Bloomberg Law
May 5, 2021, 3:58 PM

Environmental Enforcement Tool Still Stymied by Trump Regulation

Ellen M. Gilmer
Ellen M. Gilmer

A Trump-era Justice Department regulation is preventing the EPA from resuming broad use of a popular enforcement tool that the Biden administration has been asked to revive.

In an internal memo last week, EPA acting enforcement chief Lawrence E. Starfield directed staff to use “the full array of policy and legal tools available” to resolve civil enforcement cases and address environmental injustices. But supplemental environmental projects, or SEPs, remain off limits in most big cases due to a DOJ rule restricting third-party payments.

SEPs are environmentally beneficial projects companies can volunteer to do as part of a settlement for alleged violations, sometimes in exchange for lower penalties. A DOJ political official largely banned SEPs in 2020 after concluding they were illegal in most contexts, and the EPA followed along.

The Justice Department scrapped the anti-SEPs policy after President Joe Biden took office, but a broader third-party payments regulation finalized before his inauguration in December presents a bigger hurdle.

Starfield’s April 26 memo lists SEPs among the tools it recommends EPA enforcement officials consider to address “past harm to communities” caused by environmental violations. But a footnote adds that the use of SEPs in judicial settlements “is currently severely limited” by Justice Department policies, including the December rule barring settlement payments to third parties outside the government.

That means EPA enforcement lawyers, for now, can use SEPs only in settlement deals for administrative matters—lower-penalty and generally less serious cases that don’t go to court—or in cases that involve diesel emission reductions, a unique area where Congress has explicitly authorized SEPs. “EPA is coordinating closely with DOJ on the subject of SEPs,” the footnote said.

Review in Progress

The footnote clarifies the government’s interpretation of the third-party payment rule after ambiguous language left many outside lawyers uncertain about whether it actually barred all SEPs.

“The memo indicates that DOJ will continue to use SEPs in only a very limited subset of civil judicial settlements because the prior administration formally incorporated its SEPs limitations into DOJ’s internal regulations,” said Vinson & Elkins LLP lawyer Corinne Snow, a DOJ lawyer under Trump.

But the Biden administration is already reviewing the regulation and is likely to eliminate it after more political appointees are in place at the Justice Department, Snow said. The agency didn’t immediately respond to a request for comment about the status of the review.

Department officials will have to address the legal and policy questions raised in the rule but said “it shouldn’t take too long to complete,” said Baker Botts LLP attorney Jeffrey Wood, who was acting head of DOJ’s environment division at the beginning of the Trump administration.

“A little extra time is worth the effort as procedural missteps along the way could be used by litigants to oppose rollback of the SEP rule and could create hurdles for court entry of settlements that contain SEPs in the near term,” he added.

Last week’s EPA memo is part of a broader reset of environmental enforcement policies across the agency and the Justice Department. A related April 30 letter directs EPA staff to use their enforcement tools to prioritize communities overburdened by pollution.

‘Next Generation’

Starfield’s April 26 memo also reinvigorates a set of “next generation” compliance tools championed by Obama-era enforcement chief Cynthia Giles but spurned by Trump officials.

The memo outlines key tools EPA enforcement officials should use to ensure a facility “promptly returns to, and remains in, compliance” after a violation. Those include advanced monitoring; audits and third-party verification; electronic reporting; and increased transparency of compliance data.

“Use of these tools can help EPA conserve oversight resources by having settlement compliance information provided in a more readily available format and available to outside parties (such as the public) who can assist in monitoring compliance,” Starfield wrote.

The Trump administration moved away from routine use of the tools, viewing them as enforcement overreach. The EPA’s new memo “strikes me as mostly a renewal of the enforcement priorities that prevailed during the Obama administration,” Nova Southeastern University law professor Joel Mintz said.

Trump-era EPA deputy enforcement chief Patrick Traylor, now at Vinson & Elkins, said the Biden administration’s new approach emphasizes “extra-legal requirements” that could undermine the enforcement program’s reputation. But it’s unlikely to face practical pushback because defendants won’t have much choice but to go along with it, and judges are unlikely to stand in the way of a settlement, he said.

“It’s very difficult to challenge the institution of these kinds of policies,” Traylor said.

To contact the reporter on this story: Ellen M. Gilmer in Washington at

To contact the editor responsible for this story: Seth Stern at