By Grant Gilezan

Law360 (September 8, 2020, 5:11 PM EDT )

Grant Gilezan

On Aug. 31, the U.S. Environmental Protection Agency terminated its temporary enforcement policy, enacted in response to the COVID-19 pandemic to address the health and safety concerns of the public and EPA staff. But despite the time that has passed since the beginning of the pandemic, many organizations are still impacted by the virus, and should be wary of the end of the policy.

The EPA issued the temporary enforcement policy on March 26.[1] It applied to civil violations during the pandemic and addressed categories of noncompliance. The policy expected regulated facilities to comply with regulatory requirements, where reasonably practicable, and to return to compliance as quickly as possible.

To be eligible for enforcement discretion, the policy also required facilities to document decisions made to prevent or mitigate noncompliance and demonstrate how the noncompliance was caused by the COVID-19 pandemic. It did not provide leniency for intentional criminal violations of law, and did not apply to activities that are carried out under Superfund and Resource Conservation and Recovery Act corrective action enforcement instruments, which were addressed in other guidance documents.

During its short life, the temporary enforcement policy was criticized and challenged in court by various special interest groups and states, as affording too much leniency to regulated entities, and thereby endangering the environment. On June 29, the EPA issued a notice of its intention to terminate the policy.[2]

In explaining its termination decision, the EPA did not reference the pending litigation. Rather, it alluded generally to the reopening of the economy through changes to stay-at-home orders enabling more businesses to resume functioning.

The EPA based the termination of the policy on a recognition that circumstances surrounding the policy are changing — with an implicit assumption, unsupported by any formal survey data, that there would be adequate time by the end of August for all regulated entities to adjust to the changed landscape brought about by the pandemic.

The greatest benefit of the temporary enforcement policy — to both regulated entities and agency personnel — was ensuring consistent administration of enforcement discretion concerning COVID-19-related factors over all of the EPA's regions. Under the unprecedented pandemic circumstances, and the suddenly sweeping and impactful changes brought about by shelter-in-place and business shutdown orders, it afforded some greater level of certainty to an otherwise incredibly dynamic business environment.

The EPA's termination notice makes clear that the policy is no longer applicable. But it leaves unclear whether the EPA may consider any COVID-19-related factors, along with any other factors, when making enforcement decisions, or responding to requests for extensions to complete time-limited requirements under regulations, permits and consent orders. This could possibly result in the singling out and elimination of a reasonable basis for explaining a delay or practical inability to meet a deadline.

In other words, by the EPA creating and then terminating a formal method for addressing one basis for delayed compliance, it could have the effect, after Aug. 31, of preventing any consideration of COVID-19-related reasons which otherwise could have been within the range of general enforcement discretion afforded to the EPA had there never been an express, specific temporary enfrocement policy in the first place.

Another point to carefully follow is that the Aug. 31 termination date of the policy does not reflect the fact that a large portion of business and agency operations are still being conducted remotely, and will likely continue in that mode through the end of the year — and perhaps well beyond into the future. While adjustments have been made by regulated businesses to manage environmental affairs remotely, there still are certain activities that remain time-challenged to perform in strict compliance with procedural time requirements.

Take, for example, the penalty mitigation requirements in the EPA's audit policy, which was never modified to address COVID-19-related factors, but relied on an interplay with the temporary enforcement policy to afford any appropriate considerations. The audit policy includes strict timing requirements for self-disclosing noncompliance within 21 days of discovery, and taking corrective action within 60 days of discovery.

The audit policy also limits relief if similar noncompliance occurs within three years. Ongoing business functioning has not eliminated all challenges to meeting these timing requirements related to remote access limitations to paper records at an office; delays in reaching supplier and agency personnel due to their remote schedules; and difficulties in procuring vendor assistance to undertake repair work.

These same COVID-19-related factors create a risk that an audit will not be completed within 21 days of the first discovery of noncompliance — making any similar noncompliance discovered later during the same audit too soon for penalty mitigation.

COVID-19-related factors also impact the ability of regulated sources to complete certain reporting requirements within prescribed time limits, as operations come back on line and production rates are adjusted frequently, due to the ongoing dynamic nature of the economy — which is still very much impacted by COVID-19 response and protection measures.

For example, due to shutdowns and limited production upon reopening, businesses may find themselves subject to different levels of waste generator classification requirements, all of which require tracking, registration, record-keeping and reporting after management decision-making to determine whether the current rate of waste generation was temporary, episodic or permanent.

Some states impose fees on certain classifications of waste generators, so that is another requirement to track. The EPA's termination of its temporary enforcement policy suggests any circumstances of delayed notification or other action by regulated businesses due to COVID-19 — no matter how unavoidable — could be interpreted by all or some EPA regions to be subject to strict enforcement with penalty sanctions, and ineligible for any discretionary extension by the agency.

In light of the court challenge against the policy, and of the start of the reopening of the economy, it is understandable that the EPA wanted to ensure its enforcement decision-making was properly in line with the status of the circumstances of the regulated community. However, there is good reason for concern over the complete termination of the policy, without any reservations or even acknowledgment of the possibility of narrow exceptions, when many businesses are still operating remotely and in significantly different ways than prior to the onset of COVID-19.

These concerns center on the uncertainty and variability of enforcement that may result from unavoidable delays due to ongoing COVID-19 impacts that pose no immediate threat to human health or the environment. Concerns also extend to the fate of the EPA's well-established and longstanding audit program, and the self-policing incentives it offers — which translate into a win-win for the regulated community and the environment.

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Grant P. Gilezan is a member at Dykema Gossett PLLC.

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] https://www.epa.gov/sites/production/files/2020-03/documents/oecamemooncovid19implications.pdf.

[2] https://www.epa.gov/sites/production/files/2020-06/documents/covid19addendumontermination.pdf.

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