By Joel Gross and Jonathan Martel

Law360 (April 6, 2020, 3:17 PM EDT )

Joel Gross

Jonathan Martel

On March 26, Susan Parker Bodine, the U.S. Environmental Protection Agency's assistant administrator for enforcement and compliance assurance, issued an important and much-anticipated temporary policy titled "COVID-19 Implications for EPA's Enforcement and Compliance Assurance Program." The seven-page temporary policy provides general guidelines encompassing a wide range of challenges in maintaining environmental compliance obligations during the national coronavirus emergency.

Those guidelines provide some comfort to those trying to figure out how to reconcile shelter-in-place, social distancing and other directives or recommendations with environmental compliance obligations under statutes, regulation, permits, agency and court orders, and settlement agreements. Since the temporary policy could not possibly address the myriad issues that may arise during the pandemic, we address here the broad principles the policy establishes, several important questions that the policy does not address, and how regulated parties might respond.

The prefatory portions of the temporary policy, in explaining its applicability and scope, amount to a declaration that the EPA recognizes the extraordinary challenges the pandemic has created, and will exercise reasonable enforcement discretion to forego civil enforcement for companies and other entities who are acting responsibly and making good faith, reasonable decisions.

Structured as a memorandum to all governmental and private sector partners, the policy sets forth a tone and rationale that we are all in this together, and for this limited period the exigencies of the public health emergency will take precedence over enforcement of environmental regulatory obligations that do not present acute dangers to public health or the environment, such as monitoring, testing, sampling, training and reporting and compliance certifications.

As the EPA states:

We are first and foremost mindful of the health and safety of the public, as well as our staff, and those of Federal Agencies, State and Local Governments, Tribes, Regulated Entities, Contractors, and Non­governmental Organizations. The agency must take these important considerations into account as we all continue our work to protect human health and the environment.

Force Majeure Principles

Applying this rationale retroactively to March 13, the policy relies upon the typical elements of force majeure as the general principles of enforcement discretion with respect to the broad range of potential civil noncompliance during the pandemic.[1]

For example, the policy directs regulated parties to "[i]dentify how COVID-19 was the cause" of noncompliance; make "best efforts" to comply and to minimize the duration and impacts of noncompliance; to return to compliance as soon as possible; and to document those steps and information.

More specifically with regard to routine monitoring, sampling, testing training and reporting requirements that recur for intervals of less than three months, the EPA explains that, where it agrees with the entity's force majeure explanation, the agency does not expect to seek penalties or require catch-up afterward, though the EPA will expect entities to provide eventual catch-up reporting for missed biannual or annual monitoring or reports, as appropriate.

So, for example, it will be an easy call for a company to delay annual compliance testing if it is unable to get testers on site because of the pandemic. Still, the policy directs that entities should use existing procedures to report noncompliance with routine activities.

For requirements imposed under settlement agreements and consent decrees, the EPA explains that any notice and force majeure provisions of those agreements apply, and, in the case of judicial consent decrees, the agency will coordinate with the U.S. Department of Justice to exercise discretion with regard to stipulated penalties for similar routine compliance obligations.

The policy does not, like standard environmental enforcement agreements, specifically impose the burden of proof on the entity claiming force majeure, across the range of situations that may arise. Nevertheless, regulated entities are well-advised to follow the direction of the temporary guidance to document their steps carefully, and to provide notice to the government where required or where questions arise.

What Are Best Efforts?

Several aspects of this force majeure paradigm may raise more difficult questions in the context of the COVID-19 pandemic. For example, the requirement to "make every effort" or "best efforts" to comply may create tension where compliance is possible, such as by deploying employees or contractors to perform routine monitoring and reporting tasks at facilities, but such activities are not necessarily advisable given the public health concerns.

It would have been better for the EPA to omit this requirement, and simply direct entities to "act responsibly" by balancing COVID-19 concerns and the impacts of noncompliance. Nevertheless, given the agency's overall tone and rationale, we expect it to consider such balancing to be appropriate, especially with respect to routine monitoring and reporting that does not present imminent or acute risks — and regulated entities should document how they struck that balance.

Routine Compliance Procedures Versus Excess Emissions and Discharges

In addition, application of the temporary policy to circumstances with direct environmental impacts, such as excess air emissions or water discharges, is less clear. Of course, it is common sense that the COVID-19 health crisis should not justify actions that themselves create significant environmental health risks.

Standard force majeure provisions in environmental enforcement agreements requiring best efforts to minimize noncompliance and rapid notice to the government, and imposing the burden of proof on the claiming entity, also require the entity to identify events that may cause or contribute to an endangerment to public health, welfare or the environment. The temporary policy likewise distinguishes such circumstances from routine compliance procedures.

