00/00/86
Clean Air Act Compliance / Enforcement Guidance Manual -- Chapter
Ten
Chapter Contents Page.
1 Introduction 10-1.
2 Consent Decree Tracking 10-3.
3 Basic Considerations Underlying Choice of Responses 10-5.
Force Majeure and De Minimis Situations 10-5.
Situations Where Enforcement Is Appropriate 10-6.
4 Types of Enforcement Responses 10-11.
Increased Monitoring 10-11.
Amendment of the Court Order 10-12.
Stipulated Penalties 10-12.
Motions To Enforce the Court Order 10-13.
Contempt of Court Motions 10-14.
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CHAPTER TEN
1 Introduction
In Chapter Eight, we discussed civil judicial enforcement of the Clean Air
Act undertaken pursuant to Sections 113(b), 167, and 303. We noted that the
vast majority of cases are settled before trial and the settlement is
embodied usually in an order of the court called a consent decree. In cases
where the parties are not able to negotiate a settlement, the case concludes
with an order of the court often written by the prevailing party. This
chapter briefly explains how the Agency tracks compliance with consent
decrees. This chapter also discusses the variety of responses available to
remedy instances of noncompliance with court orders.
Because the terms of court orders obviously depend upon the nature of the
underlying violation and its remedy, Chapter Eight noted that a truly
"model" court order is something of an academic ideal. Enforcement of such
orders presents an analogous problem because of the wide variety of
potential violations, the variety of circumstances in which they occur, and
the variety of responses available to remedy the violation. Therefore, this
chapter does not provide specific response formulas, but rather sets forth
basic considerations in the enforcement response decisionmaking process.
The chapter supplements "Guidelines on Enforcement of Federal District Court
Order in Environmental Cases" ( see General Policy Compendium ).
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CHAPTER TEN
2 Consent Decree Tracking
The National Enforcement Investigation Center ( NEIC ) in Denver recently
established a consent decree tracking system that utilizes a central
computer and data base updated periodically by information compiled by
Regional offices. The tracking system is described in detail in guidance
issued on December 20, 1983 ( see General Policy Compendium, GM-19 ).
Briefly, the tracking system includes information on all consent decrees
that have been entered by either a federal or a state court to which EPA is
a party. The system does not track state consent decrees to which EPA is
not a party. Federal facility compliance agreements, which are always
resolved out of court, are also not tracked.
NEIC maintains a repository of all consent decrees and an automated
management information system that stores summaries of each decree. EPA
Regional and Headquarters offices are linked via computer to the library.
As EPA inspectors obtain information on progress or delay in meeting consent
decree obligations, the information is compiled for the Regional
Administrator. At the beginning of each quarter, the Regional Administrator
receives from the Headquarters Office of Enforcement and Compliance
Monitoring ( OECM ) a print-out that contains a list of all consent decree
milestones that ripened during the preceding quarter. The Regional
Administrator then must respond to OECM within 10 working days with the
following information:
o Whether the milestone was achieved;
o Whether the milestone was not achieved;
o Whether the milestone was renegotiated; and
o What response to noncompliance the Region intends to pursue.
OECM also transmits the information to NEIC, which updates the library.
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CHAPTER TEN
3 Basic Considerations Underlying Choice of Responses
A wide range of possible responses to consent decree violations is available
to EPA ranging from basically taking no action to petitioning the court to
order the defendant to show cause why he should not be held in contempt of
court. The most common mechanisms for enforcement of court orders are
stipulated penalties, bond forfeiture, and motions to the court to enforce
its order.
Many of the same considerations underlying the decision to enforce or not to
enforce regulations are also involved in the decision to enforce or not to
enforce court orders, with two significant additional elements. First, EPA
has invested considerable resources in developing the action and justifiably
expects that the defendant will abide by the order and achieve timely
compliance. Second, EPA places a very high priority on enforcement of court
orders in order to enable the Agency to maintain its credibility with the
courts, the public, and the regulated community, and to achieve the desired
environmental objective.
