Source Self-Monitoring  and Reporting;  The administering
      agency should  ensure  that minimum national requirements
      for source self-monitoring and  reporting are imposed
      and complied with,  either through regulation or permit
      condition, pursuant to  national guidance as appropriate.

duality?  Each program should define minimum standards for
quality assurance of data  and data systems, and timely and
complete documentation of  results.   At a minimum, each program
should have a quality assurance program to insure the integrity
of the compliance monitoring program.  This quality assurance
program should address essential lab analysis and chain of
custody issues as appropriate.

      Inspections?   Inspectors should be able to accurately
     document evidence needed to determine the nature and
     extent of violations/ particularly the presence of
     significant violations.  Documentation of inspection
      findings should be  timely, complete and able to support
      subsequent enforcement  responses, as appropriate to the
     purpose of the inspection.  Federal oversight inspections
     should corroborate  findings.  Oversight inspections are
     a principal means of  evaluating both the quality of an
     inspection* program  and  inspector training.

     Source Self-Monitoring;  The administering agency should
     have a strategy for and implement quality assurance
     procedures, with sufficient audits and follow-up action
     to ensure the  integrity of self-reported data.


CRITERION >4  High  or Improving Rates of Continuing Compliance

     The long-term  goal  of all of our compliance and enforcement
programs is to achieve high  rates of continuing compliance
across the broad spectrum  of the regulated community.  Until
that goal is achieved, compliance rates can  fluctuate  for
several reasons.  In assessing how well an administering
agency is meeting the goal of high or improving rates of

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                                                            11

compliance, other factors must be assessed in addition to
the overall compliance rate.  Improved inspections or inspec-io-
targeting often can result in a temporary decrease in rates
of compliance until newly found violations are corrected and
the regulated community responds to the more vigorous attention
to specific compliance problems.  In these ins-tances, a
decrease in the rate of compliance would be a sign of a
healthy compliance and enforcement program.  At a minimum,
programs should design mechanisms to track the progress of
all sources out of compliance through major milestones up to
achieving final physical (full) compliance with applicable
regulations and standards.

     Program quality must also be assessed in terms of how well
the program is returning significant noncompliers to compliance.
The use of lists of significant violators and specific commit.Tients
to track and resolve significant noncompliance should oe
part of the planning process of the administering agency,
and, between States and Regions.  The lists should be developed
in consultation wih the States and continually updated each
fiscal year and sources on it tracked through to final physical
compliance.

CRITERION IS  Timely and Appropriate Enforcement Response

    Quality enforcement programs ensure that there is timely
and appropriate enforcement response to violations.  Expectations"
for what constitutes timely and appropriate action should be
based upon national program guidance, tailored to the procedures
and authorities in a given State and assessed in regard to
particular circumstances surrounding each instance of violation.
National programs must establish benchmarks or milestones
for what constitutes timely and appropriate enforcement
action, forcing progress in enforcement cases toward ultimate
resolution and full physical compliance.  This concept is a
key new feature to our compliance and enforcement program
implementation.

    In designing oversight criteria for timely enforcement
response, each program will attempt to capture the following
concepts!     w

    1.  A a«t number of days from "detection" of a violation
        to an initial response.  Each program should clearly
        define when the clock starts, that is, how and when
        a violation ia "detected."

    2.  Over a specified period of time, a full  range of  enforce-
        ment tools may be used to try to achieve compliance,
        including notices of violation, warning  letters,  phone
        calls, site visits, etc.  The adequacy of th««e  responses
        will be assessed based upon whether they result  in
        expeditious compliance.

    3.  A prescribed number of days from initial action  within
        which a determination should generally be made,  that

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                                                           12

       either compliance has been achieve-! or *-\ administrative
       enforcement action has been taken (or a judicial  referr*'
       has been initiated, as appropriate) that, at a  minima.-?.:

       •  Explicitly requires recipient to take some corrective'
          remedial action, or refrain from certain behavior,
          to achieve or maintain compliance;

       •  Explicitly is based on the issuing Agency's  deter-
          mination that a violation has occurred;

       *  Requires specific corrective action, or specifies a
          desiced result that may b« accomplished however  the
          recipient chooses, and specifies a timetable for
          completion;

       *  May impose requirements in addition to ones  relating
          directly to  correction (e.g., specific monitoring,
          planning or  reporting requirements); and

       *  Contains requirements that are independently enforce-
          able without having to prove original violation  and
          subjects the person to adverse legal consequences
          for noncompliance.

     4.   A specific point at which a determination is  made
         either that final physical compliance has been  achieved")
         that the source is in compliance with a milestone in
         a prior order,  or that escalation to a judicial
         enforcement action has been taken if such actions
         have not already been initfated.

         In developing program-specific guidance,  this milestone
         may be treated more as a concept than as a fixed  timetable,
         taking into account the fact that the administrative
   *     hearing process and the State Attorney General's  actions
         are not within the direct control of the administering
         agency.£/  What is important, is the embodiment of the
        •concept of timely follow-up and escalation, in requirements
         for tracking  and management.

     5.   Final physical compliance date is firmly established
         and required  of the facility.  Although it i« not
         possible for  programs to establish any national
         tiaeframes, the concept of final physical compliance
         by a date certain should be embodied in CPA and State
         enforcement actions.

     6.   Expeditious physical compliance is required.   It  may
         not be possible for programs to define "expeditious"
         in terms of set time periods, but some concept of
         "expeditious" (i.e., that the schedule will result in
         a return to full physical compliance as quickly as
         can reasonably be expected) should be embodied in
         each program's guidance.

 See  p.  1", 26-27, regarding the State Agency's responsibilities
"for  coordinating with the State Attorney General or other
 legal  staffs.

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     Timeframes established by the national programs for each
of these minimum milestones are principally intended to serve
as trigger points and not as absolute deadlines, unless
specifically defined as such.  Whatever timeframes are establishe!
ar« intended to apply only to Federal requirements as adopted
by the States, and do not apply to State statutes and require-
ments that go beyond those required by Federal law.  The
timoframes are key milestones to be used to manage the program,
to trigger review of progress in specific cases, and a presumption
of where EPA may take direct enforcement action after consideration
of all pertinent factors and consultation with the State.

     Timeframes 'and their use in management will evolve over
time as they will have to reflect different types of problems
that may warrant different treatment.  For example, programs
will have to take into account such factors as new types of
violations, the difference between operating and maintenance
violations versus those that require installation of control
equipment, emergency situations which may fall outside the
scope of the normal timeframes for action, etc.

     Administering agencies are expected to address the full
range of violations in their enforcement responses considering
the specific factors of the case and the need to maintain a
credible enforcement presence.  However/ the new management
approach setting forth desired timeframes for timely action
could have resource implications beyond what is currently
available to or appropriate for the full rang* of sources
and violations.  Therefore, as we begin to employ the concept
of timely and appropriate enforcement response, at a minimum,
the focus should be on the greatest problems, i.e., the
significant noncompliers.  Over time, and with more experience,
this concept should be phased-in to cover a broader range of
violations.  This in no way should constrain the programs'
from applying the conctpts broadly.

     The choices of appropriate response are to b« defined
within the constraints of national program guidance and
applied by the administering agency based upon consideration
of what is neeAds  (1) in general, to achieve expeditious
correction of the violation, deterrence to future noncompliance
and falrnesji; and (2) in individual circumstances, based  upon
the gravity Of the violation, the circumstance* surrounding
the violation, the source's prior record of compliance and
the economic benefits accrued from noncompliance.  with
three exceptions, the form of the enforcement  response is  not
important by itself, as long as it achieves the desired
compliance result.  The exceptions generally  fall  into the
following three categories:

     1.  If compliance has not been achieved  within  a  certain
         timeframe, the enforcement  response  should  meet
         minimum requirements, usually associated  with at
         least the issuance of an administrative  order  (see
         criteria listed above) or  judicial  referral.

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                                                              14

       2.  Because of the need f> create a strong deterrence
           to noncompliance, it is important to assess  penalties
           in certain cases, and only certain types of  enforcement
           actions can provide penalties.  Each program must
           clearly define, as appropriate, the circumstances
           under which nothing less than a penalty or equivalent
           sanction will be acceptable.  (See Criterion 16  below.)

       3.  In some circumstances, a judicial action or  sanction
           is usually the only acceptable enforcement tool.   Each
           program must define these circumstances as appropriate.
           For example, a judicial action might be required
           where a* compliance schedule for Federal requirements
           goes beyond Federal statutory deadline*.

       A good program should have adequate legal authority  to
  achieve the above objectives.  Where deficiencies have been
  identified, steps should be taken to fill identified  gaps.

  CRITERION » 6  Appropriate Use of Civil Judicial and  Administrative
  Penalty and Other Sanction Authorities to Create Deterrence3/

  1.   Effective Use of Civil Penalty Authorities and Other  Sanctions;

       Civil penalties and other sanctions play an important  role  in
  an  effective enforcement program.  Deterrence of noncompliance   -
  is  achieve-] through:  1) a credible likelihood of detecting a
  violation, 2) the speed of the enforcement response,  and  3) the
  likelihood and severity of the sanction.  While penalties or
  other sanctions are the critical third element in creating
  deterrence, they can also contribute to greater equity among
  the regulated community by recovering the economic benefit  a
  violator gains from noncompliance over those who do comply.

       Effective State and regional programs should have a  clear plan
  or  strategy for how their civil penalty or other sanction
  authorities will be used in the enforcement program.   At  a
  minimum, penalties and/or sanctions should be obtained where
  programs have identified that a penalty is appropriate (see
  Criterion IS above).

       The anticipated use of sanctions should be part of the
  State/EPA Enforcement Agreements process, with Regions and
  States discussing and establishing how and when  the State
  generally plans to use penalties or other approaches where
  some sanction is required.
J/Excerpts from th« Policy on  "Oversight of State Civil Penalties
  2/28/86.  The focus of the policy  is on both  civil  judicial and
  civil administrative penalties, and does not  cover  criminal
  penalties.

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                                                             15
       EPA generally prefers  the use of cash penalties to other
   types of sanctions.^/  However, there may be other sanctions
   which are preferable to cash penalties in some circumstances.
   In particular, States may have a broader range of remedies than
   thoise available «t the Federal level.  Examples of other sanctions
   may  be:  pipeline severance  (UIC), license revocation (FIFRA)
   or criminal sanctions including fines and/or incarceration.
   National program guidance should clarify in general terms how
   the  use of other types of sanctions  fits into the program's
   penalty scheme at the Federal and State levels, e.g.. whether
   they are substitutes for or mitigate a cash penalty.£/  m
   any  case, States- are urged  to use cash penalty authorities in
   those cases for which a penalty is "appropriate" and/or to use
   other sanctions pursuant to these agreements with the Regions.

       EPA encourages States  to develop civil administrative
   penaLty authority in addition to civil judicial penalty authority,
   and  t.o provide sufficient resources  and support for successful
   implementation where they do not already have this authority.
   In general, a well designed administrative penalty authority
   can provide faster and more efficient use of enforcement
   resources, when compared to civil judicial authorities.  Both
   civil judicial and administrative penalty authorities are
   important, complementary, and each should be used to greatest
   advantage.  EPA is similarly seeking to gain administrative
   penalty authority for those Federal  programs which do not
   already have it.  To support State efforts to gain additional
   penalty authorities, EPA will share  information collected on
   existing State penalty authorities and on the Federal experience
   with the development and use of administrative authorities.

   2.  Oversight of Penalty Practices:

       EPA Headquarters will  oversee Regional penalties to
   ensure Federal penalty policies are  followed.  This oversight
   will focus both on individual penalty calculations and regional
   penalty practices and patterns.
**/In limited circumstances where  they  meet  specified  criteria,  EPA
  and DOJ policies and procedures allow for alternative  payments  —
  such a« beneficial projects  which have economic value  beyond
  the costs of returning  to  compliance — in mitigation  of
  their penalty  liability.
£/Until program-specific  guidance is developed to define the
  appropriate use of civil sanctions,  the Region and  State should
  consider whether the sanction  is comparable to a cash  penalty
  in achieving compliance *nd  deterring noncompliance.   Costs
  of returning to compliance will not  be considered a penalty.
  Criminal authorities, while  not clearly comparable  to  cash
  penaltius, can be used  as  effectively as  cash penalties to
  create deterrence in certain circumstances.

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                                                           16
      EPA  will  review  state penalties  in the context of the State's
 overall enforcement program  not merely on  its use of cash penal-les.
 While individual  cases will  be discussed,  the program review will
 more  broadly evaluate how penalties and other sanctions can be
 used  most effectively.   The  evaluation will consider whether the
 penalties or other sanctions are sought in appropriate cases,
 whether the relative  amounts of penalties or use of sanctions
 reflect increasing severity  of the violation, recalcitrance,
 recidivism etc.,  and  bear a  reasonable relationship to the economi-:
 benefit of noncompliance (as applicable) and whether they are
 successful in  contributing to a high  rate of compliance and
 deterring noncompliance.  EPA may also review the extent to which
 State penalties have  been upheld and  collected.

 3.'  Development and Use of Civil Penalty Policies;

      EPA  Regions  are  required to follow written Agency-wide
 and program specific  penalty policies and procedures.

      EPA  encourages States to develop and use their own State
penalty policies  or criteria for assessing civil penalties.
The advantages of using a penalty policy include:

        leads  to  improved consistency;
        is more defensible in court;
      -  generally places the Agency in a stronger position to
        negotiate with the violator;
        improves  communication and support within the
        administering agency and among the agency officials,
        attorneys and judges especially where other organizations
        are responsible  for  imposing  the penalty;
        when based on recoupment of economic benefit and a
        component for seriousness, deters violations based
        upon economic considerations  while providing some
        equity among  violators and nonviolators; and
      -  can be used by judges as a basis for penalty decisions.

EPA encourages States to consider EPA's penalty policies as
they develop their own penalty policies.

4.  Consideration of  Economic Benefit of Noncompliance;

      To remove incentives for noncompliance and establish deterrence,
EPA endeavors, through its civil penalties, to recoup the economic
benefit th« violator  gained  through noncompliance.  EPA encourages
States to  consider and to quantify where possible, the economic
benefit of noncompliance where this is applicable.  EPA expects
States to  make a  reasonable  effort to calculate economic benefit
and encourages States to attempt to recover this amount in  negoti-
ations and litigation.   States may use the Agency's computerized
model (known as BES)  for calculating  that  benefit or different
approaches to  calculating economic benefit.  EPA will provide
technical  assistance  to  States on calculating  the economic  benefit
of nonco-npliance, and has made the BEN computer model available
to States.

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                                                       17


CRITERION *7  Accurate Recordkeeping and Reporting

     A quality program maintains accurate *nd up-to-date files
and record* on source performance and enforcement responses
that are reviewable and accessible.  All recordVeeping and
reporting should meet the requirements of the quality assurance
management policy and procedures established by each national
program consistent with the Agency's Monitoring Policy and
Quality Assurance Management System.  Reports from States to
Regions, Region* to Headquarters must be timely, complete an<3
accurate to support effective program evaluation and*priority-
setting.
                %»
     State recordVeeping should include some documented rationale
for the penalties sought to support defensibility in court, enhance
Agency's negotiating posture, and lead to greater consistency.
These records should be in the most convenient format for adminis-
tration of the State's penalty program to avoid new or different
recordfceeping requirements.

CRITERION 18  Sound Overall Program Management

     A quality program should have an adequate level, mix and
utilization of resources, qualified and trained staff, and adequate
equipment.  The intention here is not to focus on resource and
training issues unless there is poor performance identified
elsewhere in the program.  In those instances, these measures
can provide a basis for corrective action by the administering
agency.  There may be, however, some circumstances in which
base level of trained staff and equipment can be defined by a
national program where it will be utilized as an indicator of
whether the program is adequate.

     Similarly, a good compliance and enforcement program should
have a clear scheme for how the operations of other  related
organisations, agencies and levels of government fit into the
progrc.M, especially the State Attorneys General or other appropriate
State Legal organizations.  The State Agency should, at a minimum,
ensure that the State AG, internal legal counsel, or other appropriate
government legvl staff are consulted on the enforcement co-nmitments
the State is making to EPA to assure that the level  of  legal
enforcement support and associated resources needed  to  accomplish
the agre«d-upon goals are secured.  This coordination should
result in timely review of initial referral packages, satisfactory
settlement of cases, as appropriate/ timely filing and  prosecution
of casesi, and prompt action where dischargers violate consent
decrees..  (See Section E, p. 26-27).

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                                                                  18
C.  OVERSIGHT  PROCEDURES AND  PROTOCOLS
     This section addresses how  EPA should conduct its oversight
function, its approach, process  and follow-up, to build and improve
individual programs and overall  national performance.  On May 31,
1985, the Agency issued the Policy on Performance-Based Assistance.
which contains guidance on how Regions should oversee assistance
agreements.  Both of these policies call for oversight with a
problem-solving orientation with clear identification of actions
needed to correct problems or recognize good performance.

1.  Approach

     The goal of oversight should be to improve the State (or Regional)
compliance and enforcement program.  To accomplish this, oversight
should be tailored to fit State performance and capability.  The
context must be the whole State compliance and enforcement program,
although EPA's focus for audit purposes will be on national priority
areas.

     So new oversight process is intended here.  Existing procedures
such as mid-year reviews, periodic audits and oversight inspections as
established by each program and  Region should be used.  Administering
agencies should identify strengths and weaknesses of the State and
Federal programs and develop mutual commitments to correct problems.

     EPA oversight of State performance should be consistent with
the following principles:            -

  a. Positive oversight findings should be stressed as well as the
     negative ones.

  b. Positive steps that can be taken to build the capability of
     State programs in problem areas should be emphasized.  This
     should include providing technical assistance and training —
     by EP.A staff to the extent possible.

  c. EPA action to correct problems should vary, depending on the
     environmental or public health effect of the problem and whether
     it reflects a single incident or a general problem with the
     State program.

  d. The States should be given  an opportunity to formally conur.ent
     on EPA'i performance.  Regions should provide information  to
     the States that is available on its performance against the
     national standards, including their performance on meeting  the
     "timely and appropriate" criteria, as well as their performance
     on commitments to that State.

  e. EPA should give States sufficient opportunity to  correct i>1er.ti*ie-
     problems, and take corrective action pursuant to  the  criteria  for
     direct enforcement established in Section D.

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                                                              19


  if. EPA should use the oversight process as a moans of trans-
     ferring successful regional and State approaches from one
     Region or State to the other.

2.  Process

     Several actions can result in the most constructive review
of the State's programs:

  a. To the extent possible, files to be audited will be identified
     in advance, with some provision for random review of a perce-i-
     of other files if necessary.

  b. Experienced personnel should be used to conduct the audit/
     review — EPA staff shoul>i be used to the extent possible
   • to build relationships and expertise.

  c. There should be an exit interview and every opportunity
     should be made to discuss, findings, comment on and identify
     corrective steps based upon a review draft of the written
     report.

  d. Opportunity should be made for staffs interacting on
     enforcement cases and overseeing State performance to meet
     personally rather than rely solely upon formal communications
     <-- this applies to both technical and legal staffs.

3.  Follow-Up and Consequences of Oversight

     »fhen State performance meets or exceeds the criteria and
measures for defining good program performance, EPA should
reward this performance in some of the following ways:

  a. reduce the number, level or scope, and/or frequency of
     reviews or of some reporting requirements consistent with
     statutory or regulatory requirements;

  b. rarluce the frequency and number of oversight inspections;
     and/or

  c. allow the program more flexibility in applying resources
     from an almost exclusive focus on national priorities
     e.g., Mjor sources, to addressing more priorities of
     concern to the State e.g., minor sources.
          State performance  fails  to meet  the  criteria  for  good
State performance, EPA may take  some of  the  following actions,
as appropriate:

  a. suggest changes in State procedures;

  b. suggest changes in the  State's use  of resources or training of
     staff;

  c. provide technical assistance;

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                                                        '2'J
d. increase the number of oversight inspections and/or require
   submittal of information on remedial activities;

e. provide other workable State models and practices to States
   with problems in specific are,*s ami match State staff with
   expertise in needed area;

f. if State enforcement action has not been timely and appropriate,
   EPA may take direct enforcement action;

g. track problem categories of cases more closely;

h. grant awards could be conditioned by targeting additional
   resources to correct identified problems or reduce'] based
   on poor performance where such performance is not due to
   inadequate resources; and/or

i. consider de-delegation if there is continued poor performance.

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D.  CRITERIA FOR  DIRECT FEDERAL ENFORCEMENT IS DELEGATED STATES


     This section addresses criteria defining circumstances under
which approved State progra-ns might expect direct- Federal enforce-
ment action and how EPA will c*rry out such actions so as to be
most supportive of strengthening State programs.

1.  When Might EPA Take Direct Enforcement Action in Approved States?

     A clear definition of roles and responsibilities is essential
to an effective partnership, since EPA has parallel enforcement
authority under Its statutes whether or not a State has an approved
or delegated prog'ram.  As a matter of policy in delegate.1 or**
approved programs, primary responsibility for action will reside
with State or local governments with EPA talcing action principally
where a State is  "unwilling or unable" to take "timely and appropriate"
enforcement action.  Many States view it as a failure of their
program if EPA takes an enforcement action.  This is not the
approach or view adopted here.  There are circumstances in which
EPA may want to support the broad national interest in creating
an effective deterrent to noncompliance beyond what a State may
need to do to achieve compliance in an individual case or to
support its own program.

     Because States have primary responsibility and EPA clearly
does not have the resources to take action on or to review in
detail any and all violations, EPA will circumscribe its actions
to the areas listed below and address other issues concerning
State enforcement action in the context of its broader oversight
responsibilities.  The following are four types of cases EPA ma/
consider taking -direct enforcement action where we have parallel
legal authority to take enforcement action:

      a. State requests EPA action
      b. State enforcement response is not timely and appropriate
      c. National precedents (legal or program)
      d. Violation of EPA order or consent decree

      In deciding whether to take direct enforcement in the above
      types of cases, EPA will consider the following factors:

      • Cases specifically designated as nationally significant
        (•.9., significant noncompliers, explicit national or
        regional priorities)
      - Significant environmental or public health damage or
        risk involved
      - Significant economic benefit gained by violator
      - Interstate issues (multiple States or Regions)
      - Repeat patterns of violations and  violators

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                                                              22


How. these factors are applied for the various types of cases is
discussed below.

     a.  State requests EPA action;

     The State may request EPA to take the enforcement action for
several reasons including but not limited to:  where State authority
is inadequate, interstate issues involving multiple States which
they cannot resolve by themselves, or where State resources or
expertise are inadequate, particularly to address the significant
violation/violators in the State in a timely and appropriate
manner.  EPA should honor requests by States for support in
enforcement.  EPA will follow its priorities in meeting any such
requests for assistance, considering significance of environmental
or public health damage or risk involved, significant economic
benefit gained by a violator, repeat patterns of violations and
violators.  Based on this general guidance, each program office
may develop more specific guidance on the types of violations on
which EPA should focus.  Regions and States are strongly encouraged
to plan in advance for any such requests for or areas needing EPA
enforcement assistance during the State/EPA Enforcement Agreements
Process.

     b.  State Enforcement is not "Timely and Appropriate"

     The most critical determinant of whether EPA will take direct
enforcement action in an approved State is whether the State has
or will take timely and appropriate enforcement action as defined
by national program guidance and State/Regional agreements.  EPA
will defer to State action if it is "timely and appropriate"
except in very limited circumstances:  where a State has requested
EPA action (a, above), there is a national legal or program
precedent which'cannot be addressed through coordinated State/Federal
action (c, below), EPA is enforcing its own enforcement action
(d, below) or the case of a repeat violator, where the State
response is likely to prove ineffective given the pattern of
repeat violations and prior history of the State's success  in
addressing past violations.
          «
     (,i)  Untimely State Enforcement Response:

     If a State action is untimely, EPA Regions must determine
after advance) notification and consultation with the State  whether
the State is moving expeditously to resolve the violation  in  an
"appropriate)* manner.

     (ii)  Inappropriate State Action;

     EPA may take direct action if the State enforcement  action
falls short of that agreed to in advance  in  the State/EPA Enforce-
ment Agreements as meeting the requirements of a  formal enforcement
response  (See Section B, page 13) where  a  formal  enforcement
response is required.  EPA may also take  action  if the content of
    enforcement action is inappropriate,  i.e.,  if  remedies are

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                                                              23


 clearly inappropriate to  correct  the violation, if compliance
 schedules  are  unacceptably  extended, or  if  there is no*appropria-»
 penalty or other  sanction.

      (iii)  Inappropriate Penalty or other  Sanction;

      For types  of violations  identified  in  national program
 guidance as  requiring a penalty or equivalent sanction, EPA will
 take  action  to  recover a  penalty  if a State has not assessed a
 penalty or other  appropriate  sanction.   EPA generally will not
 consider taking direct enforcement action solely for recovery of
 additional penalties  unless a State penalty is determined to be
 grossly deficient after considering all  of  the circumstances of
 the case and the  national interest.  In  making this determination,
 EPA will give every consideration to the State's own penalty
 authority  and any applicable  State penalty policy.  EPA will
 consider whether  that State's penalty bears any reasonable relationship
 to the  seriousness of the violation, the economic benefit gained
 by the  violator (where applicable) and any other unique factors
 in the  case.  While this  policy provides the basis for deciding
 whether  to take direct Federal action on the basis of an inadequate
 penalty, this issue should be discussed  in more detail during the
 agreements process to address any state-specific circumstances
 and procedures  established to address generic problems in specific
 cases.   Where identified  in national guidance and agreed to      -
 between  the  Region and State, other sanctions will be acceptable
 as substitutes  or mitigation  of penalty  amounts in these considerations.

      Program-specific national guidance  on  expectations for State
 penalty  assessments may be developed 'in  consultation with the
 States  and applied for determining adequacy of penalty amounts
 after being  applied in practice in EPA Regions.  It is the current
 expectation  of  Agency managers that EPA  will continue to gain
 experience in implementing its own penalty policies before national
 programs consider such guidance.  Thus,  in  the near term a determination
 that © penalty  is  "grossly deficient" will  remain a judgment call
made on  a  case-by-case basis.
         •

     c.  National  Precedents

     This  is the  smallest category of cases in which EPA may
 take direct  enforcement action in an approved State, and will
occur rarely in practice.  These  cases are  limited to  those of
 first impression  in law or those  fundamental to establishing a
basic elemejnt of  the  national compliance and enforcement prograr..
 This is  particularly  important for early enforcement cases un'ler
a new program or  issues that  afftct implementation of  the program
on a national basis.   Some of these cases may most appropriately
be managed or coordinated at  the  national level.  Additional
guidance on how potential cases will be  identified, decisions
made to  proceed and involvement of States and Regions  in  that
process, has been developed as Appendix  B to this document.

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                                                          24


     d.  Violation of EPA order or consent decree;

     EPA places a high priority on following through on enforcement
actions until final compliance is achieved.  If EPA has taken
administrative, civil or criminal judicial enforcement in a
delegated or approved State, EPA will take any follow up enforcene.it
action on violations of those agreements or orders to preserve
the integrity of Federal enforcement actions.

2•  How Should EPA Take Action So At To Better Support Strong
    State Programs?""                        ~~       	

     Section E describes in some detail the principles and
procedures for advance notification and consultation with States.
These are imperatives for a sound working relationship.  In all
of these circumstances, where EPA may overfile a State action on
the basis that it is not timely and appropriate EPA should work
with the State as early as possible in the case, well before
completion of a State action which, if resulting in expeditious
compliance by the facility, would render any subsequent EPA
involvement unconstructive, ineffective or moot.  This is parti-
cularly important since it is EPA policy that once a case has
been commenced, EPA generally will not withdraw that case in
light of subsequent or simultaneous State enforcement action.

     In particular, Regions also should identify, with their
Statoui, particular areas in which arrangements can or should be
made, in advance, for direct EPA enforcement support where State
authorities are inadequate or compliance has been a continuing
problem.

     There are several other approaches identified here for how
EPA can take enforcement action, where it is appropriate, in a
manner which can better support States.

     To the maximum extent possible, EPA should make arrangements
with Spates to:
         *
     a.  Take joint State/Federal action — particularly where a
         State—is responsibly moving to correct a violation but
         lack* the necessary authorities, resources, or national
         or interstate perspective appropriate to the  case.

     b.  Use State inepection or other data  and witnesses,  as
         appropriate.

     c.  Involve States in creative settlements and to participate
         in case development — so that the  credibility of  States
         as the primary actor is perceived and realized.

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                                                           25


     d.  Arrange  for division of penalties with state and local
         governments"'(to the extent they participate in Fe^eril
         enforcement actions, and where permitted by law) -- to
         enhance  Federal/State cooperation in enforcement.

     e.  Issue  joint press releases and share credit with the
         State  — to ensure EPA is not in competition with the
         State  and that  EPA action is not erroneously perceived
         as a weakness or failure in the State's program.

     f.  Keep States continually apprised of events and reasons
         for Federal actions -- to avoid conflicting actions
         and to build a  common understanding of goals and
         the State and Federal perspectives.


3.  How Do the Expectations for "Timely and Appropriate Action"
    Apply to EPA  in Delegated States?

     In delegated States, EPA performs an oversight function,
standing ready to take direct Federal enforcement action based
upon the factors stated  above.  In its oversight capacity, in
•ost cases, EPA will not obtain real-time data.  As indicated in
Section F on State Reporting, EPA will receive quarterly reports
and will supplement these with more frequent informal communi-  "
cations on the status of key cases.  Therefore, we do not expect
EPA Regions, through their oversight, to be able to take direct
enforcement action following the exact same timeframes as those
that apply to the administering agency.  However, when EPA does
determine it is appropriate to take direct Federal action, EPA
staff are expected to adhere to the same timeframes as applicable
to the States starting with the assumption of responsibility for
enforcement action.
D/See Appendix C for Agency  Policy on  "Division of Penalties
  with State and Loc*L Governments,"  issued October 30,  1985.

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                                                              26
E.  A&VAUCE NOTIFICATION AND CONSULTATION


     A policy of  "no surprises" must be the centerpiece of a.-.y
effort to ensure  the productive use of limited Federal and
State resources and an effective "partnership" in achieving
compliance.  This principle should be applied to all aspects of
the compliance and enforcement program covering inspections,
enforcement activities, press releases and public information,
and management data summaries upon which State and national
performance are assessed.

     In order to-guarantee that there is ample advance notif ica-i--.
and consultation between the proper State and Federal officials,
EPA Regions should confer annually with each State,  discuss the
following areas and devise agreements as appropriate.  The
agreements should be unique to each State and need not cover
all areas — so long as there is a clear understanding and
discussion of how each area will be addressed.

     1.   Advance Notification to Affected States of Intended EPA
         Inspections and Enforcement Actions

         Agreements should identify:

         - who should be notified, e.g.
           — the head of the program if it involves potential
              Federal enforcement; and
           — who is notified of proposed/planned Federal inspectio-.s

         - how the State will be notified, e.g.
           -- the agencies share inspection lists; and
           — the agency contact receives a telephone call on a
              proposed Federal enforcement case.

         - when they will be notified — at what poin^(s) in
           the process, e.g.
           — when a case is being considered; and/or
          ' -- when a case is ready to be referred, or notice
              order issued.

     Some specific provisions need to be made to address the
     followingi

     a.  Advance Notification of State Attorneys General or other
        legrl staff of potential EPA enforcement actions7/

        While EPA's primary relationship with the State is and
        should continue, to b« with the State agency  that has
        been delegated or been approved to administer the
        programs,  EPA needs to ensure that all parties in the
   In some States there are legal organizations that have direct.
   enforcement authority which by-passes the State AG, e.g.,
   District Attorneys, internal legal counsel, Governor's
   General Counsel.  In these instances, this guidance would
   apply to these other organizations.

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                                                      27


State affected by a pending EPA enforcement action receive^
appropriate advance notification.  In addition, when E?n
negotiates commitments each year with the State to ad.-Jrass
specific significant violators, it is important that ail
the parties affected by these commitments are aware of the
legal enforcement support and associated resources needed"
to accomplish these goals.

As part of the State/EPA Enforcement Agreements process,
the Region should discuss with the State agency their
internal procedures and/or protocols for advance notif icatio.-.
and consultation with the state AO or other legal staff.
The State- agency is responsible for assuring that the State
AG or other legal staff are properly notified and consult-? 1
about planned Federal enforcement actions and/or enforcement
initiatives on an ongoing basis.  States are strongly
encouraged to commit advance notification and consultation
procedures/protocols reached between the State agency anJ
the State AG (or State, legal staff, as appropriate) to
writing.  The Regions should seek to incorporate these
written protocols into the State/EPA Enforcement Agreements.

The Region should do everything possible to work through
the State agency on the issue of communicating with the
State AG or other legal staff on potential EPA enforcement
actions as well as other matters.  However, if the State
agency does not have a workable internal procedure and if
problems persist, the Region, after advance notification
and consultation with the State agency, may make arrangements
for directly communicating with the State AG or other legal
staff.

The Region and State agency should discuss how the outside
legal organizations will be consulted on the commitments the
State is making to EPA on addressing significant violators
each year.  These consultations are intended to clarify the
legal enforcement support needed to accomplish these goals.
Tttis is particularly important  for those State agencies
dependent upon the State AG or  other outside legal organizations
to implement their enforcement  program.

State) agencies are also encouraged to notify these organi-
zations of the anticipated timing of the negotiations each
year with EPA on the Enforcement Agreements, grants, and
related documents.

Regions are encouraged to work  with their  State  agencies  t.i
iiet up a joint meeting at least annually to which  all parties
are invited—the program and  legal staffs  of both  the E?^
Region and the State agency(s),  plus U.S.  Attorney staff
and State AG staff—to review EPA's enforcement  priorities
and recent program guidance.

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                                                              28


     b.  Federal  Facilities

         Federal  facilities may involve a greater or different
         need  for coordination, particularly where the Federal
         facilities  request EPA technical assistance or where EPA
         is  statutorily  required to conduct inspections (e.g.,
         under RCRA).  The advance notification and consultation
         protocols in the State/EPA Enforcement Agreements should
         incorporate any of the types of special arrangements
         necessary for Federal facilities.  The protocols should
         also address how the State will be involved in the review
         of  Federal agency A-106 budget submissions, and include
         plans for a joint annual review of patterns of compliance
         problems at Federal facilities in the State.

     c.  Criminal Enforcement

         Although the Policy Framework does not apply to the
         criminal enforcement program, to improve the coordination
         with States on  criminal investigations and assist the
         States in their criminal enforcement efforts the Regions
         should discuss with States any affirmative plans for
         cross-referrals and cooperative criminal investigations.
         Such discussions should include the Special Agent in
         Charge and appropriate program staff familiar with criminal
         enforcement.

     In  cases where other States or jurisdictions may be directly
and materially affected by the violation, i.e., environmental
or public health impacts, EPA's Regional Offices should attempt
to notify a11 of the States that are interested parties or are
affected by the ..enforcement action through the communication
channels established by the State agreements, working through the
appropriate Regional Office.  This notification process is parti-
cularly  important for hazardous waste cases in which regulatees
often operate across State boundaries.

     Protocols for advance notification must be established with
the understanding that  each party will respect the other's need
for confidentiality and discretion in regard to the information
being shared, wh"ere it  is appropriate.  Continuing problems in
this regard will be cause for exceptions to the basic principle
of advance notification.

     Many of our statutes or regulations already specify pro-
cedures  for advance notification of the State.  The State/Federal
agreements are intended to supplement these minimum requirements.

     2.  Establishment  of a Consultative Process

     Advance notification is only an essential  first step  and
should not be construed as the desired end result  of these

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                                                              29


State/Federal agreements.  The processes established should
be consultative and should be designed to achieve the following:

         a. Inspections

         Advance notice to States through sharing of lists of
         planned Federal inspections should be designed so
         that State and Federal agencies can properly coordinate
         the scheduling of site inspections and facilitate
         joint or multi-media inspections as appropriate.
         This should generally be done for all programs whether
         or not they are delegated, except for investigative
         inspections which would be jeopardized by this process.

         b. Enforcement Actions

         Federal and State officials must be able to Veep one
         another current on the status of enforcement actions
         against noncomplying facilities.  Regularly scheduled
         meetings or conference calls at which active and
         proposed cases and inspections are discussed may
         achieve these purposes.

     3.  Sharing Compliance and Enforcement Information

     Die Region and State should discuss the need for a process
to share, as much as practicable, inspection results, monitoring
reports, evidence, including testimony, where applicable for
Federal and/or State enforcement proceedings.  The Regions
should also establish mechanism* for sharing with the States
copies of reports generated with data submitted by the Regions
and States, including comparative data — other States in the
Region and across Regions.

     4.  Dispute Resolution

     The Region and State should agree in advance on a process
for resolving disputes, especially differences in interpretation
of regulations or program goals as they may affect resolution of
individual instances of noncompliance.  As stated in the policy
on Performance-Based Assistance, the purpose  in  laying out  a
process lay which issues can be  surfaced quickly  up the chain of
command .'In both the Regions and States is to  ensure  that
significant problems receive the prompt attention of managers
capable of solving these problems expeditiously.

     5.  Publicizing Enforcement Activities

     EPA has made commitments to account publicly for  its
complianca and enforcement programs.   It  is EPA's policy  to
publicize all judicial enforcement actions and significant
administrative actions to both  encourage  compliance  and  serve
as a deterrent to noncompliance.

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                                                              3C


     While State philosophies on these matters may v%ry, the
Region and State should discuss opportunities for joint press
releases on enforcement actions and public accounting of'both
State and Federal accomplishments in compliance and enforcement.

     Discussions should address how and when this coordination
would take place.  Regions should consult with the State on any
enforcement related EPA press release or other media event
which affects the State.  To the extent possible, the State
should be given an opportunity to join in the press release or
press conference if it has been involved in the underlying
enforcement action.  Further, EPA generated press releases and
public information reports should acknowledge and give credit
to relevant State actions and accomplishments when appropriate.

     6«  Publicly Reported Performance Data

     Regions should discuss with States mechanisms for ensuring
the accuracy of data used to generate monthly, quarterly and/or
annual reports on the status of State and Federal compliance
and enforcement activities.  Opportunities should be provided
to verify the accuracy of the data with the States prior to
transmittal to headquarters.  Time constraints may be a real
limitation on what can be accomplished, but it is important to
establish appropriate checks and control points if we are to
provide an accurate reflection of our mutual accomplishments.
If there are no data accuracy concerns, these mechanisms may
not be needed.

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                                                            31
 F.   STATE REPORTING
      This  section  reviews  key  reporting  and  recordkeeping
 requirements  for management  data  and public  reporting on
 compliance and  enforcement program accomplishments.  It also
 addresses  re Intel  reporting  considerations such as reporting
 frequency  and quality assurance.

 1 .  Overview

      A strong and  well managed  national  compliance and enforce-
 ment  program needs reliable  performance  information on which
 to judge success and identify  areas needing  management attention.
 The following outlines the reporting and recordkeepin«j framework
 for monitoring  enforcement and  compliance program performance.
 The information will be used by the Agency's chief executives
 to manage  EPA operations,  and  to  convey  our  combined Federal
 an
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                                                             32


     In addition to these five reporting requirements,  the
Agency is introducing two new areas of recordXeeping require-
ments to support general management oversight of the national
enforcement effort:  (1) success in neeting new management
milestones for defining timely and appropriate enforcement
action; and (2) the level of penalties assessed and collected.
Records should be maintained by States and Regions for review
during the course of the year and to support an assessment at
the end of the year on how well the agencies have done and
how appropriate performance expectations might best be defined.

2.  Reported Measures of Performance

     Programs and Regions should ensure the first five measures
of performance are required to be reported on a quarterly
basis:

  a. Compliance levels can be measured according to several
     different approaches.  National program guidance should
     describe the approach each has selected as most appropriate
     (jiven the characteristics of its program and regulated
     community.  Each program should, at a minimum, report
     Ifull physical compliance rates and also distinguish
     where relevant in reporting compliance levels between
     final "physical" compliance (compliance with emissions
     limits) and "paper" compliance (violation of emissions
     limits but following a compliances schedule).

  b. Progress in Returning Significant Violations to Compliance:
     E
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                                                        33


  c*  Inspections are conducted  for many purposes, including
      confirmation of compliance levels.  Reporting on
      inspections has been a  long standing practice.  Regions
      and States should be asked to provide specific quarterly
      commitments and reporting on the number of inspections
      to be conducted.  Where programs have broken Jown inspection
      reporting into different classes to reflect the different
      purposes, for example,  sampling inspections, "walk-through,"
      or records check inspections, this reporting is expected
      to continue.  Each program, as it draws up its guidance,
      should be as clear and  specific as possible in defining
      the different categories of inspection activity to be
      reported.

  d1.  Formal administrative enforcement actions will be reported
      as the critical indicator of the level of administrative
      enforcement activity being carried on by environmental
      enforcement agencies.   It is not our intention to provide
      a comprehensive reporting of all actions, both informal
      and formal, being taken to secure compliance.  At the
      same time, it is recognized that there are many different
      informal techniques used which succeed in getting sources
      to return to compliance.  What is sought here is a
      telling indicator which will keep reporting as clear
      cut and unburdensome as possible*

      In preparing its guidance each program should list the
      specific actions to be  included under this reporting
     area.  Each program should be guided by the characteristics
     of a formal administrative action set forth in Section
     B on "Timely and Appropriate Enforcement Action."  For
     programs without formal administrative authority, such
      as Drinking Water, other surrogate measures should be
     defined.

  e. Judicial Actions is an  area where there has been a long
     standing practice of Federal reporting with no corresponding
     State, data.  Commensurate with current reporting practices
     within EPA, the number  of State civil referrals and
      filed ces«,a "ill now be reported.  We will also now
      include criminal judicial actions.  These should be
      reported as a separate  class and be counted only after
      they are filed in court in recognition of their sensitive
      nature.

3.  Recordkeeping for Performance Measurement

     There are two performance areas for which States and
Regions will be asked to retain accessible records and
summary datat (1) timeliness and appropriateness of response
to violations; and (2) penalties.  These categories of
information will be considered  for future development as
measures for possible inclusion in the Agency's  management
and reporting systems.

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                                                           34


     a.  Timeliness and appropriateness of State and Federal
         response to violations is the principal subject of
         new guidance being developed by each program.
         Administering agencies need to ensure that adequate
         tracking systems are in place to assess the timeliness
         and appropriateness of actions on an ongoing basis.
         Implementation of timely and appropriate criteria
         should also be closely monitored to ensure that sources
         subject to the guidance are properly identified and
         made part of the covered universe.  The Program offices,
         in conduction with the Regions, are expected to report
         periodically on both EPA's and the States' performance
         in meeting the timely and appropriate criteria and to
         periodically reassess the criteria.  As programs gain
         experience, they should consider whether "timeliness"
         should be measured quantitatively as a performance
         accountability measure or qualitatively through program
         audits.

     b.  Penalty programs are essential to the effective working
         of an environmental enforcement program.  Sufficient
         documentation needs to be kept to enable the Region
         to evaluate whether the State obtained a penalty
         where appropriate, the State's rationale for the penalty,
         and, where appropriate, a calculation of any economic  "
         benefit of noncompliance gained by the violator.
         Records need to be kept of the number and amount of
         penalties issued by State and Federal program offices
         regularly assessing penalties, both those assessed and
         collected.  These records and summary data should be
         available for review at the time of annual program
         audits and, in the event of information requests by
         external groups, on the extent of penalties assessed
         at any point in time.  Each program office in preparing
         its guidance should specifically address the need  for
         recordkeeping on penalties.
         *
4.  Future Improvements in Enforcement Management Information
    Systems   ^

     EPA is working to fill the gaps in its current enforcement
management information and is developing a guide to State  ami
national program managers  in setting priorities  for future
design and development work on these systems.

     In f.he near term, EPA is exploring ways  to  use the  current
management systems to better reinforce  timely  and  appropriate
enforcement response and follow-through on  enforcement actions.
EPA Program Offices, in consultation with  Regions  and States,
should develop ways to better measure and  report on timeliness
of enfor-ement actions.  The focus  for  follow-through will b«
on tracKing compliance with EPA consent decrees  and administrative
orders.  State follow-through will  be part of general regional
oversight.

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                                                               35


     Other potential enforcement management indicators,  such as
the deterrence effects of enforcement, the quality of enforcene.it
actions, an extended compliance picture, and overall environment!
results of enforcement actions, are longer term issues to be
considered After the near-term issues are addressed.

5.  Reporting Considerations

     There are three areas for special consideration by the
programs as they put together their guidance on reporting
requirements:

     a.  Quality;assurance and quality control of reported data
         13 essential as these are the critical indicators of
         program performance which will be used in making program
         management decisions of priority, resource levels, and
         direction.  This information must be as reliable as
         possible.  Quality assurance and quality control of data
         encompasses three types of activities including:  (1)
         setting up initial reporting procedures; (2) building in
         information review and confirmation loops; and (3)
         conducting routine audits and reviews of reports and
         reporting systems.  Each program in preparing its guidance
         should describe the safeguards it uses in its reporting,
         review and confirmation procedures, and describe the   „
         audit protocols it will use to ensure the reliability of
         enforcement and compliance data.

     b.  The frequency of formal reporting should be done on a
         quarterly basis unless there is a specific performance
         problem in a State or compelling program need for more
         frequent (e.g., monthly) reporting, which may be necessary
         on an interim basis due either to their newness or their
         importance.  A quarterly reporting frequency is designed
         for oversight purposes.  It is not designed to provide
         for "real time" information, that is, instant access to
         information on the status of a case.  However, it is
         anticipated that formal reporting will be supplemented
         with more frequent informal communications, such as
         monthly conference calls, between the Regions and states
         on the progress of key cases of concern.

     c.  sM«ral facility compliance data should be  reported as
         Jpt of each program1 s reporting measures and commitments.
         Tfi» Regions may also request States to provide additional
         information on Federal facilities compliance status,  if
         needed, and if mutual agreement  can be  reached,  as part of
         the Enforcement Agreements process.

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  APPENDIX A;  ANNUAL PRIORITIES AND PROGRAM GUIDANC ES
     Annual Priorities for Implementing Agreements
FY 1985:  Given the enormity of the task in the first year,
          3 priorities were established:

          * defining expectations for timely and appropriate
            enforcement action;
          ' establishing protocols for advance notification
           • and consultation; and
          '-reporting State data.

FY 1986;  Building on the FY 1985 process, three areas were
          emphasized:

          * expanding the scope of the agreements process to
            cover ail delegable programs;
          * adaptitw; national guidance to State-specific
            circumstances; and
          * ensuring a constructive process for reaching
            agreement.

FY 1987;  Continuing to refine the approaches and working   •
          relationships with the States, three areas are
          to be emphasized:

          " improving the implementation and monitoring of
            timely and appropriate enforcement response with
            particular emphasis on improving the use of
            penalty authorities;

          * improving the involvement of State Attorneys
            General (or other appropriate legal staff) in
            the agreements process; and

          * implementing the revised Federal Facilities
            Compliance Strategy.

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                                                                                            APPENDIX  A
USTING OH IHAMTO) NATIONAL GUIDANCE AFFECriNG STAITi/EPA ENFORCEMENT AGREEMENTS I>*JCESS
                                                                                    Revise*!:  0/14/86
rtjos-cutting National Guidance;  * Revised  Policy Framework for State/Federal Enfircetiwnt Agreements—reissued 8/O6
                                 * Agency-wide Policy on Perfooninoe-flased Assistance—issued Ijy Admin. S/31/85
      Underlining represents guidance still  to be issued.
later - NPDES
'National Guidance
:or Oversight of
mOKS Programs
•V 1987."
 issued 4/13/86)

inal Regulation-
efinition of
nstances of non-
»iy>liance reported
n QNCR. (8/26/85)

 NCR Guidance
 issue* 1 3/')6)

 aspect ion Strategy
 r*l Guidance
 issue. 1 4/115)
 evised EMS
             Manage-
 ent System)
 issued 3/86)

 ?DES Federal
 malty Policy
 issue I 2/11/86)
  -.rate-jy for
  SSUailCi; Of
  inor |M»r*nii -j
        2/116)
•-FY 8S InltUtivee on
 OcMplianoe Mrmluring fc
 EnfbroeMant Oversight."
 6/29/84

•"Final Guidance on WS
 Grant Program laple-
 menbation"
 (3/20/84)

•Regs - NIPOMR. 40CFR
 Part 141 and 142.

'Of annual Reporting
 Requirements - "Guidance
 for PWSS Program Report-
 ing Requirements"
 7/9/84

•"FY's 85-86 Strategy for
 Eliminating Persistent
 Violations at Oamunity
 Hater Systems."  Memo
 from Paul Baltay 3/18/85.

