Additional environmental projects set to return with new guidelines | BakerHotelier

On May 5, Attorney General Merrick Garland announced the return of additional environmental projects (PES) in regulations of the United States Department of Justice (DOJ). SEPs are voluntary projects intended to benefit the environment that are carried out by corporate defendants under environmental enforcement regulations. Before being banned at the DOJ in 2020, SEPs had been used for decades and included projects such as testing the public’s blood for lead, reducing diesel emissions from school buses, restoring wetlands and schoolyards. water and repair hiking trails. SEPs were popular among corporate defendants, non-governmental organizations, local communities, and government agencies and Justice Department prosecutors who used them to resolve environmental law enforcement cases before trial. The DOJ announced its new SEP policy the same day as the Environmental Protection Agency (EPA) and The DOJ unveiled a new Environmental Justice Strategyincluding the creation of an Office of Environmental Justice within the Environment and Natural Resources Division (ENRD) of the DOJ.

Reversing the previous administration’s policy, Garland announced that “current policy is more restrictive and less responsive than necessary to address concerns that these agreements could be used to inappropriately fund projects unrelated to the harm involved. in the business”. Garland’s new policy specifically overturned a 2017 memorandum from former Attorney General Jeff Sessions that prohibited third-party settlement payments in court settlements. But at the time, many argued that the Sessions memo did not explicitly ban SEPs. It was not until Jeffrey Bossert Clark, the former ENRD Assistant Attorney General, issued a subsequent memo in March 2020 that it was clear that the DOJ had banned the use of SEPs.

SEP critics have claimed that the projects violate two federal laws. First, the Miscellaneous Receipts Act requires federal agents who receive civil fine (“money for government”) funds to deposit those funds in the US Treasury. Second, the Anti-Deficiency Act also specifically prohibits federal employees from spending more funds than Congress has appropriated.

But proponents of SEPs argue that the projects shouldn’t technically be considered payments made by defendants in lieu of civil penalties and aren’t dollars actually collected by the DOJ (or any other federal agency). SEP money is spent by the defendants on environmental projects and never passes into the hands of the government, nor is it used to fund federal government projects. In 2015, The EPA has released a comprehensive policy update resolve many long-standing legal concerns regarding SEPs.

In announcing the new SEP policy to the DOJ, Garland announced additional parameters that appear to be aimed at allaying concerns that SEPs could violate the Miscellaneous Revenue Act or breach Congressional appropriations authority. According to the new DOJ policy, SEPs must meet the following requirements:

  • Settlement agreements, including PES, must “precisely define the nature and scope of the specific project(s) that the defendant has agreed to fund.”
  • SEPs “must have a close connection to the underlying violation(s) of federal law at issue in the enforcement action” and “must be consistent with the underlying law being applied and advance at least one of the purposes of this law”. SEPs should “reduce the detrimental effects of the underlying violation” and “the likelihood of similar violations in the future.”
  • The DOJ is prohibited from identifying a “particular third party to receive payments to implement” or benefit from a SEP.
  • SEPs are only available “prior to an admission or declaration of liability in favor of the United States, and the Department of Justice and its client agencies shall not retain post-settlement control over the disposition or management” of the funds of the project “except to ensure that the parties comply with the settlement.
  • No SEP may be “used to satisfy the legal obligation of the Department of Justice or any other federal agency to perform a particular activity. Nor will such settlement provide the Department of Justice or any other federal agency with additional resources to carry out any particular activity for which the Department of Justice or any other federal agency, respectively, receives specific appropriation.
  • Finally, no SEP can “request payments from non-governmental third parties solely for public education or outreach projects; only in the form of contributions to generalized research, including at a college or university; or in the form of unrestricted cash donations.

Garland asked the DOJ to revise the justice manual to include these new SEP guidelines. There is also a pending interim final rule that will override the Trump-era rule explicitly banning SEPs (28 CFR § 50.28). While the DOJ may immediately begin accepting SEP’s proposals in environmental regulations, the DOJ can wait until the interim final rule is released by notice and comment. Any litigation over the interim final rule, as seems possible given prior opposition to the SEPs, could lead to further delays in the implementation of the SEPs in environmental enforcement regulations. Opponents of the SEP could seek to ban the interim final rule, or the DOJ could wait until the litigation is resolved before approving the SEPs in the regulations. Indeed, the DOJ might be hesitant to immediately include SEPs in the settlements, because an adverse ruling in any litigation challenging the interim final rule would potentially nullify dozens, if not more, of court settlements negotiated and finalized while the interim final rule was made. subject of a legal challenge.

Despite Garland’s attempts to reduce the risk of misuse of SEPs, these attempts seem unlikely to convince critics. After decades of bipartisan support for SEPs, the projects became a source of partisan rancor in the 2010s, and that seems unlikely to change with their reintroduction. One of the primary beneficiaries of the SEP policy are the corporate defendants who might rather do something environmentally beneficial for the communities affected by their alleged violations of environmental law than pay a large check to the US Treasury. No defendant in an environmental law enforcement case is required to perform a SEP. But given the likelihood of continued controversy and the uncertain legal challenges ahead for the DOJ’s reintroduced SEP policy, some defendants may opt out of SEPs.

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