A version of this alert was published in the first edition of the Rocky Mountain Mineral Law Foundation's Natural Resources Law Network newsletter in April 2020. 

The COVID-19 pandemic has led to a number of rapid-fire legislative, executive, and regulatory responses in the U.S. States, counties, and cities have issued shelter-in-place and other emergency orders, causing certain business operations to be staffed remotely, with a reduced workforce, or even shuttered entirely.  Citing the impact of such responses on the ability of businesses to meet federal environmental requirements, the U.S. Environmental Protection Agency (EPA) issued a “Temporary Policy” on March 26, 2020, announcing the Agency’s intent to exercise enforcement discretion for noncompliance with certain “routine” monitoring and reporting obligations. In the Temporary Policy, EPA identifies violations for which it does not plan to seek penalties, and a broader commitment to consider the totality of circumstances—including the COVID-19 pandemic—in determining whether enforcement action is appropriate in other scenarios.

I. Federal Environmental Enforcement—Key Terms of Temporary Policy

Recognizing the compliance challenges that regulated entities will encounter during the COVID-19 pandemic, EPA announces in the Temporary Policy that it: (1) does not plan to seek penalties for “routine” monitoring and reporting (and related obligations embodied in settlements); and (2) will consider the totality of circumstances in determining whether enforcement action is appropriate in other scenarios (facility operations and public water systems).  EPA also presents the possibility of tailored “No Action Assurance” letters for facilities designated as critical infrastructure.

Enforcement discretion set forth in the Temporary Policy is conditioned on a regulated entity making every effort to comply with its environmental obligations.  Where compliance is not “reasonably practicable” due to COVID-19, companies must document:

(1) their efforts to minimize the effects and duration of the noncompliance, including by tracking dates of noncompliance and identifying steps taken to come into compliance at the earliest opportunity;

(2) the specific nature of the noncompliance and how COVID-19 caused it; and

(3) the decisions and actions they took in response, including best efforts to comply.

For potential violations occurring while the Temporary Policy remains in effect, EPA will consider the circumstances—including the COVID-19 pandemic—in determining whether any enforcement action is appropriate.  The Temporary Policy is retroactively effective beginning March 13, 2020, and will remain in place until terminated by EPA. 

A. Potential No Penalty Scenarios

EPA identifies in the Temporary Policy two categories of obligations for which it does not plan to seek penalties for violations, provided regulated entities act in accordance with the Temporary Policy: (1) “routine” monitoring and reporting; and (2) reporting and milestones pursuant to settlement agreements and consent decrees.

i. Routine compliance monitoring and reporting

Regulated entities should continue to use existing procedures (such as pursuant to an applicable permit, regulation or statute) to report noncompliance with routine activities, including:

• Compliance monitoring;
• Integrity testing;
• Sampling;
• Laboratory analysis;
• Training; and
• Reporting or certification.

If reporting is not reasonably practicable  due to COVID-19 related reasons, regulated entities instead should maintain reporting information internally and be prepared to share it with EPA or other regulators upon request.  Provided that EPA agrees with the determination that the noncompliance was due to COVID-19 and the regulated entity makes supporting information available to the Agency, EPA does not plan to seek penalties for such violations. 

Upon termination of the Temporary Policy, which does not have an explicit end date, EPA expects regulated entities to return to full compliance. No “catch-up” for missed monitoring or reporting will be required if the duration of the Temporary Policy is less than three months. Regulated entities should take note of the brief seven-day notice that EPA will provide before terminating the Temporary Policy and be ready to quickly transition back to standard activities and reporting.

ii. Reporting and milestones under settlement agreements and consent decrees

If parties to EPA administrative settlement agreements anticipate missing enforceable milestones set forth in those documents due to COVID-19, those parties should utilize applicable notice procedures set forth in the agreement.  By contrast, judicial consent decrees entered into with the U.S. Department of Justice are court orders. EPA staff will coordinate with DOJ to exercise enforcement discretion with regard to stipulated penalties and other consent decree remedies for violations of compliance obligations, but courts retain ultimate jurisdiction over implementation of judicial consent decrees.  Notably, both types of documents contain force majeure provisions which should be considered and invoked as appropriate.

