UNITED STATES ENVIRONMENTAL PROTECTION AGENCY
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Dated Signed: October 30, 1985
MEMORANDUM
SUBJECT: Division of Penalties with State and Local Governments
FROM: Courtney M. Price (signed by Courtney M. Price)
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. vs.
Jones & Laughlin (N.D. Ohio) and U.S. vs. Georgia Pacific Corporation (M.D. La.). In each case,
a State or local governmental entity requested a significant portion of the involved penalty.
Consequently, OECM and DOJ jointly concluded that this policy was needed.
EPA generally encourages State and local participation in Federal environmental
enforcement actions. State and local entities may share in civil penalties that result from their
participation, to the extent that penalty division is permitted by Federal, State and local law, and
is appropriate under the circumstances of the individual case. Penalty division advances Federal
enforcement goals by:
1) Encouraging States to develop and maintain active enforcement programs; and
2) Enhancing Federal/State cooperation in environmental enforcement.
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
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potential for Federal/State disagreement over penalty division; and
2) Compliance with the Miscellaneous Receipts Act. 31 U.S.C. § 3302, which
requires that funds properly payable to the United States must be paid to the U.S.
Treasury. Thus any agreement on the division of penalties must be completed
prior to issuance of and incorporated into a consent decree.
As in any other court-ordered assessment of penalties under the statutes administered by
EPA, advance coordination and approval of penalty divisions with the Department of Justice is
required. Similarly, the Department of Justice will not agree to any penalty divisions without my
advance concurrence or that of my designee. In accordance with current Agency policy, advance
copies of all consent decrees, including those involving 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 independent 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 government 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 participated actively in prosecuting the
case. For example, the State or local government must have filed complaints 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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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, i
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 apportionment 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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