Any time a company is facing scrutiny from the U.S. Environmental Protection Agency (EPA), there are both critical steps it needs to take and costly mistakes it needs to avoid. Both of these are equally important, as any oversights can create unnecessary risk exposure—and ultimately lead to costs and other consequences that could (and should) have been avoided. 

In this article, we are focusing on what not to do when facing litigation with the EPA. When facing an EPA investigation or enforcement litigation, companies (and their counsel) must work proactively to avoid miscues with costly and irreversible consequences. While the negative effects of some mistakes can be mitigated or managed, there are invariably costs involved, and company leaders and their advisors have a duty to ensure that they are not incurring costs or creating legal exposure unnecessarily.

Before we get into the mistakes to avoid when facing EPA litigation, we should touch briefly on what owners and executives should do upon learning that the EPA is considering (or, in some cases, actively pursuing) civil or criminal enforcement action. In this situation, companies will ideally be able to execute the response protocols laid out in their EPA compliance programs. If this isn’t an option, or if an emergency response is required, then the focus should be on promptly engaging the company’s counsel to intervene and begin implementing an effective defense strategy. 

What Not to Do When Facing an EPA Investigation or Enforcement Litigation 

So, your company is facing an EPA investigation or enforcement litigation. What are the mistakes you need to avoid? Here is an overview of what not to do when civil or criminal penalties are on the table: 

1. Do Not Ignore the EPA

First and foremost, if your company is under investigation or the target of civil or criminal enforcement litigation, you cannot afford to ignore the EPA. Once you learn that your company is on the EPA’s enforcement radar, time is of the essence. 

Rather than ignoring the EPA, companies that are facing investigations and enforcement litigation need to take a proactive approach to developing and executing an informed defense strategy. By working proactively to achieve a favorable result—and one that avoids litigation if possible—companies can both mitigate their risks and mitigate the costs of their defense. 

2. Do Not Discount the Risks Involved

Speaking of risk, it is equally important not to discount the risks involved with facing EPA litigation. Depending on the circumstances involved, these risks can include: 

• Loss of an EPA license, permit, or registration
• Injunctive relief or other administrative remedies
• Civil monetary penalties (which may be imposed on a daily basis for continuing violations)
• Criminal fines
• Federal imprisonment of company owners, executives, and other key personnel

While criminal EPA enforcement litigation may be less common, it is not unheard of, and the EPA has shown a clear willingness to pursue criminal charges alongside the U.S. Department of Justice (DOJ) when warranted to protect human and environmental health. Of course, even if criminal penalties are not on the table, the direct and indirect financial consequences of an unfavorable result make it essential to prioritize the company’s defense. 

3. Do Not Make Assumptions About Why the EPA is Pursuing Enforcement

When facing any type of federal enforcement litigation, it is critical to make informed decisions, not assumptions. Among other things, this means that targeted companies should not make assumptions about why the EPA is pursuing enforcement. These types of assumptions carry multiple risks, including: 

• The company could inadvertently disclose information that aids the EPA’s enforcement efforts; and,
• The company could fail to defend against allegations at issue. 

Rather than making assumptions about what violations the EPA may or may not be targeting, companies instead need to rely on their EPA litigation defense counsel to discern the focus and scope of the EPA’s efforts. Alleged violations of the Comprehensive Environmental Response Liability Act, the Clean Air Act, the Endangered Species Act, the Toxic Substances Control Act will all require different strategies for defense in environmental litigation. This will allow for informed decision-making, and it will help prevent further mistakes that could lead to additional scrutiny or enhance the company’s risk of penalization. 

4. Do Not Make Assumptions About Your Company’s EPA Compliance Record 

Just as it is important not to make assumptions about the allegations at issue, it is equally important not to make assumptions about your company’s EPA compliance record. Instead, upon learning of an EPA investigation or enforcement action, it is imperative to promptly conduct an internal, attorney-client privileged assessment of EPA compliance. This is the only way to determine what is at stake, what defenses are available, and how best to approach the situation at hand. 

5. Do Not Ignore Potential Means of Resolution

While litigating through trial is one option, it is far from the only option for resolving an EPA enforcement action. In fact, trials in these cases are relatively rare. It is far more common for companies to target pre-trial resolutions focused on either: (i) avoiding financial liability and other consequences entirely; or, (ii) negotiating a resolution with the EPA that adequately serves both parties’ interests in light of the circumstances at hand. 

With that said, until an EPA enforcement matter has been fully and finally resolved, it is important to keep the litigation option on the table. If the EPA knows your company is firm in its position and is prepared to fight if necessary, this can provide significant leverage during the pre-trial process. 

6. Do Not Attempt to Conceal or Destroy Relevant Records

Under no circumstances should companies attempt to conceal or destroy records that may be relevant to an EPA investigation or to EPA enforcement litigation. Not only is this prohibited (and potentially grounds for federal criminal prosecution), but there are also much better, and safer, ways to deal with an adverse EPA compliance record. Any inkling that a company may be attempting to hide information will also only serve to raise red flags at the EPA—further expanding the scope of the agency’s inquiry and increasing the risk of the inquiry leading to costly litigation. 

7. Do Not Give the EPA Unfettered Access to Your Company’s Records, Personnel, or Facilities 

While companies must not improperly withhold information from the EPA, they must be equally careful not to disclose information to the EPA unnecessarily. Among other things, this means that companies should not give the EPA unfettered access to their records, personnel, or facilities. While it is true that cooperating with the EPA can be the best approach in some cases, any cooperation needs to be measured. There are generally no benefits to being overly cooperative; and, if a company’s cooperation leads to the exposure of violations that were not previously on the EPA’s radar, the EPA can expand the scope of its inquiry. 

8. Do Not Focus on Settlement if No Negative Outcomes Are Warranted

In many cases, company owners’ and executives’ first response to any type of adverse litigation will be to ask, “What can we do to make this go away?” While companies certainly should not incur the costs of EPA litigation when it is unnecessary to do so, they also should not settle with the EPA when settlement is unwarranted. 

Again, when facing an EPA investigation or enforcement litigation, informed decision-making is critical for potentially responsible parties. If your company can demonstrate compliance (or if it can prevent the EPA from proving noncompliance), then settling is not the best-case outcome. 

9. Do Not Take Unnecessary Risks

As with all types of litigation, making informed decisions in response to EPA litigation (or potential EPA litigation) is all about risk management. From the EPA’s investigation through discovery, pre-trial practice, and trial, companies must work closely with their defense counsel to ensure that they are not taking unnecessary risks. 

10. Do Not Take a Back Seat in the Process

Finally, companies facing potential civil or criminal penalties for voilations of environmental laws in EPA litigation must avoid taking a back seat in the process. Rather than letting the EPA remain in control and dictate the scope and timing of the proceedings, companies must work with experienced defense counsel who can intervene authoritatively and help steer the matter toward an efficient and favorable resolution. Taking control in the process can help provide leverage while affording the ability to pursue defense opportunities that might otherwise go unrealized. 

To be clear, while these are some of the mistakes companies need to avoid when facing an EPA investigation or enforcement litigation, this list is by no means exhaustive. There are many more risks to consider; and, in all cases, an informed, strategic, and custom-tailored approach is critical. For companies that are facing scrutiny from the EPA, making informed decisions focused on effective risk mitigation starts with promptly engaging experienced EPA litigation defense counsel.