EPA Enforcement Actions Spotlight the Insanity of Clean Water Act Draft Rule

To understand just how gargantuan my concerns are about the EPA’s new Clean Water Act “waters of the US” draft rule, let’s consider two real life stories from the EPA’s files.  First up, Michael and Chantell Sackett.

The Sacketts bought a 2/3rds acre residential lot in Northern Idaho.  Between their lot and Priest Lake (which is surrounded by mountains) sat several lots already developed with houses.  The Sackett’s lot needed some pre-construction prep work, so in April and May of 2007, they filled in about ½ acre of their lot to level it out.

Months later, the EPA sent the Sacketts a written notice that the land they filled in included “waters of the US” (wetlands related to Priest Lake) and, as such, they were in violation of the Clean Water Act for failing to obtain a permit from the US Army Corps of Engineers before disturbing their land.  The notice came with a Compliance Order, which among other things included a Restoration Work Plan, drafted by the EPA, directing them as to how, and how quickly, the EPA required them to restore their land to its pre-construction condition.

Here’s where things get sticky. The Clean Water Act authorizes the EPA to impose a civil penalty against violators of up to $37,500 per day, from the day the land is first disturbed until the day it is restored.  The EPA believes the amount doubles, to a maximum of $75,000 per day, when the EPA prevails against a person who has been issued a compliance order and has failed to comply.  That’s $37,500 for violating a statute, and $37,500 for violating a compliance order.  So the EPA puts alleged violators in this squeeze: do what we say now, and pay no more than $37,500 per day, OR don’t do what we say, and risk having to pay us $75,000 per day once we decide to sue you in court for the violation.  And once the EPA issues a compliance order, the US Army Corps of Engineers won’t issue a permit for that land until the alleged violators complete the compliance order requirements.

With no good option, the Sacketts sued the EPA for violating their right to due process of law.  And fortunately, in March of 2012, the US Supreme Court (9-0!) ordered the EPA to allow alleged violators the right to challenge these compliance orders when they are issued.  Even the US Supreme Court had no hesitation calling this tactic “strongarming.”  In my opinion, the Supreme Court chastised the EPA for using unreasonably sharp, harsh tactics in their enforcement efforts.  But the EPA must have read a different opinion than I did, because they are still continuing those harsh tactics, so here’s the second, more recent story.

In 2011, Andy Johnson pulled a permit from the Wyoming State Engineer’s Office to construct a stock tank on his property in Southwestern Wyoming, by damming up Six Mile Creek as it ran across his property.  At this point Six Mile Creek flowed two feet wide and about six inches deep.  Not. Navigable.  He dug a hole, lined the stock tank with large rocks and put a drain at the bottom.  While he built the stock tank, the water flowed through the drain.  When he finished, he closed the valve on the drain.  Now water flows out of the stock tank like a spillway.

In October of 2012, the US Army Corps of Engineers inspected the stock tank and concluded it was a pond instead of a stock tank, and concluded that this portion of Six Mile Creek contained “waters of the US”…into which Andy discharged fill material without a permit.  Six Mile Creek is a tributary of Blacks Fork Creek, which is a tributary of Green River, which is clearly navigable.  But water has to successfully travel almost 100 miles to get from six-inch-deep Six Mile Creek to the navigable Green River.  Undaunted, the EPA sent Andy one of their infamous compliance orders and assessments of $75,000 per day until Andy deconstructs his properly-permitted-by-Wyoming stock tank/pond.

The “which is it, a pond or a stock tank” is critical to the EPA’s success here, because stock tanks are generally exempt from the EPA’s Clean Water Act jurisdiction.  Ponds aren’t.

Now, if these true stories stand as examples of how EPA intends to operate after completing its current “waters of the US” rulemaking which will greatly expand the lands subject to its jurisdiction under the Clean Water Act, and I believe they do, these stories should give pause to each and every landowner throughout the country.

A possible sanction of $37,500 per day, for every day the condition of the land is in violation, in and of itself fiercely preaches against adopting a rule that is the least bit vague or ambiguous.  It argues against adopting a rule that is illogical to the reasonable person.  When that possible sanction doubles to $75,000 per day, and when that possible sanction also includes the cost of restoring the land to its pre-disturbance condition before being able to even attempt to obtain a permit, well, let me state it positively.  Such a rule would be generally considered insane by reasonable persons.  No reasonable person would willingly submit themselves to such a rule.

We can do better than this new EPA draft rule proposal.  I believe it is possible to design and write a rule that has a much better probability of bringing about on Earth the Heavenly goals listed in the Clean Water Act.  You probably have some good ideas too.  But this rule can’t improve without concerned citizens and businesses getting involved in the rulemaking process.  Please take the time and energy to write and submit written comments.  For information about filing comments, please contact me at mark@texasenvironmentallaw.com.

TCEQ Enforcement: Know What You’re Up Against

When the Texas Commission on Environmental Quality (TCEQ) contacts you about a possible infraction that may lead to a Notice of Violation or Notice of Enforcement, it helps to realize what you are up against. The TCEQ can be a formidable opponent. Their headquarters isn’t comprised of merely one, or just a part of one, office building. They have a compound of at least 6 different buildings on the North side of Austin. In addition to that, they have 16 regional offices all around the state.

Designing and implementing responses to a Notice of Violation, Notice of Enforcement, remediation process, or any other agency communication, is a blend of art and science. The TCEQ is a political body, so science is affected by political concerns, and agency interpretations can change with policy. What really matters to the agency isn’t always obvious. The “wrong” thing can be unintentionally said, aggravating known problems and sometimes creating issues when there were none. To paraphrase Miranda rights, what you say can and often is used against you by the TCEQ. So every communication counts.