The EPA asserts that it "expects all regulated entities to continue to manage and operate their facilities in a manner that is safe and that protects the public and the environment." And the temporary policy strongly encourages facilities, states and tribes to consult regarding the potential that noncompliance could result in an acute risk or imminent threat to human health or the environment, and directs that facilities should notify authorities as quickly as possible of failures of air emissions or wastewater or waste treatment equipment.

The guidance then contemplates a process in which the EPA would "work with the facility to minimize or prevent the acute or imminent threat to health or the environment from the COVID-19-caused noncompliance and obtain a return to compliance as soon as possible."

Notably, the guidance does not preclude all excess emissions or discharges, or elaborate on what might constitute acute or imminent threats or appropriate actions to minimize such events. So, for example, it is unclear whether excess emissions of air pollutants contributing incrementally to ambient air quality degradation might occur, especially in the absence of routine sampling or monitoring, constitutes an imminent or acute threat.

And it is unclear what measures might be considered appropriate to avoid or minimize such environmental impacts. For example, the policy does not address the option of facility shutdown, which is a draconian option a company might typically consider when it knows it cannot otherwise comply. Although the EPA apparently is not expecting facilities to shut down solely to prevent routine monitoring violations, that line may be more difficult to draw where excess emissions or discharges might be expected.

Consultation with regulators, where there is any question of real environmental or public risks, would be advisable and should be viewed from the perspective of how present judgments might be later evaluated in the event harm from noncompliant operations might occur. And documentation of the information shared and decisions made will be important to minimize later second-guessing.

Knowing Noncompliance

A third tension in the temporary policy is its treatment of criminal violations. The guidance states that "[t]he enforcement discretion described in this temporary policy do not apply to criminal violations." Of course, even with a force majeure rationale, entities that continue to operate in noncompliance generally would be doing so knowingly.

Although the policy does not bind the DOJ, the EPA goes on to explain that the considerations in the policy will apply "to the vast majority of people and business who are making good faith efforts to comply with their obligations in this difficult time," and that in deciding when to refer cases to the DOJ for prosecution, "[the] EPA will distinguish violations that facilities know are unavoidable as a result of COVID-19 restrictions from violations that are the result of an intentional disregard for the law."

Recognizing the limitations of the policy in specifying what violations are "unavoidable" and what constitutes "intentional" noncompliance, attention to documentation and consultation will be important in minimizing such risks, especially with respect to decisions to continue operations that result in excess emissions or discharges.

States, Tribes and Citizens

Another limitation the temporary policy recognizes but does not resolve is that there are other entities with an important enforcement role — such as states, tribes, citizens plaintiffs and courts — and this policy does not bind them.

The EPA explains that, if an entity contacts the agency due to noncompliance that could raise acute risks or imminent threats, the EPA will consult with the state or tribe implementing an authorized federal program in accordance with its preexisting July 11, 2019, state coordination policy.

The states play a central role in environmental enforcement — and most states have concurrent enforcement authority with the EPA over a wide range of matters, and are not bound by EPA policy. Accordingly, anyone seeking to rely on the temporary policy needs to consider how a relevant state with concurrent enforcement authority is likely to react to their situation. Some states have reacted quite negatively to the EPA's temporary policy.

For a very passionate example, even though New York has so far been the state hardest hit by the virus, its Department of Environmental Conservation was very critical of the temporary policy, stating that:

[The] Trump Administration is using COVID19 health crisis as opportunity to allow [the] EPA to further abdicate its already diminishing role in protecting public health and the environment. Rolling back enforcement of regulations in place to protect the quality of our air, water, and health of our communities is a shameful exploitation of the current public health crisis, and NYS will continue to uphold its implementation of the state's nation-leading initiatives and regulations to protect New Yorkers and our natural resources.[2]

Similar criticism swiftly came from the environmental community, essentially characterizing the temporary policy as a blanket license to pollute.

In the face of all this criticism, the EPA took the unusual step of responding to this criticism in a March 30 press release, titled "EPA Corrects the Record after Reckless Reporting on Temporary Compliance Guidance." Countering the attack that the temporary policy was a step of political opportunism, the EPA noted that "[t]he development of the policy was a group effort, involving … EPA staff and managers, both career and political."

Substantively, the EPA emphasized that the temporary policy was in no way any sort of license to pollute, stating:

The policy does not say that the COVID-19 pandemic will excuse exceedances of pollutant limitations in permits, regulations, and statutes. EPA expects regulated entities to comply with all obligations and if they do not, the policy says that EPA will consider the pandemic, on a case-by-case basis, when determining an appropriate response. Further, in cases that may involve acute risks or imminent threats, or failure of pollution control or other equipment that may result in exceedances, EPA's willingness to provide even that consideration is conditioned on the facility contacting the appropriate EPA region, or authorized state or tribe, to allow regulators to work with that facility to mitigate or eliminate such risks or threats.