•Guidance for the Develop-
 nent of FY 86 PMSS State
 Program Plans and
 Enf«»ro»iii»!ut Agreements"
 (issue.1 7/3/85)
                                Air
                            RCRA
•"Guidance on Timely
 & Appropriate"...
 for Significant Air
 Violators." 6/28/84

•"Timely and Approp.
 Enforcement Res|ionse
 Guidance" 4/11/86

'National Air Audit
 System Guidelines
 for FY 1986.
 (issued 2/86)

•"Guiilance on Fed-
 eral I y-Reportable
 Violations." 4/U/86

•inspection Frequency
 Guidance (Issued
 3/19/85 and
 reissued 6/11/86)

•"Final Technical
 Guidance on Review
 and Use of E*ce«.i
 Bnission Reports"
 Memo from Bl Reich
 to Air Branch Chiefs
 —Guidance For
 Regional Offices
 (issue.1 10/5/04)'
                     FIFRA
                   Fed. Fac.
•"Interim National
 Criteria for a
 Quality Hazardous'
 Haste Management
 Program umier
 RCRA."
 (reissued 6/86)

•"RCRA Penalty
 Policy" 5/8/84

•FY 1987 "RCRA
 Imjplementat ion
 Plan"
 (reissued 5/19/86)

•"RCRA Briforoement
 Response Policy"
 (issued 12/21/84)
 (to be revised by
 12/66)

•"Compliance and
 Enforcement
 Program Descrip-
 tions in Final
 Author izat ion
 Application and
 State Enforoanent
 Strategies," man?
 frcw Lee ItKJnws l.o
 R%s.
 (issue.1 6/12/fM)
'Final FY 87
 .Enforcement &
 Certification
 Grant Guidance
 (issue 1 4/13/86)

•interpretat i v*»
 Rule - FIFRA
 State Primacy
 Enforce>neiit
 Respons ibi I i t ies
 4O FR Part 171
 1/5/83.
•FF Oam-
 plianoe
 Strategy
 (to be
 issued
 10/86)
•FF Proy.
 Manual
 for Inple-
 men! ioj
 CERCLA
 RespTnai-
 bilities
 of Federal
 Agencies
 (.Iraft/
 B5;  to  be
 issued  in
                    rization)

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Page 2
NPDES
DRINKING WVTER
                                                       AIR
                                                      RCRA
                                                                                                 FIFRA
                       'Guidance on FY 86 UIC
                       eftforoamnt Agreements"
                       IGPQ §40 (issueI 6/2r'
)
                       •"FY 07 SPMS fc OkAS
                       Targets  for the PW5S
                       Program" (SMC definition)
                       (Issued  7/10/86)
                       'Guidance on FY 87 UIC
                       Enforcement Agreements
                       (Draft  iaauerl 7/1/86)

                       *Gui«lance on FY 87 IVSS
                       Biforcement Agretancnts
                       (issiieil 8/0/36)

                       "Guidvice on Use of
                       AO Authority under
                       SOWA AmenAnenta
                       (to be  issued pending
                        legislation)
                           ""Technical
                           on the Review and
                           use of Goal Sanpling
                           and Analysis  Data:
                           EPA-340/1-85-010.
                           10/30/85 Guidance
                           for Regional  Offices
"Oorapliance
 toring & Enforce-
 ment lay - form for
 recording monthly
 compliance «lat>»
 from States f»
 Regions.     '

'Technical i*iforoe«nent
 Guidance on dfound
 Water Hani tor ing
 (Interim Final  Aug.
 1985)
                                                        iance order
                                                  Guidance for Ground
                                                  Mater Monitoring
                                                  (issued  Aug. 85)

                                                  'Loss  of  Interim
                                                  Status Guidance
                                                  (issued  Aug. 85)

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GM-42

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       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                     WASHINGTON, D.C. 20460
                           JUL24
                                                    OFF1CI Of CNPORCIMENT
                                                      AND COMPLIANCE
                                                       MONITORING
MEMORANDUM
SUBJECT:  Form of Settlement  of  Civil Judicial  Cases

FROM:     Courtney M. Price^J^xJZl Ax~t^-*-
          Assistant Administrator  for Enforcement
            and Compliance Monitoring (LE-133)

TO:       Regional Counsels
          Associate Enforcement  Counsels

     This memorandum is  intended to confirm the Agency's
general policy regarding the  form  of settlement of civil
judicial enforcement cases.   The need for a statement of Agency
policy on the form of settlement recently arose because a case
had been settled without a consent decree, and  the defendant
later refused to abide by the terms of the informal settlement.
In order to make sure that the problem does not recur, OECM is
reducing this policy to writing.

     Agency policy is that after a complaint  is filed, all civil
judicial cases should be settled only (1) by  consent decree, or
(2) where appropriate, by a stipulation of dismissal.  This
second approach should be utilized only when  the settlement
requires payment of a penalty, and the penalty  has been paid in
tuil at the time of settlement.  In such cases, the continued
jurisdiction provided by a consent decree is  not needed or
required.  This form of settlement policy is  the established
practice of the Department of Justice, and all  EPA enforcement
attorneys should continue to abide by it.

     Extraordinary and compelling  circumstances may arise when
EPA, in consultation with DOJ, might wish to  settle a case with-
out the use of a consent decree  or a stipulation of dismissal.
If such a situation arises, then the involved Agency attorneys
should obtain my advance concurrence before representing to
the defendants any willingness to  settle a case without either
a consent decree or stipulation  of dismissal.

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                              -2-
     Regardless of which form of settlement is used, a copy of
the settlement documents should be provided to the Docket Control
Office following my concurrence in the settlement so that the
appropriate data can be entered.
cc:  F, Henry Habicht, II

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GM-43

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     I UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
     f                WASHINGTON. D.C. 20460
                          SEP J6
                                                         OFFICE OF
                                                       ENFORCEMENT AND
                                                     COMPLIANCE MONITORING

MEMORANDUM

SUBJECT:  Enforcement Document Release Guidelines

FROM:     Courtney M. Price v^^o*-/-^ ( **\.r***—^.
          Assistant Administrator  for Enforcement
            and Compliance Monitoring

TO:       Assistant Administrators
          General Counsel
          Inspector General
          Associate Administrators
          Regional Administrators
          Regional Counsels


     Attached are the Agency's new  "Enforcement Document Release
Guidelines".  These Guidelines will  provide Agency-wide consis-
tency in the release of enforcement  related documents.  At  the
same time, they are designed to release as much information as
possible to the public while still satisfying  the Agency's
legal obligations and maintaining  its enforcement program.

     Accordingly, the Guidelines will assist program personnel
and enforcement attorneys in their decisions to withhold or
release enforcement documents requested by the public.  As
indicated in the document, most of these decisions will be  made
in response to FOIA requests.  Nevertheless, it is important to
emphasize that all decisions for the release of any enforcement
document should be made on a case by case basis.  If there  are
any questions, the case attorney, the Regional Counsel, or  an
OECM attorney should be consulted.

     Questions regarding these Guidelines, should be addressed
to Bill Quinby of my staff.  He may  be reached at FTS  475-8781.

cc:  Associate Enforcement Counsels
     Program Enforcement Office Directors

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UNITED STATES ENVIRONMENTAL PROTECTION AGENCY




   ENFORCEMENT DOCUMENT RELEASE GUIDELINES

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             Enforcement Document Release Guidelines

                        Table of Contents

                                                   Page
I.   Purpose                                         1
II.  Goal                                            2
III. Scope                                           2
IV.  General Principles                              4
V.   Releasing General Enforcement Documents         7
     A.  Enforcement Policy                  .        7
     B.  Enforcement Strategic Planning              9
     C.  Management/Administrative                  10
     D.  Deliberative Support Documents             11
     E.  Reference Files                            12
     F..  Documents Containing Attorney-Client
         Communications                             12

VI.  Releasing Case-Specific Documents              13
     A.  Case Files                                 13
         In General                                 13
         Attorney Work Product/Attorney-Client      16
         Settlement Documents                       18
         Other Documents                            19
     B.  Case Status Reports                        21
VII. Conclusion                                     22
     APPENDIX                                       24

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 I.   Purpose	

     The purpose of  this memorandum is to provide interpretive
 guidelines  for releasing EPA enforcement related documents to
 the public  in situations when the law provides discretion.  The
 Agency seeks to enhance national consistency in the release of
 Agency documents by  providing these guidelines to enforcement
 attorneys and program personnel.  Such consistency will promote
 fairness to all public interests and ensure that EPA meets its
 legal responsibilities while protecting the effectiveness of the
 enforcement program.
     This memorandum is intended to provide general guidelines.
The decision to release a particular document may vary, depending
 on the type of document, function of the document in the Agency
process, and the status of that process.  The memorandum seeks
 to articulate the common principles which can be applied to
situations in which release decisions must be made.  Each program
office can tailor these guidelines to meet its individual statu-
tory and programmatic needs.  If the law provides EPA with the
discretion to release documents, these guidelines will assist
Agency personnel in their case by case determinations.
     Agency personnel should always contact the appropriate case
attorney before releasing documents relating to enforcement
activities.   Notifying the appropriate enforcement attorney is
important because of the possible impact on potential or pending
enforcement actions and the changing case law related to document
release.   All decisions for the release of any enforcement document

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                               -2-

should be made on a case by case basis, taking into account the

guidelines set out in this memorandum.



II.  Goal

     The EPA recognizes that an effective enforcement program is

essential to the Agency's overall mission of protecting the

environment.  EPA will release as much information as possible to
                     • tf
the public consistent with satisfying legal obligations while

still maintaining its enforcement program.  The Agency will

satisfy all statutory requirements to release or withhold docu-

ments.  If the Agency has discretion to release documents, it

should generally release the documents, or portions thereof,

unless such release will interfere with the effectiveness of

its enforcement effort.-



Ill* Scope

     The guidelines apply to any type of enforcement document,

and include written information, material recorded on magnetic

tape, material contained in a computer, video tape, film, etc.

These guidelines apply whether or not there has been a specific

request for the document.

     Th«> document must be an Agency record.  A document is

considered an EPA record if it has some or all of the following

characteristics: it was produced in the context of Agency work;

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                             -3-
its creation or physical possession arose within established
Agency procedures, and/or it was distributed to others, including
the file.  Generally, if a document is within the custody and the
control of the Agency, it is considered an Agency record.  Personal
notes, message slips, appointment calendars, etc., of an Agency
staff member may not be an EPA record if they were not circulated
to or used by other EPA employees, were unrelated or only partially
related to EPA activities, or were used only to jog the memory of
the author.  Bureau of National^Affairs v. U.S Department of
Justice 742 F.2d 1484 (D.C. Cir. 1984).
     Although the focus of the memorandum is on the release of
documents, the import of this guidance pertains to information
contained within documents.  In most cases, after EPA determines
that it will withhold certain information, the Agency will make
reasonable efforts to segregate out those portions of documents
which can be released.  In addition, the principles in the
guidance are applicable to the release of information during
oral communications with persons outside the Agency.
     This guidance does not attempt to address in any detail how
or when EPA will release documents requested under the Federal
Rules of Procedure during civil and criminal litigation.  The
release of documents pursuant to discovery proceedings during
litigation will depend on the issues being litigated and the
strategy employed.  Any request for documents outside of estab-
lished discovery procedures that relate to potential or pending
civil and criminal litigation should be brought to the attention
of the case attorney.

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                               -4-
     T.iis guidance also does not apply to requests for information
received from Congressional committees or subcommittees.  For
guidance on handling such requests, Agency personnel should con-
sult previously issued policy statements which are specific to
Congressional inquiries, Memoranda of Understanding which EPA
has entered into with several committees, and OECM's Congressional
Liaison Officer in coordination with the office of External Affairs
and, when appropriate, with the Office of General Counsel.

IV.  General Principles
     There are a number of statutes, regulations and rules of pro-
cedure which place constraints on the Agency's discretion in
releasing enforcement documents to the public.  These statutes
include:  the Administrative Procedure Act, (APA); the Freedom
of Information Act (FOIA) which is included in the APA, and
requires publication and release of certain Agency documents;
the Privacy Act which prohibits release of certain information
pertaining to individuals; and various environmental statutes
which prohibit release of trade secrets and mandate release of
certain pollution data.  Other rules of procedure, such as Rule 6
of the Federal Rules of Criminal Procedure, require safeguarding
grand jury material.   The EPA has promulgated regulations which
implement FOIA and state Agency policy on how it will use its
discretion to release information in certain cases.  These
statutes and regulations are described more fully in the Appendix
(page 24).

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                                -5-
      Congress  has  required  that agencies  release all requested
 records unless FOIA provides  a  specific exemption authorizing
 the  withholding  of those  records.  This guidance is based in large
 part on whether  specific  documents fall within one of the exemp-
 tions  from mandatory  disclosure.  If a document fits within
 one  or more of the exemptions that are discretionary under EPA's
 regulations (exemptions t>(2), b(5) and b(7)), the Agency's
 decision  to release a document  should be  determined on a case
 by case basis.   The EPA should  consider releasing the document
 if no  important  purpose would be served by withholding it.
     Generally/  once  EPA  releases a document/ it may not later
 withhold  the document unless  the Agency can show: 1) that it was
 disclosed under  explicitly  limited and controlled conditions, and
 2) that EPA preserved the rationale for the privilege established
 in the exemption.  An unauthorized leak of a document does not
 necessarily waive an EPA privilege.
     On occasion/ a party already engaged in an administrative
 enforcement proceeding or litigation with the Agency may use
 FOIA to enhance/ replace/ or otherwise modify the discovery
 rules.  These  rules are traditionally available under the
 Federal Rules  of Civil Procedure, Federal Rules of Criminal
 Procedure, discovery rules  of other Federal courts and normal
Agency discovery procedures.  Whether or  not there is an estab-
 lished administrative discovery procedure (e.g., the consoli-
 dated  rules of practice found in 40 C.F.R. Sections 22.01 et
 seq.)  the Agency may consider withholding documents where a
privilege exists to withhold the document under a FOIA exemption.

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                               -6-

     For example, EPA is able to withhold investigatory records

compiled for law enforcement purposes the release of which would

generally interfere with a prospective or pending enforcement

proceeding under exemption 7(A) of FOIA.  Investigatory records

(files) were defined originally by Congress as "related to enforce-

ment of all kinds of laws, labor and securities laws as well as

criminal laws.  This would include files prepared in connection

with related Government litigation and adjudicative proceedings."

H.R. Rep. No. 1497, 89th Cong., 2d Sess. 11 (1966).  Expressed

another way, the information must be compiled for a demonstrated

law enforcement purpose within the Agency's enforcement authority,

or gathered in the good faith belief that the prospective defendant

might violate or has violated federal law.  This is in contrast

to information gathered for routine regulatory purposes or from

customary compliance monitoring.  However, an evaluation is still

necessary to determine whether the release of a document will

interfere with an investigation.

     Exemption 7 of FOIA contains five additional withholding

privileges for investigatory records which EPA will less fre-

quently encounter in an administrative, civil or criminal

enforcement context.  They are documents whose release would

result in at least one of the following five consequences:

          7(B)  deprive a person of a right to a fair
                trial or an impartial adjudication,

          7(C)  constitute an unwarranted invasion of
                personal privacy,

          7(D)  disclose the identity of a confidential
                source,

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           7(E)   disclose investigative techniques  and
                 procedures,

           7(F)   endanger the  life  or physical  safety of
                 law enforcement  personnel.

      EPA will not  provide any person with exempt documents  the

 release  of which would  harm a case in litigation.   Nevertheless,

 the  Agency must  respond to any FOIA request  on a case by case

 basis.   Aqency personnel, including the  appropriate attorney,

 should first determine  whether an  exemption  applies.  If an

 exemption  does apply, the Agency may withhold  the  document, or

 at its discretion,  release it to the requesting party.  If an
                     •
 exemption  does not  apply,  EPA must  release the document.  Under

 FOIA, a  party's  rights  are neither  enhanced  nor diminished by

 his  or her  status as a  private litigant.  NLRB v.  Robbins Tire

 and  Rubber  Co. 437  US 214  (1978).

     Various policy  memoranda  explain  the need to  segregate and

 secure those documents  related to  criminal investigations and

 enforcement activity (e.g., a  Memorandum from the  Assistant

 Administrator dated  January 7, 1985,  entitled "Functions and

 General  Operating Procedures  for the  Criminal Enforcement

 Program").  EPA  personnel  should follow  such guidance to prevent

 the  release of documents  related to  criminal proceedings.  This

 Document Release guidance  is  consistent with existing procedures

 and, as  a general matter,  is  applicable  to documents related

 both to  criminal and civil enforcement activity.


V.   Releasing General  Enforcement  Documents	

     A.  Enforcement Policy Document

     These documents generally instruct Agency staff on how EPA

will conduct its enforcement  activities.  Examples include a

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                               -8-
Memorandum from the Administrator dated September 20, 1982, on
enforcement action against stationary air sources which will
not be in compliance by December 31, 1982, and a Memorandum from
the Assistant Administrator for Air, Noise and Radiation dated
September 15, 1982, on issuing notices of violation under the
Clean Air Act.
     EPA will release to the public those documents containing
final enforcement policy.  Such documents are signed by at least
a Divison Director or equivalent.  This policy is consistent
with the Agency's objective of informing the public about how it
conducts business.
     Even if documents contain predecisional or deliberative
information, EPA will not necessarily withhold such documents or
portions of them under FOIA exemption 5.  The Agency will withhold
those_documents only if an important purpose would be served by so
doing.  An important purpose for withholding might be found where
release would be likely in the future to inhibit honest and frank
communications necessary to effective policy making or might
inaccurately reflect or prematurely reveal the views of the Agency.
Such predecisional documents include draft copies which are often
circulated within the Agency for review and comment, documents
which discuss recommendations and options for the establishment
of enforcement policy, and documents which transmit them if such
documents reveal content.  These documents play an integral part
in development of final enforcement policy.
     A waiver of this deliberative process privilege can occur,
as in other contexts, if EPA distributes a document outside the

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                               -9-
 Federal government.  Nevertheless,  if the Agency can show that
 the  disclosure was  limited and controlled, waiver may not apply.
 For  example,  disclosure  to a state  agency may result in waiver
 unless the  responsible office has determined that state comment
 is important  to the Agency decision-making process and has taken
 steps to ensure that the state will keep the distributed draft
 confidential  (e.g., transmittal of  the draft with a cover letter
 explaining  the need for  limited distribution, numbering the docu-
 ments sequentially, and  requesting  that all copies be returned to
 EPA  after s»tate comment).
     B.  Enforcement Strategic Planning
     These  documents relate to enforcement initiatives and
 strategies  which the Agency develops to ensure that sources
 comply with environmental statutes and regulations.  An example
 is a guidance Memorandum from the Assistant Administrator for
 Solid Waste and Emergency Response dated June 18, 1982, which
 broadly describes fiscal year 1983 RCRA permit and inspection
 numbers.   Agency personnel should release documents which pertain
 to a broad  class of sources, but withhold documents which are so
 specific that an individual source could use the information to
 circumvent  EPA enforcement activity.
     For example,  final Agency documents detailing enforcement
 expenditures for compliance inspections during a fiscal year are
 documents which EPA should release to the public.  On the other
hand, EPA should consider withholding documents, or portions
 thereof,  specifically detailing the projected inspection of
enforcement targets in various metropolitan areas.  These

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                               -10-
documents are primarily intended for internal use and their re-
lease could enable a source to circumvent environmental statutes
and regulations.  This rationale will likely be available only in
the narrow context of detailed regional plans to implement a
specific enforcement effort.  If the document is not an investi-
gative record associated with a specific enforcement case, EPA
may be able to apply exemption 2 of FOIA.  This exemption relates
                      ''i*
to documents involved with  internal agency personnel rules and
practices.  The case law has extended the exemption to certain
predominantly internal documents, the release of which would
significantly risk circumvention of agency regulations or statutes.
Crocker v. Bureau of Alcohol, Tobacco and Firearms, 670 F.2d 1051,
1074 (D.C. Cir. 1981).  Of  course, a regional plan that is in the
form of A recommendation rather than a final agency policy could
also be withheld under exemption 5's deliberative process
privilege*.
     C.  Management/Administrative
     These documents relate to the day-to-day operation and
management of the Agency.   An example is a Memorandum from the
Associate Administrator and General Counsel dated November 28,
1983, which explains the requirement for clearance of significant
enforcement pleadings.
     Although the Agency has discretion to withhold internal
personnel rules and routine management documents under FOIA
exemption 2, EPA will generally release these documents unless
their release would interfere with Agency operations.  The

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                                -11-
 release  of  most  final  documents related  to  routine  budget matters
 and  internal  Agency management  will  not  interfere with  overall
 Agency activities.   If the  program office responsible for such
 operations  considers that a release  would interfere with Agency
 operations, it may  withhold the documents under exemption 2 of
 FOIA.  Instances  of interference are rare,  and consultation with
 the  office  of General  Counsel or Regional Counsel is recommended
 in such  cases.
     EPA can  also withhold  documents containing preliminary
 enforcement budget  information  if their  release would interfere
 with the frank exchange of  ideas prior to final budget  decisions.
 These documents may be exempted from disclosure under exemption 5.
     D.   Deliberative  Support Documents
     These documents accompany  other enforcement documents.' They
 include  certain transmittal  memos, memos containing recommendations,
 evaluation of enforcement options, suggestions, analyses, etc.,
 related  to general  enforcement  matters.
     In  most  cases,  EPA will use its discretion to  release doc-
 uments which  are  predecisional  intra- and interagency documents,
 unless such production would cause harm  to  the enforcement process.
 The rationale for retention  includes the protection of  open and
 frank discussion  of  enforcement options.  The Agency can withhold
 the deliberative  portions of such requested documents under
exemption 5 of
I/ "Guidance for Assertion of Deliberative Process Privilege"
Issued by the Administrator, October 3,  1984; and memorandum
from acting General Counsel, same subject, issued April  22, 1985..30

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                               -12-
     15.  Reference Files
     These are materials that enforcement personnel use for
assistance in performing general Agency business.  They include
technical files, sample forms, etc.  Generally, EPA will make
reference documents available to the public with the exception
of materials which EPA employees own and materials published by
non-federal organizations which already are readily available
from other sources.   (See 40 C.F.R. §2.100{b) for definition of
agency record.)
     F.  Documents Containing Attorney-Client Communications
     These documents which are not necessarily case specific
contain communications made in confidence between Agency staff
and attorneys for the purpose of obtaining or providing legal
advice related to EPA matters in which the "client" is authorized
to act.
     EPA legal personnel will not disclose, without the client's
consent, communications made in confidence to or from an Agency
attorney for the purpose of obtaining or providing legal advice
related to an EPA matter.  EPA may withhold documents containing
such information, if drafted by the client or the attorney.  Also
in order to protect the inadvertent disclosure of the client's
confidential factual information it may withhold documents whether
or not the communication is made in the context of litigation.
The documents may be exempted from disclosure under the attorney-
client privilege included in exemption 5.  Mead Data Control v.
U.S.  Department of the Air Force, 566 F.2d 242 (D.C. Cir. 1971).

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                               -13-
     There are  instances when the Agency may choose not to claim
 this privilege  and  therefore will release documents containing
 these communications.  For example, EPA will release the docu-
 ments if the program personnel do not consider the factual
 information confidential either at the time it is communicated
 or subsequently thereto.  If EPA wants to withhold documents,
 it should be prepared to demonstrate that the program client
 expected confidentiality.  Personnel making intra-regional com-
 munications between a program office and a Regional Counsel's
 office should be sensitive to the fact that the communications
 may be confidential and not available for disclosure at a later
 date.  For example, the document may be stamped "confidential,
 not for release under FOIA" thus limiting distribution only to
 the EPA personnel who need to know and are authorized to act for
 EPA on the particular matter.  EPA should release documents in
 which the attorney  is only stating general Agency policy or if
 the advice is later adopted as Agency policy.  EPA should consider
 release of documents, or portions thereof, containing attorney-
 client communications if the release would not harm future frank
 exchanges between Agency staff and its attorneys.

VI.  Releasing Case-Specific Documents
     A.   Case Files
                            In General
     Documents in case files contain legal and/or technical
 information related to a specific case or party.  Case files are
 frequently located in a number of offices, including offices

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                               -14-
that conduct field investigations, perform technical evaluations,
or provide legal assistance.
     Case file documents accumulate at these separate offices
during different stages in the enforcement process (e.g., while
EPA is investigating a party, while EPA is initiating an admini-
strative enforcement action, or after EPA issues a formal enforce-
ment document).  Whether EPA will release the information may
                     ''>,f
depend on the stage of the enforcement activity.  Release is
genercilly appropriate when the party is in compliance with the
law or the compliance status is unknown.  Documents containing
technical information related to the party's routine compliance
monitoring or tracking are available to the public or to poten-
tially responsible parties in CERCLA litigation.
     Once EPA identifies a potential violation, it may withhold
investigatory documents in order to prevent interference with
any potential or pending enforcement proceeding.  In such cases,
EPA should withhold the documents to prevent harm to any potential
enforcement action which may occur by the premature release of
evidence; or information.  If EPA wants to withhold the documents,
it has i.he burden of demonstrating the potential harm to an
enforcement proceeding.  This decision should be made on a case
by case basis.   EPA would be able to withhold these requested
documents under exemption 7(A) of FOIA.  NLRB v. Robbins Tire and
Rubber Co., 437 U.S. 214 (1978).
     In nany cases, the Agency will use its discretion and release
investigatory data.  This policy (with the exception of criminal
investigations) serves the useful purposes of helping a source

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                               -15-
 identify  the environmental problem, allowing the source to comment
 on  the  accuracy  of  EPA  factual findings, and informing the public
 of  the  extent of the environmental problem.
      In other instances  the Agency will consider withholding of
 investigatory documents.  The .further the Agency proceeds in any
 enforcement action  or the more data the Agency interprets, the
 more  reluctant it will be to use its discretion and release
 documents without a mutual document exchange with the source.
 The Agency will also be  reluctant to release investigatory
 findings where adequate  quality assurance checks have not been
 made, and the release of the findings could interfere with the
 enforcement activity.  Finally, the necessity to protect confi-
 dential information, and the greater need to maintain secrecy in
 criminal investigations  provide valid reasons for the Agency to
 retain  documents.   Agency personnel should always discuss
 investigatory documents which relate to enforcement activity
 with  the case attorney,  the Regional Counsel or an OECM attorney
 prior to the release decision.
     Once an enforcement action is concluded, EPA will be more
willing to release  investigatory documents because their release
 is less likely to interfere with an enforcement proceeding.
Nevertheless, if their disclosure would interfere with other
 similar or related  proceedings, reveal the identify of informers,
or if other exemption 7 privileges still apply, EPA may withhold
 the documents.
     Case files may contain information in documents which a com-
pany considers confidential business information.  As discussed

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                               -16-

in the Appendix, part D, EPA is statutorily prohibited from

releasing confidential business information.

       Attorney Work Product And Attorney-Client Materials

     Other types of documents which EPA may withhold are those

prepared by, for, or at the request of an attorney in anticipa-

tion of litigation.  The courts allow EPA to withhold such

attorney work product documents in order to create a zone of

privacy around the attorney to protect the adversarial process.

Hickman v. Taylor, 329 U.S. 495 (1947).  While EPA may withhold

such documents under exemption 5, it may make a discretionary

release of the documents.  In such a case, the Agency staff,

including the attorney, would determine on a case by case basis

that the release would not result in harm to the attorney's

ability to operate freely in litigation.  In order for EPA to

withhold a document under the attorney work product privilege,

the document must have been prepared at the time when there

was some articulable violation.  Litigation need not have been

pending; however, there should be some prospect of litigation,

either administrative or judicial.

     Specific types of documents which may be protectable as

attorney work products and which EPA may choose not to release

are:

          0   Investigative reports prepared by field
              investigators under the general direction
              of attorneys to verify further a viola-
              tion, and which would be relied upon by a
              reviewing attorney;

          0   Documents prepared at the request of
              technical staff working with attorneys
              in anticipation of, or preparing for, an
              administrative hearing or litigation;

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                               -17-

           0   Reports prepared by consultants under
              direction of attorneys to assist attorneys
              in preparation  for litigation;

           0   Reports from experts prepared under direction
              of attorneys which organize and summarize the
              evidence for a  particular enforcement action;

           0   Attorney-prepared factual synopses of, and
              opinions on, a  particular case;

           0   Attorney notes  summarizing the facts and
              observations on the evidence;

           0   Attorney notes  of conversations with program
              personnel, company representatives, etc.; and,

           0   Witness interviews conducted by attorneys or
              employees working on their behalf.

     Below are examples of documents which may not be protected as

attorney work products, but could be protected as investigatory

records if they meet the requirements of exemption 7:

           0   Routine investigatory reports gathered
              during regular  compliance monitoring; and,

           0   Verbatim witness reports and statements.

     Whether or not a document is an attorney work product will

depend on a case by case review of the document in the context of

the particular enforcement activity.  Even if the attorney work

product privilege does not apply, other exemptions, such as for

investigatory records (exemption 7), may permit the Agency to

withhold the document.

     Case files may also contain documents with attorney-client

communications.   EPA policy related to attorney-client documents

is discussed above on pages 12 - 13 in the context of general

documents.

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                               -18-

                       Settlement Documents

     In negotiating a settlement of an enforcement action, EPA

will frequently exchange draft settlement terms with the opposing

party.  These terms are often embodied in a draft administrative

or judicial order.  The drafts facilitate Agency consideration

of settlement.

     The law on whether an agency may withhold settlement docu-
                     • ;( f
ments under exemption 5 of FOIA is currently unresolved.  If

there is the likelihood that non-parties will .request settlement

documents during litigation, the lead counsel should consider

seeking a protective order.  Or at the minimum he should seek a

stipulation between parties that they will not release the

settlement documents.  Although in this latter case, the stipu-

lation would nc-t negate EPA's obligation to honor a FOIA request,

insofar as it is valid.

     In all such settlement situations, even if no protective

order or stipulation exists at the time of a request under FOIA,

EPA may consider withholding such documents under the theory

that review and comments are necessary for intra-agency review

of the settlement (exemption 5).  However, before such records

are withheld, consultation with the Office of General Counsel or

Regional Counsel is recommended in view of the unsettled law in

this area,  Any transmittal of settlement documents to an opposing

party should explain that the Agency expects that party to keep

the documents confidential.  It should also contain language indi-

cating that the limited dissemination is only intended to help  the

Agency decide whether the settlement is appropriate.

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                               -19-
     The above guidance is consistent with the Agency goal of
providing for public participation in the litigation settlement
process.  If a non-party feels that it needs to protect its
interests in particular litigation, the non-party may seek
intervention in a civil suit.  Depending upon the scope of
intervention permitted by the Court, the party-intervenor may
participate in resolving the litigation by reviewing a negotiated
order or even participating in the negotiations.  In addition,
the Department of Justice will notify the public in the Federal
Register of any proposed judicial consent decree.  The public
will then have the opportunity to comment on the decree before it
becomes final.

                         Other Documents
     Other documents which may be located in case files are law
enforcement documents which discuss unique investigative techni-
ques not generally known outside the government.  EPA need not
disclose such documents when they describe specific investigatory
techniques employed to detect violations or report on techniques
for a particular investigation (e.g., a document which lists
those particular facts which a field investigator will examine
during the inspection of a narrow class of sources).  EPA should
not disclose such documents if the release of the document could
assist a potential target of investigation in avoiding EPA's
detection of an existing violation.  EPA is able to withhold
these requested documents under exemption 7(E) of FOIA.
Document retention should not extend to routine procedures

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                             -20-
      4
already known to the public, such as common scientific tests,

technical reports which discuss indicators of compliance,

and methods for interviewing witnesses.

     EPA will generally release to the public enforcement docu-

ments which it issues to sources during formal enforcement

actions (other than pre-final settlement documents).  Examples

of such documents include notices of violation under the Clean

Air Act, administrative orders, and pleadings which are filed

with an .administrative hearing of.icer or court.  Since the

decision in Cohen v. EPA, 575 F. Supp. 425 (D.D.C. 1983), EPA

has decided to release, except in very limited circumstances,

the names of potentially responsible parties for hazardous waste

site clean-up in response to FOIA requests.  EPA will enter the

names into the data base of a computer system and will provide

requesters) with a list of potentially responsible parties who

have received notice letters.  (See Memorandum from Gene A.

Lucero, Director of the Office of Waste Programs Enforcement to

Waste Management Division Directors dated December 9, 1983.)

     Documents may be in enforcement files which relate to how

EPA should use its enforcement discretion to prosecute a particular

polluter.  As a general matter, EPA need not release such documents

if to do so would cause harm to the enforcement process.  The

EPA is able to withhold these documents, if predecisional, because

under exemption 5 they would compromise the deliberative process

of the Agency, as attorney work product, and/or as attorney-client

privileged.  In addition, they may be withheld if they are investi-

gatory documents, the release of which would interfere with a

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                               -21-
potential or pending enforcement action  (exemption 7(A)).  EPA
will release documents containing general enforcement discretion
policy statements, unless it is clear that their release would
interfere with enforcement proceedings and therefore qualify
them as investigatory records.
       The need to withhold documents discussing enforcement
discretion may diminish once a final decision is made or a case
is concluded.  At that time, in responding to a FOIA request
after final action, the office considering a document release
should assess whether the release of a predecisional delibera-
tive document or an attorney-client communication would hinder
free and frank discussion.  The attorney work product privilege
is not necessarily lost if litigation, or the potential for
litigation, no longer exists.  FTC v. Grolier, Inc.  103 S.Ct.
2209 (1983).  Even in the case of concluded or halted criminal
actions, additional concerns might preclude the release of the
documents.  EPA will not release documents if they disclose the
identity of a confidential source, confidential information, or
investigative techniques and procedures, or if this release
would endanger the life or physical safety of law enforcement
personnel.  These exemptions under FOIA related to criminal
cases are found in exemptions 7(D), (E) and (F).  (See page 6.)
     B.   Case Status Reports
     These are manually created or computerized documents in which
the Agency reports enforcement activities.  The documents may be
related to compliance tracking, general enforcement planning, and

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                               -22-

ongping specific enforcement actions including active cases

against violating sources.

     These case status reports serve a number of functions/

including compliance monitoring.  The Agency will make available

to the public documents containing information relating to track-

ing various matters related to pollution sources.  The EPA will

consider withholding documents (including non-public documents

after a case is referred or filed) once a source is identified
                    ''«'
as violating an environmental standard.  Whether the Agency will

release a document after it makes that identification depends on

the degree to which its release will interfere with enforcement

proceedings.  For example, the release of a list of suspected

violating sources for which EPA is completing its investigations

might interfere with the normal enforcement process.  The EPA is

able to withhold these requested investigatory reports under

exemption 7(A) of FOIA.  Other case status reports are used as

litigation planning and management tools.  These reports,

whether prepared by attorneys or program personnel working with

the attorneys, might fall within the category of attorney work

product as discussed above.



VII. Conclusion

     All determinations for the release of any document must be

made on a case by case basis, in light of applicable legal

authorities and the guidelines discussed in this document.

iSnforcement attorneys are available at headquarters and in all

regional legal offices for additional consultation on these

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                               -23-

matters.  Regions are encouraged to establish internal procedures

to ensure that the Regional Counsel is notified of all written

requests for enforcement-related documents.

          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 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.
                                    Courtney M. Price
                               Assistant Administrator for
                          Enforcement and Compliance Monitoring

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                               -24-

                             APPENDIX
     Thore are a number of statutes and regulations which place
constraints on the Agency's discretion to release enforcement
documenl-.s to the public.  The statutes listed below expressly
require or prohibit disclosure of records; the regulations
address EPA policy.
     Ac  Administrative Procedure Act (APA)
     The Freedom of Information Act (FOIA) is contained in Section
552 of the APA.  5 U.S.C. S 552.  Congress enacted FOIA for the
express purpose of increasing discloe re of agency records.  The
first part of FOIA mandates the disclosure of certain agency
documents.  An agency is required to publish in the Federal
Register certain enumerated types of material.  In addition,
FOIA requires all agencies to index and make available for public
inspection and copying other enumerated types of material.  Such
documents include statements of policy and interpretation adopted
by the agency, administrative staff manuals, and instructions to
staff that <:£fect members of the public.  Finally, FOIA requires
disclosure, on request, of all reasonably described records,
unless the documents can be classified within one or more of the
nine categories of records that are exempt from the disclosure
requirements.  Court decisions have clarified which documents
are properly classified as exempt from mandatory disclosure.
     Although FOIA permits the Agency to withhold certain
documents from disclosure, it does not provide guidance on how
the Agency should use its discretion to release "exempt" or

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                               -25-
"privileged" documents.  Because FOIA contains an exemption
from release for certain documents it does not automatically
mean EPA should withhold them.
     Accordingly, EPA has promulgated regulations which clarify
how the Agency will utilize its discretion to release documents
which it could withhold as exempt under the statute.  These
regulations are found in 40 C.F.R. Part 2.
     B.  The FOIA Regulations
     The Agency has determined that it will not release any
document which falls within certain of the exemptions unless it
is so ordered by a federal court or in "exceptional circumstances"
with the approval of the Office of General Counsel or Regional
Counsel.  40 C.F.R. Section 2.119.  These documents include those
related to national defense or foreign policy; documents for which
a statute prohibits disclosure; trade secrets; personnel/medical
and related files, release of which would constitute an unwarranted
invasion of personal privacy; reports prepared by, or for, an
Agency responsible for regulating financial institutions; and
geological and geophysical information.  On the other hand, the
regulations allow the Agency to utilize its discretion in decid-
ing whether to release requested documents related to internal
personnel practices, intra-agency or interagency memoranda, and
investigatory records.  Disclosure of such records is encouraged
if no important purpose would be served by withholding the records.
40 C.F.R. Section 2.119(a)

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                               -26-
     C.  Privacy Act
     Congress enacted the Privacy Act in 1974 to promote govern-
mental respect for the privacy of citizens.  5 U.S.C. § 552a.
Section 3(b) of the Act prohibits agencies/ except in 12 specified
instances, from releasing or disclosing any record maintained in
a system of records pertaining to an individual (other than to
that individual) without prior written consent of the individual.
If EPA must release a document in response to a FOIA request, it
is exempt from the nondisclosure provisions of the Privacy Act.
     D.  Confidentiality
     The environmental statutes which EPA enforces prohibit the
release of documents or information that contain trade secrets
or confidential commercial or financial information.  This pro-
hibition is usually located in the individual section of the
statute dealing with EPA investigatory authority, e.g., Section
114 of the Clean Air Act, 42 U.S.C. S 7414; Section 308 of the
Clean Water Act, 33 U.S.C. $ 1318; Section 3007 ,jf the Resource
Conservation and Recovery Act, 42 U.S.C. S 6927; and Section 104
of the Comprehensive Environmental Response, Compensation, and
Liability Act, 42 U.S.C. S 9604.  In addition, The Trade Secrets
Act, 18 U.S.C. $ 1905, contains an independent prohibition against
certain release of confidential business information by agencies.
Section 1905 makes it a crime for a federal employee to disclose
such information.
     On September 1, 1976, EPA promulgated procedures and substan-
tive rules on how to handle information that may be confidential.

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                               -27-
These regulations at 40 C.F.R. Part 2, Subpart B, establish
basic rules governing the handling of business information.
The regulations at 40 C.F.R. $ 2.204 require that before docu-
ments are released, EPA personnel must determine whether the
documents are confidential, or whether the business asserts a
claim of confidentiality.  In general, if there is a claim, the
material cannot be released prior to a review and confidentiality
determination by the appropriate EPA legal office and notice to
the submitter.  Agency guidance explaining the procedures for
handling business information under the regulations can be found
in a Memorandum from the Deputy Administrator dated November 6,
1980, and entitled "Disclosure of Business Information under FOIA.
     E.   Statutes Requiring Disclosure
     Many of the environmental statutes EPA enforces generally
require the disclosure of certain information.  For example the
Clean Air Act requires that information EPA obtains under Section
114, other than trade secrets, shall be available to the public.
CERCLA has a similar provision in Section 104(e)(2).  Where the
environmental statute generally requires disclosure of information
obtained under the investigatory authority, EPA will interpret
this language consistent with FOIA.
     F.   The Federal Rules of Civil Procedure and Federal Rules
         of Criminal Procedure
     Although exemption 5 has not been construed to incorporate
every privilege in civil discovery, generally, those documents
which are privileged under Rule 26 of the Federal Rules of Civil
Procedure are documents which the Agency can withhold under FOIA.

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                               -28-
     Pederal rules of procedure do not in themselves qualify under
exemption 3 of FOIA, which protects information specifically
exempted from disclosure by statute.  However, when Congress
subsequently modifies and enacts a rule of procedure into law
the rule may qualify under the exemption.  For example, it has
been held that because Congress altered Rule 6(e) of the Federal
Rules of Criminal Procedure (concerning matters occurring before
a grand jury), that rule satisfies the "statute" requirement of
exemption 3.  Therefore, grand jury material in the hands of
Agency personnel can be withheld under FOIA.  Other rules require
the release of certain documents to criminal defendants.
     G.  Bibliography
         1.  Freedom of Information Case List, U.S. Dept. of
             Justice, 1985 Edition;
         2.  Litigation under the Federal Freedom of Information
             Act and Privacy Act/ Adler & Halperin, Center for
             National Security Studies (9th Edition, 1983);
         3.  Federal Information Disclosure 2 Vols. James T.
             O'Reilly, McGraw-Hill, 1979 (Supplement Available);
         4.  Guidebook to the Freedom of Information and Privacy
             Acts, Clark Boardman Co., Ltd., 1983.

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GM-44

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         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       WASHINGTON, D.C. 20460
                           OCT  2)335
                                                     Oma OF ENFORCEMENT
                                                       AKD COMPLIANCE
                                                        MONITORING
MEMORANDUM
SUBJECT:  Settlement of Enforcement Actions Using Alternative
          Dispute Resolution/techniques    j\

                                           Tf yl^^^l^
PROM:     Courtney M. Price
          Assistant Administrator for Enforcement
            and Compliance Monitoring

TO:       Assistant Administrator for Water
          Assistant Administrator for Solid Waste and Emergency
            Response
          Assistant Administrator for Air and Radiation
          Assistant Administrator for Pesticides and Toxic Substances
          Regional Administrators
          Regional Counsels


I.   Purpose

     This memorandum identifies obstacles to quick resolution of
our enforcement cases, suggests options for resolving some of
these cases more expeditiously and with better results, advises
you of resources available for such resolution, and solicics
potential cases in which the use of these resources could enhance
your enforcement efforts.

II.  Background

     A.   Identified Problems

     Enforcement personnel in the regions and headquarters share
frustration over the pace of some enforcement actions.  They
agree that the length and complexity of some of these caset
burden available enforcement resources beyond their prograjunatic
or strategic value.  Further, there are a great many smaller
cases, the resolution of which by means of administrative or
judicial litigation is very time consuming.

     Obstacles to expeditious resolution of enforcement
actions are strewn throughout the negotiation and litigation
processes.  With regard to negotiations, these obstacles include:

          a large number of defendants, rendering case
          management unwieldy;

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                            -2-
          multiple plaintiffs with different agendas;

          failure of multiple defendants to establish an
          efficiently operating steering committee or
          otherwise reach agreement among themselves on
          settlement issues in the waste enforcement area;

          personality conflicts between opposing negotiators;

          inflexible negotiating postures resulting from each
          party's overestimation of the strength of its case;

          sophisticated technical circumstances surrounding
          some cases including uncertainties about technical
          remedies, leading to myriad disputes over issues of
          fact; and

          controversial issues of law and fact.

     In addition, there are obstacles inherent to the process
of litigation itself.  These include lengthy and complicated
discovery procedures, the failure of a judge to quickly rule
on motions or schedule hearings, and the intense effort which
must be made to educate the trier of fact on both legal and
technical issues.

     In an effort to resolve enforcement actions more quickly
but without making legal or policy concessions, the Agency
has begun to examine various alternatives to traditional
methods of negotiation and litigation.

     We can make resources available to you and your staff
to rosolve these cases more quickly with quality outcomes.
These; resources involve alternative dispute resolution (ADR)
procedures successfully employed in other litigation situations,
and include the use of experts in ADR and training in ADR
techniques.

     3.   ADR Mechanisins

     ;:n addition to negotiation, ADR mechanisms potentially
useful in enforcement cases include mediation, fact-finding,
mini-trials and arbitration.

     Mediation is the facilitation of negotiations by a neutral
third~party who has no power to decide the issues.  As in
traditional negotiation, the object is for the parties to

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                              -3-

 reach  a mutually acceptable  agreement.  Also as in negotiation*
 the  parties  retain  the  power to decide  the  issues, and the
 process is informal, voluntary and nonbinding.  The difference
 is that the  parties select an outside facilitator, often with
 specialized  subject matter expertise, to aid in the process of
 negotiation.  Mediation can  be used  to  address problems such
 as an  unwieldy number of defendants  or  plaintiffs/ a poorly
 operating steering  committee in the  waste enforcement area,
 personality  conflicts between the opposing  negotiators/ or a
 number of smaller actions that have  been batched together.

     Fact-finding involves the investigation by a neutral third-
 party/ with  specialized subject matter  expertise, selected by
 the  disputants,  of  issues the parties have  specified.  The
 process is voluntary and may be binding or  nonbinding, but if
 the  parties  agree,  the  material presented by the parties to
 the  fact finder may be  admissible in a  subsequent hearing.
 The  procedures are  informal  because  fact-finding is an investi-
 gatory process.   The object  of this  ADR mechanism is to narrow
 factual or technical issues  in dispute, and usually results in
 a report or  testimony.

     In a mini-trial, the parties present their positions to
 representatives  of  the  principals, preferably with authority
 to settle the  dispute and, in some cases, to a neutral third-
 party.  The  "trial* is  preceded by limited discovery and
 preparation.   The proceeding  is an abbreviated hearing with
 testimony and  cross-examination as the  parties agree.  Repre-
 sentatives of  the principals  (vice-president of a company and
 a Regional Administrator, for example)  are  the decision-makers
 with the neutral  advisor acting as referee.  The neutral third-
 party  usually  has specialized subject matter expertise in trial
 procedures and evidence, and  advises the parties regarding
 possible court rulings.  Immediately after the mini-trial, the
 parties re-enter  negotiations, sometimes with the aid of the
 neutral third-party.  This ADR mechanism is useful in narrowing
 legal  issues in dispute, and  in giving  parties a more realistic
 view of the  strength of  their respective cases.

     Arbitration  involves a hearing before a neutral third-party
decision-maker who usually has subject matter expertise.  The
 parties select the arbitrator, the procedures to be followed,
and the issues to be heard.   An arbitration is procedurally let>i
 formal than  a  trial and  can be binding or nonbinding.  As in
 fact-finding, nonbinding arbitration narrows issues in dispute.
Binding arbitration resolves the dispute.

 III.    Process

     We would like to offer Headquarters assistance for appropriate
cases in which you may  be interested in using an ADR mechanism.

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                             -4-
The first step to obtain such assistance is Regional identified
of cases where ADR nay expedite settlement.  Headquarters, the
legion and DOJ (if the case has been referred) will discuss the
possibility of using ADR in any case nominated as a candidate.
If one or more ADR techniques look promising, the case will be
discussed with someone familiar with ADR (either in-house or a
consultant) supplied by OECM.  If everyone determines the case
ic a good candidate, the litigation team will approach the
defendants with a suggestion for using ADR to resolve the dispute.
If the parties agree, they will design procedures for using a
particular ADR technique for a specified period of time.  OECM
will aid in the selection and will cover the cost of any charges
to the Agency for the tine of any outside ADR expert.  If the
chosen case is not resolved within the time period specified for
usiing the ADR method, it will continue toward trial.

     Please contact Richard Robinson, Director, Legal Enforcenent
Policy Division (FTS 982-2860, LE 130A, E nail Box EPA 2261),
by fat/utter K, 1985, with your cases any comments on this effort,
or ;if you would like nore information about ADR.

     Thank you for your attention to this natter..

cc:  Administrator
     Deputy Administrator
     General Counsel

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GM-45

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          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON, D.C. 20460
                             OCT300Q5
                                                      OFFICE OF ENFORCEMENT
                                                        AND COMPLIANCE
                                                         MONITORING
 MEMORANDUM
 SUBJECT:  Division of Penalties with State and Local Governments

 PROM:      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 nay  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. S3302, 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.

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                              -3-

     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.j/

     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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GM - 46   The Agency  issued an addendum to this policy



on August 4, 1987.  That  addendum is located in this



section right after the original policy.
      «»»
     • r .  . '  si.* — •"
      _, • • a- A;  . - 1


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GM-46

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              UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                          WASHINGTON, D.C.  20460


                              NOV 2 | !3o5
MEMORANDUM

SUBJECT

FROM:
TO:
Policy on Publicizing Enforcement Activities

Courtney M. Price v^JU-^1—>.
Assistant Administrator for Enforcement
  and Compliance Monitoring

                                    ''*~}rf-
Jennifer Joy Mansorr^Zt ^^-rt^^-r *~^>7 "   (^
Assistant Administrator for/Txt^r/>^V Affairs
Assistant Admirilstfrators
General Counsel
Inspector General
Regional Administrators
Office of Public Affairs
(Headquarters and Regions I-X)
Regional Counsel (I-X)
     Attached is the EPA Policy on Publicizing Enforcement
Activities, a joint project of the Office of Enforcement and
Compliance Monitoring and the Office of Public Affairs.  The
document establishes EPA policy on informing the public about
Agency enforcement activities.  The goal of the policy is to
improve communication with the public and the regulated community
regarding the Agency's enforcement program, and to encourage
compliance with environmental laws through consistent public
outreach among headquarters and regional offices.

     To implement this policy, national program ranagers and
public affairs directors should review the policy for the purpose
of preparing program-specific procedures where appropriate.
Further, program managers should consider reviewing the implemen-
tation of this policy in EPA Regional Offices during their regional
program reviews.  These follow-up measures should ensure that
publicity of enforcement activities will constitute a key element
of the Agency's program to deter environmental noncompliance.
Attachment

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          EPA POLICY ON PUBLICIZING  ENFORCEMENT  ACTIVITIES


 I.   PURPOSE

      This memorandum establishes  EPA  policy  on  informing the
 public  about Agency enforcement activities.   This policy is
 intended  to improve EPA communication with the  public and the
 regulated community regarding  the goals  and  activities of the
 Agency's  enforcement program.  Appropriate publication of EPA
 enforcement efforts will both  encourage  compliance and serve as
 a deterrent to  noncompliance.  The  policy provides for consistent
 public  outreach among headquarters  and regional offices.

 II.   STATEMENT  OF  POLICY

      It is  the  policy of EPA to use the  publicity of enforcement
 activities  as a key element of the  Agency's  program to deter
 noncompliance with environmental  laws and regulations.  Publicizing
 Agency  enforcement activities  on  an active and  timely basis informs
 both  the  public and the  regulated community  about EPA's efforts
 to promote  compliance.

      Press  releases should be  issued  for judicial and administrative
 enforcement actions,  including settlements and  successful rulings,
 and other significant enforcement program activities.  Purser,
 the Agency  should  consider employing  a range of methods of' A
 publicity such  as  press  conferences and  informal press briefings,
 articles, prepared statements, interviews and appearances at
 seminars by knowledgeable and  authorized representatives of the
 Agency  to inform the  public of these  activities.  EPA will work
 closely with the spates  in developing publicity on joint enforcement
 activities  and  in  supporting state  enforcement  efforts.

 III.  IMPLEMENTATION OF POLICY

      A.  When to Use  Press Releases I/

          1•  Individual  Cases

      It is  EPA  policy to  issue press releases when the Agency:
 (1) files a judicial  action or issues a major administrative
 order or complaint  (including  a notice of proposed contractor
 listing and the  administrative decision to list); (2) enters
 into  a major judicial or  administrative consent decree or files
 a motion  to enforce such  a decree?  or (3) receives a successful
 court ruling.   In  determining  whether to issue  a press release,
_!/ The term "press release" includes the traditional Agency press
release, press advisories, notes to correspondents and press
statements.  The decision on what method should be used in a given
situation must be coordinated with the appropriate public affairs
office(s).