B. Potential “Totality of Circumstances” Review Scenarios

EPA identifies in the Temporary Policy two categories for which it will consider the totality of circumstances in determining whether enforcement action is appropriate: facility operations and public water systems.

i. Facility operations

The Temporary Policy reiterates EPA’s expectation that all regulated entities manage and operate their facilities in a manner that is safe and protective of the public and the environment. That is, EPA is not giving permission to the regulated community to pollute or violate environmental laws and permits. But where a facility suffers from, for example, failure of air emission controls or wastewater or waste treatment systems that may result in violations, the facility must notify the enforcing authority as quickly as possible. Or, if a facility is a generator of hazardous waste and due to disruptions caused by the COVID-19 pandemic, it is unable to transfer waste off-site within the time periods required under the Resource Conservation and Recovery Act (RCRA), the facility should nonetheless continue to properly label and store such waste. In each case, EPA specifies in the Temporary Policy specific actions it will take to evaluate the operational issue, including consideration of COVID-19 circumstances, in determining whether to take enforcement action.

ii. Public water systems

The Temporary Policy acknowledges that public water systems have a heightened responsibility to protect public health because unsafe drinking water can lead to serious illnesses and access to clean water for drinking and handwashing is critical during the COVID-19 pandemic. EPA expects public water systems regulated under the Safe Drinking Water Act to continue normal operations and maintenance, required sampling, and timely analysis to ensure the safety of drinking water supplies. However, recognizing that COVID-19 related issues may impact both operational and laboratory workforces, EPA identifies in the Temporary Policy priority tiers of compliance monitoring, and also encourages public water system operators and laboratories to consult with EPA regarding any issues they are encountering.  EPA confirms that it also will conduct a “totality of the circumstances” review in determining whether to enforce against public water system operators that comply with the Temporary Policy. 

C. Potential “No Action Assurance” for Critical Infrastructure

Certain facilities have been designated as essential critical infrastructure by the federal Cybersecurity and Infrastructure Security Agency, which is part of the Department of Homeland Security) and thus exempt from COVID-19 shelter-in-place orders (see WilmerHale’s analysis of essential infrastructure guidance here).  For those facilities, EPA announces in the Temporary Policy that it will consider, on a case-by-case basis, issuing a more tailored short-term No Action Assurance letter with conditions to protect the public.

II. Limitations of Temporary Policy

The Temporary Policy does not excuse compliance with all environmental obligations.  Expressly excluded from the policy are:

• Criminal violations;
• Conditions of probation;
• Superfund activities;
• RCRA Corrective Action activities;
• Imports (e.g., pesticide products);
• Non-reporting obligations under settlement agreements and consent decrees (unless agreed to by EPA or DOJ, as applicable);
• Ongoing enforcement matters;
• Requirements to prevent, respond to, or report accidental releases; or
• Citizen suits.

The last of these—citizen suits—is particularly notable.  Such suits are authorized under several federal environmental laws, including the Clean Air Act (CAA), Clean Water Act (CWA) and RCRA.  Those environmental laws authorize two types of lawsuits: (1) enforcement actions against entities that violate environmental laws, including permit limitations and other regulatory and statutory requirements; and (2) actions to compel agencies to carry out nondiscretionary duties, including promulgating statutorily required regulations within a specific time frame. See CAA, 42 U.S.C. § 7604; CWA, 33 U.S.C. § 1365; RCRA, 42 U.S.C. § 6972.  Lawsuits asserting violations of environmental laws provide an avenue for citizens or groups to compel compliance in the absence of agency enforcement. There has been a notable increase in citizen suits against a host of regulated entities in recent years (in-depth analysis of recent trends in citizen suits is available here), and such lawsuits will likely continue to be filed. 

Regulated entities therefore should proceed with caution in this time of suspended enforcement.  Circumstances involving excess emissions or discharges threatening human health could increase risks of citizen enforcement actions—especially where monitoring information is publicly posted on agency databases.  Regulated entities can expect environmental organizations to keep a keen eye on such data in light of the Temporary Policy.  Although EPA guidance is not binding law, a company’s reasonable approach to compliance, consistent with that guidance and in the midst of a worldwide crisis, likely would be viewed favorably in court.  In that sense, the Temporary Policy likely has a similar effect as a “No Action Assurance” letter indicating that EPA will not recommend legal action against an entity. Similar to such a letter, the Temporary Policy could assist a company responding to a citizen suit demonstrate that its actions met the expectations of the agency charged with administering the relevant regulatory program. 

III. Scope and Implications of Temporary Policy

Under the current, extraordinary conditions, EPA is shifting resources away from compliance enforcement of certain environmental obligations. While the Agency expects regulated entities to maintain compliance to the best of their abilities, as long as industry can demonstrate that certain violations resulted from the COVID-19 pandemic, there is a low likelihood that EPA will impose sanctions.