It is possible that the temporary policy simply provided an opportunity for state opponents of the Trump administration's environmental policies to lodge criticisms. It remains unclear to what extent those states will accommodate compliance difficulties consistent with the common-sense force majeure framework of the temporary policy.

Even in the more activist states like New York, it is hard to imagine the state taking aggressive enforcement action when an entity has acted responsibly during the pandemic and without creating environmental risk to the public.

Other states have begun to issue their own COVID-19 environmental enforcement policies. But given the immediate criticism of the EPA's temporary policy, some states may take more of a case-by-case approach, rather than signing onto the temporary policy or issuing a similar one of their own.

Still, given all this back and forth, it is critical that entities considering the application of the temporary policy to their situation not overlook the need to consult state and local authorities under applicable state regulations.

Entities might also be mindful of potential citizen actions. Unless the COVID-19 pandemic extends for many months, there are obstacles to such actions as authorized under federal environmental laws such as the Clean Air Act and Clean Water Act, where citizens generally are authorized to pursue only ongoing violations and need to provide state and federal authorities 60 days' notice prior to initiating citizen enforcement.

And although EPA guidance documents do not bind courts hearing citizen suits, one would expect that most courts would be very much sympathetic to a company that acted in the midst of a worldwide crisis in the manner suggested by the EPA. Of course, circumstances involving excess emissions or discharges threatening health could also raise risks of private damages suits, and those risks may warrant attention too.

Additional Notes

Finally, a number of other aspects of the policy bear mention:

• The EPA reserves the right to terminate the policy as appropriate, but promises to provide seven days' advance notice before doing so.

• The policy does not apply to enforcement activities under Superfund and Resource Conservation and Recovery Act, or RCRA, corrective action enforcement instruments, which the EPA's Office of Enforcement and Compliance Assurance plans to address separately.

• The policy does not apply to imports, and the Office of Enforcement and Compliance Assurance notes in particular its concerns "about pesticide products entering the United States, or produced, manufactured, distributed in the United States, that claim to address COVID-19 impacts," warning that the EPA expects to focus on compliance with the requirements applicable to these products.

• The temporary policy provides that, if a facility is an RCRA hazardous waste generator and the pandemic makes it unable to dispose of waste timely to maintain its generator status, the facility should continue to properly label and store such waste and take other specified actions. And, if the facility does so, "[the] EPA will treat such entities to be hazardous waste generators, and not treatment, storage and disposal facilities." This provision could cause timing concerns if the Policy terminates before the applicable RCRA disposal period has run.

Bottom Line

Any entity potentially impacted by the temporary policy would be well advised to do the following:

• Read the temporary policy (and the subsequent press release, and any other subsequent guidance) carefully, as there is a lot in it.

• Consider each potential environmental noncompliance point potentially impacted by the pandemic, and make thoughtful decisions using the best available information that consider: (1) whether environmental compliance is even possible while strictly following public health directives and recommendations; (2) if it is, the associated risks of COVID-19 exposure to employees, other stakeholders and the public; and (3) what risks to public health or the environment would be presented by noncompliance.

• Each decision should take into account whether a state or tribe also has enforcement authority, and if it does, whether it has adopted the EPA policy or some other approach.

• Document carefully the decisions that are made, including the reasons they were made and the expected ramifications.

• Provide any required notices to the EPA, states and tribes, whether the notice is required by the temporary policy or some other document, with whatever information is required to be included.

• If the situation at issue is not covered by the policy or its application is seriously unclear, reach out to the EPA or the state or tribe for further case-specific guidance as the temporary policy encourages.

In sum, once all of this is done, the EPA has set forth conditions under which enforcement for environmental noncompliance that does not itself put human health or the environment at imminent risk is unlikely.

The temporary policy is, we think, the EPA's way of saying, "everyone act responsibly during the pandemic and we will respond with understanding." We expect other government officials, including tribes, states and courts, will follow a similar common-sense philosophy, whether by a broadly issued policy or on a case-by-case basis.

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Joel M. Gross and Jonathan S. Martel are partners at Arnold & Porter.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

[1] For an in-depth discussion of force majeure principles as applied to the coronavirus national emergency, see https://www.arnoldporter.com/en/perspectives/publications/2020/03/emergency-environmental-laws-coronavirus.

[2] See statement on Commissioner Segos on March 27, 2020, at https://twitter.com/NYSDEC.

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