Force Majeure and De Minimis Situations
Some instances of noncompliance are excused by the terms of the order.
For example, a flood that halts a facility's production operations is likely
to interrupt a compliance schedule, too. Usually, this type of situation is
covered by a force majeure clause, which operates to excuse noncompliance
for the period directly attributable to the "act of God". The existence of
a force majeure event does not by itself excuse noncompliance. Instead, the
defendant must follow the procedures established by the order to invoke the
relief.
Sometimes a defendant's failure to comply with the consent decree does not
fall within the limited situations contemplated by the force majeure clause,
but may be otherwise trivial, insignificant, or inconsequential. Prudent
exercise of prosecutorial discretion may call for no enforcement response to
such de minimis situations.
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Situations Where Enforcement Is Appropriate
Most cases of court order violation are appropriate for enforcement
follow-up. The appropriate response to a particular instance of
noncompliance depends on several interrelated factors that also affect the
establishment of enforcement priorities.
The following factors, at a minimum, should be weighed in choosing which
enforcement response is appropriate in a given case:
o The gravity of the violation in terms of its effect on air quality;
o The gravity of the violation in terms of its effect on the remaining
obligations under the decree ( e.g., the effect of a schedule
violation on subsequent increments of progress and the final
compliance date );
o The degree of the defendant's culpability in the violation;
o The presence or absence of mitigating factors;
o The likelihood that EPA's failure to act will influence the behavior
of similar defendants in similar circumstances;
o The economic benefit the defendant is realizing from continued
noncompliance; and
o The likelihood that the proposed enforcement response will accomplish
the goal of compliance.
Environmental Impact
Both the degree and the duration of emission limitation violations are
important factors. Occasional exceedances of opacity limits may call for
increased monitoring of operation and maintenance practices, while frequent
and egregious violations may indicate that the defendant is engaged in
contumacious behavior. Violations in nonattainment areas are of great
concern because of the contribution of the violation to air that is
unhealthful to humans. That is not to say that violations of court orders
in attainment or unclassified areas do not warrant follow-up enforcement,
but only that human health problems are usually of greater concern.
Violations that are causing an exceedance of an increment in a PSD area or
the emission of hazardous air pollutants are examples of "clean air area"
violations where prompt enforcement may be clearly warranted.
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Schedules
When the civil action complains of a violation of emission standards, the
court order will require final compliance with the standard. In many cases,
final compliance requires the operation of air pollution control equipment
that must be procured, installed, brought on-line, calibrated, and finally
operated and maintained. Each of these steps requires time, and the purpose
of schedules is to establish increments of progress that assure that each
step toward compliance is taken in a timely, expeditious, and enforceable
fashion.
Typically, a construction schedule has a due date for each of the following
increments:
o Submit engineering plans;
o Place purchase order for control equipment;
o Commence construction of control equipment;
o Complete construction of control equipment;
o Start-up control equipment; and
o Demonstrate compliance.
Although each increment is an important part of the schedule, timely
final compliance is the ultimate goal. When presented with evidence of a
schedule violation, usually the first question asked is "Does the delay
affect the next incremental date?". If the delay jeopardizes the final
compliance date, prompt enforcement action is particularly important to
prevent the schedule from becoming a fiction.
Notwithstanding the question of whether or not the final date may be
jeopardized, evidence that the source did not place the purchase order for
the equipment on time usually is cause for great concern. Typically, a
large down payment is required by a vendor of air pollution control
equipment upon a purchase order by the source. If the source refuses to
take delivery, the down payment is forfeited, and the source is liable to
the vendor for breach of contract. Given such strong economic incentives
for a source to abide by the purchase agreement, EPA considers the placement
of the purchase order as one barometer of the source's intention to comply
with the rest of the schedule. The purchase order is a commitment of
capital, and once the capital commitment has been made, EPA's experience
indicates that the equipment probably will be installed and operated.