If the TCEQ brings an enforcement action against you or your business, there are two general ways to respond. One, prove the TCEQ is wrong. Two, if the TCEQ is right, bring your operations into compliance with the state’s rules and regulations, and negotiate the smallest fine possible.

It is not the TCEQ’s job to tell you how to come into compliance with state environmental requirements.  And it is not the TCEQ’s job to try to identify the least costly option for compliance.  The agency just wants compliance.

One of the first documents issued by the TCEQ if it even thinks it has found a violation is a “Notice of Violation” (NOV) letter. This letter provides notice of the statute or regulation allegedly violated. You should respond to an NOV letter in writing, and by a certain deadline. The NOV letter will include your deadline and provide other contact information.

The TCEQ first attempts to resolve cases by agreement. If an agreement with the TCEQ cannot be reached in the NOV stage, your case will proceed to formal enforcement. After the NOV stage, the TCEQ will send you a “notice of enforcement” (“NOE”) letter. Again, you should respond, your response should be in writing, and it should be made by the deadline in the NOE letter.

In the NOV and NOE stages of the process, the TCEQ basically sits as prosecutor, alleging that you messed with Texas, and also as judge to determine whether or not you DID illegally mess with Texas, at least initially. The jeopardy you are in should be obvious. If it decides you messed up, it can fine you. The TCEQ releases on a regular basis the number of businesses it fines and the amount of those fines. On the TCEQ’s home page it usually has a headline like “TCEQ Approves Fines Totaling…” and these can run around $1 million every 2 weeks.

If you are still unable to resolve your case in the NOE process, the TCEQ will file a petition entitled an “Executive Director’s Preliminary Report and Petition” (EDPRP). If you are served with an EDPRP, you have 20 days to file a response or risk having the TCEQ issue a default order against you. If you file an answer, the TCEQ again attempts to reach an agreement on the proposed order.

If you cannot reach an agreement, the case will likely become a “contested case” and be referred to the State Office of Administrative Hearings (SOAH). You may want to request a contested case hearing. SOAH is a neutral party, and it will appoint an Administrative Law Judge (ALJ) to preside over the EDPRP. There are no juries in contested case hearings, and the TCEQ is not the judge; it is “only” the prosecutor, as if that weren’t enough. It puts on its case and attempts to persuade the ALJ that it should accept and approve the EDPRP. The alleged violator attempts to persuade the ALJ that it should not accept or approve the EDPRP, and this can involve proposing a specific alternative solution.

After the evidentiary hearing, the ALJ will make a decision, and that decision will be set on the agenda for an upcoming meeting of the TCEQ Commissioners.  There are 3 commissioners.  They vote on whether to accept or change the ALJ’s proposed decision.  If at least 2 vote yes, the decision becomes final.  If you are unhappy with that decision, you may appeal the decision to civil district court in Travis County.  But you don’t get to start all over.  To overturn the TCEQ’s decision, you are limited to addressing only certain alleged defects in the process, or that the decision lacks reasonable factual support in the record.  This is very hard standard to meet.  Basically, the courts will affirm the TCEQ decision if it finds any reasonable support in the record.

So it is critical to “win”, or lose the least, within the processes of the TCEQ.  Always remember the state has considerable resources lined up in its corner.  In fiscal 2013 the TCEQ had approximately 2,760 employees spread among its 16 regional offices, and a $342 million operating budget for the 2013 fiscal year (including both baseline and contingency appropriations).  In my opinion the best way to defend an enforcement is to get professional help immediately, and tell your lawyer about the impending deadlines.  Remember-use your own lawyer and environmental consultant to identify and select the lesser expensive way to comply.

I have created a diagram of the TCEQ enforcement process so it is easier to understand where you are in the enforcement process.  This is intended as a management tool to help you make informed business decisions.  To obtain a copy, please call or Email my office.

Travails of CERCLA: How a $600 Purchase Turned into a $70,000 Cost

This true story reads more like a parable, since there wasn’t so much on the line.  But understand that the CERCLA remedation required in this case cost just over 11,600% MORE than the cost of the asset.  And that truth is yet again stranger than fiction.

In 2006, a small screen print shop owner advertised a semi-trailer for sale on Craigslist.  So innocuous an ad, was it.  For $900, a buyer could purchase the trailer by itself.   But for the truly bargain conscious, the trailer could be purchased “as is” for $300 less.  “As-is” turned out to be a trailer filled with various containers of screen printing materials (some of which were hazardous materials).  Surely you are not surprised that someone bought the trailer “as-is”.

The purchaser then went to work emptying the contents of the trailer onto what is now known as the Cherokee Print Shop Wastes Superfund Site in Denver, Colorado.   The EPA incurred in excess of $70,000 to remediate the site contamination from the now empty trailer.  That’s one hundred and sixteen times the $600 cost of the trailer and its precious cargo.

The EPA filed an eforcement proceeding against the print shop owner to recover its response costs.  But it ultimately entered into an ability to pay consent order which required the print shop owner to contribute $600 (the amount received for the trailer) to the $70,000 site cleanup.

Environmental laws don’t just apply to land.  They can apply to all sorts of moveable containers.  The biggest moral to this story is simply “Manage Your Business’s Wastes Until Their Ultimate Disposal.”  Trust no one but knowledgeable professionals to do this for you.  Or not, and take the risk of paying exponentially more than you ever thought you would save.