October 6, 2023
When private interests find themselves on the wrong end of an administrative enforcement action, they frequently misjudge the true financial cost. Yes, there’s the cost of hiring attorneys and possibly consultants and technical experts. But too often, people grossly underestimate the potential penalties that the government seeks against people who delayed, ignored, or fought against compliance and enforcement warnings. It’s not just the cost of compliance. The proposed penalties reflect multiple policy factors and real-world costs as well. So, what are they?
Agencies Have Their Mission and Authority
The first principle to keep in mind is that government agencies, whether federal, state, or local, each have their unique mission, authority, and jurisdiction. These agencies aren't just focused on you; they're responsible for promoting specific behaviors across entire communities. They aim to ensure that everyone complies with laws and regulations designed to protect the environment.
Government agencies do not want businesses to view violating the law as merely a cost of doing business. Their objective is to discourage cutting corners and prioritizing profit or simplicity over legal compliance. Therefore, penalties are a means to ensure accountability and fairness across the board. This is true even when there’s no environmental harm resulting from an error or omission. Agencies see compliance failures as a harm by themselves. And courts have agreed.
2. Guidelines and Standards Shape Penalties
Government agencies often follow specific guidelines and standards when issuing penalties. Some agencies, like the United States Environmental Protection Agency (EPA), California's State Water Resources Control Board and Regional Water Boards, or the Department of Toxic Substances Control (DTSC) have their penalty guidelines publicly available online. These documents outline areas where agencies have discretion and where they are obligated to impose penalties. But “discretion” isn’t always clear. Even where agencies seemingly have the ability to impose lesser penalties or score violations lower, they often argue that overall policy and precedential concerns limit their authority.
Even for agencies without clear-cut guidelines, they must act in an equitable manner. This means they cannot favor one party over another based on personal preferences. So, even if someone believes that their situation warrants lower penalties, don’t be surprised if an agency raises concerns that it will appear to be applying its rules inconsistently. Consistency is crucial to prevent the appearance of arbitrary decision-making, which could lead to legal challenges.
3. Environmental Justice Matters
Especially in regions like Southern California or the Central Valley, environmental justice is a significant consideration. The history of their economic activities, from manufacturing to agriculture to aerospace and the oil industry, has left certain communities disproportionately impacted by pollution. Government agencies take into account these historical and current disparities when assessing penalties. If a business operates in or near an area designated for environmental justice, it may affect how the agency perceives your actions and the penalties the business faces.
Anyone receiving an order, a draft order, or a letter demanding action by a government agency should bear these overall policy concerns in mind before deciding to simply wait before addressing them. Consultants and lawyers are usually in a better position to minimize costs before a matter proceeds to enforcement. Because once administrative enforcement has begun, agencies will focus less on the specific situation and worry more about the overall compliance and enforcement program.