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                               -2-

EPA personnel will consider:  (1) the amount of the proposed
or assessed penalty (e.g., greater than $25,000); (2) the significance
of the relief sought or required in the case, and its public
health or environmental impact; (3) whether the case would
create national or program precedence; and (4) whether unique
relief is sought.  However, even enforcement actions that do not
meet these criteria may be appropriate for local publicity in
the area where the violative conduct occurred.  Where appropriate,
a single press release may be issued which covers a group or
category of similar violations.

     Where possible, press releases should mention the environmental
result dosired or achieve/ by EPA's action.  For example, where
EPA determines that a particular enforcement action resulted (or
will result) in an improvement in a stream's water quality, the
press release should note such results.  In addition, press
releases must include the penalty agreed to in settlement or
ordered by a court.

     Press releases can also be used to build better relationships
with the states, the regulated community, and environmental groups.
To this end, EPA should acknowledge efforts by outside groups to
foster compliance.  For example, where a group supports EPA
enforcement efforts by helping to expedite the cleanup of    V
Superfund site, EPA may express its support for such initiatives
by issuing a press release, issuing a statement jointly with the
group, or conducting a joint press conference.
                                               *
         2 -  Major Polici' 2

    In addition to publicizing individual enforcement cases, EPA
should publicize major enforcement policy statements and other
enforcement program activities since knowledge of Agency policies
by the regulated community can deter future violations.  Such
publicity may include the use of articles and other prepared
statements on enforcement subjects of current interest.

         3.  Program Performance

     Headquarters and reg^ :>nal offices should consider issuing
quarterly and annual reports on Agency enforcement efforts.
Such summaries pres'ent an overview of the Agency's and Regions'
enforcement activities; tiiey will allow the public to view
£PA ' s enforcement program over time, and thus give perspective
to our overall enforcement efforts.  The summaries should cover
f.rends and developments i.. Agency enforcement activities, and
may include lists of enforcement actions filed under each statute.
The Office of Enforcement and Compliance Monitoring' s (OECM)
Office of Compliance Analysis and Program Operations, and the
Offices of Regional Counsel will assist the Public Affairs Offices
in this data gathering.  Public Affairs Offices can also rely  on
t.Te figures contained in the Strategic Planning Management  ystem.

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                                -3-

          4.   Press  Releases  and Settlement Agreements

     EPA  has, on  occasion, agreed not to  issue a press release
as part of  a  settlement  agreement.  EPA should no longer agree
to a settlement which bars a press release or which restricts
the content of a  press release.  On January  30, 1985, the Deputy
Administrator issued an  abbreviated press release policy, which
stated in pertinent part that:   "It is against EPA policy to
negotiate the agency's option to issue press releases, or the
substance of press  releases, with parties outside of EPA,
particularly those parties involved in settlements, consent
decrees or  the regulatory process."  This policy will help to
ensure consistency  in the preparation of press releases and
equitable treatment of alleged  violators.

     B.   Approval of Press Releases

     EPA  must ensure that press  releases and other publicity
receive high priority in all reviewing offices.  By memorandum
dated August 23,  1984, the Office of External Affairs directed
program offices to review and comment on all press releases
within two days after the Office of Public Affairs submits its
draft to  the program office; otherwise concurrence is assumed..
This review policy extends to OECM and the Offices of Regional
Counsel for enforcement-related press releases.

     C.   Coordination                                      «  \

          1.  Enforcement, Program, and Public Affairs Offices

     More active ur •> of  publicity requires improved coordination
among regional and Headquarters  enforcement attorneys, program
offices and public affairs offices.  The lead office in an
enforcement case, generally the  regional program office in an
administrative action and the Office of Regional Counsel or OECM
in a judicial action,  should notify the appropriate Public Affairs
Office at the earliest possible  time to discuss overall strategy
for communicating the Agency's action (e.g., prior notice to
state or  local officials) and the the timing of a press release.
The lead  office should stay in close contact with Public Affairs
as the matter approaches fruition.

          2.  Regional and Headquarters Offices of Public Affairs

     Regional and headquarters Public Affairs Offices should
coordinate in developing press releases both for regionally-based
actions that have national implications and for nationally managed
or coordinated enforcement actions.  Whenever possible, both
regional  and headquarters offices should send copies of draft
press releases to their counterparts for review and comment.
Both such offices should also send copies of final releases to
their counterparts.

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                               -4-

         3.  EPA and DOJ

     EPA can further improve the timeliness, and effectiveness
of its press releases regarding judicial actions by coordinating
with DOJ's Office of Public Affairs.  When an EPA Office of
Public Affairs decides that a press release in a judicial enforce-
ment Ccise is appropriate, it should notify DOJ or the appropriate
U.S. Attorney's Office to ensure timeliness and consistency in
preparation of press releases.  DOJ has been requested to notify
OECM when DOJ intends to issue a release on an EPA-related case.
EPA's Office of Public Affairs will immediately review such
draft releases, and, if necessary to present the Agency's position
or additional information, will prepare an Agency release.

         4.  EPA and the States

     Another important goal of this policy is to encourage
cooperative enforcement publicity initiatives with the states.
The June 26, 1984, "EPA Policy on Implementing the State/Federal
Partnership in Enforcement:  State/Federal Enforcement 'Agree-
ments,'" describes key subjects that EPA should discuss with
the states in forming state-EPA Enforcement Agreements.  The
section on "Press Releases and Public Information," states that
the "Region and State should discuss opportunities for joint
press releases on enforcement actions and public accounting of
both State and Federal accomplishments in compliance and eiiroftce-
ment."  Further, as discussed in the subsequent January 4, 1985,
Agency guidance on "Implementing Nationally Managed or Coordinated
Enforcement Actions," the timing of state and EPA releases
"should be coordinated so that they are released simultaneously."

     Accordingly, EPA Public Affairs Offices should consult
with the relevant state agency on an EPA press release or
other media event which affects the State.  EPA could offer
the State the option of joining in a press release or a press
conference where the State has been involved in the underlying
enforcement action.  Further, EPA-generated press releases and
public information reports should acknowledge and give credit
tc relevant state actions and accomplishments when appropriate.

     Finally, it is requested that EPA Public Affairs Offices
j;end the State a copy of the EPA press release on any enforcement
cctivity arising in that state.

     D.  Distribution of Press Releases

     The distribution of EPA press releases is as important as
their timeliness.  Press releases may be distributed to the local,
nc.tional, and trade press, and local and network television
stations.

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                                -5-

          1•   Local  and  National  Media

      EPA  must "direct"  its press  releases  to ensure that the
 appropriate  geographical  areas  learn about  EPA enforcement
 activities.   To  accomplish this  goal, the  appropriate Public
 Affairs Office should send a press  release  to the media and
 interest  groups  in  the  affected  area, i.e., the local newspaper
 and  other local  publications, television and radio stations, and
 citizen groups.  The headquarters Public Affairs Office, in con-
 junction  with the appropriate regional office, will issue press
 releases  to  the  national  press and  major television networks
 where an  EPA enforcement  activity has national implications.

          2.   Targeted Trade Press and Mailing Lists

     The  Agency  must also disseminate information about enforce-
ment activities  to  affected industries.  Sending a press release
 to relevant  trade publications and  newsletters, particularly for
a significant  case, will put other  potential violators on
notice that  EPA  is  enforcing against specific conduct in the .
industry.  It  is also useful to follow up such press releases
with speeches  to industry groups and articles in relevant trade
publications,  reinforcing the Agency's commitment to complkpnce.

     To ensure the  appropriate distribution of publicity, we are
requesting each  of  the  regional Public Affairs Offices, in coopera-
tion with the  Regional  Counsels and regional program offices, to
establish or  review and update their mailing lists of print media,
radio and television stations, state and local officials, trade
publications,  and business and industry groups for each of the
enforcement programs conducted in the Regions.

     E.  Use of Publicity Other Than Press Releases

     EPA headquarters and regional  offices have generally relied
on press releases to disseminate information on enforcement
activities.  Other  types of enforcement publicity are also
appropriate  in certain  instances.

          1.  Press  Conferences and  Informal Press Briefings

     Press conferences  can be a useful device for highlighting
an enforcement activity and responding to public concerns in a
specific area.  Regional Administrators should consider using
press conferences to announce major enforcement actions and to
elaborate on  important  simultaneously issued press releases.
Press conferences should also be considered where an existing or
potential public hazard is involved.  The regional Public Affairs
Office should always inform the headquarters Public Affairs

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                               -6-

Office when it decides to hold a press conference to provide an
opportunity for the Administrator's advance knowledge and involve-
ment if necessary.

         2.  Informal Meetings with Constituent Groups

     To further supplement EPA efforts to inform the public and
regulated community, regional offices should meet often with
constituent groups (states, environmental groups, industry, and
the press) to brief these groups on recent enforcement developments
These meetings can be organized by the Public Affairs Offices.
By informing the public, EPA increases public interest in its
enforcement program and thereby encourages compliance.

          3.  Respond ing./to Inaccurate Statements

     EPA should selectively respond to incorrect statements made
about EPA enforcement activities.  For example, EPA may want to.
respond to an editorial or other article which inaccurately
characterizes EPA enforcement at a Superfund site with a "letter
to the editor."  Where an agency response is deemed to be       :
appropriate, it should promptly follow the inaccurate statement.

         4.  Articles and Prepared Statements

     EPA's Public Affairs Offices and the Office of Enforc
and Compliance Monitoring occasionally prepare articles on various
aspects of the Agency's enforcement program.  For example, Region
issues a biweekly column to several newspapers in the Region
covering timely enforcement issues such as asbestos in schools.
we encouraae all regional and headquarters offices to prepare
feature articles on enforcement issues.  When the regional office

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(i

      UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                 WASHINGTON. O.C. 20460
                               -A f987
  MEMORANDUM
  SUBJECT:
  FROM:
  TO:
     Addendum to GM-46:  Policy on Publicizing
     Enforcement Activities
     Thomas L. Adams, Jr.
     Assistant Administrator for Enforcement
       and Compliance-Monitoring
            Jennifer Joy Wil
            Assistant Admi
                           r tor External Affairs
     Assistant Admi/niXttoitors
     General Counse.
     Inspector General
     Regional Administrators
     Office of Public Affairs
       (Headquarters and Regions I-X)
     Regional Counsel (I-X)
  I.
ISSUE
       Significant differences can exist between civil penalties
  proposed at the initiation of enforcement cases and the final
  penalties to be paid at the conclusion of such matters.  This
  memorandum provides guidance on addressing the issue of the
  "penalty gap" where the difference between the proposed and
  final penalty is appreciable.  EPA must avoid any public misper-
  ception that EPA is not serious about enforcement when such
  differences occur.
  II.  DISCUSSION

       Attached is an "Addendum to the EPA Policy on Publicizing
  Enforcement Activities", GM-46, issued November 21, 1985.  The
  Addendum provides standard text to be included in any press
  release announcing the settlement of an enforcement case in
  which the penalty amount finally assessed differs appreciably
  from the amount proposed.

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                              -2-

     Press releases issued at the filing of cases normally
state the amount of the civil penalty being sought by the
Agency.  The proposed penalty may be the maximum statutory
amount allowable under applicable law, or a penalty amount
as calculated by application of an Agency penalty policy whie'h
assigns specific penalties to various violations of law.

     When a case is settled, however, the penalty to be paid
by the violator is oftentimes appreciably less than the
penalty sought by the Agency at the initiation of the action.
Memberu of the public may question any difference between
these two amounts, especially persons who are not familiar with
the lavs, regulations, and published policies of the Agency.

     The Addendum points out that a number of mitigating factors
can result in a penalty adjustment, and that Congress on occasion
has dictated that EPA take into account such factors in determin-
ing the amount of a civil penalty (e.g., TSCA §16, 15 U.S.C.
2615).

Attachment

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 ADDENDUM TO EPA POLICY  ON  PUBLICIZING ENFORCEMENT ACTIVITIES,
                 GM-46, ISSUED NOVEMBER 21, 1985


 I.    PURPOSE

      This addendum  to the EPA Policy on Publicizing Enforcement
 Activities,  GM-46,  issued November  21, 1985, provides standard
 text  which should be included in EPA press releases which
 announce  the settlement  of  an enforcement case in which the
 final penalty is  appreciably less than the proposed penalty.

      The  purpose  of the  text is to  preclude any public misper-
 ception that EPA  is not  serious about enforcement when these
 appreciable  differences  occur.


 II.   BACKGROUND

      Congress  has directed  the Agency in certain instances to
 consider  specific mitigation factors in assessing a final penalty.
 Accordingly,  the Agency  regularly takes into account such factors
 as the gravity of the violation(s), the violator's compliance
history,  and its degree  of  culpability—-in addition to weighing
 such  litigation concerns as the clarity of the regulatory
 requirements  and the strength of the government's evidentiary
 case--when negotiating a civil penalty amount as part of a
 settlement agreement.  Guidance for applying mitigating adjust-
ment  factors  is included in the Agency's published penalty
 policies.


 III.  POLICY

      Since it  is the policy of EPA  to use publicity of enforcement
activities as  a Xey element in the Agency's program to promote
 compliance and deter violations, public awareness.and accurate
perceptions  of the  Agency's enforcement activities are extremely
 important.

      Appreciable differences between civil penalty amounts
proposed  at  the commencement of enforcement cases and the final
penalty SUBS  to be  paid  at  the conclusion of such matters may be
erroneously  perceived as evidence that EPA is not serious about
enforcing  the  Nation's environmental laws.  Consequently, such
differences  should  be explained and accounted for in the Agency's
communications to the public.

      It is the policy of EPA that when press releases are issued
to announce  the settlement  of enforcement cases in which the
settlement penalty  figure is appreciably less than the initially
proposed penalty amount,  such releases should include standard
text  (see  Section IV, p.2)  to ensure that the general public is

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                              -2-

adequately informed of the analysis behind the final
penalty amount, and the reasons justifying the penalty
reduction.  The release should also describe any environ-
mentally beneficial performance required under the
terms of the settlement which goes beyond actions being
taken simply to come into compliance.
IV.  IMPLEMENTATION OF POLICY

     When a press release is issued at the settlement of an
enforcement action, any such press release that includes the
announcement of a final penalty assessment which is appreciably
different from the penalty proposed at the outset of the case
should include the following standard text:

          "The civil penalty in this action was the
     product of negotiation after careful consideration
     by the government of the facts constituting the
     violation, the gravity of the misconduct, the
     strength of the government's case, and established
     EPA penalty policies.

     [NOTE: Include the following paragraph only in cases
            involving environmentally beneficial
            performance.]

          "In agreeing to this $	 penalty, the
     government recognizes the contribution to long-term
     environmental protection of [briefly summarize here
     the environmentally beneficial performance explained
     in detail in the body of the release]
fi

-------
GM-47

-------
          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON, D.C. 20460
                            JAN 2 T 1986
                                                      OFFICE OF ENFORCEMENT
                                                        AND COMPLIANCE
                                                         MONITORING
MEMORANDUM

SUBJECT:  A Summary of OECM's Role  in the^-Agency ' s Regulatory
          Review Process   /-<\
FROM:     Courtney A.
          Assistant Administrator for Enforcement
            and Compliance Monitoring

TO:       Associate Enforcement Counsels
          OECM Office Directors
     The purpose of this memorandum is to provide OECM staff
with a description of OECM's role and responsibilities in the
Agency's regulatory review process, and a description of the
Agency's regulatory review process itself.  This memorandum
also sets forth procedures for OECM staff to follow  in review-
ing and concurring in regulation packages (i.e., Red Border
packages, Consent Calendars, responses to General Accounting
Office (GAO) reports, reports to Congress, etc.).

     Under present procedures, the Associate Enforcement
Counsels have the responsibility for developing a timely,
coordinated OECM response to a given regulatory package.  The
correspondence control unit (CCU) keeps track of the status
of all regulation packages under OECM review and, where neces-
sary, reminds OECM media divisions of applicable deadlines.
The Director of the Legal Enforcement Policy Division acts as
OECM's Steering Committee Representative to provide OECM's
point of view in general rulemaking procedures and act as a
clearinghouse for Start Action Requests.

     The first part of this memorandum outlines OECM's role in
the regulatory review process.  The second part sets forth
procedures for OECM staff to follow in reviewing and concurring
in regulation packages.  Attached are two appendices.  The
first contains three charts diagramming the regulatory review
system.  The second is a document which summarizes the Agency's
regulatory development and review process as managed by the
Office of Policy, Planning, and Evaluation (OPPE).

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                              -2-

     Please make sure that each member of your staff receives
a copy of this memorandum.  This will allow all of OECM to
operate with a common understanding of the procedures for
reviewing regulation packages.  If you have any questions or
comments on these procedures, please contact Arthene Pugh at
475-8->84.

Attachments

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OFFICE OF ENFORCEMENT AND COMPLIANCE MONITORING
           REGULATORY REVIEW PROCESS
                                Arthene Pugh
                                Legal Enforcement Policy
                                  Division
                                December 11, 1985

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I.   OECM's Role in The Agency's Regulation Review Process

     Over the past several years, OECM has played an active
role in the Agency's regulation review process especially
during Steering Committee and Red Border reviews.  Almost all
proposed regulations including Agency directives, manuals,
responses to GAO reports and some Agency reports to Congress
require the review of OECM staff and the official concurrence
of the Assistant Administrator for the Office of Enforcement
and Compliance Monitoring (AA/OECM).

     A.  OECM Participation in Steering Committee Meetings

     Occasionally, a formal Steering Committee meeting will be
held to discuss an important or controversial regulation package
or other related issues (see Appendix II, page 5 for the role of
the Steering Committee).  As OECM's Steering Committee represen-
tative, the Director of OECM's Legal Enforcement Policy Division
(LEPD) may attend as OECM's "official" representative at these
meetings.   As a practical matter, however, the Director/LEPD
will inform the appropriate Associate Enforcement Counsel (ABC)
of these meetings, and will rely on the AEC and his staff to
attend and participate in Steering Commitee meetings.

     B.  OECM Participation in SAR Review

     After a Start Action Request (SAR) has been submitted to
the Office of Policy, Planning, and Evaluation (OPPE), OPPE
will circulate to Steering Committee representatives a copy of
the SAR for review and approval, and a work group membership
invitation (see Appendix II, page 3 for a complete explanation
of the SAR).  Since the Director/LEPD is OECM's Steering Commit-
tee representative, he will receive the SAR and work group
invitation.  The Director/LEPD will forward the SAR review and
work group invitation to the appropriate AEC for approval and
response.   The AEC will submit the name(s) of his staff who will
participate in work group meetings, and the AEC will make any
comments on the SAR to the Office of Standards and Regulations
(OSR) in OPPE.

     C.  OECM Participation in Work Group

     The lead office will convene an Agency-wide work group to
develop the regulation.  The purposes of the work group are to
identify the issues facing different Agency offices in formulat-
ing the proposed rule and to begin resolving those issues.
OECM's representative in work group activities is responsible
for presenting a consensus OECM position on matters and issues
discussed before the work group.

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                              -2-

     D.  OECM's Participation in Steering Committee Review

     Steering Committee review is the initial procedure to
prepare the proposed regulation package for consideration and
final concurrence by senior Agency management.  The Steering
Committee review determines whether the regulation package is
ready to enter the final interoffice review (Red Border review)
prior to signature by the Administrator.  This task is accom-
plished by means of Consent Calendar clearance review.  The
Consent Calendar is a review process which gives Steering
Committee representatives the opportunity to provide written
comments on the regulation package without a scheduled meeting.
Consent Calendar packages are reviewed and concurred in by the
appropriate AEC.

     E.  OECM Participation in Red Border Review

     Red Border review normally is the final step in Agency-wide
review of a proposed regulatory action.  In this process, the
AA/OECM along with other participating AAs indicate whether they
concur in the regulation package.  OPPE will send to OECM the
regulation package for review and comment and will indicate the
established deadline for review.  The package will be reviewed
by the appropriate OECM media division and concurred in by the
AEC, where applicable, or the AA/OECM, as appropriate according
to delegations 'as described below.


II.   Procedures for Concurrence on Regulation Packages Under
     OECM Review

     A.  Procedures Under The Old System

     In the past, LEPD reviewed and maintained a tracking system
for all regulation packages (i.e., Red Border, Consent Calendar,
reports tc Congress, responses to GAO reports, etc.) that
required the signature of the AA/OECM.  LEPD maintained this
tracking system to ensure that OECM responded in a timely manner
with established deadlines.  Prior to signature by the AA/OECM,
LEPD also reviewed the package to make sure that any enforcement
issues contained in the package were properly addressed and
reviewed by the appropriate OECM media division.  After LEPD's
review, the package was forwarded to the AA/OECM for
concurrence.

     The Director/LEPD had final sign-off authority on Consent
Calendar packages.  These packages were reviewed by the appro-
priate OECM media division, and then forwarded to the Director/
LEPD for signature.  However, in rare instances, the AA/OECM
would  sign off on Consent Calendar packages if they contained
controversial enforcement issues.  Appendix #1 indicates  the
review process for regulation packages under  this system.

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     B.  Revisions  to Procedures for Reviewing Regulation
         Packages

     To streamline  the review process, in April 1985, the
AA/OECM delegated to the AECs the authority to sign off for
the AA/OECM on regulation review packages that only require a
recommendation of concur (no outstanding enforcement issues)
and concur with comment, if comments were editorial in nature
(e.g. correcting typos or grammar).  If the recommended response
was concur with substantive comment or to non-concur, then the
package had to be signed by the AA/OECM.  Consent Calendar
packages continued  to be signed by the Director/LEPD.

     Where AEC sign-off is appropriate, the new procedures
eliminated four steps - 4, 5, 6, and 7- (see Chart II in
Appendix I) in OECM's prior review process.  Packages that
required the signature of the AA/OECM continued to be processed
through all of the  8 steps (see Chart #1 in Appendix I).
Consent Calendar packages continued to be processed in the same
fashion.

     Soon thereafter LEPD conducted an evaluation of OECM's
review procedures to determine the need for LEPD to continue to
review and track regulation packages.  The evaluation revealed
that the OECM media divisions were performing the review,
commenting, and recommendation functions.  If any issues had to
be resolved or discussed with the AA/OECM, the appropriate OECM
media division handled the matter.  Consequently, in August
1985, the Director/LEPD issued a memorandum which eliminated
LEPD from the tracking and signing off steps in the review
process.  This action taken by LEPD has greatly streamlined
OECM's review process as outlined below.

     LEPD maintains its role as OECM overseer of the rulemaking
process, primarily  in two ways.  The Director/LEPD is OECM's
Steering Committee  Representative and handles all cross-media
rulemaking matters.  Also, by virtue of his position as OECM
Steering Committee  Representative, the Director/LEPD receives
a great deal of material relating to specific rulemakings,
including SARs, which are directed to the proper OECM media
division.  Twice a  year OPPE issues a complete list of all EPA
rulemakings which LEPD sends to the media divisions so the
AECs can ensure that they are actively involved in all rulemak-
ings in which they  have an interest.

     C.  Current Procedures for Concurrence on Regulation
         'Packages Under OECM Review

     OECM's correspondence control unit (CCU) now has the
responsibility for  making sure that OECM responds in a timely
manner to regulation packages under OECM review.  The CCU
forwards all regulation packages directly to the appropriate

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                               -4-

OECM rnsdium division  for review and response.  The OECM medium
division will review  the package and make a determination of
the appropriate action to be taken.  If the regulation package
is one  in which the response is concur  (no comment or outstand-
ing enforcement issues), or concur with comment  (if comments
are purely editorial  in nature), then the AEC should sign the
clearance sheet for the AA/OECM, and send it back to the CCU
for distribution.

     If the package is one in  which the response is concur with
substantive comments or non-concur, then the OECM medium divi-
sion should prepare a memorandum from the AA/OECM addressed to
the AA of the the leacl. program office, with a courtesy copy to
the AA/OPPE.  The review package and memorandum should be sent
to the CCU for signature by the AA/OECM.  (Charts #2 and |3 in
Appendix I outline the stages of review for these packages).

     With respect to Consent Calendar packages, the AECs will
have the final concurrence on all Consent Calendar clearance
sheets.  The AEC will indicate, by check mark ( ^/) the appro-
priate response, no comments or comments attached, and then
sign his name in the signature block.  It the response is
"comments attached," then a memorandum should be prepared,  for
the signciture of the appropriate AEC, and addressed to C.  Ronald
Smith,  Chairman, Steering Committee, OSR/OPPE.   After signature,
the package should be returned to CCU for distribution.   Although
OPPE permits telephone responses on Consent Calendar packages,
OECM should respond by completing the Consent Calendar clearance
sheet.

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                                                     APPENDIX I
                                                                                                             Chart fl
Regulation —> CCU	> LEPD —
Review         (Log-In)   (Assign
                                          Regulation Review - Old System

                                             3             45
Package
(Red Border,
GAO Reports
and
Reports to
Congress)
to appropriate
OECM media
division)
-> OECM	>  LEPt>	
  Media        (Review)
  Division
  (Review
  and  action)
> CCO	> AEC/OECM —> AA/OECM —> CCU	> OPPE
  (Log-in)    (Concur-     (Signa-     (Distri-
               rence)       ture)       bution)

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                                                                                      Chart #2
                                'Regulation Review - New System
Regulation -•
Review
Packages
(Red Border,
Consent
Calendar,
GAO Reports
and Reports
to Congress)
CCU	
(Log-i n
and assign
to appropriate
OECM media
division)
OECM	
Media
Division
(Review
and
signature)
> CCU	
  (Distribution)
   4

> OPPE
  This system is applicable to those packages for which a recommendation is concur (no
  comment or outstanding enforcement issues), or  concur with comments (comments are
  purely editorial  in nature).   If  the  response  is concur with comment (substantive
  comments)  or nonconcur,  use  the system  in  Chart 13  of this Appendix.

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                                                                                              Chart 13

                                       •Regulation Review - New System



                   1                  234567

Regulation	> CCU	> OECM	> CCU	> AEC/OECM	> AA/OECM	> CCU	> OPPE
Review           (Log-in             Office       (Log-     (Concur-      (Signa-      (Distribu-
Packages         and assign          (Review       in)      rence)         ture)         tion)
(Red Border,     to appropriate      and
GAO Reports      OECM division)      action)
and Reports
to Congress)
       *This system is applicable to those packages for which a recommendation is concur with
        substantive comment for which a memorandum is required, or non-concur.  If the response
        is concur (no comment or outstanding enforcement issues),  or concur with comment
        (comments are purely editorial in nature) use the system in Chart  #2 ot  this Appendix.

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                          APPENDIX  II

                AGENCY REGULATION REVIEW PROCESS
I.   Agency Participants and Their Roles in the Regulation
     Review Process

     A.  Lead Office

     The program offices have lead responsibility for initiating
and developing most regulations.  The Assistant Administrator
(AA) of the lead office and his/her designee (the project
officer) manage the development of the regulation.  The lead
office organizes the Agency-wide work group and notifies desig-
nated office representatives of scheduled work group activities.
The project officer of the lead office chairs the work group
meetings.  Milestone schedules for developing the proposed
regulation are established by t)ie lead office.  In addition, the
lead office elicits the participation, support and resources of
other Agency offices and the public in developing the proposed
regulation.

     B.  Primary Participating Offices

         1.  Program Assistant Administrators

     The program Assistant Administrators (AAs) review all of
the proposed rulemakings, including their own specific program
regulations to offer their opinions and expertise on particular
issues.  This helps ensure the necessary integration of all of
the Agency's programs.  The AAs are represented in all Steering
Committee reviews, and they participate in options selection
reviews and meetings, and in Red Border reviews that are of
interest to them, as explained below.

         2.  Assistant Administrator for Policy, Planning
             and Evaluation

     The Assistant Administrator for the Office of Policy,
Planning and Evaluation (AA/OPPE) manages the operation of
the Agency's regulation review process.  Within OPPE, the
Office of Standards and Regulations (OSR) performs the task of
coordinating the regulatory review process within the Agency.
The AA/OPPE is also responsible for overseeing the Agency's
compliance with other Federal regulations such as Executive
Order 12291, the Paperwork Reduction Act and the Regulatory
Flexibility Act.

     The AA/OPPE directs the Steering Committee process and
participates in each Red Border review.  OPPE assigns a lead
analyst to work with each of the Agency's program offices on
their regulations and work groups.  The AA/OPPE focuses the

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                              -2-

office's attention on the analytical quality, program inte-
gration, cost-effectiveness, and scientific and statistical
validity of proposed regulatory actions.  The AA/OPPE also
provides an independent assessment of the proposed rules for
the Administrator's and the Deputy Administrator's review.

         3.  Office of General Counsel/Office of Enforcement
             and Compliance Monitoring

     The Office of General Counsel (OGC) reviews regulatory
action packages to advise the Administrator, Deputy Adminis-
trator, and Assistant Administrators on the legal aspects of each
proposed rulemaking.  The Office of Enforcement and Compliance
Monitoring (OECM) reviews regulatory packages to advise the
Administrator, Deputy Administrator and Assistant Administrators
on the enforcement aspects of each proposed rulemaking.  The OGC
and OECM lawyers work closely with the lead offices to assist
them in drafting regulations.  The General Counsel and OECM are
represented in all Steering Committee reviews and participate in
Red Border reviews.

     C.  Other Participating Offices

     The Assistant Administrators for Enforcement and Compliance
Monitoring, Research and Development, External Affairs, and
Administration and Resources Management have lead office
responsibility for a select number of regulations generated by
their offices.  These AAs, as well as a representative tor the
Regional Administrators (RAs), are all represented in Steering
Committee reviews and participate in Red Border review for
regulatory actions that are of interest to them.


11.  Procedures for Developing a Regulation

     In terms of work products, the process of developing a
regulatory action can be divided into five stages:

         3  submission of a start action request;

         0  preparation of a development plan;

         c  establishment of a work group;

         6  review and selection of options; and

         0  submission of a proposed/final regulatory
            decision package.

     The procedures for these five stages consist of certain
requirements that the lead program office must satisfy together
with an associated review process.

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                              -3-

     A.   Start Action Request (SAR)

     All  proposed  regulations must have an approved SAR before
the Agency can begin development of the proposed regulation.
The lead  office must submit a SAR to OSR/OPPE for approval by
the AA/OPPE.  The  SAR is a brief document which describes the
proposed  regulatory action, its purpose, and the reason for
initiating the regulatory action including any consequences
which may result if no regulatory action were initiated or
undertaken.  The SAR must also justify why Agency time and
resources should be expended for developing the proposed regu-
lation during the  time period specified for development.  OPPE
and Steering Committee members must review and approve the SAR
within three weeks of its submission.

     B.  Preparing the Development Plan (DP)

     The DP outlines the basic policy and management framework
for developing a proposed regulation.  All rulemakings that
are classified as major or significant require a DP.  The DP
states the need for the regulatory action, identifies its goals
and objectives, identifies any alternative actions that can be
taken which may be environmentally or administratively accept-
able, and presents a work plan and strategy for developing the
regulation.

     After OPPE approves the SAR, the lead office has 60 days
in which to submit the DP to the Steering Committee.  The
Steering Committee reviews the DP, usually within a two week
period.  If the DP is acceptable, the Steering Committee Chair-
man approves it.    In the case of major regulations, the DP must
be approved by the AA/OPPE.

     C•  Establishing the Work Group

     The work group meets shortly after the SAR has been approved
The work group consists of representatives from OPPE, OECM, OGC,
Office of External Affairs, Office of Research and Development
and the RAs who choose to participate in the particular rule-
making.  Other AAs or their representatives may participate
when there are issues involved that are of interest to their
particular program.

     The work group meets throughout the regulation development
and review process until the decision package is submitted for
Agency-wide review.  Full support and participation of the work
group provides a  forum tor snaring expertise and knowledge on
the regulation under development, and ensures that all Agency
resources are efficiently and properly allocated.

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                              -4-

     D»  The Options Selection Process

     The options selection process involves the formulation,
refinement and selection of feasible options connected with
one or a series of decision points.  The goal of this process
is to narrow the range of acceptable alternatives for the
Administrator's final decision.  Work group meetings are held
to discuss the options, select/reject options and refine the
options selected for further development.  The options should
be clearly stated and defined in the development plan.

         1.  Level I Process

     There are two types of options selection processes.  The
first, Level I Process, applies to major regulatory actions.
The lead office must circulate an options paper to participat-
ing AAs and RAs and the Deputy Administrator 10 days before a
scheduled options review meeting.  The options review meeting
is chaired by the Deputy Administrator or the lead program
AA.  The participants must agree on which options are to be
retained for further development and consideration and which
are to bo rejected.  Results of options meetings are documented
by OPPE which issues a closure memorandum (summary of options
review meeting) that is used by the Deputy Administrator to
resolve any options issues.

         2.  Level II Process

     The second, Level II Process, applies to some major and
significant regulations.  For major regulations, the lead pro-
gram AA will make the determination as to which process, Level I
or Level :cI, the regulatory action will follow.  Work group
meetings are convened to discuss the options under consideration
for further development.  The lead office prepares a summary of
the options considered and those rejected, and submits this
summary along with the decision package to the Steering
Committee and Red Border reviews.

     Work group participants and the lead program AA work
together to resolve any differences or decisions on options
issues that should be considered for further development.  If
differences or decisions cannot be resolved, the Steering
Committee makes a determination which options should be con-
sidered or,, if it is unable to achieve closure, the Steering
Committee identifies all disagreements and brings them to the
attention of the Deputy Administrator, or the affected program
AA.  OPPE documents the results of the meetings and options
selected or rejected, and circulates the closure memo to the
participants and the AA/OPPE for their review.

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                               -5-

          3.   Options  Selection Paper

     With respect  to  both  Level  I  and  Level  II  processes,  the
options  selection  paper, prepared  by the  lead office,  should
evaluate and  analyze  the following issues: relevant economic
impacts, reporting and  recordkeeping burdens required  by the
proposed rulemaking,  assesment of  impact  on  other  regulatory
programs both within  and outside ot the Agency, and resources
required for  implementation and enforcement  of  the regulatory
action.

          4.  The Decision  Package

     The lead office  prepares  the  decision package which is
submitted  for Steering  Committee and Red  Border reviews.   The
decison  package includes a neutral discussion of the major
options  including  comments from any AAs regarding  the  options,
a summary  of the options considered and rejected and reasons
therefor,  a detailed  analysis  of reporting and  recordkeeping
burdens,  and a thorough analysis and assessment of the resources
necessary  for implementing the proposed rulemaking.  The deci-
sion package must  be  circulated to the work group  for  review
and comment, and must be approved  by the  lead program  AA before
it is submitted for Steering Committee or Red Border review.


III. Reviewing of  Regulatory Actions

     A.  Steering  Committee Review

     The Steering  Committee decides whether a package  is ready
tor Red  Border review after resolution ot all issues.  The
Steering Committee includes a  representative for each of the
AAs and  the General Counsel.   The  representative to the Steering
Committee  should:

          1.  Hold  a position at or above an Office Director
             level;

          2.  Hold  a position in the immediate office of the AA
             or General Counsel, or report directly to the AA
             or General Counsel;

          3.  Have  general knowledge and responsibilities
             covering the areas ot regulatory issues tor the
             program he/she represents.

The Director of OSR chairs the Steering Committee.

     All major and significant rules must follow a certain
sequence and a series ot reviews.  They must all undergo Steering
Committee  review which usually takes two weeks.  For major and

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                              -6-

some significant rules, a meeting of Steering Committee represen-
tatives; must be scheduled,,  However, some significant rules
undergo Consent Calendar review in lieu of a Steering Committee
meeting.  In such instances, OPPE circulates the package to the
Steering Committee for written comments, normally due within two
weeks.

     B.  Red Border Review

     Red Border review is the formal senior management review
ot all decision packages by the AA/OPPE, the General Counsel and
all applicable AAs and RAs.  The normal period for Red Border
review is three weeks.  It a reviewing ottice tails to respond
by the established review deadline, it is assumed by OPPE that
the reviewing office concurs without comment, and the package
proceeds on to the next stage.

     C.  Office of Management and Budget (OMB) Review

     Executive Order 12291 requires that all proposed and final
rules (except tnose that OMB has exempted) De sent to OMB tor
review.  The AA/OPPE must approve Agency documents for trans-
mittal to OMB tor review.  Minor and significant rules are
reviewed within about 10 days.  Proposals of major rules and
dratt regulatory impact analysis are subject to a 60-day review
by OMB.  Final major rules and final regulatory impact analysis
are subject to a 30 day review.

     D.  Review by the Administrator and Deputy Administrator

     Once the Red Border and OMB reviews are completed, the
package is forwarded to the Administrator and Deputy Admini-
strator for final approval arid signature.  A special assistant
to the Administrator and the Deputy Administrator will review
tne regulation package ana make a recommendation to the
Administrator and Deputy Administrator as to the appropriate
action to be taken.  Once the Administrator signs the package,
it is returned to OSR/OPPE.  This office makes the necessary
arrangements to publish the rule in the Federal Register.

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GM-48

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         UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       WASHINGTON, D.C. 20460
                      JW30GBB
MEMORANDUM
SUBJECT:  Model Litigatio

FROM:


TO:
                                                      OFFICE OF ENFORCEMENT
                                                       AND COMPLIANCE
                                                         MONTTOR1NC
                                        ne  and  Guidance
          Richard Mays,
          Senior Enforcement Counsel
                        L"
          Associate Enforcement Counsels
          Headquarters  Program Enforcement  Division
            Directors
          Regional Counsels
          Regional Program Division Directors
     Attached are the Model Litigation Report Outline and the
Model Litigation Report Guidance.  All litigation  reports
referred to OECM or the Department of Justice after  March 1,
1986r should follow the Outline in regard to format  and the
Guidance in regard to content.  The purposes of these two
documents are (1) to create a common understanding among Agency
personnel and DOJ attorneys as to what the report needs to
cover and (2) to make the litigation report's form consistent.
These two documents have been prepared by a workgroup consisting
of Jack Winder, OECM-Water; Bill Quinby, OECM-Policy? Mike
Vaccaro, Region III; Robert Schaefer, Region V; and  Tom Speicher,
Region VIII.  They also reflect extensive review and input from
the Reoions, OECM, and the Environmental Enforcement Section of
the Department of Justice.

     While we anticipate that the Model Guidance will be parti-
cularly useful to the less experienced attorney, it will also
serve as a reference for the experienced attorney.   The Outline
will be of use to all Agency enforcement personnel as it will
serve as a checklist to determine if all the parts of the pack-
age are complete and in the correct format.  By utilizing the
models  in preparing litigation referral reports, we  will be able
to expedite the referral process.

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                              -2-

     If you have any questions regarding these two documents,
please contact Bill Quinby of the Legal Enforcement Policy
Division.  He can be reached on FTS 475-8781, his mail code is
LE-130A, and his E-Mail Box is 2261.

cc:  Chief, Land and Natural Resources Division, DOJ

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        OFFICE OF ENFORCEMENT AND COMPLIANCE MONITORING

               Model Litigation Report - Outline


Any section of this outline may be addressed in the litigation
report by the entry of "not applicable (N/A)" It the section
is not relevent to the referral, or by "see section 	* if
the specific information requested in the outline has been
fully supplied in another section.  In addition, this outline
is not applicable to $107 CERCLA cost recovery cases; to CERCLA
$106, TSCA $7 or RCRA $7003 cases.

1.  Cover Page:

    a.  Region, Act involved and judicial district.

    b.  Name and address of defendant.

    c.  Name and address of facility.

    d.  Regional contacts (program/legal).

    e.  Stamp date Region refers report on cover page.

2.  Table of Contents.

3.  Synopsis of the Case.

4.  Statutory Bases of Referral:

    a.  Applicable statutes; cross-media coordination.

    b.  Enforcement authority;  jurisdiction and venue.

    c.  Substantive requirements of law.

5.  Description of Defendant:

    a.  Description of facility.

    b.  State of incorporation  of defendant.

    c.  Agent for service of process.

    d.  Defendant's legal counsel.

    e.  Identity of other potential defendants.

6.  Description of Violations:

    a.  Nature of violations.

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                               -2-

    b.  Date and manner violations  identified.

    c.  Dates and duration of  violations.

    d.  Pending regulatory changes.

    e.  Environmental consequences  (past, present and future).

7,  Enforcement History of Defendant and Pre-referral
    Negotiations:

    a.  Recent contacts with defendant by EPA/Region, (e.g.,
        AOs, permits, grants).

    b.  Pre-referral negotiations.

    c.  Contacts with defendant by state, local agencies and
        citizens, and actions  taken.

    d.  Prior enforcement history of defendant.

R.  Iniunctive Relief:

    a.  Steps to be taken by defendant to achieve compliance.

    b.  Feasible alternatives.

    c.  Cost and technology considerations.

9.  Penalties:

    a.  Proposed civil penalty and legal authority.

    b.  Penalty analysis/calculation.

    c.  Present financial  condition of defendant.

10.  Maior Issues:

    a.  Issues of national or precedential  significance.

    b.  Bankruptcy Petitions.

11.  Significance of Referral:

    a.  Primary justification for referral.

    b.  Program strategy.

    c.  Anency priority.

    d.  Program initiatives outside of stated strategy.

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                              -3-
    e.  Relation ot reterrai to previous or concurrent cases
        or actions.
12. Litigation Strategy:
    a.  Settlement potential/plan for settlement.
    b.  Need tor Interrogatories and requests for admissions.
    c.  Potential for summary judgment.
    d.  Need for preliminary injunction.
    e.  Identity of potential witnesses.
    f.  Elements ot proof and evidence and need for additional
        evidentiary support.
    g.  Anticipated defenses (legal and equitable) and govern-
        ment responses.
    h.  Resource commitments.
    i.  New evidence.
13. Attachments, where applicable:
    a.  Index to attachments.
    b.  Draft complaint.
    c.  Draft discovery.
    d.  Draft consent decree.
    e.  Draft motions.
    f.  Table of Violations.
    g.  Documentation of violations.
    h.  Permits and contracts.
    i.  Significant correspondence between EPA, defendant
        and/or state.
    j.  Penalty analysis/calculation; BEN printout.
    k.  Diagram ot tacility.

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                          -4-

1.  Case Plan.

m»  Dun and Bradstreet report; SEC Form 10K; Annual Report;
    Papers relating to corporate status from Secretary of
    State's office; ABEL printouts and legal description
    of property, as necessary and if obtainable.

n.  Other relevant information.

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        OFFICE OF ENFORCEMENT AND COMPLIANCE MONITORING

               Model Litigation Report - Guidance
Any section of this outline may be addressed in the litigation
report by the entry of "not applicable (N/A)" It the section
is not relevent to the referral, or by *eee section 	• if
the specific information requested in the outline has been
fully supplied in another section.  In addition, this guidance
is not applicable to 5107 CERCLA cost recovery cases; to CERCLA
$106, TSCA $7 or RCRA §7003 cases.
1.  Cover Page:

    a.  Region, Act involved and judicial district.

    b.  Name and address of defendant.

            Include names, addresses and telephone numbers

        ot all defendants (corporate/individual).

    c.  Name and address of facility.

             Include names, addresses and telephone numbers

        of all facilities subject to the referral.  Include

        county for venue purposes.

    d.  Regional contacts (program/legal).

             Include names, addresses and telephone numbers of

        the regional program-technical and legal contacts who

        prepared the report.

    e.  Stamp date Region refers report on cover page.

2.  Table of Contents:

        Include headings, all sub-headings and page numbers.

3.  Synopsis of the Case:

        Limit this synopsis to two pages (double-spaced), when

    possible.

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                               -2-

         The  synopsis  should  contain  a  summary  or  brief descrip-

     tion of  (1)  the tacts  (causes) which  led to the violation,

     (2)  the  legal basis of the violation  and its  environmental

     seriousness, and  (3) the proposed  relief.  Indicate need for

     expedited filing  here.

4.   Statutory Bases of Referral: £/

     a.   Reference all applicable federal  statutes by USCA cita-

         tion and by section  of the Act.   State whether coordina-

         tion across media has  occurred.   Discuss  reasons for

         including or  omitting  cross media claims.

     b.   Summarize the enforcement authority and the juris-

         diction and venue provisions of applicable statutes.

         If there is reason to  file the action in a district

         other than where the facility  is  located, note each

         available district and indicate the reasons for tiling

         there.

     c.   Present the substantive requirements of the law (federal/

         Htate) and applicable  regulations and permits.  Pertinent

         excerpts from federal/state laws  and regulations should
I/ Careful cross-media regional review should ensure that all
available causes ot action are included.  OECM recognizes that
in some cross-media cases, the initial cause(s) of action may
be ready tor referral, but that a secondary cause ot action
under a different statute may be a low priority matter or
require substantial development before tne case is ready for
referral.  Where the secondary cause of action is minor, or
where the case development will take a substantial amount of
time, the case should be referred with the excluded secondary
cause of action clearly identified.  However, it the secondary
cause of action is major, or if development will not unreasonably
delay the referral, all such causes ot action should generally
oe referred toaether.

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                              -3-
        be indentified and set forth here or attached to the
        report.
5.  Description of Defendant:
    a.   Description of facility.
        1)   Describe the violating corporation or individual
            and the particular facility  in question.   Note  any
            relevant corporate or personal interrelationships
            or subsidiaries.   Indicate  it  the  violator is a
            governmental entity.   If there is  a question as to
            whether the  corporation has  been dissolved or
            subsumed into a different entity,  ascertain status
            ot  corporation and attach Dun  and  Bradstreet report
            and corporation papers  from  Secretary of  State's
            ottice  under section  13 m.
        2)   Briefly discuss the business of  the  defendant,
            providing  details  about the  facility  in question.
            When the defendant  is a manufacturer,  describe
            what is produced.  Emphasis should be  on  the
            particular process that  is causing the problem.
            Describe the  plant and  processes used.  Include
            legal description  of  the property under section
            13  m.,  it  needed.  Reference and attach diagrams
            to  the  litigation  report.  Photographs and video
            tapes ot the  source may be helpful in  that they
            often improve  the  "show" quality of a  case should
            it  reach court.

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                              -4-
                If defendants Include corporate officers,
            discuss tacts indicating participation ot the
            corporate officers in the activities resulting
            in the violations.
    bc  State of incorporation of defendant.
             Include state of Incorporation and the principal
        place of business.
    c.  Agent for service of process.
             Incl-ude name, address and telephone number of agent
        for service of process.
    d.  Defendant's legal counsel.
             Include full name, address and telephone number
        of legal counsel.  It corporate counsel, so state.
    e.  Identity of other potential defendants.
             It it is not immediately clear who should be
        named defendants, discuss all potential defendants
        including the state, and their relation to other
        potential defendants and to their potential liability
        tor the violations that give rise to the referral.
        Cover all of the facts having a bearing on which
        potential defendants should be named and evaluate all
        reasonable options.
6.  Description of Violations:
    a.  Nature of violations.
            Discuss the types of pollutants being discharged.
        Also indicate the sources ot the pollutants, their

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                          -5-
    nature, quantity or size, and the relation to the
    statutory, regulatory or permit provisions violated.
b.  Date and manner violations identified.
        Indicate earliest date when violation became known
    to EPA and manner in which it was discovered (e.g.,
    inspection, notice from state, etc.).
c.  Identify dates and duration of violations, any mitigat-
    ing actions by defendant to reduce or correct violations
    and any recalcitrance.  Include Table of Violations at
    section 13 f.
         Describe all EPA/State site inspections, sampling
    and other investigative activities, the dates ot the
    activities and the conclusions drawn.  Attach inspec-
    tion reports under 13 g.
        State present compliance status of the defendant:
    in compliance, In violation, unknown.
d.  Pending regulatory changes.
        Identify pending regulatory changes which do or
    may impact the enforcement action, e.g., requests tor
    SIP revisions, variance applications, pending revisions
    to NPDES permits, pending RCRA permit applications or
    challenges to applicable regulations.
e.  Environmental consequences (past,  present and future).
        Indicate briefly what environmental damage,  if
    measurable, has occurred in  the past, is now happening
    or will occur in the future  if not abated.  Include

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                       -6-
 reasonable  estimates  of  total  damage  to  human health and
 to  the environment  as  a  consequence ot the violations.
      Although  the seriousness  of  the  violation  is not
 technically a  requirement of proof in enforcement of
 certain  statutes, it  is  sometimes relevant to the
 assessment  ot  penalties  and equitable relief.
     Consider the following  factors in assessing the
 seriousness of  the  violation  (a)  the  release ot toxics
 or  mutagens or  carcinogens  is  more serious than the
 release  ot  so-called  conventional pollutants; (b) the
 release  of  large quantities of pollutants is more
 significant  than the  release ot small quantities; (c)
 bioaccumulative wastes posing  long-term  threats are
 more  serious than biodegradable wastes;  (d) the release
 of  pollutants in an area not attaining primary ambient
 air quality  standards is more significant than the
 release  in  an area not meeting secondary standards;
 (e) the release ot  pollutants which directly and demon-
 strably affect health or the environment is more serious
 than  those which have no direct or obvious effect;
 (f) ongoing present  violations which  the government
 seeks to stop are more significant than episodic viola-
 tions which have ceased,  and (g)  a violation which
undermines the  ability ot the Agency  to make sound
regulatory judgments (e.g.,  the submission of fraudulent
toxicity data in support  of  a pesticide  registration)
 is more serious than a single instance of false  reporting.

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                              -7-
7.  Enforcement History of Defendant and Pre-referral Negotiations:
        Attach copies of relevent documents referenced below,
    if available, under section 13 g.
    a.  Recent contacts with defendant by EPA/Region and
        actions taken including administrative actions.
            Indicate recent contacts and enforcement actions
        taken by EPA/Region, e.g., letters, oral  communications,
        administrative requests/orders,  etc.   Include recent
        actions in all media and under all  statutes.  Include
        any related or pending  administrative  enforcement
        proceedings e.g.,  (CAA  S120, TSCA $16(a),  RCRA §3008,
        FIFRA SS13 or 14(a), and MPRSA $105(a)  proceeding).
        State defendant's  responses.
            Also indicate  recent contacts by/with  permits  and
        grants staff, if any.   With  regard  to  grants,  indicate
        likelihood source  will  obtain grant, compliance  schedule
        associated with proposed grants,  relationship  of grants
        to  financial  capability and  any  problems in  grant  his-
        tory  that  may affect injunctive  relief  or  penalties.
   b.   Pre-referral  negotiations.
            Include a brief  summary  of all  attempts  at negotiating
        a settlement  prior  to referral of the case,  including
        attempts by state.   Fully  describe  attempts  at compromise
        and why process failed.  Consider use of Alternative
        Dispute Resolution  (third  party  neutrals)  as method of
        resolvinq  case.

