Insight into theGovernment’s Perspective

Consideration of Government Enforcement Factors

Nancy KaplanOf CounselBeveridge & Diamond, P.C.Wellesley, MA

October 19, 2015

What is the Role of the Government General Counsel When the Agency Becomes Aware of an Emergency?

• Government GC is looking out for her agency’s best interests, just as a private company’s GC is looking out for his company’s best interests.

• First Priority- Public Safety and Environmental Protection– GC must work with the Commissioner, Communications Director and HR Director

• Second Priority – Once First Priority is addressed…

Is there Culpability?– Example, should gov’t agency have been aware of the potential for a spill by increased

inspections, greater scrutiny of reports, etc.?– Example, was company negligent in its handling of hazardous waste? 2

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***COMPLIANCE AND DETERRENCE***

• Proper balance between under-regulating and over-regulating

• Good working relationship with regulated community

• Compliance rates reverberate in larger circles and impact broader decisions (i.e., legislative votes on budget allocation for gov’t agencies; environmental watch dog groups initiating lawsuits, etc.)

Gov’t Goals of Enforcement

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Gov’t Fact Finding for Enforcement(Requests for Documents, Inspections, Subpoenas,

Search Warrants)

• Develop a Plan ahead for the unannounced, unexpected inspection• Possible opportunity to narrow the scope• Comply with deadlines• Cooperate!!

ALL play into potential penalty mitigation opportunities

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Government Enforcement Response

• Criminal – coordinated and referred to gov’t partner (OAG,DA,DOJ)

• Civil - coordinated and referred to gov’t partner (OAG,DOJ)

• Administrative - handled ‘in-house’ at state agency/US EPA

GOAL = PROPORTIONAL PUNISHMENT

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Considerations of What Types of Enforcement to Initiate

•Nature of Violation

•Amount of Penalty

•Remedy Needed

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US EPA and MassDEP Civil Administrative Enforcement

(Bread and Butter of Enforcement)

− Selection of Appropriate Enforcement Response

– Notice of Non Compliance/Violation– Administrative Order (with/without penalty)– Negotiated Administrative Settlement

(with/without Penalty)

• Goal=Promote Consistency7

US EPA and MassDEP Administrative Penalty Assessment

• Starts with a Preliminary Deterrence Figure

• Adjustment Factors for Penalty include the Degree of:

– Willfulness and/or Negligence– History/Pattern of Non Compliance– Gravity of Violation– Economic Benefit Derived– Knowingly Making False, Misleading, Incomplete Statements– Ability to Pay– Cooperation/Lack of Cooperation– Other Unique Factors

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Penalty Mitigation OpportunitiesGOV’T DISCRETION

• Audit Policies• Self Policing/Self Disclosure• Supplemental Environmental Projects (SEPs)(An environmentally beneficial project that a defendant in an enforcement settlement [admin or civil] agrees to undertake, but for which it is otherwise not legally bound to perform.) Examples of SEP categories:

• Public Health• Pollution Prevention• Pollution Reduction• Environmental Restoration & Protection• Assessment & Audits• Environmental Compliance Promotion• Emergency Planning & Preparedness.

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NOTICE OF ENFORCEMENT CONFERENCE

What is it? *Opportunity to settle (in administrative forum)

*Opportunity to engage in dialogue

How to Prepare ?– know your facts – bring technical expertise – bring financial info (if claiming inability to pay)– bring a decision maker

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ENFORCEMENT TRENDS

• in Gov’t resources

• in industry trends and stakeholder expectations

for disclosure

• I in gov’t self reporting policies and self certifications “THE HONOR

SYSTEM”

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Consequences for False Statements/Certifications

Administrative/Civil Penalties• $37,500 / day

Criminal• $250K/person• $500K/companies• Up to 2 years in prison

An Ounce of Prevention…*Think Ahead – Have as many SOG/SOP in place and develop the right team

*Establish Relationships with Regulators – Establish credibility -Permit writers, inspectors and attorneys all talk to each other within agencies and between agencies

*Communication – Include the Director of Communications and control the message!

*Self-Disclosure & Voluntary Reporting – Have a plan in place for the outcome and document the process for gathering information!

*Know the Requirements for Penalty Mitigation and Opportunity for a SEP

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Questions?

Nancy KaplanOf Counsel

nkaplan@bdlaw.com(781) 416-5755

Beveridge & Diamond, P.C.

15 Walnut Street, Wellesley, MA

Thank you!

This presentation is not intended as, nor is it a substitute for, legal advice. You should consult with legal counsel for advice specific to your circumstances. This presentation may be considered lawyer advertising under applicable laws regarding electronic communications.

Environmental,Land Use, Climate Change