Reports of the Death of the SEP Have Not Been Greatly Exaggerated

Posted on July 21, 2017 by Seth Jaffe

Last month, Attorney General Sessions barred DOJ from entering into settlements that provide for payments to non-governmental persons not a party to the dispute.  At the time, I peered into my crystal ball and proclaimed that the practice of incorporating supplemental environmental projects into environmental settlements was “hanging by a thread.” For once, my speculation was accurate.

Yesterday, DOJ notified the District Court for the District of Columbia that the United States and Harley-Davidson had jointly agreed to modify a consent decree that had already been lodged with the Court.  The original decree provided for a $3 million SEP, to replace old woodstoves.  Notwithstanding that SEPs have traditionally been used to mitigate penalty amounts, the modified decree did not increase the penalty to Harley-Davidson; it merely eliminated the SEP.  Well done, Harley-Davidson lawyers!

In modifying the decree, DOJ explicitly cited to the Sessions memorandum, noting simply that:

Questions exist as to whether this mitigation project is consistent with the new policy.

Ya’ think?

The only question remaining at this point is whether other defendants will be able, like Harley-Davidson, simply to pay smaller penalties or whether, going forward, penalties will increase where SEPs are unavailable as mitigation.  I know where this administration’s proclivities lie, but I’m going to stop speculating while I’m ahead of the game.



Comments (2) -

Mike McCauley United States
7/21/2017 2:32:48 PM #

I'll speculate for you, Seth. Vigorous "government" enforcement of federal environmental laws (and state environmental laws in states like Wisconsin which now has a conservative Republican Governor, Attorney General, and Republican majorities in both houses of the state legislature) is dead. At least relative to how environmental laws were enforced throughout my career as a practicing lawyer (1977-2014). Citizen suit enforcement will continue, but it can never replace direct government action. Of course, we all know that eventually, the pendulum will swing in the other direction. And when it does, many companies will be "shocked and dismayed" that what had previously appeared to them to be government-sanctioned "benign neglect" of compliance with environmental requirements will later lead to substantial civil penalties and negative publicity for those companies.

Kimi Anderson United States
7/21/2017 3:36:20 PM #

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