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                          -8-
c.  Contacts with defendant by state, local agencies and
    citizens, and actions taken.
        Include recent contacts or actions taken or antici-
    pated by state, local agencies and citizens.  In par-
    ticular discuss history of state involvement including
    any state civil or criminal enforcement actions taken
    or pending, if state net timely and appropriate criteria,
    and it state-anticipates additional enforcement actions.
d.  Prior enforcement history of defendant, if available
    and practical.
        This item relates to all prior actions and results
    other than those noted above taken by any governmental
    entity against the violator.  (Include citizens' suits
    or notices ot  intent to file.) In some cases compilation
    of this history will be impractical.   If so, include
    only the most  recent or most significant actions taken
    under any environmental statute.
Injunclive Relief;
a.  Steps to be taken by defendant to achieve compliance.
        Indicate in general terms what  affirmative relief
    should be requested.  Consider use  of an environmental
    audit (compliance ana management) as  an element ot the
    remedy.   If a  series of acts are  required, so state.
    Also include basic but not  elaborate  technical  informa-
    tion,  if available,  to support the  proposed remedy.

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                           -9-
     Specify technology which will meet regulatory require-
     ments, and indicate the tine requirements tor a schedule
     of compliance which considers time necessary for design,
     contracting, construction and start-up.   (This is not
     inconsistent with EPA policy of not prescribing specific
     compliance technologies.   This information may be neces-
     sary  in court to  illustrate  what remedy will  bring the
     source into compliance  and/or to demonstrate  technical
     feasibility if contested  by  the defendant.)   If  no
     known  technology  can  assure  compliance, describe  what
     in particular EPA expects the source to do,  including
     plant  closure where applicable.   Indicate if  another
     source has adopted the  recommended  control technology.
b.   Feasible alternatives.
        Describe  alternative  remedies  if appropriate  and
     discuss why the primary remedy  and/or sanction was
     selected.   Consider "studies* by defendant as a remedy
                  *
    where  a precise course  ot  action cannot be detined at
     time of referral.
c.   Cost and technology considerations.
        Indicate  cost  of compliance of the remedy.  Base
    these costs on the Region's best estimates.   Indicate
    technological feasibility problems.
Penalties:
a.  Proposed civil penalty and legal authority.

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                          -10-
    1)  Bottom line and opening negotiation figure.
            Include two figures here (1) the proposed bottom
        line or the amount for which EPA will agree to settle.
        Calculate this figure by use of the appropriate
        medium-specific penalty policy (see section b. below.),
        and (2) the proposed figure with which EPA will open
        any negotiations or settlement talks.  This second
        figure will be higher than the bottom line figure
        but will be related to it.
    2)  Statutory maximum amount.
            Include amount, how calculated and legal author-
        ity for the statutory maximum amount.
b.  Penalty analysis/calculation.
        Include here a brief summary of the penalty analysis
    and calculation, including a specific estimate (based on
    BEN) of economic benefit of non-compliance.  Attach the
    actual detailed analysis and calculations using the
    appropriate medium-specific penalty policy under sec-
    tion 13 j.
c.  Present financial condition of defendant.
        Indicate known financial condition of defendant,
    ability to pay penalties and meet other objectives of
    litigation and source of information.  ABEL, a computer
    model that evaluates a defendant's financial ability to
    comply and pay penalties, may be of assistance here.
    The model will be available in the spring of 1986.
    Include necessary bonding requirements and reasons

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                              -11-
        therefor, if applicable.  If there is a question as to
        defendant's tinancial capability, include Dun and
        Bradstreet report, ABEL computer printouts, SEC Form
        10K and Annual Report, if obtainable, under section 13 m.
10. Major Issues:
    a.  Issues of national or precedential significance.
            Indicate it reterral is case ot tirst impression or
        has other legal, national or precedential significance.
    b.  Bankruptcy Petitions.
            Describe the status of bankruptcy petition, if any,
        including (1) whether Chapter 7, 11 or 13, (2) whether
        reorganization plan filed, and (3) bar .date for proof
        of claim.
11. Significance of Referral:
    a.  Primary justification for referral.
            If a case does not present obvious "serious" health
        ettects or environmental harm,  but is compelling for
        some other reason,  e.g., deterrence  of continued,
        blatant violations  ot the law,  this  should be indicated.
        A defendant with a history of violations is usually more
        worthy of attention than a first time offender.
    b.  Program strategy.
            Indicate if the case is part of  the  national pro-
        gram's stated strategy and briety show how it tits
        into that strategy.  Indicate if violator is in SNC.
    c.  Agency priority.
            Indicate briefly if the violator is  of a class listed
        in the prc"./ am strategy for priority monitoring, and it

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                              -12-
        the violation is of a class listed in the strategy for
        priority case action in fiscal year operating guidance.
    
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                          -13-
         is.   Include present contacts with defendant by
         EPA,  DOJ or the U.S. Attorney's ottlce.
     2)   Present negotiating posture and comparison of
         this  posture with "bottom-line' settlement
         figure from section 9 a.
b.   Need for  interrogatories and requests for admissions.
         Indicate need for interrogatories and/or requests
     tor admissions.  Include potential names and addresses*
     if available.
c.   Potential for summary judgment.
        Indicate it case has potential for summary judgment,
     and if so, briefly describe why, and how case can be
    prepared for tiling.  Include draft motion with support-
     ing memorandum and affidavits, if possible.  Attach
    under section 13 e.
d.   Need for preliminary injunction.
        Emphasize  urgency and reasons tor requesting prelim-
     inary injunction and time frame, if applicable.
e.   Identity of potential witnesses.
     1)  Government's case
            Indicate witnesses and witness needs both as
        to liability and remedy.
            Identify all lay witnesses and any already
        known expert witnesses by name,  address, place of
        employment and business phone.   Include substance
        ot  anticipated/actual  testimony  and  it  statements

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                      -14-
    are attached or are on file.  For expert witnesses
    include (1) tield ot expertise and qualifications,
    (2) past cases where retained, (3) if under EPA
    contract, and (4) if not under EPA contract, which
    office/contract will be available to retain the
    expert.
         Indicate whether any further investigation is
    necessary to identify lay witnesses.  Indicate any
    additional expert witnesses needed beyond those
    already known by area ot expertise and testimony
    needed and state which office/contract will be
    available to retain the experts.  In particular,
    indicate if expert witnesses will be necessary to
    analyze and/or testify in regard to environmental
    consequences, technological remedy development or
    financial  capability.
2)  Defendant's case.
        Identify all lay or expert defense witnesses
    anticipated, including their employment addresses,
    expertise  and likely content of testimony.
Elements ot proof and evidence and need for additional
evidentiary support.
1)  List the necessary elements of proof to establish
    the violation under each statute/section involved.
2)  Present a detailed, objective, factual analysis
    oi the strength or weakness ot all available real,

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                           -15-
         documentary and testimonial  evidence  corresponding
         to each necessary element  ot proot  set  forth  in  the
         above list.   New or  stale  evidence  is relevant,  as
         is the dependability ot  testing  techniques and legal
         status of  test  methods.  Therefore, spell out any
         assumptions made  as  to the quality ot this evidence.
         Identify missing  facts and holes in data.
    3)   Identify and  indicate  location ot all real evidence.
         Identify all  documentary evidence, and  if possible,
         attach (or state  location of) each item ot documen-
         tary  evidence under  section  13 g.  Include a list
         ot all  ongoing  and planned evidence gathering efforts?
         e.g.,  ongoing DMR analysis, new stack tests, CEM data,
         or RCRA information  request for further inspection.
    4)   If evidence will be  obtained at a later date, state
         how and when.
    5)   If evidence is  to be made available by discovery,
         suggest discovery plan.  Indicate (1) type of
         evidence to be developed, (2) person or organization
         currently In possession ot evidence, and (3)  draft
         of initial discovery to be used.   Identify areas
        where swift action on discovery is needed.  To
        preserve testimony or records attach initial  draft
        discovery documents under section 13 c.
g.  Anticipated defenses (legal and equitable) and govern-
    ment responses.

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                          -16-



    1)  Indicate all actual or anticipated legal and


        equitable defenses favorable to the defendant, and



        briefly set forth the government's response thereto.


        For defenses such as governmental estoppel, laches


        or attirmative detenses based on Rule 12 ot the


        Federal Rules of Civil Procedure, EPA need only


        identity the defense and the underlying tacts and
                 • • tf

        merits.  The DOJ attorneys will usually be familiar


        with the legal issues.  On the other hand, EPA


        attorneys are usually more familiar with defenses


        based on Agency statutes, regulations and policies,


        or Agency involvement in matters central to the


        case.  For  these detenses the Region should not


        only identify the defenses and underlying facts,


        but fully discuss their legal bases and merits.


    2)  Include all technical data and test results


        favorable to the violator both as to prima tacie


        case and defenses.  Indicate any relevant or


        mitigating  tactors that may bear adversely on the


        government's contentions.  Reference defense



        witnesses under section 12 e. 2.


h.  Resource commitments.


        Describe estimated case budget; indicate what


    resource commitments both budgetary and personnel will


    be reauired and if the Region is prepared to provide

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                              -17-
        them.  If not, state where they will be obtained.  In-
        clude here costs tor experts and additional testing.
    i.  New evidence.
            Update all new evidence and information and forward
        it to Headquarters, DOJ and/or the U.S. Attorney, as  it
        becomes available.
13.  Attachments,  where applicable:
    a.  Index to  attachments.
            List  attachments and use tabs  if possible  for
        ease ot reterence.
    b.  Draft complaint.
            Include  draft  complaint.   Headquarters  and DOJ
        consider  the complaint  a usetul  document, although at
        a  later date the complaint may change.
    c.   Dratt  discovery.
            If discovery is  needed,  include  initial  interroga-
        tories and request for  production, etc., as  appropriate
        or  known.
    d.   Dratt  consent  decree.
            Unless the case  is  straightforward, minor  or
        negotiations  have  reached  a productive  stage,  inclusion
        of  a draft consent decree  at  this point in the case
        development  would  not be practical or advisable.   If
        attached, indicate the  stipulated penalties.

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                      -18-
Draft motions.
    Inclusion of draft notions depends somewhat on the
urgency, complexity and litigation strategy ot the
case.  Include when necessary and appropriate.
Table of Violations.
    The Table of Violations should specify dates for
each alleged violation, and tor each, the statutory/
regulatory provisions involved.
Documentation of violations.
    Include here documentation of violations and
enforcement history of defendant referenced in section
7.  Include copies of inspection reports.  Also include
here documentary evidence referenced under section 12
f. 3.
Permits end contracts.
    Include copies of all applicable permits find con-
tracts.
Significant correspondence between EPA, defendant

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                           -19-
     The  settlement  figure  should briefly discuss how the
     bottom  line  figure was determined, particularly in
     regard  to any economic benetit contained in this figure.
     The  proposed opening negotiating position should con-
     tain a  briet statement why that particular figure is
     appropriate.  Attach BEN printout.
k.   Diagram of facility.
         Include any official or unofficial diagram of the
     facility, or the actual workings (drawings) ot the
     violation.  Any diagram, if not misleading or factually
     incorrect, will be useful.  The diagram need not be to
     scale or one made by a professional artist or draftsman..
     State if video tapes were made and where located.
1.   Case Plan.
        Attach a case plan here if prepared by the Region.
m.   Dun and Bradstreet report; SEC Form 10K; Annual Report;
     Papers relating to corporate status from Secretary of
     State's ottice; ABEL printouts and legal description
     of property, as necessary and if obtainable.
n.   Other relevant information.
         This is a catch-all category and includes all
    other relevent documents, technical data and  information,
    etc., which may aid the AECs, DOJ and the U.S. Attorney
     in preparation and prosecution of the case.   Please  list
     in the Index to Attachments all such documents included
    here.

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GM-49

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  j       UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                       WASHINGTON, D.C. 20460
 4\»


                            FEB   31986
                                                     OFFICE OF E\FO»ClyfVT
                                                       k>DCOMPU*>C! .
                                                         MOMTOtl>G
MEMORANDUM

SUBJECT:  Implementation  of  Guidance  on  Parallel  Proceedings

FROM:     Terrell E. Hunt, Dlrec.car-rfi^?*^^J^^'^—f
          Office of CriminaT~~Enforcement
            and Special Litigation

TO:       Regional Counsels, Regions  I - X


I.  Background and Purpose

     Policies have been issued within the last  two  years chat
address the legal issues  which arise  in  parallel  proceedings
and suggest procedures for (1) determining  to pursue a parallel
proceeding, and (2) establishing appropriate supervisory safe-
guards to insure the integrity of parallel  criminal and  civil
or administrative proceedings.1

     This memorandum briefly reviews  the rationale  for management
caution in this area and  shares with  all of you the approach that
has been taken in some instances.  We seek  to assure consistent
practice-in this area by  implementing standard  procedures for
making the "finding" to engage in parallel  proceedings,  and for
documenting the supervisory  "wall" established  to preserve the in-
tegrity of the respective criminal/civil-administrative  processes.

n.  Issues that Arise In Parallel Proceedings

     The existence of parallel criminal/civil proceedings pro-
vide defense counsel in the  criminal  case an opportunity to
obtain valuable information  that would not  otherwise be  avail-
able to them, to engage in procedural tactics that  may delay or
complicate the prosecution,  and to raise affirmative defenses.
These defenses may include an allegations of ab^u'se  of  the grand
        IT
          See, "Policy and Procedures on Parallel  Proceedings
at the Environmental Protection Agency,"  Courtney M.  Price,
Assistant Administrator, January 23, "1984;  "The  Role  of  EPA
Supervisors During Parallel Proceedings", Courtney M.  Price,
Assistant Administrator, March 8, 1985.

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                               -2-

Jury process (Rule 6(e)1)2, Fifth Amendment violations3, and
improperly using civil discovery or administrative means to
obtain information for the criminal case4.
            i*

     In the absence of clear guidance from the case law in this
area, we seek to take every precaution to minimize the avail-
ability of such tactics and allow a strong response where such
defenses are raised.   It is essential that we follow existing
guidance in (1) deciding consciously (and at the policy level) to
engage in a parallel proceeding, in (2) separating the technical
and legal support staffs* on the respective cases, and in (3)
documenting both the decision and the separation of staffs.

     The Offices of Regional Counsel execute all criminal and
gi.vil actions and concur in the issuance of all administrative
complaints.  ORC can serve as the focal point in identifying
parallel actions and in applying the appropriate procedures.


III.  Procedures for Seeking Authorization for Engaging in
      Parallel Enforcement Actions

     These potential problems in parallel criminal/civil actions
motivated the Assistant Administrator to require Headquarters
review and approval of any parallel proceeding^.  The Assistant
Administrator notifies the Regional Administrator after parallel
action has been approved?.  In seeking approval to engage in a
parallel enforcement action, the region must identify the
respective actions that are proposed to be taken and set forth
the circumstances requiring parallel action.  Typically, the
justification will focus on the following matters:

    (A)  The nature of the misconduct of the potential defendants
         in the crioinal/civil-administrative actions, and  the
         applicability of the respective remedies to the miscon-
         duct of che respective defendants;

    (B)  The urgency of any environmental and/or health risks
         posed by such alleged misconduct, and the best use of
         available authorities to respond to such risks; and

    (C)  The regulatory context within which the violation  arises
         and the application of enforcement sanctions which will
         send the strongest deterrent message to the regulated
         community.
       ^"Policy and Procedures on Parallel Proceedings",  Id. at  9,
       3ld., at 5.
       73T3. , at 9.
       13. at 8, 11.
       ^Tunctions and General Operating  Procedures  for  the
Criminal Enforcement Program." Courtney M. Price, Assistant
Administrator. January 7, 1985, at  7,  8.
       7ld. at 3.

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                             -3-

     A good recent example of a. letter requesting a parallel pro-
ceeding and communicating Che rationale therefore was submitted
by Region VIII in the "Eagle-Picher" case.  That request, together
with the subsequent approval, is attached as Attachment No. 1.


IV.  Procedures for Documenting the Separation of Technical and
     Legal Support Staff

     One of the primary reasons for the approval of the Assistant
Administrator is the necessity of monitoring the separation of
the technical and legal staffs assigned to the respective cases.
Documents listing the legal and technical staff separation
arrangements should be drafted immediately after the parallel
proceeding is approved by the Assistant Administrator.5  The
documents should include at a minimum:

     (A)  The identity of the matter;

     (B)  The date of Assistant Administrator's approval
          of the parallel proceeding;

     (C)  The names of persons who will provide technical or
          legal support to each case and their criminal or
          civil-administrative designation;

     (D)  A statement that the list will be revised if
          necessary for changes in personnel involved.

     An example of the documentation of the technical staff separ-
ation in a Region VI case is attached as Attachment No. 2.  The
chart provided by the Region is a good format to follow.  A doc-
ument from the Regional Counsel listing the legal staff separation
should also be included as an attachment to the letter.  The
Regional Administrator or Deputy Regional Administrator should
sign the document.  The document and any revisions should be kept
on file in the Regional Office, with a copy sent to the Assistant
Administrator for filing at Headquarters.
Attachments (2)

cc  Deputy Regional Administrators, Regions I -
    Too Gallagher, NEIC
    David Buente, DOJ
    Judson Starr, DOJ/ECU

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                     'u* STATES ENVIRONMENTAL PROTECTION . JENCY ^tacnnent M
                                   REGION Vlll

                   ONE DENVER PLACE - m inx STREET - SUITE 1300
 REF  SRC
              JUK f •      DENVER. COLORADO 10202-2413
 MEMORANDUM   *UI «* 885

             / .   ^      ""*ENFORCEMENT CONFIDENTIAL'
 TO:       Terrell E. Hunt,  Associate Enforcement Counsel  for Criminal
           Enforcement and Special Litigation


 FROM:     Robert  L. Ouprey,
           Hazardous Waste

           Thomas  A. Spelcher
           Regional  Counsel

 SUBJECT:   Request for  Concurrence on  Initiation  of  C1v1l  Parallel  Proceeding,
           Eagle-Picher Industries


      ISSUE;     The  Regional  Office  Intends to file  a RCRA administrative
 complaint  and  compliance order requiring  Installation of  groundwater  wells and
 site  cleanup  and  seeking penalties.   Issuance of this action  constitutes  a
 parallel proceeding as there 1s  an  on-going  criminal Investigation at this
 site.

      DESCRIPTION  OF THE  PARALLEL PROCEEDING;  Eagle-P1cher Industries, Inc.,
 (EPI) has  been  under criminal investigation  since August  of 1984.   Information
 received by EPA indicated that EPI personnel Illegally  burled drummed
 hazardous  waste at  the site,  located  in Colorado Springs,  Colorado.   We
 understand that the  U.S.  attorney has reviewed the  criminal case and  that an
 indictment is pending  a  request  for immunity.

     Routine RCRA compliance  inspections conducted  in 1983  indicated  that the
 EPI facility was  not in  compliance with the  hazardous waste regulations.
 Significant violations of the regulations were confirmed  by samples collected
 during the joint criminal and civil investigations  that occurred in 1984.  The
 most significant violations  are  lack of any  groundwater monitoring wells  and
 spills and leaks of  hazardous waste that have resulted  in  surface  and
 subsurface soil contamination.

     The assistant U.S.  attorney  assigned to the criminal case has Indicated
 that the criminal  action deals solely with the one  instance of illegal drum
 burial.  The administrative  action the Region proposes to  issue deals  with
 groundwater monitoring violations at four surface impoundments located away
 from the drum burial site, as well as spillage/disposal of hazardous  waste at
 a loading  dock  and at  other  sites which are removed from the  drum  burial
site.  The criminal   and  administrative counts are therefore separate  and
distinct,  without overlapping subject matter.

     NECESSITY  OF A  PARALLEL PROCEEDING:  Significant environmental and
political  issues have  been identified at the EPI site.  The available
 information is  summarized below and supporting data and facts are  included in
 the attachments.

-------
Bequest for ttnairrence an Initiation of Civil feralltl Proceeding,
Begle-Picher industries
      2
      (ID  Four hazardous waste ponds, two of which are not lined, are used to
      •tore hazardous waste containing cadmium.  There are no groundwater
      monitoring wells.  Refer to attachment A - Draft Complaint,  for specific
      inforration.

      (2)  Spilled and discharged hazardous waste has resulted in  soil
      conftaminaticn.

      (3)  Contamination of off -site toils, adjacent surface water, and
      groundwater is suspected.  EPA contractors are now being used to
      investigate possible releases fror the site for issuance at  a later tire
      of « corrective action order.

      (4)  The company is not financially sound according to an analysis
     performed by Region VI II 'a financial analyst.  This evaluation is based
     on tit»e company's liability resulting fror asbestos litigation and is
     detailed in attachment B.  Our financial analyst strongly urges that we
     proeoed with enforcement action before the corpany seeks protection under
     bankruptcy.

      (5)  The facility was identified in 1984 as a "significant non-oorplier"
     because of the major violations of the groundwater monitoring
      requirarents.  EPA policy dictates that enforcement actions be issued
     against significant non-cocpUers as soon as possible.  Additionally, the
     facility is listed in the Dingell report as 'lacking groundwater* wells
     and no enforcement action has been taken.
     (6)  '.rhe public, news media, and Senator Kramer have all expressed
     concern over the significant environmental issues at the site and have
     requested that EPA require site clean-up as soon as possible.  Refer to
     attachment C which includes correspondence and relevant newspaper
     articles .

     (7)  The Region's intention to file an administrative complaint has been
     discussed with the assistant U.S. attorney assigned to the criminal
     case.  He has indicated that the Region may proceed with its intended
     course of action and has no objection to the complaint and compliance
     order with proposed penalties.

     There ire several pertinent issues raised in Qxrtney Price's January 23,
1984, memo en parallel proceedings that have been addressed.  Please refer to
attachment D for specific comments.

     SUWARY;  Significant environmental and political issues irake it
necessary ror EPA to pursue a civil action at the EPI facility.  The civil
action has a legitimate purpose and is not being instituted to strengthen the
criminal caas.  The criminal investigation at EPT is limited in scops, and the
civil action for cleanup and groundwater monitoring with proposed penalties
will address areas of the site unaffected by the criminal proceeding.

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Request  for  Concurrence on  Initiation  of  Civil  Parallel  Proceeding,
Btgle-Picher Industries
Page  3


      Separate technical and legal staff have been assigned to the civil and
criminal matteca.  EPI is aware of the criminal investigation and knows that
civil compliance problems exist at the site.  The assistant U.S. attorney
conducting the cririnal case has no objection to the Region proceeding with
the civil action.

      If  farther information if desired please contact Lorraine Rosa of the
Office of Regional Counsel at PS 564-1473.

     RBCPEST PCR ACTION;  Region VIII  requests concurrence on the initiation
of a civil administrative action which will constitute a parallel proceeding
in this ratter.  Do you concur?
                                                                     YES
Attachments A - D

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           UNITED SUTES ENVIRONMENTAL PROTECT,.. * AGENCY
   ,'                    WASHINGTON. D.C. 20460
                             JUL30G65
                                                       OWK'l f>r »\>,i«( i\.t
 MEMORANDUM
 SUBJECT:   InlcUcion of Contemporaneous  CivLT Administrative
           Proceed Ing)  Ejgle-Picher In
                       ^
 FROM :      Ttrr
           Offiet of Criminal  Enforcement
             «nd  Special Litigation

 TO:        Robert L.  Duprey, Dirtetor
           Hazardous  Waste Management Division

           Thomas A.  Speicher
           Regional  Counsel


     We concur with  your request to proceed with an administrative
 action against Eagle-Picher Industries which would run contempor-
 aneously with  the on-going criminal investigation.  We agree that
 the  environmental and  health  risks at the site and the tenuous
 financial  status of  the  firm  warrant timely administrative action.

     Over  the  past  few weeks, Randy Lutz, Director of the Office
 of Criminal  Enforcement, has  conferred by telephone with Dianne
 Shannon about  the nature and  scope of the proposed administrative
 action.  Clarity in  this natter is important in determining
whether a  classical  parallel  proceeding  would result from the
 filing of  the'adminsitrative  case.  As we understand it, the
 Region has now determined that its administrative case will not
 include counts for waste burial which are the sole subject of the
 criminal case.   Accordingly,  the administrative case will not
 include any  counts which would be  included in the indictment,
 and  is not,  strictly speaking, a parallel proceeding.

     Our concurrence relies heavily upon your assurance that the
 U.S. Attorney  conducting the  criminal case has no objection to
 the  civil  action.  I have discussed the matter with NElC's Ren
Vahl, the  agent  handling the  criminal case,  who noted that NE1C/OCI
has  supported  contemporaneous civil action in this matter since
 it was first discussed last December.   We strongly endorse your
decision to  assign separate technical and legal staff to the
respective criminal and administrative matters.

     I appreciate the  substantial effort you have made to document
the  case and seek our  review of the matter.

cc/  Richard  H. Mays, OECM
     Judson Starr, DOJ/ECU
    James  L. Prange, Ken Uahl, NE1C/OCI

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           UNITED STATES ENVIRONMENTAL PROTECTION ACENft
                        WASHINGTON, D.C. 20440
                             OCT 17
                                                      IM I . , .

                                                         4V '
 Honorable Dick Whiteington
 Regional Administrator, Region VI
 D.S. Environmental
 Protection Agency
 1201 Elm Street
 Dallas, Texae  75270

     Re:  Parallel Civil/Criminal Proceeding Against
Dear Dick:

     I ao writing to you in your capacity a* Region 6 Enforce-
ment Contact to enliit your assistance in properly coordinating


     A criminal referral against £••••? and three of its
corporate officers was approved by me on September 30, 1985,
and mailed to the Office of the United States Attorney for the
Southern District of Texas in Houston, Texas.  Last week, I
approved a concurrent civil referral under the Clean Water Act,
seeking necessary injunctive relief as well as civil penalties
against VHW  The decision whether to pursue these remedies
simultaneously or sequentially is an important matter of reg-
ulatory policy and prosecutorial judgment on which the Agency
and Department will consult.  At this early stage, however, the
procedures indicated in my January 23, 1984 and March 12, 1985
memoranda concerning "parallel proceedings" by the Agency should
be instituted.  I understand'that the region has already taken
steps to implement that guidance for this case.  Separation of
staff and supervisory personnel and responsibilities working on
the civil case from those working on the criminal case,  should
be effectuated immediately.

     I would appreciate your reiterating to the appropriate
Region 6 staff the importance the Agency places upon avoiding
any potentially improper entanglements of the two proceedings.
I further request that an appropriate Region 6 official  advise
Terrell E. Hunt, Director,  Office of Criminal Enforcement and
Special Litigation,  of the specific procedures being implemented
to ensure the separate development and prosecution of these
proceedings.

-------
                               -2-
     I iffi gratTeful for your assistance In this  vary  important
natter.

                                  Sincerely yours,
                                      
-------
•» \   UNITED IT ATES ENVIRONMENTAL MOTICTION AGENCY
            Regional Administrator
                                  vi
                iNTKftFlMT TWO iUILOlNC. ItOI tLM STftf CT
                        DALLAS. Tf XAS 7M70


                         November 20,  1985
  MEMORANDUM

  SUBJECT:  PiriVUl Proceed1ng^ga1nst


  FROM:
  TO:       Ttrrtll E. Hunt, Director
            Office of Criminal Enforcement and
            Special Litigation (LE-134P)

       In response to Courtney Price's letter of October 17,
  1985, I am taking this occasion to advise you of the specific
  procedures which have been Implemented by Region VI to ensure
  the separate development and prosecution of potential parallel

  are aware, the JBIBV criminal referral involves alleged
  violations of multiple environmental statutes and Sections of
  Title 18 of the United States Code.  Although the existing
  civil referral contains only water counts, our assumption 1s
  that additional RCRA counts will be added at a later date.
  Because of the multi-media aspects of this case, support
  activity from Region VI could potentially come from four
  divisions within the Region •- the Water Management Division,
  the Hazardous Waste Management Division, the Environmental
  Services Division and the Office of Regional Counsel.

       In order to avoid any potentially improper entanglements
  of the proceedings, Region VI has identified separate liti-
  gation support teams to provide technical and legal assistance
  to the prosecution of each case.  Additionally, efforts are
  currently underway to ensure that all  potential participants
  in either prosecution effort are aware of all requirements set
  forth in memoranda issued by Courtney Price on March 12, 1985,
  and January 23, 1984, respectively.  I have attached a chart
  showing the make-up of the litigation teams.  If you have any
  further questions regarding this matter, please contact Jim
  Neet, Deputy Regional Counsel  at FTS 729-9984.

  Attachment

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Criminal
Civil
                    Name
Position
Reg. VI Ofc.
Area of
Expertise
SupervIsor
I. Hark Potts Engineer Water Enf. Water Roger llartung
-»
2. Dave Sullivan Env. Sc1. Env.Serv .01 v . RCRA/CERCIA Charley Gazrfa
3. Nary Kale Attorney . Req. Counsel Legal
1. Bruce Hale Engineer Water Inf. Water
?. Harriet Tregnnlng EPS RCRA Enf. RCRA
3. Ralph Corley Attorney Reg. Counsel legal
Barbara Greenfield
*
Jack Ferguson
Rill Taylor
Jim Col 1 Ins

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GM-50

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     5 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY

    /                WASHINGTON. D.C. 20460



                            AIJG281986


                                                        OFFICE Of
                                                      ENFORCEMENT AND
                                                     COMPLIANCE MONITOMINC
 MEMORANDUM

 SUBJECT:   Expanded Civil  Judicial  Referral  Procedures

 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
of 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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                              -2-

collection actions and all non-governmental mobile source tam-
pering 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 wh'ere 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
         V.oxicity.

     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 STPs due to a future change in the related NAAQS.

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                               -3-

         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 Interiir.
         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  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 non-ferrous smelters;

         c.  cases  involving NESHAPs;

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                              -4-

         d.  post - 1982 date cases.

      4.  All TSCA & FIFRA collection actions for unpaid
         administratively assessed penalties.^/

      15.  All mobile 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 referral program.

     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.  The Regions should continue to send
copies of the case referral reports directly to OECM, and
where appropriate, to the program office for review.  OECM and
DOJ will concurrently review these referrals.  Within 35 days
of receipt of a copy of the direct referral package, the appro-
priate AEC will comment on the merits of the referral to DOJ
and to the originating regional office.  He may ask the
Assistant Administrator of OECM to recommend to DOJ 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.  It
should be noted that in all direct referral cases, as with
all other enforcement cases, the Regions still must coordinate
settlement terms with Headquarters and submit consent decrees
to OECM for review and approval.  (See memorandum of November 28,
1983, entitled, "Implementation of Direct Referrals for Civil
Cases Beginning December 1, 1983" at page 5 (GM-18).)  All other
existing policies and procedures regarding direct referrals and
case management will remain in effect.


Pre-referral Negotiations

     OECM has concluded that Headquarters should not establish
mandatory requirements for pre-referral negotiations.  Never-
theless, use by the Regions of pre-referral negotiations, when
and where appropriate, is to be encouraged by the Regional
Counselso  Also note that the Regions should continue to follow
current applicable guidance set forth in Frederick F. Stiehl's
July 30, r.985,  memorandum entitled "Preparation of Hazardous
Waste Referrals" wherein pre-referral negotiations for hazard-
ous waste cases are discussed.  In addition, refer to the
4/ This class is now included in actions for unpaid administra-
tively or judicially assessed penalties arising under any
statute.  See expansion category number 1 above.

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                               -5-

memorandum  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.
 "Hold 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 them 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
 time and resources in the Regions, in OECM and at DOJ.

     Therefore, it is OECM policy that hold action requests
 should be used pnly 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 be
 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
and 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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                              -6-

must be very careful to avoid risking large resource expendi-
tures in bankruptcy cases where there may be little realistic
chance of obtaining material recoveries, even it we prevail on
legal issues.  These concerns make it imperative that bankruptcy
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 OECM review and referral to DOJ
at the earliest possiJble time.  These claims will be referred
by the Assistant Administrator, OECM and approved in writing
by the Assistant Attorney General, Land and Natural Resources,
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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                           Appendix A


  Categories of Direct Referral Cases As of September 2, 1986


General

     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 CCRCLA
         and cases where Lhare 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 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.£/  The pre-
         ceding types of actions against governmental entities
         shall continue to be referred to OECM.


Clean Air Act

     1.  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.  NESHAPs cases other than asbestos and vinyl
             chloride; and

         d.  lead sources.

     2.  All mobile source tampering and fuels cases (except
         governmental entity cases)  arising under the Clean
         Air Act, sections 203 and 211 respectively.
I/  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,

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                              -2-

Clean Water Act

     1.  All cases involving discharges without a permit by
         industrial dischargers.

     2.  All cases against minor industrial dischargers.

     3.  All cases involving failure to monitor or report by
         industrial dischargers.

     4.  Referrals to collect stipulated penalties from
         industrials under consent decrees.

     5.  Referrals to collect administrative spill
         penalties under Section 311(j) of the CWA.

     6.  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.


Safe Drinking Water Act

         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.)
RCRA
     1.  All judicial actions alleging interim status violations
         under RCRA §3008(a) except cases involving 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 authority does not include
         corrective action cases under 3008(h).

     2.  All RCRA judicial actions seeking penalties only,
         except for underground injection control regulation
         f»a co c
         cases

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                              -3-

         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.
TSCA & FIFRA
         All TSCA & FIFRA collection actions for unpaid
         administratively assessed penalties.
2/ This class is now included in actions for unpaid administra-
tively or judicially assessed penalties arising under any
statute.  See General category number 1 above.

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    Ti
    3 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
    /                WASHINGTON, D.C. 20460
                                                        OFFCEOF
                                                      ENFORCEMENT AND
                                                     covpuANCt MOMiTOMtNG

 Honorable  F.  Henry  Habicht,  II
 Assistant  Attorney  General
 Land and Natural Resources Division
 U.S. Department of  Justice
 Washington, D.C.  20530

                       Re; 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 15, 1977, Memorandum of Understanding
 between our respective Agencies.

     The following  8 classes of cases will be added  to the
direct referral program:

     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-

     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.}_/  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 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
         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
         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 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:
I/  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 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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                               -3-

      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  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
     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 & FIFRA 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.  He may
ask the Assistant Administrator of OECM to recommend to DOJ

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                              -4-

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 Hgadquarters program offices
a.nd 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,
                            Thoraas L. Adams, Jr.    V
                            Assistant Administrator
Approved:
   Henry]Habicht, II
Assistant Attorney General
Land and Natural Resources Division
U.S. Department of Justice

cc:  Richard H. Mays
     Senior Enforcement Counsel

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GM-51

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      1 UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
     '/                 WASHINGTON. D.C. 20460

                             OCT281986
                                                          Office of
                                                        ENFORCEMENT AND
                                                      COMPLIANtk MONITORING
MEMORANDUM
SUBJECT:  Guidance on Calculating After Tax Net Present Value
          of Alternative.Payments
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. V

     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 u.se the after tax value of a proposed
investment when determining whether and by how much to mitigate
a civil penalty.^/

     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.^/ Therefore, the Agency
also must reduce the after-tax value of the cash flows invested
in an alternative payment project to its net present value at
the date of settlement.


FTProposed 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.

?J   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 tax 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 about 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-

     Tne 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:'

             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 ot the alternative payment on tne date of
settlement, which is the date substituted for the first month
ot noncompliance (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 showing 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
$500,000 in pollution control
provide environmental benefits
meeting legal requirements for
present value in 1986 dollars
period of 20 months is $299,56
alternative payment in this ex
violator must commit to invest
how the BEN model displays the
 to invest over the next 20 months
equipment.  The equipment will
 beyond those that result from
 compliance.  The after tax net
of a $500,000 investment over a
2.  Therefore, the value of the
ample is $299,562, although the
ing $500,000.  Exhibit 1 shows
 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 2

                            OUTPUT OPTIOH 2
     ALTERNATIVE PAYMENT EXAMPLE
                                          «-:'ftWtft:24, 1986
                                          ~   *   .
                                               V f 1* f T ;
     PRESENT VALUE COST " OF PURCHASINBr THE:INITIAL
     POLLUTION CONTROL gOUIfPlgNT ON T!I'IE flNP	
     OPERATING IT THROUGHOUT ITS USEFUL LIFE
                                                         303688
 B.   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
OFERATION OP POLLUTION CONTROL EQUIPMENT	
PLUS ALL FUTURE REPLACEMENTS      *"
                          1BMB
ECONOMIC BENEFIT OF A    1 MONTH DELAY
AS OF INITIAL DATE OF NONCOMPLIANCE
(EQUALS B MINUS C)
                                                             3763O4
                                                               3378



AS OF THE PENALTY PAYMENT DATE, 1 MONTHS
=========

->-

v_>_>.> THE ECONOMIC SAVINGS CALCULATION ABOVE <-<-<-<-<-<-
9*. ' '


USER SPECIFIED VALUES
1.
4. .
3.
5.
• »•
7.
CASE NAME" ALTERNATIVE PAYMENT EXAMPLE
ONE 'I ME NONDEPRECIABLE EXPENDITURE • • » O
FIRST MONTH OF NONCOMPLIANCE" M, 1987
PENALTY PAYMENT- DATE- " ' 12, 1987




STANDARD VALUES '' • '' * •;/ '

9.
11.
1*..
13.

INVESTMENT TAX CREDIT RATE . - - - • • 10. OO
ANNUAL INFLATION RATE" ' r .:"''' " 6'°°
'IStJOUNT — rmTt •" 	 — — - - • . . ». »"• ^v
AMOUNT OF LOW INTEREST .FINANCING* --: ;;"';" » 0
7.
r.


-------
                                 EXHIBIT 1

                                    OPTION 2
     ALTERNATIVE PAYMENT EXAMPLE
                                              APRIL 16, J1986
 A.   PRESENT VALUE COST OF PURCHASING THE INITIAL
	PHI I I IT TDM PfHMTRnt  F'nilTPMP'MT  DM  TIME AND
     OPERATING IT THROUGHOUT  ITS USEFUL LIFE
B.   PRESENT VALUE COST OF ON-TIME  PURCHASE AND
	ClPFRATTflN IIP INITIAL POLLUTION CONTROL	
     EQUIPMENT F>LUS ALL FUTURE KEPLACEME.NfS
     PRESENT VALUE COST OF DELAYED PURCHASE AND
     OPERATION GIF POLLUTION CONTROL EQUIPMENT
     PLUS ALL FUTURE REPLACEMENTS
     ECONOMIC DE'NEFIT OF A  20 MUNIH L^.Lf
     AS OF INITIAL DATE OF NONCOMPLI AtJCE
     (EQUALS B MINUS C)
                                                           58620
.UJ£,
                      .FIT DF A   20 MONTH DELAY
     n2  Of I'SL : t.:4ALTY PAYMENT DATE,   20 MONTHS
     AFTER THE INITIAL DATE OF NONCOMPLIANCE
                                                           77252
                 THE ECONOMIC SAVINGS CALCULATION ABOVE
                 USED THE FOLLOWING VARIABLES;	
         USER 'SPECIFIED VALUES-
:l>-
4!."
s.
6.
7-
CASE NAME- ALTERNATIVE PAYMENT EXAMPLE
INJTJAL CAPITAL INVESTMENT * *
ONE-TIME NONDEPRECIABLE EXPENDITURE -
ANNUAL O&M EXPENSE- *
FIRST MONTH OF NONCOMPLIANCE-
COMPLIANCE f>ATE»
PENALTY PAYMENT DATE? ..'_•.-
5000OO
*
7OOO
4,
12.
. .*2,
19Bfc DOLLARS
0
1986 DOLLARS
1986
1987
1987
         STANDARD VALUES
8,
9,,
10.
11.
12.
13.
USEFUL -tlFE OF POLLUTION CONTROL EQUIPMENT - " • \ .
INVESTMENT TAX CREDIT ..RATE. - . .-.-.:
MARGINAL IWpOME TAX RATE-- . , -
ANNUAL INFLATION RATEF «. . ' *«'.-. ' . .
DISCOUNT pATE » ..*...,.,,. .... .
AMOUNT OF LON INTEREST FINANCING - *
. 15 YEABS.
10.00*^
50.00
6 . 00
18.0O V.
0
                                          • . >>

-------
GM52

-------
          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                        WASHINGTON. D.C. 20460
MEMORANDUM

SUBJECT:  Final EPA Policy on the Inclusion of Environmental
          Auditing Provisions in Enforcement Settlements

FROM:     Thomas L. Adams, Jr.
          Assistant Administrator for Enforcement
            and Compliance Monitoring

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 con ^rning this policy should be directed to
Neil Stoloff, Legaj. 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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                              -2-

Addresseeu:

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

-------
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.

-------
     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."!/

 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."3/

     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:

     8  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.

     9  Focus the attention of a r> Dilated 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 time 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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                              -2-

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 may, in part,  take the form of   ~~
a party's commitment to conduct an environmental audit of 'its
operations.  While this would not replace tho need for correction
oi: 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

     8 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. "j>/

     This policy is particularly applicable in cases involving
tho owner or operator of extensive or multiple facilities,
whore inadequate environmental management practices are likely
to extend throughout those facilities.(5/  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 f:  n 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
ordsr 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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                               -3-

 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. U)/  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.ll/

      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) internal
 communications and  control  systems; and (9) hazard identifica-
 tion and risk  assessment.12/

     Whether to seek a compliance audit, a management audit, ot
 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. 1_3/  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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                              -4-

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.

     0 A process which includes specific procedures to promptly
       prepare candid, clear and appropriate written reports •
       on audit findings, corrective actions, and schedules
       for implementation.

     * 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
of::ices 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
th« 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
merits 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
corrmitment 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.1J3/  Other recent
Agency settlements, also successful, have entailed full disclosure
of the auditor's report of findings regarding noncompliance,

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                              -5-

 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 noncompliance unless the plan requires:

     0 Use  of an  independent third-party auditor not affiliated
         with the audited entity;
     0 Adherence  to detailed audit protocols; and
     8 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.2^/  Notwithstanding such statutory
 authority, Agency negotiators should expressly reserve 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 may 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 £>trong 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
steims 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 aud   result in a penalty amount lower
than the economic benefit of noncompliance.

     For judicial settlements wnere penalties are proposed to'
be nitigated 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.31_/  Where appropriate, negotiators
may consider defining in advance which categories of audit
information will qualify for CBI treatment.32/  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 Legal 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, auditing 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 Enforcement:  State/Federal Enforcement 'Agree-
ment s."'3£/

Attachments

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                               -8-

                            FOOTNOTES

 L.  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., Vicke.ry, Ohio and
     Kettleman Hills, California facilities, Attachment B,  pp. 1
     and 2 respectively; and Attachment 0.

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, 1983).

28.  51 Fed. Reg. 25007 (1986).

29..  See Attachment C, §A.3; Attachment D, §B; Attachment E,
     "§CT3; 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
     (EPA 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 B:  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
Acjency 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 G:  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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                          Attachment A
            Wednesday
            July 9, 1986
e    'S
Part IV

Environmental
Protection  Agency
Environmental Auditing Policy Statement;
Notice

-------
25004
                   Federal Register / Vol. 51. No.  131 / Wednesday. July 9. 1986 /  Notices
                   ^"^^«_^^__^^__P«^HMM^MM
ENVIRONMENTAL PROTECTION
i    E-fRL-3046-«]

Environmental Auditing Policy
Statement

AGENCY: Environmental Protection
Agency (EPA).
ACTION: Finil policy statement.

SUMMARY: I:: is EPA policy to encourage
;he use of environmental acditirg by
regulated entities to help achieve and
maintain compliance with
er.vironmen al laws and regulations, as
well as tc help identify and correct
unrrgulated environmental hazards.
EPA first published this policy as
'.-.terim guidance on November 8, 1985
 ;0 FR 46504 . Based on commends
received regarding (he interim  guidance.
'.;•.ve!op. implement and upgrade
-r.viror.mentel auditing programs;
  • Discussej when the Agency may or
.T iv not request audit reports;
    "xplains how EPA's inspection and
    .rcement ;ictivities  may respond to
regulated entities' efforts to assure
ci?.Tip!iance through auditing;
  • Endorses environmental auditing at
"•.••: not create any defense to. or
. -'-.e.-wise iirr.it. the responsibility of any
• >"-iated entity to comply with
 ;:?!icable regu.atory requirements.
  5f2:es arc encouraged to adopt these
    .T.ilar and equally effective policies
    der to advance the use of
r.^-.rcr.nen'.al auditing or. a consistent.
r.Htionwide basis.
DATES: This f.nal policy statement i
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                   Federal  Register  /  Vol.  51. No.  131 / Wednesday. July 9. 1986 / Notices
                                                                    25005
provide technical assistance for
environmental compliance.

Requests for Reports
  EPA received 12 comments regarding
Agency requests for environmental audit
reports, far more than on any other topic
in the policy statement. One commenter
felt that EPA struck an appropriate
balance between respecting the need for
self-evaluation with some measure of
privacy, and allowing the Agency
enough flexibility of inquiry to
accomplish future statutory missions.
However, most commenters expressed
concern that the interim guidance did
not go far enough to assuage corporate
fears that EPA will use audit reports for
environmental compliance "witch
hunts." Several commenters suggested
additional specific assurances regarding
the circumstances under which EPA will
request such reports.
  One commenter recommended that
EPA request audit reports only "when
the Agency can show the information it
needs to perform its statutory mission
cannot be obtained from the monitoring.
compliance or other data that is
otherwise reportable and/or accessible
to EPA. or where the Government deems
an audit report material to a criminal
investigation." EPA accepts this
recommendation in part. The Agency
believes it would not be in the best
interest of human health and the
environment to commit to making a
"showing" of a compelling information
need before ever requesting an audit
report  While EPA may normally be
willing to do so. the Agency cannot rule
out in advance all circumstances in
which such a showing may not be
possible. However,  it would be helpful
to further clarify that a request for an
audit report or a portion of a report
normally will be made when needed
infoimation is not available by
alternative means. Therefore. EPA has
revised Section UI.A., paragraph two
and added the phrase: "and usually
made where the information needed
cannot be obtained from monitoring.
reporting or other data otherwise
available to the Agency."
  Another commenter suggested that
(except in  the case of criminal
investigations] EPA should iLuit
requests for audit documents to specific
questions. By including the phrase " j?
relevant portions of a report" in Section
III.A., EPA meant to emphasize it would
not request an entire audit document
when only a relevant portion would
suffice. Likewise. EPA fully intends not
to request  even a portion of a report if
needed information or data can be
otherwise obtained. To further clarify
this point EPA has added the phrase.
"most likely focused on particular
information needs rather than the entire
report" to the second sentence of
paragraph two. Section III.A.
Incorporating the two comments above,
the first two sentences in paragraph two
of final Section III A. now read: "EPA's
authority to request an audit report, or
relevant portions thereof, will be
exercised on a case-by-case basis where
the Agency determines it is needed to
accomplish a statutory mission or the
Government deems it to be material to a
criminal investigation. EPA expects such
requests to be limited, most likely
focused on particular information needs
rather than the entire report and usually
made where the information needed
cannot be obtained from monitoring,
reporting or other data otherwise
available to the Agency."
  Other commenters recommended that
EPA not request audit reports under any
circumstances, that requests be
"restricted to only those legally
required." that requests be limited to
criminal investigations, or that requests
be made only when EPA has reason to
believe "that the audit programs or
reports are being used to conceal
evidence of environmental non-
compliance or otherwise being used in
bad faith." EPA appreciates concern*
underlying all of these comments and
has considered each carefully. However.
the Agency believes that these
recommendations do not strike the
appropriate balance between  retaining
the flexibility to accomplish EPA's
statutory missions in future, unforeseen
circumstances, and acknowledging
regulated entities' need to self-evaluate
environmental performance with some
measure of privacy. Indeed, based on
prime informal comments, the small
number of formal comments received.
and the even smaller number  of adverse
comments. EPA believes the final policy
statement should remain largely
unchanged from the interim version.