EPA’s existing policies on enforcement discretion—coupled with the ability for regulated entities to raise force majeure claims—would likely have sufficed to provide enforcement forbearance on a case-by-case basis to entities whose ability to comply with environmental laws due to COVID-19 was compromised.  In other words, EPA could have accomplished the same goals by relying on more narrow enforcement discretion announced under its 1984 and 1995 “no action” assurance policies, instead of taking the highly unusual and broad enforcement approach announced in the Temporary Policy.    

However, the more sweeping nature of the Temporary Policy provides greater certainty to regulated entities at the outset, including by offering a presumption of enforcement forbearance if its conditions are met.  And, although it is unprecedented in scope, the Temporary Policy is not the first time EPA has exercised expansive enforcement discretion.  For example, in 2005, in order to obtain data regarding Animal Feeding Operations (AFOs), EPA announced an industry-wide Voluntary Air Compliance Agreement with the agriculture sector. As part of that agreement, EPA agreed not to sue participating AFOs for past CAA, CERCLA, and other violations, provided that the AFOs paid nominal penalties and collected air quality data for EPA’s use.

Unlike the 2005 AFO agreement, the Temporary Policy does not excuse past violations that occurred prior to March 13, 2020.  In fact, EPA will continue enforcement of violations of environmental laws occurring prior to that date.

 IV. State Environmental Enforcement

The Temporary Policy does not provide a full reprieve from enforcement. In addition to the limitations noted above (especially the possibility of citizen suits), states, local governments, and tribes with independent authority may continue to take enforcement actions—or they may issue their own more limited versions of enforcement forbearance guidelines.

For example, the California Environmental Protection Agency has so far been silent on enforcement during COVID-19.  But the California State Water Resources Control Board (“Water Board”) published an alert on March 20, 2020, stating that compliance with its permits is still required and expected, notwithstanding any shelter-in-place orders.¹ The Water Board does, however, allow potential for compliance leniency where a requirement cannot be “timely met because it would be inconsistent with current governmental directives or guidelines related to COVID-19.”² The position taken by the Water Board is just one of many examples across the nation where environmental enforcement may be relaxed or less certain while the pandemic continues to spread.

Massachusetts has taken a middle-ground approach by extending expiration dates for certain permits in effect as of March 10, 2020, and suspending hearing and recording requirements associated with wetlands and other permitting processes.³  Notably, however, the Massachusetts Executive Order does not apply to enforcement actions—meaning enforcement will continue unless suspended by other executive or agency directive.

Other states have taken more expansive approaches.  For instance, the Texas Commission on Environmental Quality (“TCEQ”) announced that it would exercise administrative relief and enforcement discretion for various environmental reporting requirements during the COVID-19 response.⁴  Louisiana also has offered compliance leniency for regulated entities, by issuing a Declaration of Emergency and an Administrative Order that grants a 30-day extension for regulated entities to comply with specified CAA program deadlines, “insofar as a facility does not have appropriate personnel available due to COVID-19.”⁵

V. Forecasts

During the COVID-19 pandemic, we anticipate that EPA and states will issue additional guidance on environmental compliance and enforcement protocols.  For example, EPA is expected to issue specific guidance for CERCLA and RCRA compliance since those programs are expressly beyond the scope of the Temporary Policy. 

Such additional guidance will add to the bevy of directives and orders that already have been issued.  Other federal agencies that have recently announced suspension of enforcement during the COVID-19 pandemic include:

• US Pipeline and Hazardous Materials Safety Administration (regarding pipeline operator employee qualifications and training and training requirements for hazardous material carriers);
• US Food & Drug Administration (regarding animal examinations and onsite audits of food suppliers); and
• US Department of Transportation (regarding Federal Motor Carrier Safety Regulations).

Regulated entities should continue to closely monitor quickly evolving enforcement guidelines, and remain mindful that EPA’s Temporary Policy is not an express permission to violate environmental laws or avoid permit requirements. Even where environmental compliance and enforcement has been expressly relaxed, companies should be aware of the temporary—and unprecedented—nature of the guidelines, make reasonable efforts to comply, and carefully document any instances of unavoidable noncompliance. In the meantime, EPA also urges the regulated community to avail itself of EPA’s Audit Policy to self-disclose potential instances of noncompliance. 

WilmerHale’s Environmental team is available to answer developing questions and help companies navigate their compliance obligations during this crisis.