Evidence that commencement of construction has been delayed beyond the due
date should be a cause for concern. It may indicate that a purchase order
that had been placed on time may have been subsequently cancelled. Failure
to commence construction on time may also indicate that the final compliance
date is in jeopardy. In any event, when construction is not proceeding on
schedule, EPA should immediately initiate an investigation of the reasons
for the delay. It is possible that the vendor of the control equipment has
failed to deliver on time. This situation may indicate that the defendant
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inadequately polices his contracts, or it may indicate an intention not to
comply. The failure to commence construction may indicate
that since the court order was entered the defendant may be reviewing
compliance plans. The defendant may be planning to shut down the violating
source, or he may be planning to employ the control equipment at another
site. In any event, the failure to commence construction in a timely
fashion should be immediately addressed.
Since compliance with the applicable emission limitation is typically the
ultimate goal of any decree, timely compliance by the source with the
compliance demonstration requirement is of paramount importance.
Purchasing, installing, and operating equipment is simply not acceptable if
the applicable emission standard is not achieved.
In cases involving chemical reformulation as the means of obtaining
compliance ( as opposed to installation of control equipment ), the
"increments" of a schedule more closely resemble separate final compliance
dates. For example, a reformulation schedule may call for 25 percent of the
production lines to comply with applicable requirements by "X" date, with
another 25 percent due by "Y" date, and the balance due on "Z" date.
If the date for final compliance passes and the compliance demonstration is
either not conducted or indicates a failure to achieve the standard, EPA
must survey its array of enforcement options and pursue the best course
available to obtain compliance. If the underlying violation was cause
enough to require judicial resolution, it follows that the failure to comply
with that resolution should be of at least equal concern.
Culpability of Defendant
This element considers whether or not the defendant is exhibiting "good
faith" in attempting to meet the court-ordered requirements. If the
defendant is proceeding in bad faith, a strong enforcement response is
probably appropriate even for relatively minor violations. Such a response
will communicate that the Agency is monitoring progress and intends to
ensure final compliance.
Whether or not good faith is present can be determined from a number of
circumstances. For example, a defendant who promptly notifies EPA of
problems with a vendor's delivery agreement is not likely to be one who is
trying to mislead EPA into believing that the decree is being smoothly
implemented. Similarly, the defendant who requests that EPA observe the
operation of new control equipment is likely to be one who will pay
attention to whether the equipment is being operated properly on a
continuous basis.
A defendant exhibiting bad faith is one who fails to place purchase orders,
cancels purchase orders, does not train its employees in the proper
operation of control equipment, etc. Operation and maintenance practices
are a good barometer of a defendant's good faith because such problems are
usually easily and inexpensively remedied. For example, a defendant who
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does not regularly clean the door jambs on a coke oven battery ( carbon
build-up on jambs causes extensive emission leaks ) is likely to be the
defendant who will not try very hard to comply with other requirements.
Finally, the defendant's history of noncompliance can sometimes indicate the
presence of good or bad faith. The defendant who remained out of compliance
for years after receiving NOVs or who resisted attempts at a negotiated
settlement is the defendant whose excuses for decree violations are likely
to be most questionable.
Mitigating Factors
This element considers whether there are any facts and circumstances to
explain the reason for noncompliance with the decree that were not provided
for in the decree. Typically, noncompliance with the decree is excused only
if the force majeure or another specially drafted provision applies.
Occasionally, however, facts and circumstances associated with a decree
violation arise that EPA may consider in choosing an enforcement response.
Such facts and circumstances would not excuse the noncompliance, but may
cause EPA to treat the noncompliance as a lower priority than might
otherwise be called for, or may justify a modification to the court order.
Examples of such facts and circumstances are not simple to list. Indeed, to
the extent that any such facts and circumstances can be anticipated, the
decree should expressly provide for them. Realistically, however, the
parties to the decree will not anticipate everything.