Elements ofEffectire Environmental
Auditing
  Three commenters expressed
concerns regarding the seven  general
elements EPA outlined in the  Appendix
to the interim guidance.
  One commenter noted that  were EPA
to further expand or more fully detail
such elements, programs not specifically
fulfilling each element would  then be
judged inadequate. EPA agrees that
presenting highly specific and
prescriptive auditing elements could be
counter-productive by not taking into
account numerous factors which vary
extensively from one organization to
another, but which may still result in
effective auditing programs.
Accordingly. EPA does not plan to
expand or more fully detail these
auditing elements.
  Another commenter asserted that
states and localities should be cautioned
not to consider EPA's auditing elements
as mandatory steps. The Agency is fully
aware of this concern and in the interim
guidance noted its strong opinion that
"regulatory agencies should not attempt
to prescribe the precise form and
structure of regulated entities'
environmental management or auditing
programs." While EPA cannot require
state or local regulators to adopt this or
similar policies, the Agency does
strongly encourage them to do so. both
in the interim and final policies.
  A final commenter thought the
Appendix too specifically prescribed
what should and what should not be
included in an auditing program. Other
commenters. on the other hand, viewed
the elements described as very general
in nature. EPA agrees with these other
commenters. The elements are  in no
way binding. Moreover, EPA believes
that most mature, effective
environmental auditing programs do
incorporate each of these general
elements in some form, and considers
them useful yardsticks for those
considering adopting or upgrading audit
programs. For these reasons EPA has
not revised the Appendix in today's
final policy statement

Other Comments
   Other significant comments addressed
EPA inspection priorities for. and
enforcement responses to. organizations
with environmental auditing programs.
   One commenter. stressing that audit
programs are internal management
tools, took exception to the phrase in the
second paragraph of section III.B.I. of
the interim guidance which states that
environmental audits can 'complement'
regulatory oversight By using the word
'complement' in this context. EPA does
not intend to imply that audit reports
must  be obtained by the  Agency in order
to supplement regulatory inspections.
'Complement' is used in a broad sense
of being in addition to inspections and
providing something (i.e., self-
assessment) which otherwise would be
lacking. To clarify this point EPA has
added the phrase "by providing self-
assessment to assure compliance" after
"environmental audits may complement
inspections" in this paragraph.
   The same commenter also expressed
concern that as EPA sets inspection
priorities, a company having an audit
program could appear to be a 'poor
performer' due to complete and sccurat.
reporting when measured against a

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25006
Federal Register / Vol.  51.  No. 131  /  Wednesday,  July  9. 1986 / Notices
company which reports something less
than required by law. EPA agrees that it
'• '-nportant to communicate th:!s fact to
    icy and state personnel, and will do
bv,. However, the Agency does not
believe a change in the policy statement
is necessary.
   A further comment suggested EPA
should commit to lake auditing
programs into account when assessing
jl! enforcement actions. Howevur. in
order to maintain enforcement flexibility
under varied circumstances, the Agency
cannot prorrise reduced enforcement
responses to violations at all audited
facilities when other factors may be
overriding. Therefore the policy
statement continues  to state that EPA
niny exercise; its decretion to consider
Auditing programs as evidence of honest
 md genuine efforts to assure
compliance, which would then be taken
:.-to account n fashioning enforcement
responses to violations.
   A final corr mentor suggested the
phrase "e.xpe ditiously correct
environmental problems" not be tsed in
the eifurccmo'nt context since it implied
EPA would use an entity's record of
i.sr-pctir.g nor regulated matters when
ijvdluatir.g reguldiory violations. EPA
did not intend for such  an inference to
he made. EPA intended the term
    ironmenu 1 problems" to refer to the
     Hying circumstances which
e'. untLally  lead up to the  violations. To
i.l.infy this  poi.it. EPA is revising the
first tun sentences of the paragraph to
•Ahirh th:s comment  refers by changing
"L—%.;ronmer.ta  problems" to "violations
ar.il underlying  environmental
p.-v'jlpms" in the first sentence and to
 •:r.d-?r!ying e.-.vironmental problems" in
ihp second  sentence.
   (n j sep.irjte  development EPA is
preparing nn updiite of its January 1984
(•'•\lerct Fcc:::t:cs Compliance Strategy.
•A?.-ch is -pferenced in section III. C. of
•he u'.idi'.ir.j policy. The Strategy should
He crT.f.c'.ea and available on request
!'.•-> m EPA's Office  of Federal Activities
!.it
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                    Federal Register  /  Vol. 51. No. 131 / Wednesday. July 9.  1986 / Notices
                                                                       25007
 performance of the facility lies with top
 management, which therefore has a
 strong incentive to use reasonable
 means, such as environmental auditing.
 to secure reliable information of facility
 compliance status.
  EPA does not intend to dictate or
 interfere with the environmental
 management practices of private or
 public organizations. Nor does EPA
 intend !o mandate auditing (though in
 certain instances EPA may seek to
 include provisions for environmental
 auditing as part of settlement
 agreements, as noted below). Because
 environmental auditing systems have
 been widely adopted on a voluntary
 basis in the past, and because audit
 quality depends to a large degree upon
 genuine management commitment  to the
 program and its objectives, auditing
 should remain a voluntary activity.

 111. EPA Policy on Specific
 Environmental Auditing Issues
 A. Agency Requests for Audit Reports
  EPA has broad statutory authority to
 request relevant information on the
 environmental compliance status of
 regulated entities. However. EPA
 believes routine Agency requests for
 audit reports * could inhibit auditing in
 the long run. decreasing both the
 quantity and quality of audits
 conducted. Therefore, as a matter of
 policy, EPA  will not routinely request
 environmental audit reports.
  EPA's authority to request an audit
 report, or relevant portions thereof, will
 be exercised on a case-by-case  basis
 where the Agency determines it is
 needed to accomplish a statutory
 mission, or where the Government
 deems it to be material to a criminal
 investigation. EPA expects such
 requests to be limited, most likely
 focused on particular information needs
 rather than the entire report, and usually
 made where the information needed
 cannot be obtained from monitoring.
 reporting or other data otherwise
 available to the Agency. Examples
 would likely include situations where:
 audits are conducted under consent
 decrees or other settlement agreements;
 a company has placed its management
 practices ai  issue by raibiug ihem as a
 defense: or state of mind or intent are a
 relevant element of inquiry, such as
 during a criminal investigation.  This list
  ' An "environmental audit report" it • written
report which candidly and thoroughly presents
findings from i review, conducted is part of an
environmental audit as described in section 11.A., of
facility environmental performance and practices.
An audit report is not a.substitute for compliance
monitoring reports or other reports or records which
may be required by EPA or other regulatory
agencies.
is illustrative rather than exhaustive,
since there doubtless will be other
situations, not subject to prediction, in
which audit reports rather than
information may be required.
  EPA acknowledges regulated entities'
need to self-evaluate environmental
performance with some measure of
privacy and encourages such activity.
However, audit reports may not shield
monitoring, compliance, or other
information that would otherwise be
reportable and/or accessible to EPA.
even if there is no explicit 'requirement
to generate that data.4 Thus, this policy
does not alter regulated entities' existing
or future obligations to monitor, record
or report information required under
environmental statutes, regulations or
permits, or to allow EPA access to that
information. Nor does this policy alter
EPA's authority to request and receive
any relevant information—including that
contained in audit reports—under
various environmental statutes  (e.g..
Clean Water Act section 308. Clean  Air
Act sections 114 and 208) or in other
administrative or judicial proceedings
  Regulated entities also should be
aware that certain audit findings may by
law have to be reported to government
agencies. However, in addition  to any
such requirements. EPA encourages
regulated entities to notify appropriate
State or Federal officials of findings
which suggest significant environmental
or public health risks, even when not
specifically required to do so.

B. EPA Response to Environmental
A uditing

1. General Policy

  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
environmental management practices.
Indeed, a credible enforcement program
provides a strong incentive for regulated
entities to audit.
  Regulatory agencies have an
obligation to assess source compliance
status independently and cannot
eliminate inspections for particular firms
or classes of firms. Although
environmental audits may complement
inspections by providing self-
assessment to assure compliance, they
are in no way a substitute for regulatory
oversight. Moreover, certain statutes
(e.g. RCRA) and Agency policies
establish minimum facility inspection
frequencies to which EPA will adhere.
  However. EPA will continue to
address environmental problems on a
priority basis and will consequent!;.
inspect facilities with poor
environmental records and practice?
more frequently. Since effective
environmental auditing helps
management identify and prompt:.
correct actual or potential problems
audited facilities' environmental
performance should improve. Thi^
while EPA inspections of self-audr.f •.
facilities will continue, to the exi.r.i ::.
compliance performance is conjldtv..
in setting inspection priorities, facis:'. • •
with a good compliance history may h
subject to fewer inspections.
  In fashioning enforcement response-
to violations. EPA policy is to lake int.
account, on a case-by-case basis, the
honest and genuine efforts of rpp'ilattr
entities to avoid and promptly corrcc1
violations and underlying environme.-'
problems. When regulated entities ta^
reasonable precautions to avoid
noncompliance. expecitiously corrtr
underlying environmental problerr.s
discovered through audits or other
means, and implement measures to
prevent their recurrence. EPA may  -
exercise its discretion to consider such
actions as honest and genuine efforts tr.
assure compliance. Such consideration
applies particularly when a regulate':
entity promptly reports violations or
compliance data which otherwise wr-rt%
not required to be recorded or reports J
to EPA.
2. Audit Provisions as Remedies in
Enforcement Actions

  EPA ma^ propose environmental -
auditing provisions in consent decrees
and in other settlement negotiation!!
where auditing could provide a rerr.edy
for  identified problems and reduce  the
likelihood of similar problems recurring
in the future.4 Environmental auditing
provisions are most likely to be
proposed in settlement negotiations
where:
  • A pattern of violations can be
attributed, at leas: in part, to the
absence or poor functioning of an
environmental management system: or
  • The type or nature of violations
indicates a likelihood that similar
noncompliance problems may exist o:
occur elsewhere in the facility or at
other facilities operated by the regulate(
entity.
  • See. for example. "Duties to Report or Disclose
Information on the Environmental Aspects of
Business Activities." Environmental Law Institute
report to EPA. final report September IMS.
  • EPA is developing guidance for use by Agency
negotiator* in structunnp appropriate environment
audit provisions for consent decrees and other
settlement negotiations.

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 23008
Federal  Register /• Vol. 51. No. 131  / Wednesday.  July  9. 1986 / Notices
  Through this consent decree approach
    other means. EPA may consider
 hov •- encourage effective auditing by
 pi:      cm-mid sewage treatment works
 (PC .  .,'s). POTWs often have
 compliance problems related to
 •ipera'.ion and maintenance procedures
 •A hich can be addressed effectively
 rhrouijh the use of environmental
 .r;ti:::.".g. Under its National Municipal
 I'-jlicy EPA already is requiring many
 POTU's !o develop composite correction
 yi.i.ns !c identify and correct compliance
C. Environmeiital Auditing at Federal
r-iCiHties
   KPA encourages all federal agencies
Mibject to environmental laws and
••"Tilations to nstitute environmental
 •editing systems to help ensure the;
 iJequacy of internal systems to achieve,
riiintain and monitor compliance.
F'..".v;ronmental auditing at federal
facilities can  b>. an effective supplement
to EPA and stale inspections. Such
federal facility environmental audit
programs should be structured to
promptly identify environmental
problems and expenditiously develop
schedules Tor re- medial action.
   To the extent feasible. EPA will
provide technical assistance  to help
ft"-1   ' agencies design and initiate
HL     .-ograms. Where appropriate. EPA
'.vi 1 1 enter into agreements with other
fancies to clar.fy the respective roles.
responsibilities md commitments of
• •.«rh dvency in conducting and
r-xpondins; to federal facility
>"~.\ .'nrrr.pntal audits.
   U'i;h respect to inspections of self-
..::;J:!eci facilities  (see section III.B.l
i!'i:ve) and requests for audit reportu
•.<*e section \ll.A  above). EPA generally
••-.ill respond to environmental audit:! by
;V:->ral facilities in the same manner as
i: Jo'is for uth"pip.j wi:h the  spirit and intent of
r\ecutive Order 12086 and the EPA
f^'Jercl Facilities Compliance Strategy
i January 1984. update forthcoming in
Lite 1986). Federal agencies should,
hc/wever. be aware that the Freedom of
Information Act will govern any
disclosure of aud.t reports or audit-
venerated ;nforrrution requested from
f.'Jsral dsenries by the public.
  '.Vhen  federal agencies discover
•ii'-ir.ificant violations through an
.•nv.ronmental audit. EPA encourages
rr.Hm to submit th» related audit findings
.inJ remedial  action plans expediriouiily
to the applicable EPA regional office
;.'    'sponsibie  a>urpa of effective,
mature audit programs can help those
starting audit programs, especially
federal agencies and smaller businesses.
These elements also indicate the
attributes of auditing EPA generally
considers important to ensure program
effectiveness. Regulatory agencies may
use  these elements in negotiating
environmental auditing provisions for
consent decrees. Finally, these elements
can  help guide .states and localities
considering auditing initiatives.

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                    Federal Register / Vol.  51. No. 131  / Wednesday. July 9. 1986  /  Notices
                                                                        25009
  An effective environmental auditing
system will likely include the following
general elements:
  I. Explicit top management support for
environmental auditing and
commitment to follow-up on audit
findings. Management support may be
demonstrated by a written policy
articulating upper management support
for the auditing program, and for
compliance with  all pertinent
requirements, including corporate
policies and permit requirements as well
as federal, state and local statutes and
regulations.
  Management support for the auditing
program also should be demonstrated
by an explicit written commitment to
follow-up on audit findings to correct
identified problems and prevent their
recurrence.
  II. An environmental auditing function
independent of audited activities. The
status or organizational locus of
environmental auditors should be
sufficient  to ensure objective and
unobstructed inquiry, observation and
testing. Auditor objectivity should not
be impaired by personal relationships.
financial or other conflicts of interest.
interference with free inquiry or
judgment, or fear of potential
retribution.
  III. Adequate team staffing and
auditor training. Environmental auditors
should possess or have ready access to
the knowledge, skills, and disciplines
needed to accomplish audit objectives
Each individual auditor should  comply
with the company's professional
standards of conduct. Auditors, whether
full-time or part-time, should maintain
their technical and analytical
competence through continuing
education and training.
  IV. Explicit audit program  objectives.
scope, resources and frequency. At a
minimum, audit objectives should
include assessing compliance with
applicable environmental laws and
evaluating the adequacy of internal
compliance policies, procedures, and
personrv  'raining programs to  ensure
continue- Compliance.
  Audits should be based on a  process
wliij. provides auditors: all corporate
policies, permits, and federal, state, and
local regulations  pertinent to the facility:
and checklists or protocols addressing
specific features that should  be
evaluated by auditors.
  Explicit written audit procedures
generally should be used for planning
audits, establishing audit scope.
examining and evaluating audit findings.
communicating audit results, and
following-up.
  V. A process which collects, analyzes.
interprets and documents information
sufficient to achieve audit objectives.
Information should be collected before
and during an onsite visit regarding
environmental compliance!;),
environmental management
effectiveness^), and other matters (3)
related to audit objectives and scope.
This information should be sufficient.
reliable, relevant and useful to provide a
sound basis for audit findings and
recommendations.
  a. Sufficient information is factual.
adequate and convincing so that a
prudent, informed person would be
likely to reach the same conclusions as
the auditor.
  b. Reliable information is the best
attainable through use of appropriate
audit techniques.
  c. Relevcr.t information supports audit
findings and recommendations  and is
consistent with the objectives for the
audit.
  d. Useful information helps the
organization meet its goals.
  The audit process  should include a
periodic renew of the reliability and
integrity of this information and the
means used to identify, measure.
classify and report it. Audit procedures.
including the testing and sampling
techniques employed, should be selected
in advance, to the extent practical, and
expanded or altered if circumstances
warrant. The process of collecting.
analyzing, interpreting, and
documenting information should provide
reasonable assurance that audit
objectivity is maintained and audit goals
are met.
  VI. A process which includes specific
procedures to promptly prepare candid.
clear and appropriate written reports on
audit findings, corrective actions, and
schedules for implementation.
Procedures should be in place to ensure
that such information is communicated
to managers, including facility and
corporate management, who can
evaluate the information and ensure
correction of identified problems.
Procedures also should be in place for
determining what internal findings are
reportable to  state or federal agencies.
  VII. A process which includes quality
assurance procedures to assure the
accuracy and thoroughness of
environmental audits. Quality assurance
may be accomplished through
supervision, independent internal
reviews, external reviews, or a
combination of these approaches.
Footnote* to Appendix
  (7) A comprehensive assessment of
compliance with federal environmental
regulations requires an analysis of facility
performance against numerous
environmental statutes and implementing
regulations. These statutes include:
Resource Conservation and Recovery- Ac*
Federal Water Pollution Control Act
Clean Air Act
Hazardous Materials Transportation Act
Toxic Substances Control Act
Comprehensive Environmental Response.
  Compensation and Liability Act
Safe Drinking Water Ac:
Federal Insecticide. Funcicide and
  Rodenticide Act
Marine Protection. Research and Sanctuaries
  Act
Uranium Mill Tailings Rad:u!:on Control Ai'
  In addition, state and local anvernmtr.: *tr
likely to have their own environmental iaw»
Many states have been dtlrgaieu author:--. •»
administer federal programs  Many local
governments' building, fire, safety and htal:'.
codes also have environmental rpquirent-rv*
relevant to an audit evaluation.
  (2) An environmental audit could go «•-.
beyond the type of compliance asses?—*•?.•
normally conducted during regulator
inspections, for example, by evaluatr.;:
policies and pracfces regardless cf wi:r!~. •
they are part of the environment..; «v«tcn  i--
the operating and maintenance prored;::i-«
Specifically, audits can evaluate the f \:-n: •<.
\\hir.h systems or procedures:
  1. Develop organizational environment:;!
policies which: a. implement regulator;.
requirements: b. provide management
guidance for environmental hazard? noi
specifically addressed in reguiav.o:.*
  2. Train and motivate facility person.-.?! to
work in an environmentally-accepiaUi'
manner and to understand and comply *:-h
government regulations and the en:-'\ *
environmental policy:
  3. Communicate relevant env.ron.Tien:«:
developments expeditiously  lu fari!:!> a.*..:
other personnel:
  4. Communicate effectively -v.-ih
government and the public regardirc SK- .:.-•
environmental incidents:
  5. Require third parties working for w-.th c,:
on behalf of the organization to foii'^v :!»
environmental procedures:

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23010	Federal  Register  / Vol.  51.  No. 131 /  Wednesday.  July 9,  1986 /  Notices
  t). Make proficient personnel available at
.ill lime* to carry out envirenmestoi*
(rf    illy emergency) procedures:
        irpnrale environmental protection
ir.i'j ..itten operating procedures: .
  4. Apply best management practice* and
 'Perati-.g procMtlures. including "good
'>• 'list-keeping" techniques:
  •'  Institute preventive and currectivi
•':.!' Vi'njnr.e systems to minimize actual and
.••••'.•"•i::l rnvimnmental harm:
  :n l:niize beat dvailuble process and
. .:•.!:•.;! technologies:
  '. '. l'si> most-effective Sdir.pling and
••, •.:-.,:< r:rvj 'echniques. test method*.
 ••• .".;kf*ping systems or reporting protocols
• ' •••  '-ii rv.mimum leg^l requirpmeRts):
  ' J L\.ii:J lie causes behind any serious
 ,-.\ ir::- )' -liurrs to a\oid recurrence:
  i.l r\oloi;  soi.rce reduction. rec>cle jnd
  •..*•• pi,iiMit;.il wherever practical;  imi 'inrertainties.
Jr.. ISO COOC 15*0- 40- M

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                                                     Attachment B

                                                 Revised 10/17/86

                    A REPRESENTATIVE SAMPLE OF

       ENVIRONMENTAL AUDITING SETTLEMENTS ACHIEVED TO DATE*

REGION Hi

Crompton and Knowles Corporation, Consent Agreement and Final
Order (CAFO), II TSCA-PCB-82-0108, 1/28/86.  Compliance audit
of 28 facilities, covering TSCA PCB requirements, with certifica-
tion of compliance.  EPA attorney:  Randye Stein, FTS 264-8157.

REGION V:

BASF Wyandotte Corporation, CAFO, TSCA-V-C-410, 4/25/86.
In settlement of a premanufacture notification action under TSCA,
BASF agreed to conduct an audit (actually called a "review") of
all chemicals subject to TSCA §5 inventory requirements that
are produced, imported or used by 13 BASF facilities.  BASF also
agreed to certify that (1) all chemicals manufactured by or
imported/purchased from its parent or an affiliate company are
listed on the TSCA Chemical Substances Inventory; and (2) to the
best of its knowledge, all chemicals purchased from unrelated
parties are listed on the TSCA inventory.  EPA attorney:  Art
Smith, FTS 886-4253.

Chemical Waste Management, Inc. (Vickery, Ohio facility), CAFO,
TSCA-V-C-307, RCRA-V-85R-019, 4/5/85.  Management audit covering
all RCRA and TSCA requirements.  Audit also addresses personnel
training, spill response, operations and maintenance, interim
stabilization, and quality control and assurance.  EPA attorneys:
Rodger Field, FTS 886-6726; Michael Walker, FTS 475-8697.

Detroit Metropolitan (Wayne County Airport), CAFO, TSCA-V-C-468,
7/30/86.PCB compliance audit of all facilities with certification
of compliance and submission of inventory of each facility which
specifies general location and quantity of all PCBs and PCB items
subject to the requirements of 40 CFR Part 761.  EPA attorney:
Dorothy Attermayer, FTS 886-6776.

Michigan Department of Mental Health, CAFO, TSCA-V-C-231, 1/4/85.
PCB compliance audit of all facilities, with certification of
compliance.  EPA attorney:  Michael Walker, FTS 475-8697.

Michigan Dei  'tment of Corrections, CAFO, TSCA-V-C-187, 10/9/83.
PCB compliance audit of all facilities, with certification of
compliance.  EPA attorney:  Michael Walker, FTS 475-8697.

Owens-Corning Fiberglas Corporation, CAFO, TSCA-V-C-101, 6/8/84.
PCB compliance audit of 63 facilities, with certification of
compliance.  EPA attorney:  Michael Walker, FTS 475-8697.

* Note:   Some of the settlements identified herein may not fall
  within the strict definition of "environmental auditing" but
  contain requirements sufficiently similar to auditing to
  warrant their inclusion.

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                               -2-

Potlatch Corporation, CAFO, TSCA-V-C-137, 8/31/83.  PCS compliance
audit of all facilities, with certification of compliance.  EPA
attorney:  David Sims, FTS 353-2094.

Ren Plastics, an operating unit of Ciba-Geigy Corp. (E. Lansing,
Michigan), CAFO, TSCA-V-C-411,  2/12/86.  CAFO requires review of
the chemicals manufactured by Ciba-Geigy plants with certification
tha-:. all chemicals are on the TSCA inventory.  Respondent also
agreed to conduct an environmental seminar for plant personnel
with a section on TSCA compliance; respondent intends to continue
refining its employee training program.  EPA attorney:  Dorothy
Attormeyer, FTS 886-6776.

REGION VI:

USA v. Georgia-Pacific Corporation, Nos. 84-457-B and 85-136-B
(D.LA.,  entered 2/6/86).Clean Air Act Consent Decree requires
implementation of compliance plan produced by presettlement
audit, covering CAA National Emissions Standard for vinyl chloride.
EPA attorney:  Elliott Gilberg, FTS 382-2864.

REGION IX:

Chemical Waste Management, Inc. (Kettleman Hills, California
facility), CAFO, RCRA-0984-0037, TSCA-09-84-0009, 11/7/85.
Management audit covering all RCRA and TSCA requirements.  Audit
also addresses personnel training, spill response, operations and
maintenance, interim stabilization, and quality control and
assurance.  EPA attorneys:  Bill Wick, FTS 454-8039; Keith Onsdorff,
FTS 1)82-3072 .

REGION X:

Allstate Insurance Company, CAFO, X83-09-09-2614, 5/25/84.  PCB
audit of 140 buildings nationwide, formulation of PCB inspection
plan and guidelines to be distributed to facility managers, and
follow-up training conferences and review of program implementation.
EPA attorney:  Ted Rogowski, FTS 399-1185.

Bonneville Power Administration, Memorandum of Agreement with
EPA, 2/20/85.MOA provides for:   (1) training of personnel
conducting TSCA inspections, CERCLA preliminary assessments, and
sit<» investigations; (2) conduct of environmental audits covering
TSCA ;?CB requirements; (3) testing and evaluation of facilities
to determine status of compliance with TSCA and to assess threatened
or actual release of "hazardous substances" as defined by CERCLA;
and (4)  remedial actions to be taken based upon risk assessment
that utilizes criteria and information in the National Contingency
Plan.  EPA attorney:  Ted Rogowski, FTS 399-1185.

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                                -3-

 Chem Security Systems/  Inc.  (Arlington, OR), CAFOs, TSCA 1085-
 07-42-2615P,  12/26/85;  and RCRA 1085-06-08-3008P, 12/2/85.
 Four compliance  audits  (performed quarterly over a one-year period),
 covering all  RCRA requirements  and PCB requirements under TSCA.
 EPA attorney:  Barbara  Lither,  FTS 399-1222.

 Crown Zellerbach Corporation, CAFO, X83-06-08-2614, 11/30/83.
 Settlement  provides  for refinement of existing corporate-wide
 compliance  program for  TSCA  PCB requirements, including certification
 of  compliance.   EPA  attorneys   Ted Rogowski, FTS 399-1185.

 Roseburg Lumber  Company, CAFO,  X83-05-02-2614, 1/10/85.  Settlement
 provides for  development of  a training program and manual describing
 PCB compliance requirements  and procedures; and a program to bring
 12  facilities  into full compliance with TSCA PCB requirements
 within one  year  of settlement.   EPA attorney:  Ted Rogowski,
 FTS 399-1185.

 Washington  State University, CAFO, X83-05-02-2614, 5/30/84.
 Settlement  provides  for development of guidance manual for employees
 regarding proper handling of PCBs, followed by training sessions
 to  ensure employees' familiarity with PCB compliance procedures.
 EPA attorney:  Ted Rogowski, FTS 399-1185.

 HEADQUARTERS:

 American Petrofina Company of Texas, Nos. 1217 and 1293, 9/5/85.
 Consolidated Clean Air  Act Settlement Agreement requires institu-
 tion  of  annual visitation program by Respondent to verify the
 existence of proper  unleaded gasoline handling procedures at all
 branded  gasoline retail outlets.  EPA attorneys:  Rich Kozlowski,
 FTS  382-2633; Rich Ackerman, FTS 382-4410.

 Ashland  Oil, Inc.  (Catlettsburg, KY refinery), No.     •	
 (E.D.  Kentucky,  entered 	).  Clean Water Act consent
 decree requires  the  performance  of a "Wastewater Treatment System
 Engineering Study" by an independent party and the implementation
 of  those recommendations agreed  upon by the parties.  Settlement
 also mandates the  commencement of a "Best Management Practices
 Study" in order  to minimize  potential significant releases;
 includes  the developr nt of  a toxicity testing and control plan
 and  establishes  a  stipulated penalty schedule for daily and
 monthly  violations of effluent  limits contained in Defendant's
 NPDES permit.  EPA attorney:  Joseph Moran, FTS 473-8185.

 BASF Systems Corporation, CAFO, TSCA-85-H-04, 5/28/86.
 Environmental management audit and development of procedures for
handling  chemical  substances imported from BASF's German parent
 corporation.  BASF will pay  a stipulated penalty of $10,000 per
 "safe" chemical  not  listed on the TSCA Chemical Inventory.  EPA
will apply the TSCA  PMN penalty policy to violations for unregis-
 tered  "bad" chemicals discovered in the "review" process.  EPA
 attorney:  Michael Walker, FTS 475-8697.

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                               -4-

Chapman Chem. Co., et al., FIFRA 529,  et al. ,  Filed 9/30"/85.
The industry parties to the settlement agreement agreed to imple-
ment and participate in a voluntary Consumer Awareness Program
to provide users of treated wood products with use, handling,
and precautionary information.  The focus of the program is a
Consumer Information Sheet which contains language approved by
the Agency.  Industry agreed to conduct an audit of the program
within a year after settlement and to submit the results of
the audit to EPA within 30 days of its completion.  EPA attorney:
Cara Jablon, FTS 382-2940.

Chemical Waste Management, Inc. (Emelle, Alabama facility), CAFO,
TSCA-84-H-03,12/19/84.Management audit covering all RCRA and
TSCA requirements.  Audit.also addresses personnel training,
spill response,  operation's and maintenance, interim stabilization,
and quality control and assurance.  EPA attorneys:  Keith Onsdorff,
FTS 382-3072; Alex Varela, FTS 475-8690; Arthur Ray, FTS 382-3050.

Conoco Inc. and Kayo Oil Company,  CAA (211)-449, 520, 596, 709,
and 710,8/31/83.  Settlement Agreement requires (or confirms):
(1) revision of Conoco's Jobber Franchise Agreement to include
provision for unleaded gasoline sampling on a quarterly basis at
each Conoco Jobber retail outlet;  (2)  all drivers of Conoco
company cars to certify that no tampering has occurred which
would allow the introduction of leaded gasoline into a vehicle
requiring unleaded gasoline; (3) posting of public information
notices designed to inform Kayo customers of problems related to
fuel switching;  and (4) training to inform Kayo employees of
EPA unleaded fuels regulations.  EPA attorneys:  Rich Kozlowski,
FTS 382-2633; Rich Ackerman, FTS 382-4410.

Department of Defense, Federal Facility Compliance Agreement,
12/30/83.Agreement covers all DoD facilities where PCBs are
stored for disposal; establishes compliance plan designed to
achieve and maintain compliance with all applicable PCB storage
and disposal requirements.  EPA attorney:  Deeohn Ferris,
FTS 475-8690.

Diamond Shamrock Corporation, CAFO, TSCA-85-H-03, 7/15/85.
Compliance audit of 43 facilities, covering all TSCA requirements.
EPA attorneys:  Deeohn Ferris, FTS 475-8690; Bob Pittman, FTS
475-8690.

General Electric Co. (Waterford, NY facility), No. 84-CV-681
(N.D.N.Y., entered 	).  Clean Water Act consent decree
requires the implementation of an engineering study to insure
compliance with Defendant's N/SPDES permit.  Settlement also
requires monthly progress reports to be submitted to EPA with
provisions for stipulated civil penalties  for discharge violations,
EPA attorney:  Joseph Moran, FTS 475-8185.

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Mac Oil Company d/b/a Circle Oil, No. FOSD-1908, 5/21/85.  Clean
Air Act Settlement Agreement requires:   (1) institution of an
unleaded gasoline sampling and testing program at all facilities
receiving unleaded gasoline from Respondent;  (2) inspections of
the gasoline pumps at all facilities to which Respondent delivers
gasoline to determine compliance with nozzle/ label and warning
sign requirements; and  (3) maintenance of a company unleaded
gasoline policy that informs all employees, agents and common
carriers of gasoline handling and compartment labeling procedures.
EPA attorney:  Dean Uhler, FTS 382-2947.

National Convenience Stores, Inc. d/b/a Stop  "n Go, Nos. FOSD-1140
and FOSD-1404,8/16/84.Consolidated Settlement Agreement requires:
(1) institution of a program for compliance with EPA unleaded fuels
regulations at all retail gasoline outlets that Respondent operates
under any name, including periodic verification that nozzle require-
ments are met; and (2)  submission to EPA of a Certificate of Compliance.
EPA attorney:  Rich Kozlowski, FTS 382-2633.

Phillips Petroleum Company, Consolidated Clean Air Act Settlement
Agreement,3/11/85.Settlement requires Phillips to:  (1) estab-
lish, implement and maintain a program for unleaded gasoline
quality assurance among its branded marketers and retailers;
(2) conduct a threephase program of sampling unleaded gasoline at
all branded retail outlets in the United States; (3) conduct annual
inspections of ten percent of its branded retail outlets in the
United States for compliance with EPA unleaded gasoline regula-
tions; (4)  at the time of contract renewal, review with its
marketers and retailers their contractual obligations pertaining
to the sale, handling, and distribution of unleaded gasoline; and
(5) conduct a review of its Unleaded Gasoline Quality Assurance
Program after the first year of operation and submit a written
report to EPA assessing the program's effectiveness in improving
the quality of unleaded gasoline and reducing the potential or
actual number of violations of the regulatory limits for lead.
EPA attorney: Rich Kozlowski, FTS 382-2633.

R.I. Marketing, Inc., No. FOSD-1611, 10/5/84.  Clean Air Act
Settlement Agreement requires institution of a fuel switching
preventative action program, at each of approximately 200 retail
outlets,  designed to prevent leaded gasoline from being introduced
into vehicles requiring unle ""^d fuel.  EPA attorney:  Rich
Kozlowski,  FTS 382-2633.

Savoca's Service Center, Inc., No. FOSD-2101, 10/17/85. Clean Air
Act Settlement Agreement requires institution of a fuel switching
preventative action program, at all retail outlets, designed to
prevent leaded gasoline from being introduced into vehicles
requiring unleaded fuel.  EPA attorney:  Rich Kozlowski, FTS
382-2633.

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                               -6-

Union Carbide Corporation, CAFO, TSCA-85-H-06, 2/26/86.  Settlement
provides for development of a training program emphasizing pre-
manufacture notification requirements under TSCA, followed by
a test program to monitor responses for compliance with TSCA.
EPA attorney:  Alex Varela, FTS 475-8690.

United American Fuels, Inc., No. FOSD-1578, 12/18/84.  Clean Air
Act Settlement Agreement requires implementation of a fuel additive
quality control and testing program.  EPA attorney:  Rich Kozlowski,
FTS 382-2633.

USA v. Parma, Ohio, No. C-85-208, (N.D. Ohio, February 28, 1985).
Gleam Air Act Consent.Judgment requires Defendant to:  (1) replace
catalytic converters that had been removed illegally; (2) inspect
(periodically for two years) all city vehicles for tampering with
emission controls; (3) tune-up and test (periodically for two
years) all city vehicles for emissions; (4) report all tampering
found to EPA and take appropriate remedial measures; (5) train
mechanics in compliance with EPA standards; (6) distribute pamph-
lets discussing tampering and fuel switching to all households in
Parma, Ohio; and (7) display for one year posters cautioning
against tampering and fuel switching.  EPA attorney:  Debra
Rosenberg, FTS 382-2649.

USA v. State of Maine, No. 84-0152-B (D. Maine, November 19, 1985)
Clean Air Act Consent Decree requires State to (1) inspect all
Main<» Forest Service vehicles for tampering with emission control
devices,  and correct deficiencies; (2) inspect each gasoline
fuel:.ng facility owned or operated by the Maine Department of
Conservation for compliance with label, notice and nozzle size
requirements, and correct deficiencies; (3) publicize to Maine
Fores:t Service personnel and the public the importance of comply-
ing with mobile source requirements; and (4) implement fully the
catalytic converter and inlet restrictor inspection program
mandated by State law, and audit at least 90 percent of licensed
inspection facilities to verify compliance.  EPA attorney:
Richard Friedman, FTS 382-2940.

Note:  The settlements identified herein relating to mobile  source
enforcement under the Clean Air Act are representative of approxi-
mate 1 y 200 such settlements that have been achieved to date.-

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                                                   Attachment C
   MODEL ENVIRONMENTAL COMPLIANCE AUDIT PROVISION FOR CONSENT
   "DECREES OR AGREEMENTS"
  A.I.  Defendant/Respondent shall, within sixty days after
the effective date of this Decree/Agreement [and where a contin-
uing audit requirement is appropriate, add:  and not less often
than annually thereafter for a five-year period], audit the
status of [applicable statutory] compliance at the [site of
facility(ies)] and take prompt remedial action against all
violations found.

  A.2.  Defendant/Respondent .shall, within sixty days after
completion of the compliance audit required by paragraph I/
submit to EPA's [name of EPA office overseeing compliance with
Decree/Agreement] a certification that, to the best of its
knowledge, Defendant/Respondent is in compliance with all
[applicable statutory and regulatory] requirements or has
developed a schedule for achieving compliance subject to EPA
approval.

  A.3.  Nothing in this Decree/Agreement shall preclude EPA
from instituting enforcement actions against Defendant/Respon-
dent for any violations of [applicable statutory and regulatory]
requirements which are not cited within the Complaint giving
rise to this Decree/Agreement.

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                                                    Attachment  D
    MODEL ENVIRONMENTAL MANAGEMENT AUDIT PROVISION FOR CONSENT
                      DECREES  OR AGREEMENTS

   B.I.    Defendant/Respondent shall  propose  to  EPA's  [name  of
 EPA office overseeing compliance with  Decree/Agreement]  by
 written submittal  to [name  of Agency contact] within  thirty (30)
 days of the effective date  of this Decree/Agreement,  the scope
 of work for the  services  of a [third party or internal]  auditor
 who shall be expert  in environmental auditing,  environmental
 management systems and [applicable statutory program(s)]  management
 operations.   Such  auditor shall  be independent  of and  in no way
 responsible  to production management.   This  scope of  work and
 auditor shall be agreed upon  by  EPA  and Defendant/Respondent  in
 writing,  prior to  the auditor's  commencing the  performance  of
 the professional services more  fully set  forth  below.  The
 auditor will be  retained  and  the  scope  of work  will be designed
 to review and make recommendations regarding the  improvement  of
 Defendant's/Respondent's  environmental  compliance and management
 policies,  practices,  and  systems  at  the [site of  facility(ies)]
 and in  the Defendant's/Respondent's  corporate offices having
 responsibility for supervision of compliance activities  at  such
 facility(ies).

      2.    Within one  hundred  twenty  (120) days  after  agreement
 upon  the  scope of work  and  the auditor,  the  auditor shall
 submit  a  written Environmental Audit Report  to  the Defendant/
 Respondent.   This Report  shall:

           a.  Identify  and  describe  the existing  facility
 environmental management  operations  and  the  corporate offices
 responsible  for  overall company-wide environmental compliance
 and management systems, policies  and prevailing practices as
 they  affect  [applicable statutory and regulatory]  compliance
 at  the  [site  of  facility(ies)].

           b.  Evaluate  such operations  and systems, practices
 and policies  and identify and describe  fully the  perceived
 weaknesses in such operations and  systems, practices  and policies
 by  comparing  them, to the extent  practicable, to:

               i.  their  ability  to  promote  compliance with
 [applicable  statutory and regulatory] reqi irements;

              ii.  the  existing practices, programs and  policies
of other  [applicable  industry] corporations  operating within
 the continental  United  States, including  consideration of the
 available  literature  and  consultant's experience  pertinent  to
 regulatory compliance programs, practices and policies currently
operative  in  the [applicable  industry]  in the continental
 United  States;

              iii.  the  history of [facility] operations  in  terms
of the  facility's(ies') compliance programs, compliance  record

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                           -2-

and environmental management practices over the previous five
years  [or longer if necessary or relevant].

        The auditor shall apply its expertise and judgment
i:o the foregoing information, using such factors as the auditor
believes to be relevant and appropriate, which factors shall
be stated in the report.

          c.  Based on the evaluation required in paragraphs
2.a. and b. above, the auditor shall identify and describe
fully with supporting rationales the perceived areas, if any,
where Defendant's/Respondent's environmental management systems,
practices and policies may be improved as they affect the
[facility(ies)]  regarding [applicable statutory] compliance
obligations, listing specific options for any improvements at
the [facility{ies)] in the following areas:

               i.  environmental compliance program management
operation, staffing, education and experience requirements.

              ii.  compliance management budget, lines of authority
to Defendant's/Respondent's corporate offices responsible for
overall company-wide environmental compliance and management
systems, policies, and practices, and relationship to the
operating facility(ies) manager.

             iii.  personnel training for individual employee
compliance obligations and [applicable medium-specific
activities].

              iv.  Operations and Maintenance (O&M) procedures for
[applicable medium-specific pollution control] equipment.

               v.  evaluation of [applicable  industry] operations
and pollution control equipment in terms of adequacy'of
design and compatibility with [applicable medium-specific
substances] being passed through such equipment.

              vi.  quality and thoroughness of  implementation of
all waste and wastewater [or other pollutant  source] analysis
plans for both ir-:oming and outgoing waste  [or other pollutant]
streams, whether -^rectly discharged, emitted, released to the
ambient environment, or conveyed off-site in  bulk shipments.

             vii.  preparation of Quality Assurance and
Quality Control programs for sampling and analysis and
for environmental testing procedures, including  [facility(ies)]
laboratories and contract laboratories  for  [facility(ies)].

            viii.  preparation of records needed to provide  the
[facility(ies)]  management with an adequate data base  to  accurat'
determine compliance with all applicable statutory and regulatory
requirements, with particular attention to waste [or other

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                             ^

pollutant] generation  (including quantity and chemical composi-
tion), movements, treatment, and ultimate disposition by location
of waste  [or other pollutant] source, handling, points and final
disposition.  This evaluation shall encompass proposals for
state-of-the-art data management systems providing timely
access to all of the above records to be maintained, by an
onsite computer.
              ix.  preparation of self-monitoring reports required
to be filed with the State and EPA.

               x.  preparation and review of Incident Reports
evaluating causes of [applicable medium-specific pollution
control] equipment malfunctions, improper [applicable medium-
specific substances] handling, or breakdowns, with specific
recommendations for corrective steps and preventive O&M, along
with procedures for reporting these recommendations to corporate
headquarters.

     3.  Within 30 days after Defendant's/Respondent's receipt
of the Audit Report, Defendant/Respondent shall submit to EPA
that portion of the Audit Report which contains the recommenda-
tions of the auditor, together with a report of Defendant's/
Respondent's good faith evaluation of each option it has selected
for adoption and the reasons for rejecting other options.  The
report by Defendant/Respondent shall set forth the specific
actions the company shall take and a schedule, not to exceed
sixty (60) days [or longer if necessary] from the date that EPA
receives and evaluates the schedule, for implementation of the
recommendations adopted by Defendant/Respondent.

     4.  Any failure by Defendant/Respondent to meet the schedule
for implementing the audit program set forth in this Decree/
Agreement shall result in stipulated penalties of [$_,	]  (in
addition to whatever sanctions the court/ALJ may impose for
contempt), payable by Defendant/Respondent to the U.S. Treasury,
for each day such schedule is not met.

  B.   Nothing in this Decree/Agreement shall preclude EPA from
instituting enforcement actions against Defendant/Respondent
for any violations of [applicable statutory and r« nulatory]
requirements which are not cited within the Complaint giving
rise  to this Decree/Agreement.

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     A Note Concerning Application of the Model Provisions

     Attachments C-G represent model provisions for the
incorporation of environmental auditing requirements within
enforcement settlements.  These models are based upon medium-
specific settlements and necessarily reflect the circumstances
surrounding those settlements.  Accordingly, Agency negotiators
should not hesitate to alter them as necessary to meet the
needs of a particular case.  An attempt has been made to
fashion the models in such a manner that they can be used
in any enforcement settlement; however, some language has
been retained which applies to only one or two EPA programs.
Even where specific language is found to be inapposite, the
general headings under which such language is found should
provide helpful guidance to Agency personnel in identifying
the categories of issues which a particular type of auditing
settlement should address.

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                                                   Attachment E
 MODEL ENVIRONMENTAL COMPLIANCE AND MANAGEMENT AUDIT PROVISION
               FOR CONSENT DECREES AND AGREEMENTS


  C.I.  Defendant/Respondent shall conduct environmental
audits of its facility(ies) [of appropriate frequency and
duration] in accordance with the Audit Workplan attached hereto
as Exhibit B [company specific; not included].  The first such
audit shall commence on or about three months from the effective
date of this Decree/Agreement.  Each of the audits shall be
completed in accordance with the schedule set forth in the
Audit Workplan.

    2.  The performance standard of each such audit is to
complete a detailed and professional investigation as set forth
in the Audit Workplan of the facility's recordkeeping practices
and environmental management operations during the [applicable
period].  In accordance with the Audit Workplan, the following
audit reports shall be prepared and submitted, with copies of
supporting documentation, to EPA within thirty days following
the initiation of each such audit:

        a.  A report on all [pollutants] whose locations (as
reported in the facility records) differ from their observed
physical location or whose physical locations cannot be corrob-
orated by existing records kept at the facility.

        b.  A report of all quantity variations (of 10% or more
by volume or weight, or any variation in piece count) between
[pollutants] received and [pollutants] disposed of at the
facility.

        c.  A report on Defendant's/Respondent's activities at
the facility in terms of whether or not they comply wj.th the
procedures required under the [Pollutant] Analysis Plan for
[pollutant] acceptance.   Defendant/Respondent shall include
with this report the results of a minimum of three laboratory
(including Defendant's/Respondent's laboratory) analyses of
blind standards (i.e., pre-analyzed samples whose concentrations
are unknown to the laboratories participating in the audit) to
be provided by the audit team to evaluate .Defendant's/Respondent's
ability to quantify representative hazardous constituents in
various media.

        d.  A report of any observed deviations from Defendant's/
Respondent's written operating procedures, including documentation
on any untimely response to the repair and/or replacement of
deteriorating or malfunctioning [pollutant] containers, structures,
or equipment.

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                              -2-

        e.  Recommendations as to potential significant improve-
ments and/or modifications which should be made to Defendant's/
Respondent's operating procedures to achieve compliance with
[applicable statutory and regulatory]  requirements.

    3.  Nothing in this Decree/Agreement shall preclude EPA
from instituting enforcement actions against Defendant/Respondent
for any violations of [applicable statutory and regulatory]
requirements which are not cited within the Complaint giving
rise to this Decree/Agreement.

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                                                        Appendix 1



                DEFENDANT'S/RESPONDENT'S FACILITIES
 1.




 2.



 3.



 4.



 5.



 6.



 7.



 8.



 9.



10.



11.



12.



13.



14.



15.

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                                                       Attachment F


     MODEL ENVIRONMENTAL COMPLIANCE AND MANAGEMENT  AUDIT* PROVISION
                  FOR CONSENT DECREES AND AGREEMENTS*

                          TABLE OF CONTENTS

                                                    .   Page
  I.   PRELIMINARY STATEMENT

            Purposes of Consent Decree/Agreement	    1

 II.   DEFINITIONS	    1

III.   GENERAL AUDIT PROCEDURES

            Preliminary Matters

                 Scope of Work	    6

                 Establishment of Trust	    6

                 Selection of Audit  Firm	    7

            Audit Seminar	    7

            Observation of EPA Protocols	    7

            Review of Work Plan	    7

            Facilities to be Audited	    8

 IV.    FACILITY COMPLIANCE AUDITS

            Records to be Examined	    9

                 Records Relevant to Compliance
                   with RCRA	    9

                 Records Relevant to Compliance
                   with TSCA	    9

                 Records to be Examined  by  the
                   Audit Firm	    9

            Access to Documents	   10
    * This provision  is  only  appropriate  for  a  party  with  an  exten-
     sive history  of noncompliance.   It  requires  a high level  of
     Agency  oversight.   Based  on  a  draft settlement  document,  the
     provision  reflects a  pro-Agency  bias and  thus is  more suscep-
     tible than other model  provisions to the  give and take  of
     the negotiation process.  While  the provision only addresses
     requirements  under RCRA and  TSCA, audit provisions under
     other statutes  may be crafted  by using  as a  framework the
     headings contained in this provision.

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                    TABLE OF CONTENTS (Continued)


                                                       Page

            Public Access to Records	   10

            Assertion of Confidential Business
              Information Claims	   10

            Tentative Observance of CBI Claims	   11

            Preservation of Records	   11
                           '•4f
            Examination of Groundwater Monitoring
              Information	   11

            Audit Schedule/Agency Access to
              Defendant's Facilities	   11

            Facility Audit Reports	   11

            Correction of Violations/Submission of
              Compliance Plans	   12

  V.   PENALTIES AND CORRECTIVE ACTION

            For Missed Audit Deadlines	   12

            For Violations of RCRA/TSCA

                 Payment of Penalties	   12

                 Unlisted Violations	   13

                 Uncorrected or New
                   Violations	   13

 VI.   RESERVATION OF RIGHTS

            Reservation of States' and Local Govern-
              ments' Right to Inspect	13

            Reservation of Agency's Right
              to Relief	   14

VII.   MANAGEMENT SYSTEMS AUDIT

            Corporate Management Systems Report	   14

            Corporate Management Report and Plan	   14
                                   11

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                      TABLE OF CONTENTS (Continued)

                                                        Page
VIII.   MISCELLANEOUS TERMS

             Submission of Reports	   14

             Effective Date of Decree/Agreement	   15

             Notice	   15

             Modification	   15

             Dispute Resolution	   15

             Continuing Jurisdiction of the District
               Court/Administrative Law Judge	   15

             Relation to RCRA Permitting Process	   15

             Violations Not Covered by RCRA or TSCA....   16

             Continuing Audit Requirement	   16


   DEFENDANT ' S/RESPONDENT ' S FACILITIES	  Appendix 1

   PENALTY SCHEDULE	  Appendix 2

   CORPORATE MANAGEMENT SYSTEMS REPORT
   PROTOCOL	  Appendix 3
                                   ill

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     1.   Purposes of Consent Decree/Agreement.   In order to
achieve the mutual goal of ensuring full compliance with applicabj.
environmental laws, regulations,  and permits by Defendant's/
Respondent's active facilities in an efficient  and coordinated
manner,  Defendant/Respondent and EPA hereby enter into a Consent
Decree/Agreement under which:

         (L) independent auditors to be retained by EPA and
         paid for by Defendant/Respondent shall,  subject to EPA
         oversight, audit each facility and report to both
         parties on their assessment of Defendant's/Respondent's
         compliance with RCRA and TSCA and their implementing
         permits, rules and regulations;

         (2) the independent auditors shall perform an analysis
         of Defendant's/Respondent's environmental management
         systems, practices and policies, as they affect inter-
         facility and intra-facility transactions (as defined
         in Paragraphs 5(11) and 5(12) of this  Decree/Agreement);

         (3) Defendant/Respondent shall pay penalties for
         violations of the aforementioned statutes, permits,
         rules and regulations according to the Penalty Schedule
         set forth as Appendix 2 to this Decree/Agreement; and

        . (4)  EPA shall accept the penalties provided in Appendix
         2 as full and complete settlement and satisfaction of
         any of its civil claims for violations detected by
         the audit firm (with certain exceptions as set forth
         in Paragraphs 23, 24, and 25 of this Decree/Agreement)
                      TERMS OF SETTLEMENT
                          DEFINITIONS

     5.   Whenever the following terms are used in this Decree/
     Agreement, the definitions specified herein shall apply:

          (1)  Compliance Report and Plan;  A document to be
          submitted by Defendant/Respondent to EPA, pursuant tc
          Paragraph 19 of this Decree/Agreement, which:

               (a)  describes in full detail every corrective
                    action taken in response to a Facility
                    Audit Report;

               (b)  in the case of violations which are not
                    corrected within 60 days of submittal of
                    the Facility Audit Report, describes every
                    action to be taken in response to any

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                    -2-

          violations or  findings  in  the Facility
          Audit  Report;  and

     (c)   certifies  under  oath  the accuracy of
          information contained in the Compliance
          Report and Plan.

(2)   Confidential Business Information (CBI)

     (a)   Information/Documents Determined Not to Be
          Entitled to CBI  Protection.  It is agreed
          between the parties that portions of docu-
          ments  containing the  following information
          shall  not  be eligible for  CBI treatment:

         (i)   The fact that any chemical waste was
              disposed of  at any  Defendant/Respondent
              facility.

        (ii)   The location of disposal of any chemical
              waste  at any Defendant/Respondent facility.

       (iii)   Any information contained or referred
              to in  any  manifest  for any chemical
              waste  disposed of at any Defendant/
              Respondent facility.

        (iv)   The identity and  quantity of any chemical
              waste  disposed of at any Defendant/Respondent
              facility.

         (v)   Any monitoring data or analysis of
              monitoring data pertaining to disposal
              activities at any Defendant/Respondent
              facility/  including monitoring data
              from any well/ whether or not installed
              pursuant to  40 C.F.R.  Part 265, Subpart
              F,  or  40 C.F.R. Part 254, Subpart F
              (RCRA  Groundwater Monitoring Requirements).