For example, the sole vendor of the required control equipment may go out of
business unexpectedly. A union with a "no strike" contract may violate the
contract. An economic downturn may cause a prolonged shutdown of a facility
with the prospect of restart only a dim possibility. A technology that had
been successfully applied at one facility may simply fail to achieve the
same success at another facility notwithstanding all good faith attempts to
design, modify, and operate the equipment in a manner consistent with good
pollution control practices.
For the sake of emphasis, understand that such facts and circumstances do
not excuse noncompliance, but should only be considered in determining
whether the violation may be viewed as de minimis in nature.
The Deterrence Factor
Because investment in pollution control equipment is usually a
"non-productive" investment ( i.e., there is no income derived from the
investment ), the company that does not make such investments is at least
theoretically at a competitive advantage over the company that spends money
on controls. Thus, members of each industry generally attempt to spend no
more on pollution control than their competitors do. Understandably,
sources can be expected to attempt to avoid any expenses that the
competition avoids, and it has been EPA's experience that competitors are
rather knowledgeable about each other's pollution control efforts and
problems.
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For these reasons, it is important to look beyond the specific violation of
the court order and to attempt to predict whether a particular response is
likely to prevent the violator's competition from getting ideas of its own.
Of course, this is a factor in determining whether to initiate a civil
judicial action in the first place, but it is perhaps even more important to
consider at the court order enforcement stage. This is true because a
violator who believes that EPA will not enforce the court order is likely to
consider the negotiation process as just another way to delay pollution
control expenses.
Economic Benefit
Removal of the economic benefit associated with continuing noncompliance
should be a goal second only to final compliance.
One of the defendant's obligations under most court orders is the payment of
a civil penalty. As discussed in the Civil Penalty Policy ( GM-21 ), the
civil penalty is calculated to remove the economic benefit the defendant
derived from noncompliance and to create some deterrence to future
noncompliance. The penalty period is measured from the date of the first
provable violation to the date of anticipated compliance. If the defendant
delays compliance with the terms of a court order, the continuing economic
benefit renders the agreed-upon civil penalty figure as representative of
only a portion of the period of noncompliance. As the period of
noncompliance continues, the economic benefit increases and the benefit of
noncompliance becomes even more attractive to the defendant. Thus,
recouping this additional economic benefit is just as important as
collecting the original civil penalty amount. For this reason, the
stipulated penalty provisions of the order should be set at levels that
would remove the economic incentives for noncompliance.
Goal-Oriented Action
A final factor to weigh is the likelihood that the proposed action will
achieve the goal of compliance. For example, a demand for the payment of
stipulated penalties is not likely to force compliance by the violator who
views the stipulated penalties as simply the "price of polluting". That
polluter will just pay and continue the noncomplying behavior. Those cases
may call for the contempt of court petition.
Conversely, a contempt of court petition is likely to be overkill in
response to a failure to submit a report in a timely fashion. In such case,
a stipulated penalty and a motion to enforce may be sufficient to ensure
timely submittal of subsequent reports.
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CHAPTER TEN
4 Types of Enforcement Responses
EPA responses to court order violations should be commensurate with the
seriousness of the violation as measured by the combined weight of the
factors set forth in the previous section. Violations that are not cause
for great concern may be dealt with by increased monitoring or by a
bilateral revision ( with court approval ) to the order. Serious violations
may be grounds for collection of hefty stipulated penalties, a motion to
enforce the order, or a contempt of court petition. Whatever response is
appropriate, it is critically important that the response be undertaken
promptly to prevent the order from becoming a fiction. The order should
always reflect the realistic expectations of the parties.
Increased Monitoring
An appropriate response to relatively minor decree violations may be to
increase monitoring of the source. This can be accomplished by an on-site
inspection or issuing Section 114 requests for information. Although these
techniques may not be viewed as "enforcement action" in the traditional
sense of the term, the increased visibility of the Agency that accompanies
these mild responses may serve to prompt rapid remedial work and to deter
future noncompliance.
The monitoring response may be particularly appropriate to remedy court
order violations associated with operation and maintenance requirements. In
contrast to a one-time obligation, such as a placement of a purchase order,
operation and maintenance ( O/M ) requirements usually entail daily
activity.
Scheduled inspections may not turn up evidence of daily operation and
maintenance problems because defendants often take measures for scheduled
inspections that are not employed as a matter of course. An unannounced
inspection pursuant to a warrant, however, is not only likely to be
representative of actual conditions, but it also serves to deter the
formation of the opinion that O/M compliance provisions apply only on "show"
inspection days. A Section 114 letter requiring records of O/M practices
for the past month ( or quarter ) may also provide an accurate picture of
day-to-day operations, as well as serving to deter future noncompliance.
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Amendment of the Court Order
In some cases, EPA may agree to an amendment to a court order where the
source has not achieved compliance or is behind on a schedule. Sources
frequently request EPA to agree to modify orders in order to gain time or to
obtain final compliance obligations more easily or less expensively. In the
vast majority of cases, EPA strongly resists such efforts, but in rare cases
where the defendant convincingly demonstrates that it has made
extra-ordinary efforts to comply, an amendment to the order to reflect the
actual expectations of the parties may be appropriate.
Stipulated Penalties
If the court order provides for substantial stipulated penalties, the threat
that EPA will demand and collect them often is enough incentive for the
defendant to comply. Occasionally, however, a recalcitrant defendant must
be prodded into compliance by more than simply the threat of penalty.
The procedure for the assessment, demand, and collection of stipulated
penalties is usually provided for in the court order. Typically, the order
provides that the government will issue a demand letter ( certified mail,
return receipt requested ) to the defendant. The letter instructs the
defendant to make a check payable to the "United States Treasurer" for the
full amount. The letter also instructs that the check is to be delivered to
the United States Attorney for the district in which the decree was entered
or to the Department of Justice, Land and Natural Resources Division, in
Washington, D.C. The letter should recite the applicable provision
authorizing the demand, the applicable provision that has been violated, and
the time period that the demand covers.
Stipulated penalties should not be demanded for all violations that are
detected. Indeed, most orders will not provide for stipulated penalties for
all violations. But, even where a stipulated penalty might be applicable,
the issuance of a demand letter is not an automatic response. For example,
some court orders provide that any stipulated penalties accrued for delay in
scheduled increments of progress are to be forgiven if final compliance is
achieved on schedule. Thus, if it appears that slippage in the schedule
will not jeopardize timely final compliance, and there is no other apparent
reason to suspect that the delay is indicative of a pattern of
noncompliance, then the demand for stipulated penalties may not be fruitful.
Likewise, collection of stipulated penalties may not be appropriate after
final compliance is achieved where only a small amount of money, reflecting
minor deviations from the schedule, is involved.
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Motions To Enforce the Consent Decree
When noncompliance with the court order is of a serious nature and increased
monitoring or the demand for stipulated penalties is not sufficient to force
compliance, the Agency may wish to involve the court again. In a Motion To
Enforce the Judgment, the government is requesting that the court ensure
that its order is obeyed. The motion asserts that the defendant has failed
to comply with the provisions relating to the compliance schedule or
operation and maintenance requirements, the payment of stipulated penalties,
or other requirements, and that no provision of the court order operates to
excuse noncompliance. The motion may also request that the court compel the
payment of accrued and anticipated stipulated penalties in cases where a
demand letter has failed to elicit payment.
The government's procedures for a motion to enforce the court order
are similar to the underlying enforcement action in the sense that the
Regional Office prepares a litigation report and the same review procedures
at Headquarters and at the Department of Justice are followed. In addition,
the standard of proof for a motion to enforce the court order is the same as
for the underlying complaint ( i.e., the government must prove each element
of the allegation "by a preponderance of the evidence" ).