        (iv)   Any permit applications submitted to
              EPA or to  any state pursuant to federal
              or state statute  or regulation.

       (vii)   Any information regarding planned im-
              provements in the treatment, storage or
              disposal of  chemical wastes at any
              Defendant/Respondent facility.

      (viii)   Any hydrogeologic or geologic data.

        (ix)   Any groundwater monitoring data.

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                    -3-

         (x)  Any contingency plans, closure plans,
              or post-closure plans.

        (xi)  Any waste analysis plans.

       (xii)  Any training and/or inspection manuals
              and schedules.

      (xiii)  Any point source discharge or receiving
              water monitoring data.

(b)  The status of information not listed in Section
(a) above shall be determined in accordance with
40 CFR Part. ,2, which provides for CBI treatment of
information where:

         (i)  Defendant/Respondent has taken reasonable
              measures through the issuance and
              observance of companywide policies and
              procedures to protect the confidentiality
              of the information, and that it intends
              to continue to take such measures;

        (ii)  The information is not, and has not been,
              reasonably obtainable without Defendant's
              Respondent's consent by other persons
              (other than governmental bodies which
              are bound by and observing Defendant's/
              Respondent's claims of CBI as to that
              information) by use of legitimate means
              (other than discovery based on a showing
              of special need in a judicial or quasi-
              judicial proceeding);
                                           i
       (iii)  Disclosure of the information is likely
              to cause substantial harm to Defendant's/
              Respondent's competitive position.

(3)  Corporate Management Report and Plan;  A document
submitted by Defendant/Respondent to EPA, pursuant to
Paragraph 27 of this Decree/Agreement, describing in
full detail what actions Defendant/Respondent has
taken or will take to implement the findings of the
Corporate Management Systems Report.

(4)  Corporate Management Systems Report;  A fully
integrated separate report prepared pursuant to the
Corporate Management Systems Report Protocol set
forth in Appendix 3 of this Decree/Agreement and
submitted by Defendant/Respondent to EPA pursuant
to Paragraph 26 of this Decree/Agreement.

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                    -4-

 (5)  Corrective Action;  Any action taken by Defendant/
 Respondent in order to come into compliance with any
 federal, state or local statutory or regulatory
 requirement for the treatment, storage, or disposal
 of any Hazardous Substance.

 (6)  Facility Audit Reports;  Reports to be submitted
 by the Audit Firm to EPA, pursuant to Paragraph 19
 of this Decree/Agreement, which;

     (a)  describe in detail the procedures followed
          in the facility audit, the facility itself,
          the regulatory history of the facility,
          and the facility's current compliance
          status;

     (b)  describe in detail each violation detected
          during the audit;

     (c)  provide any other information which, in
          the judgment of the Audit Firm, merits
          Agency review;

     (d)  for each violation reported, provide the
          relevant statutory or regulatory section;
          the particular area of the facility where
          the violation was found (if appropriate);
          the dates during which the violation
          occurred or existed (if it can reasonably
          be determined); and any other relevant or
          appropriate information.

 (7)  Hazardous Substances; Those materials meeting
 the definition contained in the Comprehensive
 Environmental Response, Compensation, and Liability
Act ("CERCLA"), 42 U.S.C. §§9601 et se£., §9601(14).

 (8)  Hazardous Wastes;  Those materials meeting the
 definition contained in 42 U.S.C. §6903(5) and the
 regulations promulgated at 40 C.F.R. Part 261.

 (9)  Independent Audit Firm ("Audit Firm"); A firm
 selected by EPA, pursuant to Paragraph 6 of this
 Decree/Agreement, for the purpose of performing the
 Facility Compliance and Management Systems Audits
described herein.  For the purpose of this Decree/
Agreement,  the Independent Audit Firm must exercise
 the same independent judgment that a Certified Public
Accounting firm would be expected to exercise in
auditing a publicly held corporation.  In addition,
the Independent Audit Firm must;

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                    -5-

     (a)   not own stock in Defendant/Respondent
           or any parent, subsidiary, or affiliated
           corporation;

     (b)   have no history of participation in any
           previous contractual agreement with
           Defendant/Respondent or any parent, subsidiary,
           or affiliated corporation; and

     (c)   have no other direct financial stake in
           the outcome of the Facility Compliance or
           Management Systems Audits outlined in
           this Decree/Agreement.

I! 10)  Inter-facility Transactions;  Any letters,
contracts, memoranda, or other communications between
two or more offices or facilities owned or operated
by Defendant/Respondent.

(11)  Intra-facility Transactions;  Any letters,
contracts, memoranda, or other communications between
two or more locations or offices at a single Defendant/
Respondent Facility.

(12)  Manifest;  The shipping document EPA form
8700-22 and, if necessary, EPA form 8700-22A (as
required by 40 C.F.R. Part 262) or equivalent.

(13)  New Violation;  Any statutory or regulatory
violation not reported in the Facility Inspection
Report.

(14)  Plaintiff;  The United States of America, for
the Administrator of the United States Environmental
Protection Agency (collectively, "the Agency" or
"EPA").

(15)  Records;  Any Defendant/Respondent or consultant
report, document, writing, photograph, tape recording
or other electronic means of data collection and
retention which bears upon Defendant's/Respondent's
compliance with EPA, state and local rules and regulations

(16)  Facility;  Any facility which treats, stores, or
disposes of hazardous waste as those terms are defined
at 42 U.S.C. §§6903(3), 6903(33), and 6903(34).

(17)  Uncorrected Violation;  Any violation reported
in a Facility Inspection Report which remains
uncorrected for 60 days or more after the completion
and submission of the Facility Inspection Report
pursuant to Paragraph 19 of this Decree/Agreement.

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                         -6-

               GENERAL AUDIT PROCEDURES

6.   Preliminary Matters

     (!)   Scope of Work

     (a)   Defendant/Respondent shall  submit  to  the Agency
     within thirty (30) days of the effective date of  this
     Decree/Agreement the Scope of Work for  audits of  the
     Defendant/Respondent facilities  listed  in  Appendix
     1  for RCRA and TSCA violations.   EPA  shall have
     thirty (30)  days from the date of receipt  of this
     Scope of Work and proposed Audit Firm to submit to
     Defendant/Respondent in writing  any proposed modifi-
     cations in the scope of work.

     (b)   Defendant/Respondent shall  have  fifteen  (15)
     days  from the date of receipt of EPA's  proposed modifi-
     cations within which to submit in writing  its comments
     upon  those proposed modifications.

     (b)   Within ten (10)  days of  receipt  of Defendant's/
     Respondent's comments,  the Agency shall issue its
     final decision as to the Scope of Work, which shall
     be binding upon Defendant/Respondent.

     (2)   Establishment of Trust

     (a)   Within thirty (30)  days  of  the date of this
     Decree/Agreement,  Defendant/Respondent  shall establish
     an irrevocable trust fund ("Trust"),  the form and
     text  of which shall be approved  by EPA.  If no  fund
     is approved by EPA within thirty (30) days of the
     date  of this Decree/Agreement, a form supplied by EPA
     shall be used.   The Trustee shall be  a  bank'selected
     by Defendant/Respondent,  which must be  approved by EPA.

     (b)   The Administrator of EPA shall have special
     power of appointment (and the only power of appoint-
     ment) over all income and all assets  of the Trust.
     That  powez  may be exercised only to make appointments
     of funds i.. accordance with this Decree/Agreement.
     If, at the conclusion of all  tasks set  forth in this
     Decree/Agreement,  there remains  trust Income or
     assets which have not been appointed  by exercise  of
     such  special power,  then all  such remaining unappointed
     assets shall be delivered forthwith to  Defendant/
     Respondent.   Defendant/Respondent shall fund the
     Trust by placing $	^_^^ in the hands of  the
     Trustee within forty-five (45) days after  the date of
     this  Decree/Agreement.

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                              -7-

          (3)  Selection of Audit Firm

          (a)  Within forty-five (45)  days after the date of
          this Decree/Agreement, EPA shall notify Defendant/
          Respondent of its selection of a proposed Audit Firm.
          Defendant/Respondent shall have fifteen (15)  days  from
          the date of receipt of EPA's proposed Audit Firm to
          accept, reject, or comment upon this selection.
          Reasons for which Defendant/Respondent may reject  the
          proposed Audit Firm are limited to lack of sufficient
          national reputation; inexperience in performing
          environmental compliance and management audits;
          inadequate staffing levels;  and failure to qualify as
          
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                              -8-

          Work Plan shall include the auditing protocols to be
          used by the Audit Firm; a schedule for conducting
          facility audits and completion of all other tasks
          set forth in the Scope of Work; and the names and
          resumes of those Audit Firm employees who will be
          primarily responsible for performance of the tasks
          set forth in the Scope of Work.  The proposed Work
          Plan shall not specify the order of audits or otherwise
          provide Defendant/Respondent with advance notice of
          specific audits.

          (2)  EPA and Defendant/Respondent shall have 30 days
          .from the date of receipt of the-proposed Work Plan to
          submit in writing any proposed revisions to the proposed
          Work Plan.

          (3)  The Audit Firm shall have fifteen (15) days from
          the date of receipt of these revisions within which
          to submit in writing its comments on these proposed
          revisions.

          (4)  Within ten (10) days of receipt of the Audit
          Firm's comments, EPA shall issue its final decision
          as to the work plan, which shall be binding on both
          Defendant/Respondent and the Audit Firm.

          (5)  The provisions of this Paragraph shall also be
          set forth as provisions of the contract between
          Defendant/Respondent and the Audit Firm for the
          performance of the subject audits.

     10. Facilities to be Audited.  The Audit Firm shall,
subject to the provisions set forth herein, conduct comprehensive
RCRA/TSCA Compliance Audits (see Paragraphs 11 through 25) and
a Management Systems Audit (see Paragraphs 26 and 27) of the
facilities listed in Appendix 1 of this Decree/Agreement.
The designation of RCRA/TSCA as the primary areas of a.udits
shall not prohibit the Audit Firm from auditing and reporting
violations of any other environmental statutes or regulations
should those violations come to the attention of the Audit Firm
audit team during the inspe tions.  Notice of individual
facility audits shall be provided to NEIC at least thirty (30)
days prior to scheduled visits.  Advance notice of individual
facility inspections shall not be provided to Defendant/Respondent

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                              -9-

                   FACILITY COMPLIANCE AUDITS

Review of Records

     11.  Records to be Examined.

         &.   Records Relevant to Compliance with  RCRA.

             Facility audits may include a review of any facility
             record of Defendant/Respondent or its predecessors
             from November 1980.  Other records pre-dating
             November 1980 which bear on the facility's  compliance
             after November 1980 may also be examined, but
             only to the extent that they are  necessary  to
             render judgment regarding any event  occurring
             after November 1980.

         br   Records Relevant to Compliance with  TSCA.

             Facility audits may include a review of any facility
             record of Defendant/Respondent or its' predecessors
             from April 1978 which is relevant to compliance
             with TSCA and its implementing regulations.
             Other records pre-dating April 1978  which bear on
             the facility's compliance after April 1978  may
             also be examined, but only to the extent  that they
             are necessary to render judgment regarding  any
             event occurring after April 1978.

         c.   Records to be Examined by the Audit  Firm.   Records
             to be examined include but are not limited  to:

             (1)  all records required by federal, state or
             local law to be maintained by Defendant/Respondent.

             (2)  facility operating records,  including  but not
             limited to waste profile sheets,  containing waste
             pre-acceptance data, receiving logs, analytical
             verification data, waste tracking data for intra-
             facility movement of received wastes or wastes
             generated on-site, waste storage data, waste
             treatment data, and data reflecting the disposition
             of received wastes.

             (3)  corporate and  facility guidelines, policies
             and internal operating rules pertaining to facility
             operations, inspections, personnel training, and
             recordkeeping procedures.

             (4)  corporate guidelines, policies and internal
             operating rules pertaining to emergency response,
             site closure, and postclosure activities.

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                              -10-

             (5)  applications, licenses, permits and approvals
             (including state permits and approvals), RCRA opera-
             tion plans, or other regulatory documents pertaining
             to on-site activities at the facility.

             (6)   environmental monitoring plans for the facility.

             (7)   waste treatability studies.

             (8)   PCB operations plans, letters of approval,
             pumping logs, and records pertaining to the processing
             or handling of transformers, capacitors, and/or
             any other PCB articles, items and containers.

             (9)   manifests for wastes entering or leaving any
             Defendant/Respondent facility.

             (10)  records of use, maintenance and decommissioning
             of vehicles used on-site and/or off-site for the
             transportation of RCRA/TSCA wastes to, from, and
             within any Defendant/Respondent facility.

             (11)  vehicle washing records.

             (12)  any effluent data, including data on any direct
             discharge to surface water or any discharge to a
             publicly owned treatment facility, which Defendant/
             Respondent is required to keep pursuant to any
             federal, state, or local permit or regulation.


     12.  Access to Documents.  The Audit Firm and representatives
of the Agency, including contractors, shall have full,  unfettered
access to all documents bearing upon compliance with -RCRA or TSCA
kept at each facility or at Defendant's/Respondent's corporate
headquarters, regardless of whether these records are deemed
by Defendant/Respondent to constitute CBI or deemed by the
Audit Firm to indicate or support a violation.  The Defendant/
Respondent shall retain and make available to EPA copies of
any Defendant/Respondent document(s) examined by the Audit Firm
which indicate or support any viola !on detected during the
audit program.  The Audit Firm shall prepare and provide to EPA
a full and complete index of all document? tha*-. it examines to
ensure that  the Defendant/Respondent retains these records for
subsequent EPA inspection.

     13.  Public Access to Records.  Each document submitted
by Defendant/Respondent to the Audit Firm or EPA pursuant to
this Decree/Agreement shall be subject to public inspection
unless it is determined by EPA (following a claim made by Defendant/
Respondent)  to be CBI in accordance with Paragraphs 5(2) and
14 of this Decree/Agreement.

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                              -11-

     14,  Assertion of Confidential Business Information Claims.

          a.  Defendant/Respondent recognizes that EPA will
treat as TSCA CBI only that information claimed confidential
which EPA. uses for purposes related to TSCA.

          b.  Claims that information is CBI shall be made on
or before the date on which such information is provided to
the Audit Firm or EPA.

     15.  Tentative Observance of CBI Claims.  Any information
claimed by Defendant/Respondent and asserted to meet the criteria
set forth in Paragraph 5(2) will be treated by EPA as confidential
in accordance with 40 C.F.R. §§2.201 through 2.215 and any
relevant special confidentiality regulations at 40 C.F.R. §§2.301
et seg. pending any final determination that the information  is
not CBI.

     16.  Preservation of Records.  Defendant/Respondent shall
preserve all Records examined by the Audit Firm for three years
after submission of its Corporate Management Report and Plan  to
EPA (See Paragraph 27 below).  Nothing in this provision shall
authorize destruction of any document required by law or regula-
tion to be preserved for any period of time in excess of three
years.

     17.  Examination of Groundwater Monitoring Information.
The Audit Firm shall be required to examine and submit to EPA
groundwater monitoring plans and data for each Defendant/Respon-
dent facility listed in Appendix 1 of this Decree/Agreement.

     18.  Audit Schedule/Agency Access to Defendant's/
Respondent's Facilities.  All audits by the Audit Firm of the
sites listed in Appendix 1 of this Decree/Agreement shall be
completed within 180 days of EPA approval of the Work Plan as
described in Paragraph 9 above.  Representatives of the Agency,
including contractors, may accompany audit teams from the
Audit Firm on site audits performed by the Audit Firm and
oversee  he performance of the audits by the audit teams for
t.he purpose of ensuring that the audit procedures and protocols
required by the contract are followed.

     19.  Facility Audit Reports.  As each separate  facility
audit is completed, the Audit Firm shall, no later than  30
days thereafter, simultaneously submit to Defendant/Respondent
and the Agency a copy of a Facility Audit Report as defined  in
Paragraph 5(7).  The failure of the Facility Audit Report to
include all of the required information for any violation
specified in the report shall not be grounds for avoidance of
any penalty which is payable under the Penalty Schedule  set
forth in Appendix 2.  The Agency shall not be bound by any

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                               -12-

determination of the Audit Firm indicating that Defendant/
Respondent is in compliance with any applicable statutory or
regulatory requirement.

      20.  Correction of Violations/Submission of Compliance Plans.
In addition to paying the penalties set forth in the Penalty
Schedule below, Defendant/Respondent shall:

          (1) correct any violation indicated within a Facility
          Audit Report as soon as is physically possible.

          (2) No later than 60 days after it has received an
          individual Facility Audit Report, submit to the Agency
          a Compliance Report and Plan.

     The Agency shall not be bound by any Defendant/Respondent
determination that it has achieved compliance, that the compliance
was physically impossible to achieve, or that the times for correc-
tive actions proposed by Defendant/Respondent to achieve compliance
are reasonable.  All corrective actions mandated by this Decree/
Agreement shall be undertaken in accordance with applicable
federal, state and local law.

                PENALTIES AND CORRECTIVE ACTION

     21.  For. Missed Audit Deadlines.  Defendant/Respondent shall
pay the following stipulated penalties for any failure by Defendant/
Respondent to comply with any time requirement set forth in this
Decree/Agreement:

         Period of Failure to Comply    Penalty per Day of Delay

         1st day through 14th day             $ 5,000.00
         15th day through 44th day            $10,000.00
         45th day and beyond                  $15,OOOsOO


For Violations of RCRA/TSCA

     22.  Payment of Penalties.  For every violation of RCRA
or TSCA reported in each Facility Audit Report, Defendant/
Respondent shall pay a penalty based on the nenalty Schedule
provided as Appendix 2 of this Decree/Agreement.  The listing
of the violation in a Facility Audit Report shall be conclusive
and binding on Defendant/Respondent, and the amount set forth in
the Penalty Schedule shall be due and payable by certified check
to the "Treasurer of the United States."  The check shall be
remitted to:
                [appropriate EPA lockbox address]

within 30 days of receipt of the applicable Facility Inspection
Report.  Penalties shall accrue from the date the violation is
determined to have begun to the date such violation is corrected

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                             -13-

or abated.  Subject to the rights reserved in Paragraph 25
below, EPA will not take further enforcement action on those
violations for which penalties are paid and corrective action
taken in compliance with this Decree/Agreement.

     23.  Unlisted Violations.  In the event that the audit
firm reports statutory or regulatory violations  other than those
listed in Appendix 2, Defendant/Respondent shall correct such
violations as soon as is physically possible.  In addition, the
parties will, for a period of 60 days following  receipt of the
Facility Audit Report in which such unlisted violations are
contained,, attempt to settle by negotiation the  appropriate
remedy and penalties Defendant/Respondent shall  pay for such
unlisted violations.  In such negotiations, the  parties will
compare each unlisted violation to the most similar listed
violation, if possible.  In the event of failure of the parties
to achieve settlement of unlisted violations within 60 days/
EPA shall be free to take any enforcement measure authorized
by law.

     24.  Uncorrected or New Violations.  Beginning on the date
EPA receives a Facility Audit Report, Defendant/Respondent
shall have sixty (60) days to correct violations cited therein.
For any previously reported violation discovered to be uncorrecte
at the end of such sixty (60)-day-period, Defendant/Respondent
shall pay a civil penalty of $25,000 per day for each day of
continued noncompliance unless, within sixty (60) days,
Defendant/Respondent has notified the Agency in accordance
with Paragraph 20 that compliance is physically impossible and
has obtained a final decision from the Agency verifying such
physical impossibility.  If, during the audit period or during
the first post-audit inspection, the Agency discovers violations
which were not reported to the Agency by the Audit Firm,  for
j.uch violations Defendant/Respondent shall pay a civil penalty
eis set forth in the Penalty Schedule (Appendix 2).  In addition,
t.he Agency reserves the right to initiate civil or criminal
action (or both) with regard to any previously reported and
uncorrected violation and any violation not previously reported.


     25.  Reserv tion of Rights.

          a°  Reservation of States' and Local Governments'
              Right to Inspect Defendant's/Respondent's Facilities

              Nothing in this Decree/Agreement shall  limit  the
              authority of EPA or any state or local  government
              to enter and inspect any Defendant/Respondent
              facility.

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                              -14-

          b.  Reservation of Agency's Right to Seek Relief.

                   Except as provided in Sections 21 through
              24 above, nothing in this Decree/Agreement shall
              be construed to limit the ability of the United
              States to take any enforcement action authorized
              by law.


                    MANAGEMENT SYSTEMS AUDIT

     26.  Corporate Management Systems Report.  No later than
60 days after the last Facility Audit Report is submitted to
Defendant/Respondent and EPA, the Audit Firm shall submit to
Defendant/Respondent and EPA a Corporate Management Systems
Report as defined in Paragraph 5(4) of this Decree/Agreement.

     27.  Corporate Management Report and Plan.  No later than
90 days after it has received the Corporate Management Systems
Report, Defendant/Respondent shall submit to the Agency its own
Corporate Management Report and Plan describing in full detail
what actions it has taken or will take to implement the findings
of the Corporate Management Systems Report.


                      MISCELLANEOUS TERMS

     28.  Submission of Reports.  Any reports produced by the
Audit Firm,  including Facility Audit Reports and the Corporate
Management Systems Report, shall be submitted simultaneously
to EPA and Defendant/Respondent.  The Audit Firm shall not
share draft copies of such reports with Defendant/Respondent
unless such drafts are simultaneously submitted to EPA.  The
requirements of this Paragraph shall be set forth as .a requirement
in the contract between Defendant/Respondent and the Audit Firm
for the performance of the audits described herein.

     29.  Effective Date of Decree/Agreement.  This Decree/
Agreement shall be considered binding and in full effect upon
approval by the Federal district court judge/administrative
law judge to whom this matter has been assigned.

     30.  Notice.  AH submissions and notices required by this
Order shall be sent to the following address(es):

 [insert address(es) of EPA office(s) overseeing Decree/Agreement]

     31.  Modification.  This Decree/Agreement may be modified
upon written approval of all parties hereto, and concurrence of
the Federal District Court Judge/administrative law judge
assigned to this matter.

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                              -15-

     32.  Dispute Resolution.

          (1)  The parties recognize that a dispute may arise
          between Defendant/Respondent and EPA regarding plans,
          proposals or implementation schedules required to be
          submitted, regarding tasks required to be performed
          by Defendant/Respondent pursuant to the terms and
          provisions of this Decree/Agreement, or regarding
          whether Defendant/Respondent has incurred liability
          to pay stipulated penalties under Paragraphs 19
          through 24.  If such a dispute arises, the parties
          will endeavor to settle it by good faith negotiations
          among themselves.  If the parties cannot resolve the
          issue within a reasonable time, not to exceed thirty
          (30) calendar days, the position of EPA shall prevail
          unless Defendant/Respondent files a petition with the
          court/administrative law judge setting forth the
          matter in dispute.  The filing of a petition asking
          the court/administrative law judge to resolve a
          dispute shall not extend or postpone Defendant's/
          Respondent's obligations under this Decree/Agreement
          with respect to the disputed issue.

          (2)  In presenting any matter in dispute to the court/
          administrative law judge, Defendant/Respondent shall
          have the burden of proving that EPA's interpretation
          of the requirements of this Decree/Agreement are arbi-
          trary, capricious, or otherwise not in accordance with
          the law.

     33.  Continuing Jurisdiction of the District Court/Adminis-
trative Law~Judqe.The district court/administrativeforum in
which this Decree/Agreement is entered shall retain jurisdiction
until all obligations set forth herein are satisfied..

     34.  Relation to RCRA Permitting Process.  Notwithstanding
any other provision of this Decree/Agreement, EPA hereby reserves
all of its rights, powers and authorities pursuant to the
provisions of 42 U.S.C. §§6901 e_t seq. (RCRA) governing permits
for facilities, and the regulations promulgated thereunder.

     35.  Violations Not Covered by RCRA or TSCA.  No stipulated
penalty or other remedy agreed to shall cover or apply to
nDn-RCRA, noa-TSCA violations.  The parties shall be left to
their respective rights, liabilities and defenses with regard
to these matters.

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                              -16-

     36.  Continuing Audit Requirement.  For the five-year-period
beginning on the date that Defendant/Respondent submits to the
Agency the Corporate Management Report and Plan required by
Paragraph VII. 27. of this Decree/Agreement, Defendant/Respondent
shall conduct comprehensive audits not less often than annually
of the compliance of its facilities with [applicable statutory
and regulatory requirements].   After the initial audit by a
third party consultant (as required by this Decree/Agreement),
such audits may be conducted by such a consultant or by an
independent audit staff of the company not responsible to
production management.  Reports of the results of such audits
shall be furnished to the [appropriate corporate environmental
official and plant manager].   Within thirty (30) days after
completion of each final annual audit report,  Defendant/Respondent
shall submit to EPA a report of incidents of noncompliance
identified by the audit and steps that will be taken to correct
any continuing noncompliance and prevent future incidents of
noncompliance.

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                                                      Appendix 2
                         PENALTY SCHEDULE
        RCRA Violation

  I.   Groundwater Monitoring
      40 C.F.R. §§ 264.91 and
      265.91

  II.  Unsaturated Zone Monitoring
      40 C.F.R. §§ 264.97 through
      264.100 and 265.92 through
      265.94

  III. Waste Analysis Plans:
      Content and Implementation
      40 C.F.R. §§ 264.13(a) and (b),
      and 265.13(a) and (b)

  IV.  Bulk Liauids in Landfill
      40 C.F.R. §§ 264.314(a)
      and 265.314(a)

 V.   Containerized Liquids
      Disposal in Landfill
      40 C.F.R. §§ 264.314(b)
      and 265.314(b)

 VI.  Waste Tracking within
      TSD facility
      40 C.F.R. 5 264.222

 VII. Maintensnce of Minimum
      Freeboard level for
      Surface Impoundment
      40 C.F.P. § 264.226(c)

VIII. Ignitable/Reactive
      Disposal in Landfill
      40 C.F.R. §§ 264.312
      and 265.312

 IX.  Land Disposal (direct
      application to  unlined
      surface soils)  of non-
      biodegradesble  wsstes
      40 C.F.R. §§ 264.272(a)
      and 265.272(a)
Penalty

$22,500.00
per missed sampling event
$22,500.00
per missed sampling event
$25,000.00
$22,500
per day of occurrence
$22,500.00
per day of occurrence
$25,500.00
$6,500.00  ,
per freeboard violation
$9,500.00
per cell, per day.
$22,500.00
per day

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                              -2-
        RCRA Violation

 X.    Trial test of waste
       compatibility prior
       to discharge into
       surface impoundment
       40 C.F.R. § 265.225

XI.    Trial test of waste
       solidification process
       prior to landfill
       40 C.F.R. §265.402
                      • '.t f
XII.   Failure to control wind
       dispersal of land treatment
       waste disposal zones
       40 C..F.R. §§ 264.272(e)
       and :>65.273(f)

XIII.  Incompatible wastes placed
       into surface impoundment
       40 C.F.R. §§ 264.230
       and 265.230

XIV.   Unauthorized expansion of
       TSD facility during
       Interim status
       40 C.F.R. §270.72

XV.    Closure of Units w/o
       demonstration of
       compliance with facility
       closure plan
       40 C.1T.R. §§ 264.113
       and 2(55.113

XVI.   Inadequate closure/
       post-closure inspec-
       tion/maintenance plans
       40 C.F.R. §§ 264.112
       and 265.112

XVII..  Absence of post-closure
       groundwater monitoring
       program
       40 C.F.R. §§ 264.117(a)(1)
       and §265.117(a)(2)
Penalty

$22,500.00
per day of event
$22,500,00
per day
$22,500.00
per unit
$22,500.00
per day
$20,000.00
per day or as
needed to recapture
all profits gained

$25,000.00
per unit
$15,000.00 per unit
$22,500.00 per day

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                              -3-
           RCRA Violation

 XVIII.   Failure  to  update closure/
         post  closure plan cost
         estimates
         40 C.F.R. §§ 264.144(c)
         and 265.114(c)

 XIX.     No schedule included
         for closure activities
         40 C.F.R. §§ 264.112(a)
         and 265.112(a)

 XX.      Inadequate  Part A
         Applications, absence
         of identified operating
         units
         40 C.F.R. §270.13

 XXI.     Inadequate  Part B
         Application
         40 C.F.R. §270.14

 XXII.    Absence of complete
         facility Inspection
         Plan, units omitted
         40 C.F.R. §§ 264.15(b)
         and 265.15{b)

 XXIII.   Failure to record
        on facility inspections
         reports repairs or
        remedial measures taken
        40 C.F.R. §§ 264.15(b)
        and 265.15(d)

 XXIV.    Failure to inspect
         freeboard levels
        of surface  impoundments
        40 C.F.R. §§ 264.226(b),
         (c) and 265.226(a)

XXV.    Operating Record
        Omissions failure
        complete grid maps
        of landfilled lifts
        of waste
        40 C.F.R. §§ 264.309
        and 265.309
Penalty

$3,000.00 per day
$6,500.00 per plan
milestone omitted
$9,500.00 per unit
not properly identified
$9,500.00 per unit
not properly identified
$2,250.00 .
per unit emitted,
per day
$2,250.00
per omission
$2,250.00
per occurrence
$2,250.00
per omission

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                                -4-
             RCRA Violation

  XXVI.   Failure to record on-site
          generated hazardous wastes
          i.,e. truck washing facility
          40 C.F.R. § 262.4Kb)

  XXVII.  No training provided
          to employee assigned to
          do waste analyses
          40 C.F.R. §§ 264.16
          and 265.16

  XXVIII. No analyses performed
          on materials added to
          on-site waste piles
          40 C.F.R. § 265.252

  xxix.   Records not provided
          to Agency
          within 48 hours of reauest.
          40 C.F.R. §§ 264.74
          and 265.74

  XXX.    Fence not installed
          around all operating
          areas of TSD facility
          40 C.F.R. §§ 264.14
          and 265.14

  XXXI.   Emergency Contingency
          Plan Inadequacies
          40 C.F.R. §§ 264.52
          and 265.52

  XXXII.  Failure to Meet
          Financial Responsibility
          Requirements
          40 C.F.R. Part 264, Subpt. H
          and Part 265,  Subpt. H
Penalty

$9,500.00
per unrecorded event
$3,000.00
per untrained
employee
$22,500.00
per event
$6,500.00 per day
of delay
$1,000.00
S2,225.00
per component
deficiency
$25,000.00
per day of delay
            TSCA Violation
Penalty
XXXIII.  Improper Disposal of PCBs
         40 C.F.R. §§ 761.60 (a)-(d)

         —1,100 or more gallons
           or 750 or more cubic
           feet of PCB contaminated
           material.
$25,000.00 per day/
per violation

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                                 -5-
             TSCA Violation

          —220-1,000  gallons  or
            150-750  cubic  feet of
            PCB contaminated
            material

          —less than  220  gallons or
             150 cubic  feet of PCB
             contaminated  material

 XXXIV.    Failure  to Dispose of PCBs
          by Jan.  1, 1984.
          40 C.F.R. § 761.65(a)

          —1,100  or more  gallons
            or  750 or more cubic
            feet of PCB contaminated
            material.

          —220-1,100 gallons or
            150-750 cubic  feet of
            PCB  contaminated
            material.

          —less than 220  gallons or
            150  cubic feet of PCB
            contaminated material.

 XXXV.     Failure  to Dispose of PCBs
          within one year  of removal
          from service.
          40 C.F.R. § 761.65(a)

          --1,100 or more gallons
            or 750 or more cubic
            feet of PCB contaminated
           material.

          —220-1,100 gallons or
            150-750 cubic feet of
            PCB  contaminated
           material.

         —less than 220 gallons or
            150  cubic feet of PCB
            contaminated material.

XXXVI.   Improper Processing of PCBs
         40 C.F.R. § 761.20U)
Penalty

$17,000.00 per day,
per violation
$5,000.00 per day,
per violation
$25,000.00 per day,
per violation
$17,000.00 per day,
per violation
$5,000.00 per day,
per violation
$25,000.00 per day,
per violation
$17,000.00 per day,
per violation
$5,000.00 per day,
per violation


$20,000.00 per day,
per violation

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                                  -6-
              TSCA Violation

  XXXVII.  Improper Distribution of
           PCBs (sale) in commerce.
           40 C.F.R. S 761.20(a)

  XXXVIII. Improper treatment and
           testing of waste oils.
           40 C.F.R. §§ 761.60(g) (2)(i)
           and ( ii)

  XXXIX.   Improper Use of .PCBs
           40 C.F.R. § 761:'20(a)

  XXXX.    Improper use of PCBs
           {road oiling;  dust
           control; sealants)
           40 C.F.R. § 761.20(d)
           Improper use of PCBs

           - Transformers
             40 C.F.R. § 761.30(a)
           - Capacitors
             40 C.F.R. § 761.30(1)
           - Heat transfer systems
             40 C.F.R. § 761.30(d)
XXXXII.    PC3 Storage Violations

           - 40 C.F.R. § 761.65(b)
            (facility criteria)
           - 40 C.F.R. § 761.65(c) (7) (ii)
            (spill plan development)
           - 40 C.F.R. § 761.65(c) (8)
            (management of liquids
             in storage)

XXXXIII.  Recordkeeping Violations
          (storage for disposal)
          40 C.F.R. § 761.180(a)

 XXXIV,   Recordkeeping violations
          (disposal facilities)
          Incinerators
          40 C.F.R. § 761.180(c)
          Chemical waste landfills
          40 C.F.R. § 761.180(d)
Penalty

$20/000.00 per day/
per violation
$25/000.00 per day/
per violation
$25,000.00 per day,
per violation

$25,000.00 per day,
per violation
$20,000.00 per day,
per violation
$15,000.00 per day,
per violation
$10,000.00 per
per violation
$15,000.00 per day/
per violation

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                                  -7-
xxxxv.
   TSCA Violation

Marking Violations
40 C.F.R.  § 761.40(a)
Penalty

$15,000.00 per day,
per violation
XXXXVI.   Failure to Date PCB Items
          placed into storage
          40 C.F.R. § 761.180(a)
                                   $5,000.00  per  day,
                                   per  violation
XXXXVII.  Violation of any condition
          of a PCB chemical waste
          landfill (40 C.F.R. § 761.75)
          or incinerator (40 C.F.R.
          § 761.70) application approval.
                                   $25,000.00 per day,
                                   per  violation
XXXXVIII. Failure to decontaminate
          PCB container, tanker
          trucks, etc.
          40 C.F.R.  § 761.79
                                   $25,000.00 per day,
                                   per  violation

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                                                     Appendix 3

          CORPORATE MANAGEMENT SYSTEMS REPORT PROTOCOL


The Corporate Management Systems Report shall:

(1)   Identify and describe the existing facility waste manage-
ment  operations and the Environmental Management Department's
systems, policies and prevailing practices as they affect
Dafendant1s/Respondent's corporate compliance with RCRA and
TSCA.

(2)   Evaluate such operations/ systems, practices, and policies
and identify and describe fully the perceived weaknesses in
such  operations, systems, practices, and policies by comparing
them, to the extent practicable, to the existing practices,
programs and policies of other RCRA and TSCA waste management
corporations operating within the continental United States and
to generally accepted corporate management practices.

(3) Based on the evaluation required in paragraphs (1) and (2)
above, the consultant shall identify and describe fully with
supporting rationales the perceived areas, if any, where Defen-
dant's/Respondent's inter- and intra-facility waste management
operations and corporate to operating level environmental
management systems, practices and policies may be improved.
The Corporate Management Systems Report shall list specific
options for improvements in the following areas:

          (a)  Corporate data management practices pertaining
to the following items:

          i.  compliance budgets;

         ii.  staffing;

              training;

              auditing;

          v.  incident reporting, including but not limited to
              manifest exception reports and any unpermitted
              disposal,  release,  or discharge;

         vi.  quality assurance cest reporting;

        vii.  quality control reporting;

       viii.  generator  waste profile reports, facility pre-
              acceptance reports, and acceptance analysis as
              these items compare to each facility's stated
              basis for  accepting or rejecting individual
              waste loads;  and

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                              -2-
         .Lx.  facility mass balance records reflecting the
              internal disposition of all wastes received
              for final disposal.

       (b)  Corporate data evaluation practices, capabilities
and policies pertaining to reports to and from compliance
officers, internal and external environmental audits, regulatory
agency notices of violation and all other compliance data
documents which when evaluated may lead to changes in TSD
operating procedures or directives by corporate management to
modify any individual or multi-facility TSD facility operating
procedures.

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                                                   Attachment G
 MODEL EMERGENCY  ENVIRONMENTAL  MANAGEMENT REORGANIZATION PROVISION
                 FOR  CONSENT  DECREES OR AGREEMENTS

   E.I.   The  objective of  this  provision is to provide a manage-
 ment  structure at  the corporate  headquarters level that will
 ensure  that  comprehensive environmental policies and procedures
 are developed by top management  and fully implemented company-wide
 at all  facilities.

    2.   Defendant/Respondent shall propose to EPA's  [name of
 EPA office overseeing compliance with Decree/Agreement] by
 written submittal  to [name of  Agency contact] within thirty
 (30)'days of the effective date of this Decree/Agreement, a
 plan  for reorganization of the corporate management structure
 with  respect to  environmental  affairs.  This reorganization
 proposal shall be  agreed upon  by EPA and Defendant/Respondent
 in writing/  prior  to implementation of the reorganization.

      a.  The management plan  shall provide for the creation of
 a new position of  Director,  Environmental Affairs  [or other
 appropriate  title]  to exercise the responsibilities set forth
 herein.  The Director, Environmental Affairs shall report
 directly to  [a corporate Vice  President or other appropriate
 top management official not directly responsible for manufacturing/
 production activities].  The position shall at all times be
 filled  by an experienced executive with a background in [approp-
 riate industrial field]  and  in environmental management and
 compliance.

      b.  It shall be the responsibility of the Director,
 Environmental Affairs to develop appropriate corporate environ-
 mental  policies and  procedures and to oversee their implementation
 at all  company facilities to ensure compliance with applicable
 Federal, State and local environmental statutes and regulations.
 In the  development of such policies and procedures, the recom-
 mendations of the environmental audit conducted at the [facility]
 by an outside consultant as described herein shall be given
 full consideration.

      c.  Defendant/Respondent shall also establish such addi-
 tional  technical and support positions reporting directly to
 the Direct _, Environmental Affairs as are necessary to meet
 the objective of this provision.  Neither the Director nor
 staff shall be assigned additional responsibilities not related
 to environmental compliance.   Defendant/Respondent shall provide
 adequate budgetary support to  the environmental staff.

    3.  Within ninety (90) days of EPA's approval of the environ-
mental management plan,  the company shall appoint the Director,
 Environmental Affairs and appropriately qualified staff.

    4.  Within two hundred seventy (270) days of EPA's approval of
 the environmental management plan, the Director, Environmental

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                              -2-

Affairs shall complete development and begin the implementation
of appropriate corporate environmental policies and procedures
to meet the objective of this provision.

   5.  within eighteen (18) months of the effective date of
this Decree/Agreement, Defendant/Respondent shall fully implement
the corporate environmental policies and procedures at all
company facilities.  This shall include any necessary organiza-
tional or personnel changes at the individual facility level.

   6.  Recognizing the corporate responsibility to maintain
compliance with all applicable environmental statutes and
regulations, Defendant/Respondent agrees to maintain a permanent
corporate environmental management staff.  The organization,
makeup and functions of this staff may be modified from time
to time as dictated by changes in corporate facilities or
operations or the requirements of environmental statutes and
reaulations.

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GM-53

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          UNITED STATES ENVIRONMENTAL PROTECTION AGENCY     / r
                        WASHINGTON, D.C. 20460                  4" $3
                             NOV 26 BBS                 ANDCOMPUANCE
OFFICE OF ENFORCEMENT
   IDCOMPLIANC
   MONITORING
 MEMORANDUM

 SUBJECT:   Guidance on Implementing the Discretionary Contractor
           Listing Program
                                  Vi
 FROM:      Thomas L. Adams, Jr.
           Assistant Administrator for Enforcement
             and Compliance Monitoring

 TO:        Assistant Administrator for Air and Radiation
           Assistant Administrator for Water
           General Counsel
           Inspector General
           Regional Administrators, Regions 1-X
           Regional Counsels,  Regions I-X


 I.    Purpose

      This document establishes Agency policy and procedures for
 implementing the discretionary contractor listing program in EPA
 enforcement proceedings.  It  should be read in conjunction with
 the  final revisions to the contractor listing regulations (40 CFR
 Part 15,  50 FR 36188,  September 5, 1985), and the guidance document,
 "Implementation of Mandatory  Contractor Listing" (General Enforce-
 ment Policy No. GM-32, August 8,  1984).  The procedures-to be
 followed  in all contractor listing actions are contained in the
 rule and  are summarized in an Appendix to this document.  This
 policy applies only to discretionary listing proceedings and super-
 sedes  the "Guidance for Implementing EPA's Contractor Listing
 Authority" (General Enforcement Policy No. GM-31, July  18, 1984).

      The  revisions tc  *he contractor listing regulations, together
 with this guidance document and other management initiatives, should
-encourage greater use of the  Agency's listing authority and should
 expedite  the process for listing a facility.

 II.   Background

      The  Clean Air Act (CAA), Section 306, and the Clean Water Act
 (CWA),  Section 508, as implemented by Executive Order 11738, authorize
 EPA  to prohibit facilities from obtaining federal government contracts.

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                                -2-

grantu or loans (including subcontracts, subgrants and subloans),
as a consequence of criminal or civil violations of the CAA or CWA.
Commonly called "contractor listing," this progs-am provides EPA
with an effective administrative tool to obtain compliance with
the CAA and CWA where administrative or judicial action against a
facility has failed to do so.

     On July 31, 1984, EPA proposed revisions to the contractor
listing regulations (40 CFR Part 15 (49 FR 30628)) to simplify and
clarify the procedural opportunities which EPA will provide to
parties to listing or removal actions and to provide for mandatory
(i.e., automatic) listing of facilities which give rise to criminal
convictions under Section 113(c)(l) of the CAA or Section 309(c)
of the CWA.  Final rules were promulgated on September 5, 1985
(50 FR 36188).

III.  Appropriate Cases for Discretionary Listing Recommendations

     In numerous cases, initiation of a listing action has
proved to be effective in achieving more expeditious compliance
and case settlements.   While regional offices should consider
making contractor listing recommendations in every case where
the criteria of 40 CFR Part 15 are met, listing is a tool to
be used in conjunction with other enforcement actions.   (See IV.
Standard of Proof in Listing Proceedings, page 4.) The circumstanc«l
surrounding each case will dictate whether a listing action should
be initiated.  In particular, use of listing may be appropriate in
the following cases:

          A.  Violations of Consent Decrees

     Regional offices should strongly consider making listing
recommendations for all cases of noncompliance with consent decrees
under th« CAA or CWA.   The recommendation should be prepared at
the earliest possible time after the Region learns of noncompliance
with the decree, but no later than the  filing of  a motion to enforce
the decree.  Initiation of the listing  action should be  supplementary
to, and not in lieu of, a motion to enforce the decree.  Where a
consent decree covers CAA or CWA violations as well as violations
of other environmental statutes, such as the Resource Conservation
and Recovery Act (RCRA) or the Toxic Substances Control  Act  (TSCA)
(where EPA does not have contractor listing authority),  a  listing
recommendation also should be considered.

          B.  Continuing or Recurring Violations  Following
              Filed Civil Judicial Actions

     Whero EPA has filed a civil judicial enforcement action,  the
Regional Office should initiate a  listing action  at the  earliest
possible time after it determines  that:   (1) noncompliance  is
ongoing, (2) the defendant is not  making good  faith efforts  to

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                                -3-

comply, and  (3J an expeditious settlement does not appear likely.
For example, a" defendant may make a firm settlement offer that is
far below the economic savings it realized from its noncompliance,
making  settlement unlikely.

     Similarly, where EPA initiates a multi-media civil enforcement
action  against violations under the CAA or CWA and other environ-
mental  statutes (such as RCRA or TSCA), and continuing water or
air compliance problems exist without good faith corrective efforts,
the Region should consider bringing a listing action.  Therefore,
it is important that all CAA and CWA counts be included in a multi-
media enforcement action.

          C.  Violations of Administrative Orders

     Where noncompliance continues after an administrative order
has been issued under the CAA or CWA,  and the Regional Office
determines that the facility is not making sufficient efforts to
come into compliance, a listing recommendation should be considered.
Initiation of a listing action generally should not be in lieu.of
filing  a civil judicial action to enforce the administrative order,
but should support the civil action.  The Regional Office should
consider initiating a listing action at the same time that it
files the civil judicial action.

          D.  Multi-Facility Noncompliance within a Single Company

     Contractor listing can be an effective tool to address a
pattern of noncompliance within a single company.  Where continuing
or recurring CAA or CWA violations occur at two or more facilities
within  the same company, and EPA previously has taken an enforcement
action  against each, the Regional Office should consider making
listing recommendations in all such cases.

     While each facility's continuing or recurring noncompliance
must be proved separately (i.e., one may not use one violation from
branch  facility A and one violation from branch facility B to
constitute the minimum two violations required), one listing recom-
mendation describing noncompliance at two or more facilities may be
submitted to the Assistant Administrator for the Office of Enforce-
ment and Compliance Monitoring (OECM).  A joint listing proceeding
may be  held concerning all facilities.  Joint consideration of two
or more facilities' violati  i will require fewer Agency resources
than listing each facility separately.  It will also discourage
companies from switching government contracts from a listed facility
to another facility without taking steps to correct the violations
which gave rise to the listing.

     To accomplish this, the Regional Office, with headquarters
staff support, should review the EPA enforcement docket to see if
a potential listing candidate has committed CAA or CWA violations
at other company facilities.  Note that a company's  facilities may
be known by the parent company name or by the names of company

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                                -4-

subsidiariea. -Regional offices may obtain information on
other company-'facilities from Charlene Swibas,  Chief,  Information
Services Section, NEIC (FTS 776-3219), who will search EPA's
Facility Index System which lists this information for all EPA
regions, or provide a Dunn and Bradstreet report containing this
information.

     The Region may also request data on administrative orders
issued against a company under the headquarters Permit Compliance
System  (for CWA violations) and the Compliance Data System (for
CAA violations).  In some cases EPA has issued administrative
orders and filed civil enforcement actions against company facil-
itieo which are located in more than one region.  Such multi-regional
inquiries may be coordinated with the Headquarters participating
attorney and the Agency's Listing Official.

          E.  Other Circumstances Where Listing is Appropriate

     The regulation provides two other situations where listing may
be appropriate.  First, EPA can list a facility after it has issued
a Notice of Noncompliance under Section 120 of the CAA.  The threat
of listing in combination with noncompliance penalties can impose a
sufficiently severe economic cost on a facility to encourage efforts
to achieve both compliance and quicker settlements.  Second, Regional
Offices may recommend listing when a state or local court convicts
any person who owns, operates, or leases a facility of a criminal^
offense on the basis of noncompliance with the CAA or the CWA.
They also may recommend listing when a state or local court has
issued an injunction, order, judgement, decree  (including consent
decrees), or other civil ruling as a result of noncompliance with
the CAA or CWA.

IV.  Standard of Proof in Listing Proceedings

     It will be the responsibility of the  Office of Regional
Counsel to represent the Agency at any listing proceeding  (where
one is requested by the affected facility).  According to  40 CFR
Section 15.13(e), "[t]o demonstrate an adequate basis  for  listing
a facility, the record must show by a preponderance of the  evidence
that there is a record of continuing or recurring non-compliance
at the  facility named in the recommendation to  list and  that  the
requisite enforcement action has been taken."

     "Requisite enforcement action" can be established by  reference
to an issued administrative or court  order, or  a  filed civil  judicial
action,,  "Continuing or recurring" violations  are understood  to
mean two or more violations of any standard at  a  facility,  which
violations either occur or continue to exist over a period of  time.
Such a  violation occurs even when different standards  are  violated
and time has elapsed between violations.   Thus,  in a  listing
ing, it is not necessary to prove all  violations  of CAA  or CWA
standards alleged in the underlying enforcement action.   Nonethel

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                              -5-

the regional attorney must carefully review the sufficiency of the
evidence and evaluate anticipated defenses.

V.   Fairness Concerns in EPA Use of Contractor Listing

     It is the intent of this guidance document to encourage the
use of the Agency's contractor listing authority in appropriate
cases.  However, it must be recognized that listing is a severe
sanction.  Before making a recommendation in any case, the Regional
Office should determine that the continuing or recurring noncompli-
ance involves clearly applicable CAA or CWA standards.  Likewise,
Agency enforcement personnel must be careful in using listing
terminology during discussions with defendants.  During settlement
negotiations, for example, it is certainly proper for EPA to advise
a defendant of the range of available EPA enforcement authorities,
including contractor listing.  However, EPA personnel must distin-
guish between a listing recommendation (made by a "recommending
person," usually the Regional Administrator, to the Assistant
Administrator for OECM), a notice of proposed listing by the Agency
to the affected facility (which is sent by the Listing Official
after a preliminary decision to proceed is made by the Assistant
Administrator for OECM), and a final decision to list which is made
either by an Agency Case Examiner at the end of a listing proceeding,
or by the Assistant Administrator for OECM if no listing proceeding
is requested.  Where appropriate, EPA personnel should explain that
the Regional Administrator's listing recommendation does not consti-
tute a final Agency decision to list.

VI.   Press Releases on Contractor Listing Actions

     EPA will use press releases and other publicity to inform
existing and potential violators of the CAA and the CWA that EPA
will use its contractor listing authority in appropriate situations.
The November 21, 1985, "Policy on Publicizing Enforcement Activities"
(GM-46),  states that "[i]t is EPA policy to issue preas releases when
the Agency:  (1) files a judicial action or issues a major adminis-
trative order or complaint (including a notice of proposed contractor
listing and the administrative decision to list)...."  As discussed
in that policy, the press release should be distributed to both the
local media in the area of the violative conduct and the trade
press of the affected industry.

VII.  Coordination with the Departm^nc of Justice

     To ensure that information presented during a listing proceeding
will hot compromise the litigation posture of any pending legal
action against a party, EPA will coordinate with the Department of
Justice (DOJ) before a recommendation to list is made to the Assis-
tant Administrator for OECM.  If the recommending party is an  EPA
regional office official, he or she shall coordinate with the
appropriate DOJ attorney before a recommendation is submitted  to
the Listing Official.  He or she shall also provide the DOJ attor-
ney's comments to the Listing Official as part of the recommendation

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                                -6-

package.  If the recommending party is not an EPA official,  the
Listing Official shall coordinate with the EPA Office of Regional
Counsel and the appropriate DOJ attorney before a recommendation
to list i8 presented to the Assistant Administrator for OECM.

VIII.  Applicability of Contractor Listing to Municipalities

     Municipalities are subject to listing under appropriate cir-
cumstances.  State and local governments and other municipal bodies
are specifically identified by 40 CFR §15.4 as "persons" whose
facilities may be listed.  The standards for recommending that a
municipal facility be listed are the same as those for listing
other facilities.  Listing may not be the most effective enforce-
ment tool in many municipal cases because often the only federal
funds received by a municipal facility are grant funds to abate or
control pollution, which are exempted from the listing sanction by
40 CFR §15.5.  However, listing still should be considered in cases
where a municipal facility receives nonexempt funds or where the
principles underlying the listing authority otherwise would be.
furthered by a recommendation to list.

IX.  Uae of Listing in Administrative Orders

     Enforcement offices may wish to inform violating facilities
early in the enforcement process of the possibility of being listel
Many facilities do not know about the listing sanction; such know!
edge may provide additional impetus for a facility to take steps
to come into compliance.  For example, some EPA regions notify
facilities whose violations make them potential candidates for
listing of this possibility in the cover letter which accompanies
an administrative order requiring them to take action to correct
their noncompliance.

X.   Obtaining Information Concerning Government^ Contracts
     Held by a Facility Under Consideration for Listing

     After an EPA recommending person, usually the Regional
Administrator, has submitted a listing recommendation to the
Listing Official, the regional office attorney handling the
case may require the facility to provide a  list of all  federal
contract*, grants, and loans (including subcontracts, sub-
grants, ar,  subloans).  To insure that such a requirement is
not imposed prematurely, the regional office attorney should
require this information from a facility only after advising
the Listing Official of his or her intention to do so.  Requiring
this information from the facility is not a prerequisite for
listing a facility.

     Requiring this information from a  facility may be  accom-
plished by telephone or through a letter similar  to the models
provided in Attachments D and E.  Attachment D  is  a model  letter
requesting information from a facility which is  violating an
administrative order issued under the authority of the  Clean

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                                -7-

Water Act for .violating its National Pollutant Discharge Elimination
System  (NPDES)" permit.  Attachment E is a letter to a facility
which EPA and the Department of Justice have filed a civil suit
against  for violating the Clean Air Act.  Regional office attorneys
may elect to have such a request letter serve as notification to
the facility that EPA is considering instituting a listing action,
or they  may wish to inform the facility before sending such a
letter.  Which approach is taken will depend on the regional office
attorney's judgment of the notification's effects on the overall
case against the facility.

XI.  Headquarters Assistance in Preparing and Processing
     Listing Recommendations

     In  order to encourage the use of the contractor listing author-
ity in appropriate cases, OECM staff have been directed to assist
regional offices in preparing listing recommendations.  Attached
are model listing recommendations indicating the level of detail
and support that should be provided with recommendations.  (See
Attachments A, B, and C for model listing recommendations.)  Where
a listing recommendation is sufficient, the Assistant Administrator
for OECM will decide whether to proceed with the listing action
under Section 15.11(c) (i.e., by directing the Listing Official to
issue a  notice of proposed listing to the affected facility) within
two weeks after receiving the recommendation.  Questions concerning
contractor listing may be directed to the Agency Listing Official,
Cynthia  Psoras,  LE-130A,  FTS 475-8785, E-Mail Sox EPA2261.

Attachments

cc:  John Ulfelder
     Senior Enforcement Counsel
     Associate Enforcement Counsel for Air
     Associate Enforcement Counsel for Water
     Director, Office of Water Enforcement and Permits
     Director, Stationary Source Compliance Division
     Director, Office of Compliance Analysis and Program Operations
     Director, NEIC
     Director, Water Management Division (Regions I-X)
     Director, Air Management Division  (Regions I, III, V and  IX)
     Director, Air and Waste Management Division (Regions  II and  VI)
     Director, Air, Pesticides and Toxics M< nagement Division
        (Region IV)
     Director, Air and Toxics Division  (Regions VII, VIII and  X)
     David Buente, Department of Justice (DOJ)
     Nancy Firestone, DOJ

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                                                      Appendix




     The Listing program and Final Revisions to 40 CFR Part 15

     A.  Mandatory Listing

     If a violation at a facility gives rise to a criminal con-
viction under Section 113(c)(l) of the CAA or Section 309(c) of
the CWA, listing of the facility is mandatory (and effective upon
conviction under 40 CFR Section 15.10).  As soon as a conviction
occurs, the Director of the Office of Criminal Enforcement,
within the Office of Enforcement and Compliance Monitoring (OECM),
must verify the conviction and notify the Listing Official.  The
Listing Official sends written notification to the facility and
to the Federal Register.  Both documents must state the basis for
and the effective date of the mandatory listing.

     Removal from the mandatory list may occur only if:  (1) the
Assistant Administrator certifies that the facility has corrected
the condition that gave rise to the criminal conviction under
Section 113(c)(l) of the CAA or Section 309(c) of the CWA, or (2)
a court has overturned the criminal conviction.  The August 8,
1984, memorandum, "Implementation of Mandatory Contractor Listing,"
(GM-32) discusses the procedures for mandatory listing in more detail

     B.  Discretionary Listing

     1.  Basis for Discretionary Listing

     The following enforcement actions may serve as a basis for
discretionary listing if there is also a record of continuing or
recurring noncompliance at a facility:

          a.  A federal court finds any person guilty under Section
              113(c)(2) of the CAA, if that person owns, leases,
              or supervises the facility.

          b.  A state or local court convicts any person of a
              criminal offense on the basis of noncompliance with
              clean, air or clean water standards if that person
              owns, leases, or supervises the facility.

          c.  A federal, state, or local court issres an injunction,
              order, judgment, decree (including c< jent decrees)
              or other form of civil ruling as a result of non
              compliance with the CWA or CWA at the facility.

          d.  The facility is the recipient of a Notice of
              Noncompliance under Section 120 of the CAA.

          e.  The facility has violated an administrative order
              under:

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                                -2-
              •  CAA  Section 113(a)
              :a  CAA  Section 113(d)
              *  CAA  Section 167
              0  CAA  Section 303
              9  CWA  Section 309(a)

          f.  The facility is the subject of a district court
              civil enforcement action under:

              0  CAA  Section 113(b)
              *  CAA  Section 167
              8  CAA  Section 204
              *  CAA  Section 205
              *  CAA  Section 211
              0  CWA  ..Section 309(b)

     ?..   The Discretionary Listing Process

     a.   Listing Recommendation and Notice of Proposed Listing

     The discretionary listing process begins when a "recommending
person"  files a listing recommendation with the Listing official.
Recommending persons may include any member of the public, Regional
Administrators, the Assistant Administrator for Air and Radiation,
the Assistant Administrator  for Water, the Associate Enforcement
Counsel  for Air, the Associate Enforcement Counsel for Water,  and
the Governor of any State.   The recommendation to list:   (1) state
the name, address, and telephone number of the recommending person;
(2) identifies the facility  to be listed, and provides its street
address  and mailing address; and (3) describes the alleged continuing
or recurring noncompliance,  and the requisite enforcement action
(see 40 CFR Section 15.11(b)).  The recommendation to  list should
describe the history of violations  in detail, including the specific
statutory, regulatory, or permit requirements violated.   In addition,
regional offices may include as attachments to the listing recommen-
dation documents prepared for other purposes, such as  complaints,
litigation reports, and other explanatory material which  describes
the nature of the violations.  (See Attachments for model listing
recommendations.)

     Tho Listing Official must determine whether the recommendation
meets the requirements of  Action IS.ll(b).   If the recommendation
is sufficient and the Assistant Administrator for OECM decides to
proceed under Section 15.11(c), the listing official will contact
the regional office to ensure that  it still wishes to  proceed.   If
the decision is made to proceed, the  listing  official  provides notice
of the proposed listing to the owner  or operator of the affected
facility and provides the owner or  operator of the facility 30
days to request a listing proceeding.  A  listing proceeding is
not a formal hearing; rather, it is an informal administrative
proceeding presided over by  an Agency Case  Examiner.   If  the  facil-
ity's owner or operator requests a  listing  proceeding, the Listing
Official must schedule it and notify  the  recommending  person  and

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 the  owner or operator of the date, time, and location of
 the  proceeding./  The Assistant Administrator designates a
 Case Examiner  to preside over the listing over the listing
 proceeding.^/

      b.  Listing Proceeding

      The Federal Rules of Civil Procedure and Evidence are not
 used during listing proceedings.  The Agency and the facility may
 be represented by counsel and may present relevant oral and written
 evidence.  With the approval of the Case Examiner, either party
 may  call, examine, and cross-examine witnesses.  The Case Examiner
 may  refuse to permit cross-examination to the extent it would:
 (1)  prematurely reveal sensitive enforcement information which the
 government may legally withhold, or (2) unduly extend the proceedings
 in light of the usefulness of any additional information likely to
 be produced (see Section 15.13(b)).  A transcript of the proceeding
 along with any other evidence admitted in the proceeding constitutes
 the  record.  The Agency must prove each element of a discretionary
 listing by a preponderance of the evidence (see Section 15.13(c)).

     The Case Examiner must issue a written decision within 30
 calendar days after the proceeding.  The party adversely affected
 may  appeal the decision to the General Counsel.  The appeal, which
 is filed with the Listing Official, must contain a statement of:
 (1)  the case and the facts involved, (2) the issues, and (3)
why  the decision of the Case Examiner is not correct based on
 the  record of the proceeding considered as a whole.  The General
 Counsel must issue a final decision, in writing, as soon as
practicable after reviewing the record.  The Listing Official
 then must send written notice of the decision to the recommending
person and to the facility, and must publish the effective date
 of the listing in the Federal Register if the General Counsel
 upholds the Case Examiner's decision to list.

     c.  Removal from the List of Violating Facilities'

     Removal from the List of Violating Facilities can occur in
any of the following circumstances:

          1.  Upon reversal or other modification of the
          criminal conviction decree, order, judgment, or
          other civil ruling or finding which formed the
          basis for the discretionary listing, where the
          reversal or modification removes the basis tor the
          listing;
I/ If the owner or operator of the facility does not make a timely
request for a listing proceeding, the Assistant Administrator will
determine whether to list the facility based upon the recommendation
to list and any other available information.

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                                -4-
          2.  If the Assistant Administrator for OECM
          determines that the facility has corrected the
          condition(s) which gave rise to the listing;

          3.  Automatically if, after the facility has
          remained on the discretionary list for one year
          on the basis of Section 15.11(a)(4) or Section
          15.11(a)(5) and a basis for listing under Sections
          15.11(a)(l), (2), or (3) does not exist; or

          4.  If the Assistant Administrator for OECM has
          approved a plan for compliance which ensures
          correction of the condition(s) which gave rise to
          the discretionary listing.

     The original recommending person or the owner or operator of
the facility may request removal from the list.  The Assistant
Administrator for OECM then must review the request and issue a
decision as soon as possible.  The Listing Official then must
transmit the decision to the person requesting removal.

     If the Assistant Administrator for OECM denies a request for
removal/ the requesting person may file a written request for a
removal proceeding to be conducted by a Case Examiner designated
by the Assistant Administrator.  The Federal Rules of Civil
Procedure and Evidence are not used during a removal proceeding.
The Case Examiner's written decision must be based solely on the
record of the removal proceeding.

     Within 30 calendar days after the date of the Case Examiner's
decision, the owner or operator of the facility may file with the
Listing Official a request for review by the Administrator.  The
Administrator will determine if the Case Examiner's decision is
correct based upon the record of the removal proceeding considered
as a whole.  The Administrator then must issue a  final written
decision.

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                                               Attachment A

               MODEL LISTING RECOMMENDATION
          BASED ON ADMINISTRATIVE ENFORCEMENT ACTION

 DATE:      10701/86

 SUBJECT:   Recommendation to List Violating Facility

 FROM:      Regional Administrator, Region XI

 TO:        Cynthia Psoras
           Listing Official
           Legal Enforcement Policy Division (LE-130A)

     The  purpose of this memorandum is to recommend that
 the [name of facility and type of operations conducted at
 the facility] owned and operated by John Doe at [street
 address,  city and state] be placed on the EPA List of
 Violating  Facilities because of violations of clean air
 standards.  Information concerning the recurring violations
 and the history of action taken thus far by the Agency is
 set forth  below.  Copies of pertinent supporting materials
 are attached. [Attach technical documents describing the
 violation, the administrative order, and other documents
 describing the enforcement action taken.]

     This  plant is subject to the New Source Performance
 Standards  (NSPS) for Asphalt Concrete Plants.  40 CFR Part
 60, Subpart I (1986).

     On July 5,  1985, the Region XI Director, Air Management
 Division,  notified [owner and operator] that on the basis
of performance tests conducted December 19, 1984, the
 facility was in violation of 40 CFR 60.92(a)(l), in that
 it was discharging gases into the atmosphere, and those
gases contained 256.5 milligrams of particulate matter per dry
 standard  cubic meter (0.114 grain per dry standard cubic foot)
The allowable discharge of particulate matter into the
atmosphere is 90 milligrams per dry standard cubic meter
 (0.04 grain per dry standard cubic foot).

     On August 14, 1985, the Region XI Regional Administrator
issued an  Administrative Order pursuant to Section 113(a)(3)
of the Clean Air Act.  That order required, in part, that
 [name of  facility] operate its [specific portion of the
plant or processes causing the violations] in compliance
with the NSPS for Asphalt Concrete Planls, 40 CFR Part 60,
Subpart I, and to conduct performance tests for emissions
of particulate matter within sixty days following the
effective  date of the Administrative Order.

     Performance tests were completed on September 1, 1985,
and the particulate emissions were 373.5 milligrams per dry
standard cubic meter (0.166 grain per dry standard cubic
foot).  Thus,  [name of facility] is not in compliance, and has
violated the Administrative Order.  Further, the violation

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of' the NSPS has been a continuing violation in that the
particulate:" emissions have been greater than the permissible
limits since the December 19, 1985, test date.

     The recommending person for this listing recommendation
is Regional Administrator, Region XI, EPA, Government
Office Building, City, 51st State; her telephone number is
(FTS) 123-4567.

     This action is authorized under discretionary listing,
40 CFP 15.11(a)(4) (1986).  It meets the regulations' two
requirements that:  there is "continuing or recurring
ncmcompliance with clean air standards ...  at the facility
recommended for listing" and that the facility has violated
an administrative order issued under Section 113(a) of
the Clean Air Act. '

     If you have any questions, please contact Attorney, at
(FTS) 123-4568, or Engineer, at (FTS) 123-4569.

Attachments
[technical documents, Administrative Order,
documents describing the previous enforcement actions taken]

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                                               Attachment B
                MODEL  LISTING RECOMMENDATION
             BASED ON JUDICIAL ENFORCEMENT ACTION
 MEMORANDUM
 SUBJECT:   Recommendation  for Listing

 FROM:      Regional Administrator, EPA Region 12

 TO:        Cynthia Psoras
           Listing Official
           Legal Enforcement Policy Division, LE-130A

     This  is a recommendation that the [facility name and
 address] be placed on the EPA List of Violating Facilities,
 pursuant to Section 306 of the Clean Air Act, Executive
 Order 11738, 40 CFR Part  15, and the October 1986 guidance
 from the Assistant Administrator for Enforcement and Compliance
 Monitoring.  This action  is authorized under 40 CFR 15.11(a)(6)
 (1986).  This recommendation is based on violations alleged
 in the civil action currently being pursued against [facility
 name] in the United States District Court for the Fifty
 Second State.  [Facility  name] operates four coal-fired
 boilers (boilers nos. 2-5) at the [facility] without adequate
 air pollution control equipment.

     As indicated in the  attached counterclaim, motion for partial
 summary judgment, and affidavits, [facility name] has been
 in violation of the Federal New Source Performance Standards
 (NSPS) for particulate emissions since startup of the boilers,
 more than  five years ago.  The United States issued a notice
 of violation to [facility name] regarding mass emission
 violations at the [facility name] boilers nos. 2-5 on May  30,
 1981.  [Facility name] has not substantially modified the
particulate emission control system for these four bpilers
 since that time.  Particulate stack testing conducted as
 recently as January 1986  shows continuing violations of
 the boilers.  The complaint, attached to this memo, was
 filed by defendant on June 15, 1985.  The United States
then filed a counterclaim on August 1, 1985.  The Government's
Motion for Partial Summary Judgment as to liability, filed on or
about December 12, 1985, was granted in part on April 8,
 1986, wherein the court denied [facility name's] claim that
 the four boilers were not covered by NSPS.  The remainder
of the Motion, requesting judgment on the counterclaim for
enforcement, is pending before the court.

     The [facility name] plant is located in [City and State]
which is a secondary nonattainment area for Total Suspended
 Particulates.

     The attached affidavits contain summaries of mass violations
 at the [facility name's]  boilers nos. 2-5.  All data summarized

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were obtained from stack tests performed on the [facility name]
boilers by th'e [owner and operator corporation] and stack
testa performed by a consultant retained by the [owner and
operator corporation].

     Based on the information contained above and in the
attachments to this recommendation/ I request that the
Assistant Administrator for Enforcement and Compliance Monitoring
find that there is adequate evidence of continuing or recurring
violations of Clean Air Act standards at the [facility name]
and place this facility on the EPA List of Violating Facilities
pursuant to the procedures set forth in 40 CFR Part 15.

     For further information please contact Attorney on
(FTS) 987-654 or Technical Specialist (FTS) 987-655.
                                 (Signed)

                                 Regional Administrator

Attachments

[technical documents, consultant's report, documents describing
the judicial enforcement action]

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                                               Attachment C
         ATTACHMENT TO MODEL LISTING RECOMMENDATION
             BASED ON JUDICIAL ENFORCEMENT ACTION

MEMORANDUM

SUBJECT:  Attachment to Recommendation for Listing

FROM:     Regional Administrator, EPA Region 12

TO:       Cynthia Psoras
          Listing Official
          Legal Enforcement Policy Division (LE-103-A)

Description  of Violations
                                             •
     The four coal-fired boilers at [facility name] are
subject to 40 CFR part 60, Subpart D,  "Standards of
Performance  for Fossil-Fuel-Fired Steam Generators for
which Construction is Commenced after August 17, 1971," and
40 CFR part  60, Subpart A, "General Provisions," which are
applicable to all categories of sources for which New Source
Performance  Standards (NSPS) have been promulgated.

     Subpart D includes emission limits for particulate
matter, opacity, sulfur dioxide and nitrogen oxides (40 CFR
§60.42).  It also requires installation, calibration,
maintenance  and operation of continuous emission monitoring ("CEM")
systems for  opacity,  sulfur dioxide and nitrogen oxides (40
CFR §45(a)).  Each of the facility's boilers nos. 2, 3, 4, and
5 is subject to these emission limitations and CEM requirements.
When [owner  and operator] constructed the facility's boilers
2-5 between  1978 and 1980, it equipped each of the boilers
with a double alkali venturi scrubber for combined control
of sulfur dioxide and particulate matter.  These scrubbers suc-
cessfully control sulfur dioxide emissions but they have
never achieved the Subpart D particulate emission limit, 40
CFR §60.42(a)(1).  [Owner and operator] also equipped the
boilers with continuous monitoring systems for opacity, sulfur
dioxide and  oxygen (it was exempt from the NOX CEM requirement,
pursuant to  40 CFR §60.45(b)(3)).  The sulfur dioxide
monitoring aystern has never operated properly.

     Subpart A includes requirements related to operation
and maintenance of CEM systems (40 CFR §60.13); notification
and recordkeeping (40 CFR §60.7) and performance testing
(40 CFR §60.8k).  Under 40 CFR §60.13, all CEM systems
installed under applicable subparts must:

     a.  be  installed and operational prior to conducting
         performance tests (emissions tests) - §60.13(b);

     b.  Undergo a performance evaluation (monitor

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          certification test) during or within 30 days of
          the" performance tests - §60.13(c);

     c.   undergo regular calibration and maintenance -
          §60.13(d)(l).

     [Facility name] violated all these provisions.  It
nev«r performed a monitor performance evaluation on, and
has never operated and maintained, its sulfur dioxide GEM
system.

     Under 40 CFR §60.7, owners and operators of NSPS sources
must:
                    • *( ^
     a.  Notify EPA of the anticipated date of initial
         start-up of an affected facility postmarked not
         less than 30 days prior to such date -.§60.7(a)(2);

     b.  Notify EPA of the actual date of initial
         start-up postmarked within 15 days of such date
         §60.7(a)(3);

     c.  Submit quarterly reports of "excess emissions"
         (emissions exceeding applicable emission limits)
          as measured by continuous monitoring systems
          - §60.7(c).

     [Facility name] failed to notify EPA of the anticipated
or actual start-up of boilers 4 and 5.  [Facility name] has
never submitted any excess emissions reports to EPA.

     Under 40 CFR §60.8, owners/operators are required to
conduct performance tests of affected facilities not later
than 180 days after initial start-up.  [Facility name]
violaf.ed this provision with respect to boilers 4 and 5.

     Jit is [facility name's] customary practice to operate
one or more of the boilers during the winter heating season.
The steam'that is generated is used for space heating and
production.  The boilers are not operated, or are operated
using only natural gas as fuel, in the wanner months.  E -h
heating teaaon since the NOV was issued (in August  1980),
boilers 2 and 3 have been regularly operated.  Each day a
boiler is operated, particulate emissions from that boiler
exceed the limit, and violations of the GEM regulations
occur because the sulfur dioxide GEN remains inoperative.
This winter, [facility name] has informed us that they will not
operate the boilers using coal for fuel and will only use natural
gas.  However, they have made no commitment to permanently
cease operating the boilers using coal.

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The Motion for Summary Judgment

     On September  25, 1985, the District Court for the
Central District of the Fifty Second State ruled on EPA's
motiion for partial summary judgment with respect to the
Agency's counterclaim for enforcement.  EPA's motion dealt
only with the alleged violations of the subpart D particulate
emissions limit.  It did not deal with the monitoring,
notification and reporting violations.  EPA introduced
into evidence six stack tests conducted on boilers nos. 2-5,
all of which showed the tested boiler to be exceeding the
limit.  The court ruled that on the six days on which
those tests occurred, [facility name] violated the subpart
D particulate standard.  Enclosed is a copy of the transcript
of the September 26, 1985, hearing on the Motion for Summary
Judgment.  Judge X ruled from the bench following oral
argument by the parties.  See pages 21-25.  The judge
stated that he would issue a written order, but he has not
done so yet.  We will furnish you with a copy upon receipt.

     An evidentiary hearing is scheduled for March 1, 1985,
to establish days of violation other than the six stack
test days.


                                    (signed)

                              Regional Administrator

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                                               Attachment D

            MODEL LETTER TO A FACILITY VIOLATING THE
            CLEAN WATER ACT REQUESTING A LIST OF ITS
              FEDERAL CONTRACTS, GRANTS, AND LOANS


CERTIFIED MAIL
RETURN RECEIPT REQUESTED

Mr. John Smith
President
XYZ Corporation
1000 Corporate Lane
Fifty Second  State  12345

Dear Mr. Smith:

     The XYZ  Corporation was issued National Pollutant
Discharge Elimination System (NPDES) permit number FS0100524
by the Regional Administrator of EPA, Region XI, pursuant to
Title 33, United States Code, Section 1342.  This permit
authorizes  the discharge of pollutants into the Blue River
in accordance with the effluent limitations, monitoring
requirements, and other provisions of the permit.  On May 6,
1986, EPA issued Administrative Order #86-1570 to the XYZ
Corporation pursuant to the authority granted under Title
33, United  States Code, Section 1319(a)(3) for exceeding the
effluent limitations for biochemical oxygen demand and total
suspended solids.  As discussed in our letter to you of July
6, 1986 you are currently in violation of this Administrative
Order.

     Under  the provisions of Title 33, United States Code,
Section 1368(a), a facility owned, leased, or supervised by a
"person" (defined to include a corporation such as XYZ Corpora-
tion) who commits "continuing or recurring" violations of the
Clean Water Act may be placed on a "List of Violating Facilities"
and prohibited from receiving Federal contracts, grants and
loans.  Th« prohibition under Title 33, United States Code,
Section 1368(a) is implemented by the Environmental Protection
Agency (EPA)  under regulations promulgated at Title 40 of
the Code of Federal Regulations Part 15, entitled "Adminis-
tra ;on of  The Clean Air Act and Federal Water Pollution
Control Act with Respect to Federal Contracts, Grants, or
Loans."  These regulations state that a facility may be
placed on the "List of Violating "Facilities" for a violation
of an administrative order under Title 33, United States
Code, Section 1319(a).

     Under  Title 33, United States Code, Section 1318, EPA
has authority to require the owner or operator of any point
source to make such reports and to provide such other infor-
mation as are deemed reasonably necessary to carry out the

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                             -2-
objectives of the Clean Water Act,  Title 33,  United States
Code,, Section 1251 et seg.

     Accordingly, for the purposes  of implementing Title 33,
United States Code,  Section 1368(a),  EPA hereby invokes  its
authority under Title 33, United States Code,  Section 1318,
and requires XYZ Corporation, as the  owner and operator  of a
point source, identified in NPDES permit number FS0100524, ,
to provide the information specified  below no later than 15
calendar days from receipt of this  letter.  The submittal
should be addressed to:

                   Regional Attorney
                   Office of Regional Counsel
                   U.S. Environmental Protection Agency
                   Region XI

Information to be Submitted to EPA

1.   Identify, by contract number,  contracting agency and con-
tract date, all Federal contracts held by the facility for
the procurement of personal property or nonpersonal services,
for which XYZ Corporation is either the prime contractor or
subcontractor.

2.   Identify, by grant number, granting agency, and grant date,
all Federal grants received by the facility,  including grants-in-
aid, for which XYZ. Corporation is either the grantee (prime
recipient of a grant) or a subgrantee (the holder of an
agreement or an arrangement under which any portion of the
activity or program is being assisted under the grant).

3.   Identify, by loan number, lending agency, and loan date,
all Federal loans for which XYZ Corporation is a borrower
or subborrower.

4.   Identify, by bid number, agency and date, all bids submit-
ted by XYZ Corporation for future Federal contracts or
subcontracts.

5.   Identify, by grant application number, agency and date,  all
grant applications submitted by XYZ Corporation for any
future Federal grant or subgrant.

6.   Identify, by loan application number, agency and date, all
loan applications submitted by XYZ Corporation  for future
Federal loans or subloans.

7.   Identify, by percentage estimate, the extent to which
XYZ Corporation's business is connected,  in any degree, to
Federal contracts, grants and  loans.

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                             -3-
8.    Identify the effect, if any, of the prohibition of Title
33, United States Code, Section  1368(a), upon the business of
XYZ Corporation.

      This inquiry does not constitute an official notification
that  XYZ Corportion is under consideration for placement on
the "List of Violating Facilities."  If deemed appropriate,
such  a notice will be initiated by the Listing Official,
Office of Enforcement and Compliance Monitoring, EPA.

      Under Title 33, United States Code, Section 1318(b),  XYZ
Corporation may assert a business confidentiality claim
with  respect to part or all of the information submitted to
EPA in the manner described at 40 C.F.R. § 2.203(b).  Information
covered by such a claim will be disclosed by EPA only to the
extent, and by means of the procedures set forth in 40 C.F.R.
Part  2, Subpart B.  If no such claim accompanies the information
when  it is submitted to EPA, it may be made available to the
public by EPA without further notice to XYZ Corporation.

     Care should be taken in ensuring that the response to this
letter is complete and accurate because Title 33, United
States Code,  Section 1319(c)(2) provides criminal penalties
for knowingly or willfully submitting false information to
EPA in any report required by the Clean Water Act.  In addition,
Title 18, United States Code, Section 1001 provides criminal
penalties for knowingly or willfully submitting false
information to a federal official.

     This information request is not subject to the approval
requirements  of the Paperwork Reduction Act of 1980, Title 44
United States Code, Sections 3501 e_t seq.

     Should you have any questions, please contact me at (123)
456-7890.

                                 Sincerely yours,
                                 Regional Attorney
                                 Region XI

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                                               Attachment
           MODEL LETTER TO A FACILITY VIOLATING THE
            CLEAN AIR ACT REQUESTING A LIST OF ITS
             FEDERAL CONTRACTS, GRANTS, AND LOANS
CERTIFIED MAIL
RETURN RECEIPT REQUESTED

Mr. John Smith
President
ABC Corporation
1000 Corporate Lane
Fifty Third State  12345

Dear Mr. Smith:

     On May 5, 1986, in the Southern District of the Fifty
Third State, the Department of Justice instituted a civil
suit against the ABC Corporation for continuing and recurring
violations of Title 42, United States Code, Section 7413(b).

     Title 40 of the Code of Federal Regulations, Part 15,
entitled "Administration of The Clean Air Act and Federal
Water Pollution Control Act with Respect to Federal Contracts,
Grants, or Loans," promulgated pursuant to Title 42, United
States Code, Section 7606(a) and Executive Order 11738 (38 FR
25161, September 12, 1973) authorize EPA to establish a "List
of Violating Facilities."  Facilities on this List are prohibited
from receiving Federal contracts, grants, and loans.  A facility
who commits "continuing or recurring" violations of the
Clean Air Act may be placed on the List.  These regulations
state that a facility may be placed on the List after EPA,
through the Department of Justice, has filed a civil enforce-
ment action in federal court under Title 42, United States Code,
Section 7413(b).

     Under Title 42, United States Code, Section 7414(a), EPA
has authority to require the owner or operator of any emission
source to make such reports and to provide such other infor-
mation as are deemed reasonably necessary to carry out the
objectives of the Clean Air Act, Title 42, United States
Code, Section 7401 < *. seq.

     Accordingly, for the purposes of implementing Title  42,
United States Code, Section 7606(a), EPA hereby  invokes its
authority under Title 42, United States Code, Section 7414,
and requires ABC Corporation as the owner and operator of a
emission source, to provide the information specified below
no later than 15 calendar days from receipt of this letter.

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                             -2-
The submittal should be addressed to:

                   Regional Attorney
                   Office of Regional Counsel
                   U.S. Environmental Protection Agency
                   Region XI

Information to be Submitted to EPA

1.   Identify, by contract number, contracting agency and con-
tract date, all Federal contracts held by this facility for
the procurement of personal property or nonpersonal services,
for which ABC Corporation is either the prime contractor or
subcontractor.
                     ' •('
2.   identify, by grant number, granting agency, and grant date,
all Federal grants received by this facility, including
grant£!-in-aid, for which ABC Corporation is either the grantee
(prime recipient of a grant) or a subgrantee (the holder of
an agreement or an arrangement under which any portion of
the activity or program is being assisted under the grant).

3.   Identify, by loan number, lending agency, and loan date,
all Federal loans for which ABC Corporation is a borrower
or subborrower.

4.   Identify, by bid number, agency and date, all bids subnit-
ted by ABC Corporation for future Federal contracts or
subcontracts.

5.   Identify, by grant application number, agency and date, all
grant applications submitted by ABC Corporation for any
future Federal grant or subgrant.
                                                      i
6.   Identify, by loan application number, agency and date, all
loan applications submitted by ABC Corporation for future
Federal, loans or sub loans.

7.   Identify, by percentage estimate, the extent to which
ABC Corporation's business is connected, in any degree, to
Federal contracts, grants and loans.

8.   Identify the effect, if any, of the prohibition of Title
42, United States Code, Section 76CO\a), upon the business  of
ABC Corporation.

     This inquiry does not constitute an official notification
that ABC Corportion is under consideration for placement on the
"List of Violating Facilities."   If deemed appropriate, such
a notice will be initiated by the Listing Official, Office
of Enforcement and Compliance Monitoring, EPA.

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                             -3-
     Under Title 42, United States Code, Section 7414(c), ABC
Corporation may assert a business confidentiality claim with
respect to part or all of the information submitted to EPA in the
manner described at 40 C.F.R. § 2.203(b).  Information covered
by such a claim will be disclosed by EPA only to the extent,  and
by means of the procedures set forth in 40 C.F.R. Part 2,
Subpart B.  If no such claim accompanies the information when
it is submitted to EPA, it may be made available to the public
by EPA without further notice to ABC Corporation.

     Care should be taken in ensuring that the response to this
letter is complete and accurate because Title 42, United
States Code, Section 7413(c)(2) provides criminal penalties
for knowingly submitting false information to EPA in any
report required by the Clean Air Act.  In addition, Title
18, United States Code, Section 1001 provides criminal penalties
for knowingly or willfully submitting false information to
a federal official.

     This information request is not subject to  the approval
requirements of the Paperwork Reduction Act of 1980, Title 44
United States Code, Sections 3501 e_t seq.

     Should you have any questions, please contact me at  (123)
456-7890.

                                 Sincerely yours,
                                 Regional Attorney
                                 Region XI

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GM-54

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%
*
              UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                            WASHINGTON, D.C 20460
                               NOV  1 2 B66                   ANDCOMfLU>CE
OFFICE OF ENFORCEMENT
   .DCOMflU.NC
   MONITORING
        MEMORANDUM

        SUBJECT:  Referral  Letters for Forwarding Judicial Referrals
                    and Consent Decrees to the Department of Justice

        FROM:     Thomas L. Adams, Jr.
                  Assistant Administrator

        TO:       All OECM  Attorneys

            During the past few weeks I have had an opportunity to
        review numerous civil judicial referral packages.  The
        referral letters prepared for my signature are carefully arid
        accurately drafted  and reflect high quality work by OECM
        attorneys.  However, some of the information currently
        included in our referral letters is unnecessary inasmuch as
        the Department of Justice already has access to this infor-
        mation through other channels.  Also, there are certain
        inconsistencies in  the formats used by each division which
        should be addressed.

             This memorandum and the attached Model Civil Referral
        Letter and Model Letter Recommending Approval of Settlement
        are intended to help standardize and streamline the
        preparation of referral letters by OECM staff attorneys.
        Beginning December  1, 1986, referral letters sent to me for
        signature should follow the formats shown in thes,e model
        letters.

             Please note that both model letters indicate that  the
        Region is responsible for sending a litigation report to the
        Environmental Enforcement Section of DOJ.  Nevertheless, we
        should continue the current practice of contacting DOJ  on
        an informa1  basis to assure that ^hey have received  this
        report.

             Also, please note that the only attorney names  which
        should appear in the body of the referral letter are those  of
        the OECM and Regional staff attorneys assigned to the case.

             If you have any questions regarding this memorandum
        please call Julie Becker at 382-4137.

        Attachments

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               MODEL CIVIL JUDICIAL REFERRAL LETTER
                                                     Date

Honorable F. Henry Habicht II
Assistant Attorney General
U.S. Department of Justice
Land and Natural Resources Division
Washington, D.C.  20530

          Re:   [facility name and location]

Dear Mr. Habicht:"

     I am  referring  the  above-referenced matter  to  the
Department of Justice for civil action.  This matter, which
was referred  to us  by  our  Region  	  office,   is  [brief
description of  matter,  e.g., "a  Clean Water Act  case for
NPDES permit violations by a POTW."]

     A copy of  the  litigation report has been forwarded to
the Environmental  Enforcement  Section  of the  Lands  and
Natural Resources Division.   [Discussion of any unresolved
issues or  issues  or  facts warranting  special  attention.]

     Once this matter is transmitted to the U.S. Attorney's
Office, please  have  your  staff  send copies  of  your trans-
mittal to the  EPA  Regional  and  Headquarters  participating
attorneys identified below.   Please also  have  them advise
the U.S.  Attorney's Office to inform  the  EPA participating
attorneys when this action is filed.

     The Agency's participating attorneys  are:

          [Name, address and phone number  of Regional  attorney]

          [Name, address and  phone .number of Headquart
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                        MODEL CIVIL JUDICIAL REFERRAL LETTER (contd.J
                            -2-
cc t   Regional Administrator

     Regional Counsel

     Division Director for the appropriate Headquarters
       program office

     David Buente, Chief
     Environmental Enforcement Section
     Department of Justice

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      MODEL LETTER RECOMMENDING APPROVAL OF SETTLEMENT


                                 Date

Honorable F. Henry Habicht II
Assistant Attorney General
Land and Natural Resources Division
U.S. Department of Justice
Washington, D.C.  20530

          Re:   [facility/case name, location, docket number]

Dear Mr. Habicht:

     I am referring the above-referenced (complaint and]
consent decree to- Department of Justice for your signature
and filing in the appropriate U.S. District Court.  This
matter, which was referred to us by our Region 	 office,
is  [brief description of matter, e.g., "a Clean Water Act
case for NPDES permit violations by a POTW."]

     [If this is a new referral: "A copy of the litigation
report has been forwarded by the Region to the Environmental
Enforcement Section of the Land and Natural Resources
Division."] [Brief discussion of any unresolved issues or
issues or facts warranting special attention.]

     Once this  [matter/consent decree] is transmitted to the
U.S. Attorney's Office, please have your staff send copies
of your transmittal to the EPA Regional-and Headquarters
participating attorneys identified below.  Please also have
them advise the U.S. Attorney's Office to inform the EPA
participating attorneys when the decree is lodged.

     The Agency's participating attorneys are:

          [Name, address and phone number of Regional attorney]

          [Name, address and phone number of Headquarters
          attorney]

                        Sincerely yours,
                        Thomas L. Adams, Jr.
                        Assistant Administrator
Enclosure(s)

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       MODEL LETTER RECOMMENDING APPROVAL OF SETTLEMENT (contd.)
                            -2-
cc»  Regional Administrator

     Regional Counsel

     Division Director for the appropriate Headquarters
       program office

     David Buente, Chief
     Environmental Enforcement Section
     Department of Justice

     For CERCLA §107 cases only:
     Ivery Jacobs
     Financial Management Specialist
     EPA Headquarters

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GM-55

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/ "  *
* 3!Z2 * UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
 \   ^'                WASHINGTON. D C 20460

                            DEC  I 2 1986
 MEMORANDUM
 SUBJECT:  Media Relations  on Matters  Pertaining to EPA's
           Criminal Enforcement  Program
 FROM:
           Thomas L.  Adams,  Jr.
           Assistant  Administrator
            for Enforcement and Compliance Monitoring  v

                                  I/it****** ""^
                                  for External Affairs
           Jennifer Joy W
           Assistant Adminis
 TO:
          Regional Administrators
          Deputy Regional Administrators
          Assistant Administrators
          Regional Counsels
          Director, National Enforcement Investigations
            Center (NEIC)
          Director, Office of Public Affairs
          Assistant Director for Criminal Investigations (NEIC)
          Regional Press Officers
          Regional Media Criminal Enforcement Contacts
          All SAICs and RAICs, Office of Criminal Investigations
          Office of Regional Counsel Criminal Enforcement
            Contacts

I.  INTRODUCTION

     A significant amount of media attention is being received
by the Agency's developing criminal enforcement program.  This
memorandum, which is based to a significant extent on.'current
Justice Department media information guidelines, 28 C.F.R. § 50.2
(attached), establishes Agency-wide guidance for response to
Tiedia inquiries on active and freshly concluded criminal cases. I/
 I/  The Agency's  general  media  policy  on enforcement  activities
 (see  memorandum  entitled "Policy on Pu  licizing  Enforcement
 Activities,"  from  Courtney  M.  Price anu Jennifer Joy Manson,
 dated November 21,  1985  (general media  policy))  does not  specifi-
 cally consider the  unique problems  which may be  encountered  in  a
 criminal  enforcement  setting.   Accordingly,  the  Agency's  media
 policy in criminal  enforcement matters  will  be derived solely
 from  this specific  criminal enforcement guidance, except  for the
 distribution  of  media materials (see  Section III of  this  memorandum,
 infra at  9).

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     eet ef UM DeearaiMflt *<
     ta« M crttUmal tee*
   (ft) GefisraJ, <1) The ftVftlUbuity  to
 ntwi medlft of Information in criminal
 and dtti cuts' to ft matter which has
 become increasingly ft fUbjsrt of eon*
 cern  IB tht adaintotrstloti of fouet.
 Tht purpose «f UUi gateBnt to  to
 formulate  ipeafle ffUMefaes  for the
 release of such information b   _
 o«l of (ht Department of JbBttos.
   (3)  While the release of information
 /or tin purpose  of influencing a trial
 is. of course, always improper.  there
 an valid reason* (or •»**««>§ available
 to the pubue information about the
 administration of the law. The task  of
 striking a  fair balance between the
 prouctioo  of  Individuals accused  of
 ertme or Involved IB etvll  pronMiiinsj
 with tht Government and pubUe un-
 derstandings of the problems  of oath
 trolling crime tad administering gov-
 ernment depends largely on the exer-
 eiM of aound judgment by thoM re-
 sponsible for administering tht law
 and by  representatives  of tht
 and othtr media.
  (3) inasmuch as tht Department of
 Juitlce has generally fulfilled IU re-
 sponsibilities with awareness and un-
 derstanding of the eompeUnc needs in
 this are*, thin statement, to a  consid-
 enble extent, reflects and f firms Mm
 the lUnd&rdfl to which repmenuuvei
 of the Department have  adhered In
 the put. Non«theie«. it wtu be help-
 ful la eafluria* uniformity of practice
 to Mt forth the following fuldeUaei
 for all ptfMaael of tht Department of
 Junlet.
  (4) BeeauM of the difficulty and im-
 portance of the question* thej raiae.  it
 u felt that  aome  portion! of the mtt>
 ten covered by thl* lUtemeat, iuch at
 the  authorization  ta  make available
 Federal conviction record* and a 4e-
 •crtpUon of luemj Mixed at the time of
 arrest, chould be  the lubjeet of eon-
 tinulnc review and ooulderatloa by
 the Department on the OMII of experi-
 ence   and   fufietlooi  from   thott
 within and ouuide the Department.
  (b)  Quidtliiut  to  criminal aeftoiu.
( 1 ) Theae fuldellnee thall apply to tat
releaae of infonnaUon to news media
from the time a penoa I*  the wbject
of a criminal tavettlfUlea untfl any
proceeding reeuiun< from tuea aa *•
veatlcaUon  QJJ  btta Itialneieil b?
trial or otherwlM.
  (3) At no Urn* ah*Jl panned at toe
Department  of  JuflttaB  tantth toy
natement or laJforauttoa fc » tht pur*
pott of laflutooac tbt on   it of  •
defendant'!  trial, nor ab*U ptnonnel
of tht Departm«nt fumiih any «uu-
ment or tnformmtloa  which could rea-
sonably be expected to bt  «*«•»» IMI.
 ed by mean* of public communication.
 if  iuch a  tuument  or  in/ormatlofl
 may retuonably bt expected to la/lu-
 enot  tht  outcome of a  pir^'M or
 future trtaL
  (3) Pereonnel of tht Department of
Juftict. subject to iptelfte UmlUtioai
 tmpottd by  law or court rule or order.
may male  public the following in/or-
   (I) Tht defendant1! tvame. aft. real.
  dance,  employment,  marital  ttatua,
  and atmllar backcround information.
   (U) Tht lunttane* or text  of  tht
  chant, such  ae a complalat.  Indict-
  ment, or Information.
   (ill) The Identity of the lavestlf&tint
  and/or  arreaUnx  ateney  tnd   tht
  lenfth or scope of an invtetlfttlon.
   .
situations la which It will limit the re-
lease of information which would not
be prejudicial under the particular cir-
cumstances.  If a representative of the
Department believes that in the inter-
est of the fair administration of Justice
»ad tht law enforcement process in-
formation  beyond  these  guidelines
should  bt released, in a particular
ease, he shall request  the permission
of  tht  Attorney  General  or  the
Deputy Attorney General to do so.
  (o Ontfsftns! (o  civil actions.  Per-
sonnel of tbt Department of Justice
associated with a civil action shall not
during  Its investigation or litigation
make or participate la making an ex-
trajudldal statement,  other  than a
quotation from or reference to public
records, which  a reasonable penoa
would  expect to bt disseminated by
u««j»f  of public  communication if
there to a reasonable  likelihood thai
MCB dissemination  will interfere with
a fair trial and which relates to:
  (1) Oldeaot regarding  the occur-
rence or traosadion involved.
   (3)  The  character,  credibility, or
 criminal records of a party, witness, or
 prospective witness.
   O) The  performance or
 any examinations or tests or uul
  al or failure of a party  to  sue
  such*
   <4)  An opinion as to the merit* 01
  the claims or  defense*  of  a psrty.
  except a* required by law or adminis-
  trative rule.
    
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                               -2-
     In developing this guidance, the Agency has been aware  of
 its responsibility to provide accurate information to the  public
 on Agency activities while at the same time respecting the rights
 of individuals .and organizations facing criminal investigations
 and prosecutions.  This guidance strives to outline the fullest
 range of information — consistent with a prudent approach
 guaranteeing constitutional rights and safeguarding Agency
 investigations — which may be disclosed.

     Accurate reporting of charges brought and convictions obtained
 in EPA criminal cases is an important component of the deterrent
 effect that such cases are expected to have upon unlawful  conduct.
 On the other hand, great care must be taken to ensure that the
 reputations of targets are not unfairly prejudiced and that the
 right to a fair trial is respected.  Further, the Agency maintains
 a strong interest in ensuring that its criminal investigations
 are neither compromised nor impeded and that its Special Agents
 are not endangered by the disclosure of confidential or otherwise
 nondisclosable information.

 II •  MEDIA RELATIONS DURING ACTIVE INVESTIGATIONS

     A.  General Guidelines

     On occasion, EPA personnel will encounter members of  the
media during the pursuit of active investigative operations,
 for example, during the execution of a criminal search warrant.
Agency personnel should not obstruct or prevent representatives
of the media from conducting their professional activities,
so long as these activities are lawful and do not improperly
 interfere with the carrying out of investigative functions by
 the Agency.  A brief statement may be provided by the appropriate
Special Agent-in-Charge (SAIC), Resident Agent-in-Charge  (RAIC),
lead Special Agent or public affairs officer (after clearance
with the SAIC, RAIC or lead Special Agent) concerning the nature
of the investigative activity, e.g., "The Agency  is  involved in
the execution of a search warrant."  Beyond a simple, statement
confirming investigative activity witnessed by the public, no
further comments should be made ordinarily by any Agency  personnel.
Inquiries beyond these limited statements should be  referred to
either the local United States Attorney's Office  (if  a  prosecutor
has been assigned) or to the Environmental Crimes Unit  (ECU)
 (FTS 633-2490) of the Department of Justice  (collectively referred
to as "DOJ") for any further comment.

     Prior to an investigative event which  is  likely  to generate
publicity (or, in instances where pre-event  secrecy  must  be
maintained, as soon thereafter as  is practicable),  the  SAIC  or
RAIC of the investigating  field or resident  office  of the National
 Enforcement Investigations Center's  (NEIC) Office  of  Criminal
 Investigations (OCI) should notify the  Office  of  Regional Counsel
 (ORC).  SAICs and RAICs will be  responsible  also  for ensuring
 that throughout the course of  the  criminal  investigation  the ORC

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                               -3-


 staff  attorney assigned to the case and the Office of Criminal
 Enforcement  (OCE) staff attorney assigned to the Region are
 supplied with copies of relevant documents containing public
 information, which are likely to be necessary to respond to media
 inquiries, for example, applications for search warrants.  (Of
 course, documents which are under court seal may not be distributed
 to Office of Public Affairs (OPA) or Headquarters Press Office
 (HPO)  personnel.)

     When it is  advisable to notify the public of apparent health
 or environmental hazards which are also the subject of a criminal
 investigation, HPO or regional OPA personnel or designated
 spokespersons are authorized to provide the necessary information
 or to  tell the public./that it will be notified if a health threat
 arises.  These statements must, however, avoid discussion of any
 related criminal inquiry or of the source of the information
 (e.g., a disgruntled employee) where an informant may be involved.
 They should also be cleared routinely with the appropriate SAIC
 or RAIC and DOJ  to insure that information is released in a
 manner that does not adversely affect the criminal  inquiry.

     The media may on occasion make requests under  the Freedom of
 Information Act  (FOIA), 5 U.S.C. $ 552, which relate directly or
 indirectly to a  criminal investigation.  It is usually the primary
 responsibility of the criminal contact person for the program to
which  the FOIA request has been directed to alert the appropriate
SAIC/RAIC of the request.  It is essential that any responses to
such requests be made only after the concurrence of the  SAIC/RAIC
and the appropriate ORC attorney (or, if no ORC attorney has been
assigned, the ORC criminal enforcement contact) or  the appropriate
OCE attorney.  Failure to follow this procedure may inadvertently
signal the existence of a confidential criminal investigation or
might otherwise provide information which could compromise  the case.

     Moreover, certain information gathered by EPA  under its
statutory powers -- in contrast to material gathered under  a
criminal search, warrant -- appears likely to be subject  to
mandatory disclosure upon request, including a media  inquiry.
The Office of General Counsel (OGC) has stated that it  intends
to issue a guidance document indicating what the Agency  would be
required to release under these various provisions.  For now,
 if a request is made for information which  is arguably  subject
to release) under such a provision, and concerns a  target of a
criminal investigate   (as well as the same basic  sut  ~ct  matter
as the investigation), no release of information may  be  made
without the consent of the SAIC or RAIC and the appropriate ORC
or OCE attorney  (with the consultation of DOJ as  appropriate).
The decision whether to release such material will  be  reached on
a case-by-case basis, pending the incorporation of  the  OGC guidance
 into OECM policy.

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                               -4-
      EPA  personnel will at no time encourage or assist the media
 in  photographing or  televising an accused person, any aspect of
 an  active investigation, or any facility involved in an Agency
 investigation.  Moreover, the Agency will not ordinarily make
 available photographs of an accused.  Information which is
 authorized  to be disclosed to the media should be provided equally
 to  all members of the media, subject to any limitations imposed
 by  law or court order.