The defendant's answer to the motion is required within 20 days. The answer
may admit or deny the allegations, or admit the allegation with some
explanation or defense. For example, the defendant may admit the violation,
but argue that the force majeure clause excuses the noncompliance.
The defendant may also attempt to invoke Rule 60 of the Federal Rules of
Civil Procedure that provides for relief from judgments. Rule 60 provides
that a court may relieve a party from a final judgment, order, or proceeding
for any of the following reasons:
o Clerical mistakes;
o Mistake, inadvertence, surprise, or excusable neglect;
o Newly discovered evidence;
o Fraud, misrepresentation, or other misconduct of an adverse party;
o The judgment is void;
o The judgment has been satisfied, released, discharged, or a prior
judgment upon which it is based has been reversed or otherwise
vacated, or it is no longer equitable that the judgment should have
prospective application; and
o Any other reason justifying relief from the operation of the
judgment.
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Contempt of Court Motions
For the most serious violations of a consent decree, the government may file
a motion with the court aimed at securing a ruling that the defendant's
noncompliance is a contempt of the court. A contempt motion, technically
styled as a Motion To Show Cause Why Defendant Should Not Be Held in
Contempt, requests the court to exercise its inherent authority to ensure
that its orders are obeyed. A contempt motion is usually accompanied by or
is a part of a Motion To Enforce the Decree.
The chief benefit of a contempt action is to permit the government to obtain
relief beyond the four corners of the court order, e.g., additional
injunctive relief or penalties for violations not covered by stipulated
penalties.
The defendant must respond to a contempt motion within 20 days. The
defendant can be anticipated to file a motion under Rule 60 of the Federal
Rules of Civil Procedure for relief from the consent decree. The defendant
may also raise equitable defenses such as "estoppel," "laches," and "unclean
hands" in an attempt to place responsibility for noncompliance on the
government. For example, one defendant argued ( unsuccessfully ) that a
year-plus delay in installing controls was due to EPA's delay in responding
to applications for alternative emission control plans, even though the
decree expressly placed the risk associated with delay squarely on the
defendant's shoulders.
Other defenses that might be anticipated are claims of financial inability,
failure of EPA to respond to reasonable requests for modification of the
decree, failure of control techniques to accomplish required emission
reductions despite all good faith efforts to operate the equipment, EPA
acquiescence in a control technique that subsequently failed, interference
with compliance efforts by third parties ( such as a labor union or
equipment vendor ), and force majeure. EPA should oppose any such
arguments.
Various forms of relief are available to EPA if the court finds the
defendant in contempt. The court is likely to order a new schedule based on
EPA estimates of expeditious compliance. The court will also order the
payment of stipulated penalties already accrued, periodic payments of
stipulated penalties ( sometimes into an escrow account ) prospectively
until compliance is achieved, and contempt penalties in addition to the
stipulated penalties.
The court may also find, either upon motion by the government under 18
U.S.C. Section 401(3) or sua sponte ( i.e., on its own without motion by
EPA ), that the defendant's noncompliance was a willful and intentional
ignoring of the court's order amounting to criminal contempt. In such a
case, the court may order a jail sentence and the payment of monetary
penalties aimed at punishing the defendant. The defendant's behavior must
be willful and intentional "beyond a reasonable doubt" to constitute
criminal behavior.
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When drafting the motion for contempt, it is critical that it clearly states
whether it is for civil or criminal contempt. If the motion is not
carefully crafted, the judge may treat a civil motion as a criminal motion
thereby substantially increasing the government's burden of proof. The
government should request a hearing on the motion and the allegations should
be supported with affidavits and other appropriate documentation. In
addition, the government should submit an order for the judge to sign and a
memorandum of law in support of the ruling. Those steps should help to
ensure that the judge is properly informed of EPA's position.
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