      Finally, any conflicts among Agency personnel as to when or
 what  information may be disclosed to the public must be resolved
 at  the Headquarters  level, after Headquarters' consultation with
 DOJ and the Assistant Director for Criminal Investigations of
 NEIC.  The Office of Criminal Enforcement and the Headquarters
 Press Office should  be contacted as soon as possible.

      B.   Inquiries Concerning Particular Criminal Targets
           Before the Lodging of Formal Charges

     The  existence of any criminal investigation being conducted
 within the Agency must never be acknowledged or commented upon.
 To acknowledge even  the existence of an investigation might
 prejudice the rights of an individual or compromise an investi-
 gation.   When asked, Agency personnel must respond:  "It is
 Agency policy to neither confirm nor deny the existence of a
 criminal  investigation.". Of course, to be effective, this
 response must be utilized habitually even when it is known
 that no criminal investigation is planned or under way.  In
 the event that this  response proves insufficient to quell a
 particular  inquirer, Agency personnel may direct the inquirer
 to the appropriate SAIC or RAIC (who will generally be much
 more accustomed to handling persistent inquirers), but under  no
 circumstances may acknowledge tne existence or nonexistence of
 an  investigation or  provide any information related to it.

     Where a representative of another organization or agency
 nas acknowledged the existence of or commented upon a'criminal
 investigation, and has publicly stated that EPA  is conducting
 an investigation, it might be necessary to make, in some  rare
circumstances, a very limited response in order  to prevent
 further unwarranted  damage to the investigation  and/or the
privacy or reputation of the individual(s) involved and preserve
 the credibility of the Agency.  However, such exceptions  will  oe
made only on a case-by-case basis, and must be approve   in
 advance by the Office of Criminal Enforcement  in consultation
 with, the Assistant Director for Criminal Investigations of.
 NEIC.

     At any time after a DOJ prosecutor has been assigned or
 the case  has been referred to DOJ, EPA personnel will  not  respond
 to media  inquiries or volunteer comments on the  case,  whether
 oral or written, for attribution or not, without  the prior  express
 approval of DOJ, until the case is concluded  absolutely.

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                               -5-
     C.  Media- Inquiries and Media Releases After Formal Charges
           .Are Filed                      '	a—

     Subsequent to lodging of formal charges (i.e.,  via indict-
ment, information or criminal complaint), and until  the absolute
conclusion of the case j2/, EPA personnel will not respond
to media inquiries on a case without the prior approval of DOJ.
Accordingly, such media inquiries will normally be forwarded to
the lead prosecutor — either with the local office  of the
United States Attorney or the ECU -- assigned to the case.
Comments by DOJ will be consistent with its media guidelines
found at 28 C.F.R. S 50.2.

     To the extent that the Agency wishes to issue a DOJ-
authorized media release V at cne ti»« formal charges are made
or at the occurrence of oTher critical events in the prosecution,
CPA will honor DOJ policy and not issue a release without the
prior approval of, DOJ.  See United States Attorney's Manual,
Title 1-5.570.  DOJ diligently will endeavor to revise, reject
or otherwise comment on such proposed media release as soon as
possible or within two work days of its receipt at DOJ.  In any
evant, consistent with DOJ guidelines, disclosure of only the
following information will be permitted under Agency policy:  1)
information from (or copies of) public documents (e.g., the
indictment, court pleadings filed, etc.) or 2} incontrovertible
facts — which have been verified by the drafter(s)  of the
media statement or the person(s) providing the information directj
to the media -- relating to the following subjects:

          (1)  The defendant's name, age, residence,  employment,
     and (with the approval of the SAIC/RAIC) similar  background
     information;

          (2)  The identity of the investigating and/or arresting
     agency(ies) and (with the approval of the SAIC/RAIC) the
     length and/or scope of an investigation (provided no inform-
     ation released could implicate a person not charged,
     particularly where an investigation continues after  charging
     some but not all targets); and
2/ see Section II  (D)(3> of  ^is memorandum,  infra.

3/ The terra "media release" as used  herein  includes,  among  ether
things:  1) Traditional Media Release  (Written  statement; maximum
three pages; can involve more than one  "story";  usually  has quotes
from EPA personnel); 2) No.te to Correspondents  (Short statement;
usually a few paragraphs; gives the  basic  facts);  and 3)  Press
Advisory (Written  statement; contains  several (3 or  4)  "stories"
in ona release issued  at end of week).

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                               -6-


          T3)  The  time and place of arrest.

 Even. th«  release of  this  limited information needs to be evaluated
 in  the context of  whether, due to unique circumstances, it could
 arguably  prejudice the defendant's right to a fair trial.

      D.   When  Media  Releases Should Be Issued

      The  Agency has  a strong interest in informing the public and
 the  regulated  community about its successful criminal enforcement
 efforts.  Such information will serve to promote awareness of and
 respect for environmental laws, as well as to deter potential
 violators from engaging in criminal activity. 4/

      Several threshold issues must be determined prior to preparing
 a media release.   First,  a decision must be made whether or not
 a particular criminal enforcement activity warrants a media release,
 and,  if so, whether  it should be national or regional in scope.
 Second, agreement  must be reached regarding the form the media
 release is to  take.  (See note 3, supra).

      In order  to maximize the value of such publicity, while
 carefully safeguarding the rights of the accused, the following
general considerations -- which are keyed to the stage of the
criminal proceedings — should serve as guides on a case-by-
case  basis:

      1.  Filing of charges.  Two major concerns will make the
 issuance of an Agency media release at this stage rare:  1) the
extreme sensitivity  of commenting on criminal cases prior to
trial and 2) the difficulty in providing timely information to
 trie media posed by Rule 6(e) of the Federal Rules of Criminal
Procedures Si/.  However,  the Agency should routinely encourage
and support the issuance  of a media release by DOJ.  Appropriate
OCI and OCE (or ORC) representatives should request that OOJ
4/  Significant enforcement events may require or benefit  from
communications activities other than media releases, such  as
notifications to Congressional delegations, states and environ-
mental and industry groups.  When considering the announcement
of an event/ the criminal enforcement program should notify the
Assistant Administrator Cor External Affairs, whose office wil
assist in developing a communications strategy.

V Rule 6(e) bars absolutely the dissemination of grand  jury
material to any person not specifically  authorized under court
rule.  Usually (among Agency personnel)  only  the Special Agent
assigned to the case and  (perhaps) the assigned ORC and/or OCE
attorney and/or the cruef Agency technical expert would  be so
authorized.  Thus, Rule 6(e) would,  as a practical matter,
prohibit the circulation  o£ a draft  media release prior  to the

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                                -7-


 allow  EPA *ffl_opportunity  to  comment on such  (and any other EPA
 criminal-anforceraent  related) DOJ media  releases.  In cases of
 unusual  national  significance (e.g., a precedent-setting prosecution
 or  one of unique  programmatic significance)  the Agency'will consider
 is.-juing  its own DOJ-approved media release,  particularly when
 DOJ does not intend to  issue its own media release.

     2.  Criminal conviction.   Cases resulting in a criminal
 conviction, either through guilty verdict after trial or by the
 entering of a guilty  plea by the defendant,  should ordinarily be
 considered candidates for a  traditional  national media release.
 Araong  the factors which might militate in favor of such release
 arc whether the case  involves:  1) a felony  conviction (either
 for an environmental  viola1: .on  or an offense under Title 18 of
 the United States Co4e  (e.g., knowing false  statements to a
 federal agency, 18 U.S.C. S  1001)), 2) multiple misdemeanors
 which could result in incarceration for  more than 1 year, 3) an
 issue of legal or programmatic  significance  (e.g.; the national
 asbestos enforcement  strategy), 4) nationally recognizable defend-
 ants, 5) significant  harm or potential harm  to the public health
 or environment, 6) a  conviction of a high-level corporate manager
 (other than of a  small business) or 7) a conviction obtained
 after trial.  (The issuance  of  a national media release does not
 preclude the issuance of a regional release  as well; however,
 both releases would need to  be  approved  by DOJ and care must be
 exercised to ensure the consistency of the releases.)  This list
 of factors is merely  illustrative; the decision whether or not
 to issue a national release  must be made on  a case-by-case basis.

     Less nationally  significant cases resulting  in convictions
may still be of interest  regionally or to trade publications and
 thua would be appropriately  handled by a regional media release
 and/or Headquarters press advisory or by a phone  call  to the
general media or  trade press.   Regions are free to develop their
own procedures for the  issuance of regional  media releases tailored
 to their unique circumstances,  but they  must provide 'for the
critical roles to be  played  by  OCI and DOJ as outlined- in  this
guidance.  It would appear to be good practice that all such
 regional releases be  approved within EPA by  both  the appropriate
SAIC/RAIC and the ORC criminal  enforcement contact.

     At tills stage of the proceeding, because the case is  still
open, DOJ approval of the media release  is mandatory.
Footnote J5/ continued?

time the indictment was actually  handed  down,  thus making the
drafting, reviewing and approving activities necessary to the
issuance of a media release  very  difficult  on  a timely basis.

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                               -8-


      3.  Sentencing.

      Criminal  cases  resulting  in sentences which include the
 following would  be typically strong candidates Cor a traditional
 national media release:   1)  (other than de minimus) incarceration,
 2) significant fines  relative  to the criminal conduct, 3) unusual
 or significant "clean-up" or restitution provisions, 4) use of
 tae Alternative  Fines Act (so  long as application of this law to
 environmental crimes  remains novel); or 5) provisions which other-
 wise  highlight a successful prosecution.  As with convictions,
 many  cases which are  not of great national significance would
 nonetheless merit a  regional or limited Headquarters media
 release.  Cases where the penalties imposed are insignificant or
 disproportionately minor compared witn the crime committed should
 be carefully analyzed to determine whether soliciting publicity
 might harm the Agency's enforcement strategies.

      Even after sentencing has been completed, a case is not
 necessarily over.  As to one or more defendants, motions for a
 new trial may be pending, appeals may yet be noted or may be
 pending, and after an unsuccessful appeal the case may yet come
 before the Supreme Court.  After sentencing, DOJ regards a case
 as open until all possible avenues of appeal are either exhausted
 or the time allowed  for noting such appeals has expired.  Therefore,
 until tnere is no possiointy  wnatsoever of a new trial, the
 case  is not considered absolutely concluded and closed, and DOJ
 approval ot a media  release  is still required.

    III.  PROCEDURES  FOR PREPARING A NATIONAL MEDIA RELEASE

     Atter tne decision to issue a national media release has
 been made, the following general procedures will be utilized  in
preparing it:

      1.  OCE will-ordinarily have notified the Headquarters Press
Ottice in advance of  the upcoming significant event and will  ensure
 that HPO has a copy  of all public documents that it may desire. £/

     2.  The staff OCE attorney assigned to the case will  inform
HPO of the occurrence of the significant event (e.g., a guilty  plea
was ent«r«d on a particular date) and will provide  additional
 information requested by HPO or will supply HPO with  the  necessary
 contact person.  (It  may be mutually decided by OCE and ORC  that
 the ORC staff attorney should  have the lead on the  national media
 release.  If so, the  ORC attorney will be responsible  for  all of
6/  In the event the Agency's  criminal  enforcement  program wishes
To issue a media release at  the  time  of an  indictment,  it will
notify the HPO of  its desire and  supply the necessary  information
and documents as soon as possible after the indictment.

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                               -9-


 the OCE functions listed in these general procedures for preparing
 a media release and for keeping OCE informed as to its status.)

     3.  HPO will have the lead responsibility for preparing the
 actual media action.  The OCE (or ORC) attorney will assist in
 ths drafting of the media release as requested by HPO.

     4.  HPO is responsible for coordination with the regional
OPA and for obtaining a concurrence from OCE (and ORC, where
applicable).  (OCE concurrence will be required even where the
ORC attorney has the lead.)  The OCE (or ORC) attorney will be
responsible for consulting with the appropriate SAIC/RAIC or lead
Special Agent and with DOJ prior to providing a concurrence.  HPO
may issue press advisories regarding convictions and sentencing
based upon OCE non-confidential "Weekly Highlight" material, pro-
viding it obtains the prior concurrence of OCE (which in turn will
consult with OCI "and DOJ), which ordinarily will be given quickly.

     5.  Distribution of media material will be accomplished by
HPO as indicated in the general media policy.

     In order to be effective it is essential that a media release
be issued as contemporaneously as possible with the event  it  is
publicizing.  Therefore, it is critical that Agency personnel
involved in the particular criminal enforcement proceeding provide
HPO (and/or the regional OPA) with all necessary information, as
well as review and concurrence, on an expedited basis.

    IV.  MEDIA INQUIRIES ON THE CRIMINAL ENFORCEMENT PROGRAM
           GENERALLY

     The Agency encourages good media relations and accurate
media coverage of the Agency's criminal enforcement program
generally,  as in all other aspects of the Agency's activities.
To ensure the accuracy of responses to media inquiries, and  to
protect against inadvertent prejudice to the rights of defen-
dants in active cases, these inquiries will  be directed to the
Headquarters Press Office (FTS 382-4355; E-Mail Box EPA 1704),
the Director of the Office of Criminal Enforcement  (FTS 475-9660;
E-Mail Box EPA 2261), or to the Assistant Director  for Criminal
Investigations, at the National Enforcement  Investigations Center
in Denv«r {FTS 776-3215; E-Mail Box EPA 2390).

     V.  RESERVATIONS

     The policies and procedures set  forth  herein,  and  internal
office procedures adopted pursuant hereto,  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  to
litigation with the United States.  The Agency  reserves  the
right to take any action alleged to be at variance  with  these
policies and procedures or not  in compliance with  internal office
procedures that may be adopted pursuant  to  these  materials.

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                               -10-
Attachment

cc:  Director, Environmental Crimes Unit,  Department of  Justice
     Associate General Counsel; Grants/  Contracts and General
       Law Division
     Jonathan Cannon, Office of General  Counsel

-------
   - 57, was revised on June 20, 1988.  The 1987 version
has been replaced with the 1988 version.

-------
GM-56

-------
       | UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
 ><                 WASHINGTON. O.C. 20460
                            DEC I 6 !986              L
 MEMORANDUM

 SUBJECT:  Guidance on Determining a  Violator's
           Ability to Pay a Civil  Penalty
                                               \
FROM:     Thomas L. Adams,  Jr.
          Assistant Adminstrator for
            Enforcement and Compliance Monitoring

TO:       Assistant Administrators
          Regional Administrators
 I.    PURPOSE

      This guidance amplifies  the  discussion  in  the Uniform
 Civil Penalty Policy on how to  adjust  a penalty target figure
 when a violator  claims  paying a civil  penalty would cause
 extreme financial  hardship.   This  guidance was developed to
 meet the commitment  made in the Uniform Civil Penalty Policy
 issued February  16,  1984, and in  response to Regional Office
 requests for  amplification of the  "Framework for Statute-
 Specific Approaches  to  Penalty  Assessments"  (GM-22).
!!•  APPLICABILITY

     This guidance applies to the calculation of civil
penalties under medium-specific policies issued in accordance
with the Uniform Civil Penalty Policy that EPA imposes on:

     1.  For-profit publicly or closely held entities; and

     2.  Por-profit entities owned by not-for-profit entities.

     This guidance does not apply to:

     1.  The calculation of civil penalties that EPA imposes
on municipalities and other not-for-profit entities; or

     2.  A violator who files for bankruptcy or is in bankruptcy
proceedings after EPA initiates the enforcement action.

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                              -2-

 III. SCOPE

      This guidance only gives a general evaluation of the
 financial health of a violator and the possible effects  of
 paying a civil penalty for the purpose of settlement
 negotiations.  It describes when to apply the ability to pay
 factor and provides a methodology for applying the factor
 using a computer program,  ABEL.

      The guidance does not prescribe the amount by which EPA
 may reduce a civil penalty if the ability to pay factor  is
 applied.  The methodology in this guidance will not calculate
 a specific dollar amount that a violator can afford in civil
 penalties nor does it provide a way to predict whether paying
 a certain amount for a civil penalty will cause an already
 financially troubled firm to go out of business.

      For an ability to pay analysis,  EPA needs specific  financial
 information from a violator (see section V).  EPA includes  the
 financial data in a litigation report only when the data are
 requested by the Department of Justice or offered by the violator,


 IV.   THE ABILITY TO PAY FACTOR

      Under  the Uniform Civil Penalty Policy, EPA may consider
 using the ability to pay  factor  to adjust a civil penalty
 when  the  assessment of a  civil penalty may result in extreme
 financial hardship.   Financial hardship cannot be expressed
 in absolute  terms.   Any  limitation on a violator's  ability
 to pay depends  on how  soon  the payments must be  made and
 what  the  violator has  to give  up to make the payments.   A
 violator  has  several options  for paying a civil  penalty:

      1.   Use  cash on hand;

      2.   Sell  assets;

      3.   Increase debt by  commercial  borrowing;

      4.   Increase equity by  selling stock;

      5.   Apply  toward  a civil  oenalty for a period of time
what  wo-^vl otherwise be dis trio  ted as profit;  or
     6.  Use internally-generated  future  cash  flows  by  deferring
or eliminating some planned  future  investments.

     Each of these options will affect  a  for-profit  violator's
operations to some degree.   EPA must  decide whether  to  adjust

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                              -3-

 a proposed penalty amount and by how much,  taking into account
 the gravity of the violation and other criteria in medium-
 specific guidance.


 V.   INFORMATION TO DETERMINE ABILITY TO PAY

      If ability to pay is at issue,  EPA may request from a
 violator any financial information the Agency needs to evaluate
 the violator's claim of extreme financial hardship.  A violator
 who raises the issue has the burden of providing information
 to demonstrate extreme financial hardship.

      Financial information to request from  for-profit entities
 may include the most recent three to five years of:

      1.   Tax returns;

      2.   Balance  sheets;

      3.   Income statements;

      4.   Statements of changes  in financial position;

      5.   Statements of operations;

      6.   Retained earnings statements;

      7.   Loan  applications,  financing agreements,
 security  agreements;

      8.   Annual reports;  or

      9.   Business services,  such as  Compustat,  Dun and
 Bradstreet,  or  Value Line.

     Tax  returns  are the  most complete  and  in the most consis-
 tent  form for  analysis.   Tax returns also provide financial
 information  in a  format for  direct  input into ABEL.   Annual
 reports art  the most difficult  to analyze and may require
 the assistance of a financial analyst.

     When reque;  Ing information  informally or  through
 interrogatories or  discovery, E?A shc_~J ask for three to
 five years of tax  returns  along  with all other  financial
 information that  a violator  regularly maintains as business
 records.  If a violator refuses  to give  EPA the information
 to evaluate the violator's ability to pay,  EPA  should  seek
 the full calculated penalty  amount under  the assumption  that
the violator can pay.

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                              -4-

 VI.  CONFIDENTIALITY OF FINANCIAL INFORMATION

      A violator can claim confidentiality for financial
 information submitted to EPA.   In accordance  with  the  regu-
 lations on confidential business information,  40 CFR 2.203,
 EPA must give notice to a violator that the violator may
 assert a business confidentiality claim.   EPA's notice must
 contain the information required in 40 CFR 2.203.  The notice
 must include a statement that  if the violator submits  financial
 information without a confidentiality claim,  EPA may release
 the information without further notice to the violator.

      The violator can make a claim of confidentiality  for
 financial information in a cover letter accompanying the
 information.   Information in published annual reports  would
 not be entitled to confidential treatment.
 VII<  APPLYING THE ABILITY TO  PAY FACTOR

      Under the terms  of a consent decree,  a  violator pays a
 civil penalty in  addition to  making  any capital  investment
 necessary to come into compliance.   EPA considers  the  costs
 of  attaining compliance when  applying  the  ability  to pay factor
 to  a  civil penalty calculation.

      EPA  determines whether to apply the ability to pay
 factor using a four-step process:

      1.   Determine, if-possible,  whether a violator plans to
 claim extreme financial hardship;

      2.   Determine whether criteria  in the Uniform Civil
 Penalty Policy and medium-specific guidance  require consideration
 of  ability to pay;

      3.   Evaluate the  overall financial health of  a violator's
 operations by analyzing financial information provided by a
 violator  or from  other sources,  such as business services; and

      4.   Project  the probabilities of  a violator having future
 internally-generated cash flows  to evaluate  hov  paying a proposed
 civil  penalty may affect  * violator's  financial  Decisions.
VIII. FINANCIAL COMPUTER  PROGRAM

     EPA's computer program, ABEL,  assists  in  evaluating the
financial health of for-profit entities,  based on the estimated
strength of internally-generated  cash  flows.   ABEL uses  financial
information on a violator to evaluate  the overall financial
health of a violator  (step 3 above).   The program uses standard

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                              -5-

 financial ra±ios to evaluate a violator's ability  to  borrow
 money and pay current and long-term operating expenses.

      ABEL also projects the probable availability  of
 future internally-generated cash flows to evaluate some  of a
 violator's options for paying a civil penalty (step 4 above).
 EPA is developing a user's manual to provide self  instruction
 in the use of ABEL in addition to the documentation and  help
 aids in the computer program.

      Exhibit 1 is a hypothetical use of ABEL to evaluate a
 violator's financial health.  If the ABEL analysis indicates
 that a violator may not be able to finance a civil penalty
 with internally-generated cash flows,  EPA should check all
 available financial information for other possible sources
 of cash flows for paying a civil penalty.

      For example,  in corporate tax returns,  item 26 of
 Schedule A (cost of goods sold)  sets forth deductions for
 entertaining,  advertising,  and professional dues.   Schedule E
 shows  the compensation of officers.   In Schedule L (balance
 sheets),  item 8 sets forth investments that may include
 certificates  of deposit or money market funds.   These types
 of assets and expenses do not directly affect operations and
 may vary  considerably  from year  to year without adversely
 affecting the violator's  operations.   Because a civil penalty
 should  be viewed  as  a  one-time  expense,  these kinds of assets
 and  expenses  could  be  sources  of cash  for  a  civil  penalty.

     Using the  sources  of  financial  information from  the example
 above,  liquid  assets such  as  certificates  of  deposit  and
 money market  funds  could  be  used to  pay a  penalty.  Expenses
 for  advertising,  entertaining, or professional  dues could be
 reduced for a  short  period  to pay a  civil  penalty.  A corporate
officer might  even  be  willing  to take  less  compensation  for
a short period.  A  combination of  options  like  these  may
produce enough  cash  flow  to  pay  a  civil  penalty without
causing the violator extreme  financial  hardship in  meeting
operating expenses.
Attachment

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                           EXHIBIT  1

 Assumption that  Violator  is  Financially Healthy

      Assume that EPA has  calculated an economic benefit for
 Company X of $140,000 and  a  gravity component of $110,000 for
 a  total proposed penalty  of  $250,000.  EPA presents the
 proposed penalty after  several negotiation sessions, and the
 CEO for Company  X then  claims that the company cannot afford
 to pay  that much.   In support of the claim, the CEO produces
 accounting statements showing that the firm paid no income
 taxes for the previous  three years and had less than $100,000
 in net  income for those years.

      EPA requests tax returns and other financial information
 for  the  most recent three  years of Company X.  EPA enters the
 tax  return information  in  ABEL and receives the output in
 Attachment A.  The  Phase  1 analysis from ABEL is not dispositive
 of the  issue, so EPA performs a Phase 2 analysis.

      The  Phase 2 analysis  indicates that Company X can finance
 a  civil  penalty  of  $250,000  from internally-generated cash flows,
 even after planning for $400,000 in pollution control investments
 and  $50,000 for  annual  O&M expenses.  The table in Phase 2
 shows a  99 percent probability that Company X will have future
 cash  flows with  a net present value of $370,061 available to
 pay a civil penalty.

 Assumption that  Violator  Is  Not Financially Healthy

     Assume again that  EPA has calculated a total penalty amount
 of $250,000.  Company Z claims extreme financial hardship.  If
 the ABEL  analysis indicates  that Company Z would have little
 probability of generating  $250,000 in cash flows during the
 next five  years,  EPA would go back to the financial data
 supplied  by the  violator and look for items that may indicate
 a  source  of cash, including  loans outstanding to corporate
 officers,  entertainment expense deductions, company cars or
 airplanes,  amount of compensation for corporate officers,
 compensation for  relatives of corporate officers who ,do not
have clearly defined duties.

     If the ABEL Phase  1 analysis indicates that Company Z
may have  additional debt capacity  (debt/equity ratio), EPA
would look  in the tax returns for the amount of long term
debt the  violator is carrying and analyze any loan applications
 the violator submitted  in  response to I^A's request for
 financial  information.  Frequently, firms can borrow addition;-. 1
money for  operations and  free up cash flow to pay civil
penalties.

     Even  a firm on the verge of bankruptcy may choose to
 settle an  enforcement action with a civil penalty provision  in
 the consent decree.  EPA  should always seek some civil penalty.
ABEL and other financial analysis provide a range of penalty
amounts  for the  purpose of settlement negotiations.

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                                       ATTACHMENT A
             ...             ...... ^ t ...

    DATA- FOR ABEL EXAMPLE           - ' •

    ANALYSIS DATE:   NOVEMBER 24,  1986

    DEBT EQUITY RATIOS

1983    0.38   A RATIO LESS THAN 1.3 INDICATES THE  FIRM
               MAY HAVE ADDITIONAL DEBT CAPACITY •

1984    2.91   A RATIO GREATER THAN 1.3 INDICATES  •  '  -
               THE FIRM MAY HAVE DIFFICULTY BORROHINQ

1983  .. 1.39   A RATIO GREATER THAN 1.3 INDICATES
               THE FIRM MAY HAVE DIFFICULTY BORROWING  .

 PLEASE ENTER A. CARRIAGE RETURN TO CONTINUE


    CURRENT RATIOS                          '              |

1983    1.10   A RATIO LESS THAN 2.0 MAY INDICATE         |
               LIQUIDITY PROBLEMS-  '                      •
                                                          \
1TC4    1.20   A RATIO LESS THAN 2.0 MAY INDICATE         I
               LIQUIDITY PROBLEMS      •  .                 j
                                                          4
1933    1.03   A RATIO LESS THAN 2.0 MAY INDICATE
               LIQUIDITY .PROBLEMS

 RLEASE ENTER A CARRIAGE RETURN TO CONTINUE
    3EAVER'S RATIOS
                                                           <
19S3     0.22  A RATIO GREATER THAN 0.20  INDICATES         •
               HEALTHY SOLVENCY                            J

1984     0.20  A RATIO BETWEEN 0.10 AND 0.20  ig           J
               INDETERMINATE                  '             j
                                                           I

1933     0.30  A RATIO GREATER THAN 0.20  INDICATES         (
               HEALTHY SOLVENCY                            j

 PLEASE ENTER A CARRIAGE  RETURN  TO CONTINUE               !
    TIMES  INTEREST  EARNED                                 j

1903     1.02   A  RATIO  LESS THAN 2.0 MAY INDICATE         |
                SOLVENCY PROBLEMS          •                »
1784      1.64   A  RATIO LESS THAN 2.0 MAY INDICATE
                SOLVENCY PROBLEMS

1983      1.30   A  RATIO LESS THAN 2.0 MAY INDICATE
                SOLVE!1."I Y proSLlMS

 PLEASE ENTER  A CAFRIA3E RETURN TO CONTINUE

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       ABEL INTERPRETS THE OVERALL RESULTS OF THE  FINANCIAL
       RATIOS AS FOLLOWS!                      -           *

       ALTHOUGH THE FIRM MAY FACE CURRENT CASH  tOR LIQUIDITY*
       CONSTRAINTS, ITS LONG-TERM PROSPECTS ARE  GOOD AND IT SHOULD
       BE  ABLE TO FINANCE PENALTIES AND  INVESTMENTS.  A PHASE
       TWO ANALYSIS IS RECOMMENDED.

       ABEL NOTES THAT THE FIRM'S MOST RECENT DEBT- EQUITY
       RATIO IS SUBSTANTIALLY -BETTER .THAN ITS HISTORIC AVERAGE.
       AE'EL  NOTES THAT THE FIRM'S MOST RECENT  fiis INTEREST
       EARNED IS SUBSTANTIALLY POORER THAN  ITS HISTORIC AVERAGE.

       DO  YOU WISH TO CONTINUE WITH T! IE PHASE  TWO ANALYSIS
       (V  OR N).T   / .  .  -.v^.;.. .. . ..  * «•   >...-. - ; ... •
             "            "  '
       DO  YOU WISH TO ANALYZE A CIVIL  PENALTY (P> OR A NEW
       PLtA'jE INPUT THE INITIAL PROPOSED SETTLEMENT PENALTY
       AMOUNT IN CURRENT DOLLARS  (Z.G.,  300O) ;  IF THERE IS NO  TASCC-E2
       PENALTY,  ENTER 0.
250000
       EEFCFVE PROCEED ING WITH  THE  CIVIL PENALTY ANALYSIS,
       ABIIL WILL REGUIKE CERTAIN ADDITIONAL INFORMATICN r.'EGAR
       AN/  INVESTMENTS WHICH MAY £:£  REQUIRED IN Cr.'D'Ir;: f.jR  7KE  FIRM
       TO  ACHIEVE COMPLIANCE.

       ENTER THE DEPRECIABLE CAPITAL COST OF THE NEW  INVES™1-:4^ .
       (E.G., 1000.00);  IF  THERE  IS  NO NEW INVESTMENT, ENTER n

200000
       PLEASE ENTER WHAT YEAR  DOLLARS THIS 15 £
-------
      ENTER ANY UQN-uEP^Er.I-r'.E, BUT TAX
      i-EliUCTIBLS CQ5T3 ASSOCIATED WITH THE NEW  INVESTMENT.
      IF THERE 13 NO COST THAT MEETS THIS REQUIREMENT
      PLEASE ENTER 0.
100000

      PLEASE ENTER WHAT YEAR DOLLARS THIS'IS EXPRESSED  IN
      (E.G., 19Q4)
1983                                   -.  r

      ENTER THE ANNUAL DIM COST OF THE NEW INVESTMENT'.
      IF THERE IS NO 0*.M COST, ENTER O
50000

      PI-EASE ENTER .WHAT YEAR DOLLARS THIS IS EXPRESSED  IN
      (E.G., 1984)
1985

      THE FOLLOWING STANDARD VALUES ARE  USED  IN THIS SECTION OF
      HoEL:
      1.  REINVESTMENT RATE • 0.0
      2.  NOMINAL DISCOUNT RATE =» 13. 69V.
      3.  INFLATION RATE • 4.417.          ..
      4.  MARGINAL  INCOME TAX RATE  =30.007.
      5.  INVESTMENT TAX CREDIT -10.00X

      DO YOU WISH TO HAVE THESE  ITEMS  EXPLAINED (Y OR M) ">
N

      DO YOU WISH TO CHANGE ANY OF  THESE INPUTS (Y OR N)?


    '  ASfL  IS READY" TO  PROVIDE"ODTPOT;  YOU HAVE "THE CHOICE
      OF THREE OUTPUT OPTIONS:

      I.  PRINT ONLY THE  POSSIBILITY OF THE PRESENT VALUE
          OF THE  FIRM'S FIVE  YEAR PROJECTED CASH FLOW EXCEEDING
          EITHER  AN INITIAL  PROPOSED SETTLEMENT PENALTY. OR  A  P-EQUIRED
          .INVESTMENT.

      2.  PRINT A TABLE SHOWING THE NET AVAILABLE CASH  FLOW
          WITH AN ANALYSIS  OF THE TABLE.

      3.  PRINT A DETAILED  TABLE SHOWING THE COMPONENTS' OF  THE
          FIRM'S  CASH  FLOWS.   THIS OPTION MAY  BE HELPFUL  TO' FINANCIAL
            ANALYSTS BUT IS  NOT  RECOMMENDED FOR MOST  USERS.
      PLEASE ENTER  YCUR CHOICE Cl,2 OR 3).
2

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     THERE IS A  99.9 % CHANCE THAT THE FIRM
     CAN FINANCE THE PROPOSED SETTLEMENT PENALTY QF
     * •  230000.OOBASED-ON THE STRENGTH OF INTERNALLY
     GENERATED CASH FLOWS FOR THE NEXT FIVE YEARS   THE
     ANALYSIS AT THIS POINT DOES NOT DEMONSTRATE
     CONCLUSIVELY THE FIRM'S ABILITY TO PAY THE PROPOSED
     PENALTY.  TO MAKE A DETERMINATION, ONE MUST LOOK  AT
     THE FIRM'S OTHER OPTIONS, INCLUDING INCREASING EQUITY.
     SELLING ASSETS, OR LEVERAGING UNLEVERED ASSETS.

     ABEL IS READY TO BEGIN OUTPUT.  IF YOU WISH, PLEASE
     POSITION YOUR PRINTER TO THE START OF A NEW PAGE.  PLEASE
     ENTER A CARRIAGE RETURN TO CONTINUE
     DATA FOR ABEL EXAMPLE

     ANALYSIS DATE:  NOVEMBER 24, 1986

                       NET PRESENT VALUE       EQUIVALENT
     PROBABILITY           AVAILABLE          ANNUAL CHARGE
                                                              I
        50.0                 716944.31               280891.31

        60.0                 679230.25               266115.37

        70.0            ,     633832.69              . 250280.OO

        30.0                 591423.31               231713.^2

        90.0                 525833.SO               206013.06

        95.0                 471726.Si               184317.36

        99.0                 370061.81               144996.37

   THE HOOVE DATA ARE PRESENTED  IN CURRENT-YEAR  DOLLARS

  r-LLASE ENTER A. CARRIAGE RETURN  TO CONTINUE
   THIS TABLE SHOWS  THE  PROBABILITY  THAT THE VIOLATOR
   CAN FINANCE CIVIL PENALTIES  OF  A  GIVEN AMOUNT.   FOR EXAMPLE,
   THERE  IS A 93.00  */.  CHANCE  OF FINANCING A LUMP
   SUM PENALTY' OF UP TO  *   471726.56 BASED ON THE STRENGTHS
   OF PROJECTED  INTERNALLY  GENERATED CASH FLOWS.  THIS IS
   EQUIVALENT TO ALLOWING THE FIRM TO MAK.C TH^EE EQUAL ANNUAL
   PAYMENTS OF *   134817.56.  THE ANALYSIS AT THIS POINT DOES
   NOT DEMONSTRATE CONCLUSIVELY THE FIRM'S ABILITY TO PAY
   THE PROPOSED  PENALTY.- TO  MAKE  A DETERMINATION, ONE MUST
   LOOK AT THE- FIRM'S  OTHER OPTIONS, INCLUDING INCREASING
   EQUITY, SELLING ASSETS,  OR'LEVERAGING UNLEVERED ASSETS.

   DO YOU WISH TO PERFORM  THE PHASE TWO ANALYSIS FOR
   r:
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GM-57

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             UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
                         WASHINGTON. O.C. 20460
                                * o
                                                          ernet e»
                                                       TMI AOMIMIflTHATQM
MEMORANDUM

SUBJECT:  Guidance for  the PY 1989 State/EPA
          Enforcement Agreements Process

PROM:     A. James Barnes       l<
          Deputy
TO:       Assistant Administrators
          Associate Administrator for Regional Operations
          Regional Administrators
          Regional Counsels
          Regional Division Directors
          Directors, Program Compliance Offices


     The attached enforcement agreements guidance for PY 1989
looks to continuing the successes of the State/EPA enforcement
relationship.  It re-emphasizes the need for annual updates
of the enforcement agreements.  It also introduces the regional
enforcement strategies process as a means of addressing state and
regional priorities and reiterates the importance of timely and
appropriate enforcement responses and federal facilities compliance.
There is a new emphasis for FY 1989 on tracking of both state and
federal referred/filed cases, inspector training and development,
and on upfront agreements on penalty sharing.

     The "Revised Policy Framework for State/EPA Enforcement
Agreements" renains our blueprint for the State/EPA enforcement
relationship.  States and Regions should reacquaint themselves
with its provisions and focus on fully implementing them,  consistent
with progr««-specif ic guidance.

     T.iw recently issued report on the PY 87 Implementation of
the Timely and Appropriate Enforcement Response Criteria  highlights
response areas needing increased attention  by Headquarters program
Offices, Regions, and States.  I encourage  you  to  read  this  report
and work closely within the Regions and Headquarters  Program  Offices

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                                -2-
 to improve regional and state performance,  trackina of  vi
 and enforcement follow-up.  The steering Committi£9on the
 Federal Enforcement Relationship is c
             Region's performance in implementing the timely and
                           C°ntinue to
                                      .*:..".  3CS  fc :.".S<.
      In a continuing effort to improve e"n^rcWenit' planning, OECM
 will be developing, with the program o^fieeWVulftaries of FY
 1989 enforcement priorities.  These «uram*'ri«s will be available in
 June and will be based on results of th* 'strategic planning sessions
 with the program offices and the FY 1989 GpVratirtg year Guidance.
 They can assist in developing operating platfjb ¥»ong regional
 program divisions, Regional Counsels, and Environmental service
 Oivioions,  by identifying shifting emphases in ease selection,
 inspoction  targeting,  etc.   The Regions may wish,to share these
 enforcement priority summaries with states'1 ii^part of the enforcement
 agreements  process.                       /roi:.,
                                         r s, J.'-! i i-i - •'

     I remain  firmly  committed to full and "effective implementation
of the Enforcement  Agreements process and "Sin; relying on your
continued personal  attention  to this impol*€ait&. Effort.
                                      .•  a -. c - » :" -• -'
Attachments
cc:  Steering Committee on  the  State/Federal
      Enforcement Relationship           ^aus
     Regional Enforcement Contacts
                                           ait
                                               i; a i. :.>
                                         r,  95 s&ncfo so

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                                                       ATTACHMENT 1

                        "

 GUIDANCE POR'JlJPLEMEjTING THE PY 1989 ENFORCEMENT AGREEMENTS PROCESS

           v ? *  pn 1 1 v^  c'-
                  ** f ' '
             ~        .
 1.   Maintainirnq.fehcSnf or cement Agreements Process

      The  process  for State/EPA enforcement agreements has been
 in  place  fqr a^e/sc^our years and has led to greater clarity of
 the roles amlcsj&ansib-ilities between Regions and States and to
 more effective e^po^&ment — as our enforcement data for the
 last two  ycals, i^^P«*« •  The revised "Policy Framework for
 State/EPA erfra£ffi«nfc Agreements," issued in August 1986, continues
 to  serve  as tfe>" Blueprint for our State/EPA enforcement relationship.
 Each year, RegioAS-and States should jointly review the agreements
 to  assure:  w/rti "ee^
             f!&£W ¥$ft-
 • That the agreem.fnts reflect any changes in State and Federal
  enforcement priorities.  Guidance documents which highlight
  enforcement priorities are identified in Attachment 2.  The
  new Regional^aforcement strategies process that resulted from
  the EPA Enforcement Management Council discussions, may be used
  as  one  mean|''4&ftf after responding to differences among national,
  regional, and state enforcement priorities.

 • That the "no surprises" policy applies to all aspects of the
  compliance and enforcement program,  states and Regions should
  evaluate their success in involving Attorneys General, determine
  if  Attorney General involvement should be increased, especially
  for Superfund and Federal facilities enforcement actions, and
  determine if other parties1 need to be routinely notified or
  consulted in the enforcement process.  Regions and States
  should  discuss the need to further share enforcement and
  compliance information including inspection results, monitoring
  reports, and evidence, and how this could best be accomplished.

 0 That effective dispute resolution processes are in plaice
  to  surface issues quickly to managers in both Regions' and
  States  and provide for prompt resolution.


2.   Improved Management and Tracking of Enforcement Responses

a.   For Enfogctaant Responses that are Timely and Appropriate;

      The  PY 1987 report on the implementation of  the timely  and
appropriate enforcement response criteria  indicated that  some
improvements have te««n made by some programs but  that  still  more
needed to be don« to fully implement the guidance.   In PY 1988,
the steering Committee on the State/Federal  Enforcement  Relationship
I/ The Steering committee  on  the  State/Federal Enforcement
~  Relationship is exploring  the  need to improve communications
   and relations with  State environmental boards or commissions.

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                                -2-
will be discussing how to improve th^use^^ the;, timely and
appropriate response criteria as an
 approprate response criteria  as  an .9Q£0?£«pieB&&ool.

 •  Regions  and  States should, connistsnf, .wiroqrain guidances,
   improve  their  management  and track"i"hgr~cTf 'Isighif icarit  non-
   compliers/violators.          .   r*c  sv,fi^3   If .ISA •'
                                      ..
 •  The  PY  1988  enforcement  agreements -jstrt^pta  improving  use  of
   state penalty  authorities  or  other^ sanctions r.tPo?  PY  1989,
   States  should  commit  to  developing^asdbiSipitSienfcing A  strategy
   for  obtaining  a  penalty  or other  sanefc*on^d«signed  to  determine
   future  violations  consistent  with program faidance  defining
   •appropriate"  enforcement  response, --Regions -should continue
   to encourage states to develop ciy&|£adffiiniaferative penalty
   authorities  or to  use- other appropriate iS.a»efeions available
   under state  law  or regulation.
                                    . o .;  as 7 &?£ :• • •
     The  Deputy  Administrator and each, .p^ograifl office will
 review Regional  data for timely and appropriate; response as
 part of scheduled  Regional visits and reviews.  The PY 1987
 timaly and appropriate  report includes :c?9ection  on EPA  and
 state  performance, by Region, specif icalTy Tor 'this purpose.
                                         & ** *3j t~. *> -"  JU "*'
b.  For Tracking and  Follow-through  on?Cag«ss jr.U

     The current tracking  and  reporting systemg-.call for periodic
reporting by EPA and  states  on cases filed or referred,  we are,
howover, facing problems by  not knowingc-fefeejafeatus of state cases
once they have been filed  or referred,^nofc^Hnowiag whether or
when they have been settled, or not  kno^i-ng whether or when
final compliance has  been  achieved.

9 Regions and States  should  agree  on how e^isfrt&g:reporting
  relationships can provide  the status  of filed or referred cases
  up to the time of settlement or  closure,jtnd^wben compliance has
  been achieved.                      ': *?;.?.

3.  Inspector Training and Development
                                      a\*«j;
     In PY 1988, EPA  will  issue a  policy^* ferment and EPA
Order on inspector training  and development»  Although EPA's
Order for inspector training and development does  not establish
training requirements for  state and  local inspectors* States
are encouraged to adopt their  own  formal inspector training
programs.

• Regions and States  should  annually assess a State's inspector
  training needs and  inspection priorities as part of the
  enforcement agreements process.

• Regions should encourage state inspector training programs
  through information sharing  and  through state participation

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                                -3-
 in  the  design of EPA's training curricula,  routine communication
 on  course  9f£eEthcal entities may share in civil
penalties  thati?rtstttt*froBi their participation, to the extent
permitted  by§>4t&q«&d?-1tfeei circumstances of the individual case.
Appendix  C:.^f£atoens»©l'ieypPrainework is an October 30, 1985
memorandum eont&iiiiRf* EPA's policy on the division of penalties
with  state ®Rdsa§e&i -^governments,  unnecessary disputes regarding
penalty sharing-tha'fffe&aiiaen when discussions on the appropriate
division of'-pAaaiGiftfl'&d&cur late in the enforcement process.

• Regions  and  States  should consider developing a process
  for establ£sfe£ftfc?€naltv sharing ground rules in advance of
  enf orcement«sit£i«men! negotiations .
5.  Working wtittasftaCtaSTo- improve Federal Facilities Compliance
           r „•  10J  Y-'---- • '•  •
     Once the  Federal  Facilities Compliance strategy is complete,
Regions should £i&Ss.ess'; the  following areas and incorporate
into the agreements, as  appropriate, understandings reached
with
                      •
  The enfore€>Fneftt£&ppiroffieh  a State generally plans to use for
  responding ?t:0«Ped<*ral -facility violations and plans for
  escalating.^!!®'  pftSi^onse,  if necessary;
• Types of situations  where a State would request EPA support
  or direct oset'SdfJF  *•''•'*
  Advance ntftlfrf fc©*t*0n  to States when EPA conducts inspections
  at Federal facilities,  and protocols for State enforcement
  response following  EPA  inspections in delegated States j

  plans for joint  !PA/§tate annual review of compliance
  problems -ae^^*iS«l facilities in a State.

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        A -,           4 : V"5   .—•  1 2" "'•'•"••-

EXISTING OR PLANNED* NATIONAL GUIDANCE AFFECTING STATE EPA ENFORCEMENT AGREEMENTS PROCESS
                                                                                                  (rev. 4/6/88)
                                        inter-program National Guidance:
• Revised Policy Framework for State/Federal Enforcement Agreements, August 26, 1986
                                                                        •«•*    •  -.»
                                                                          i-     . r t,*-

• Annual Guidance for the W 1999 Enforcement Agreements Process.
              Program to Train, Develop and Recognize Compliance Inspectors and field Investigators,
     be-'4ssaed June 1988. •„ ----/•&                                      ./•    '-'"*-  *•'•* c
? Federa-L-tFaqtlity Compliance Strategy, to be issued June 1988.
    water-NPDES
                      Drinking Mater
                   Media Program Guidance;

                             Air
                                                      RCKA
                                                                                              FIFRA/TSCA
• national Guidance
  fore Overs ight of -i
r NPDES Programs'
  PY 1987, 4/1/87
l7^     ,            I
 • PY 85 Initiatives   ° Timely and Appro-
   on Compliance Moni-   priate Enforce-
 v. tor ing and Enforce-   ment Response
   ment Oversight,       Guidance, 6/28/84.
   6/29/84.              rev. 4/11/86
                     ^
 • ffinar Guidance on
  stances of Non-
  Cowpliance Report-
              8/26/85
,,v    ., ,
• QNCR Guidance,  3/86
0 Inspection Strategy
  and Guidance, 4/85
implementation,
3/20/84.

Regulations:
NIPDWR, 40 CPR
Parts 141, 142.

Guidance for PWSS
Program Reporting
Requirements,
7/9/84.
                                           Compliance Data
                                           System Guidelines
                                           for  FY 1986,  2/86.
                                         • Guidance on
                                          Pedera1ly-Report-
                                          able Violations,
                                          4/11/86.

                                         0 Compliance Moni-
                                          toring Strategy,
                                          3/31/88.
                                                                  Interim National
                                                                  Criteria for a
                                                                  Quality Hazardous
                                                                  Waste Management
                                                                  program Under RCRA,
                                                                          '        A
                                                                                         I
                                              • PY 1988 RCRA Imple-
                                                mentation Plah> -
                                                3/31/87, to be^rg-
                                                issued for FY 89
                                                by 4/1/88.

                                              • RCRA Enforcement
                                                Response Policy,
                                                issued 12/21/84,
                                                revised 12/21/87.
                                                                                            Final py 88 En-
                                                                                            forcement and
                                                                                            Certification
                                                                                            Grant Guidance,
                                                                                            3/10/87.

                                                                                            Interpretative
                                                                                            Rule: PIPRA State
                                                                                            Primacy Enforce-
                                                                                            ment Responsibi-
                                                                                            lities, 40 CPR
                                                                                            Part 173, 1/15/83
                                                                                            Final TSCA Grant
                                                                                            Guidance for the
                                                                                            Cooperative Agree-
                                                                                            ment States,
                                                                                            3/10/87.
• Plan
        ridance  is underlined.

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     Hatec-MPDES	Drinking Hater
T	1	r
 • Revised Enforcement • PY 85-86 Strategy   '
                                                      Air
                                                                            RCRA
                                                                                              PIPRA/TSCA
  Management System,
  3/86.
.-. <«-  & 5  . {  -.;,„•,.
• NPDES Federal
  Penalty Policy,
  Peewits, 2/86.
• Guidance for Re-
  porting and Evalu-
  ating/ row Ncsi-
_ Compl iance with __
  Prctereatment " '
  Implementation
  Requirements,
  9/30/87.

• Ii^lemenfcat^on of
  the Pretreatment
  fermfts and En-
 , toreement Track-
  ing system,
  3/24/87 Uetter)

• National Municipal
  Policy, published
  3/28/84, and
  guidance, 3/84.
• NMP Enforcement
  Strategy, 9/22/87.
                        for Eliminating
                        Persistent  Viola-
                        tions at  Community
                        water systems,
                        3/r yes,
                                !fVF f OU*
                        Agreements,  4/87.
                        W*.' 87r SPMS fc OWAS
                        Targets  for the  ••
                        IKSS Pcogram,  (SNC
                        definitions),
Asbestos Strategy,
3/31/88.
                        Guidance on  PY 88
                        PWSS Enforcement
                        Agreements,  4/87.
                        Guidance on use of
                        AO Authority Under
                        SDMA Amendments,
                        1/20/87.

                        PY 88 UIC Reporting
                        Guidance, 4/87.
                        UIC Program Guidance
                        153, 12/86.
                        •? >•„ 5.-'*1 '  *  C».  .
                        PWSS Oompllance
                        Strategy, 4/1/87.
                     • Compliance and
                       Enforcement Program
                       Descriptions in
Class B VOC source     Final Authorization
Compliance Strategy,   Application and State
3/87.                  Enforcement Strategies,
                     o 6/12/84.'*-HV <* i     i
                                                            VSSC'
                                                                            ^McKEnforce-
                                                                       ment Log - form for
                                                                                 monthly
                                                                       Technical Enforce-
                                                                       ment Guidance on
                                                                       Ground-Mater
                                                                       Monitoring, Interim
                                                                       Final, 8/85.

                                                                       compliance Order
                                                                       Guidance for Ground
                                                                       water Monitoring,
                                                                       8/85.

                                                                       Loss of Interim
                                                                       Status Guidance,
                                                                       8/85.

                                                                       RCRA State Over-
                                                                       sight Inspections,
                                                                       12/87.
                                                                                            T«ff.S.f»S.«('

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Hater-HPDES
                          Drinking  Mater
Air
RCRA
PIPRA/tSCA
   .'. ' '• ;•'/ ;:--.'     I    .-••.•-•••   "         I
  Pretreati«ent Otm-   * UIC OCMpliance
  piianoe Monitoring    Strategy,  3/31/67.
  and Enforcement
  Guidance, July 25,
• Administrative
  Penalty Order Regu-
  lations, Policies,
 1 and Guidances,
  August 28, 1987
  r*'-;:.'•;-.>•"". "  .:-^'-
• IKS Policy;&jjfe'
  •ent, Oct. 31,
  1905.
  f,   '*,

* OdMf>liance Moni-
  toring and firi-
  forcenent Strategy
  for ipxlcg.  to be
  issued April 1986.

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