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Environment & Energy Report

Justice Department Memo Targets Environmental Mitigation (1)

Jan. 13, 2021, 5:38 PM; Updated: Jan. 13, 2021, 6:34 PM

The Trump administration is limiting the inclusion of certain mitigation requirements in environmental enforcement cases, building on other Justice Department moves to set constraints on settlements.

Assistant Attorney General Jeffrey Bossert Clark issued a memo Tuesday, requiring lawyers in the Environment and Natural Resources Division to include “equitable mitigation” relief in settlements only after considering a set of precautions “to ensure that our civil enforcement actions do not overstep the bounds set by Congress.”

Equitable mitigation refers to Justice Department lawyers’ practice of asking courts to force companies to remedy alleged violations by offsetting related environmental harms. It’s a form of relief often included in environmental settlements.

‘Significant Concern’

The message and timing of Clark’s policy prompted quick and incisive criticism from some lawyers.

“It is amazing to me that only a few days before a change in administration, the Assistant Attorney General would put out any kind of a policy memo, let alone one that purports to reduce or restrain mitigation in environmental settlements,” Beveridge & Diamond PC attorney John Cruden said.

Cruden, who was assistant attorney general during the Obama administration and a career lawyer in the department before that, added that redressing environmental problems is the point of environmental law.

Clark’s policy is cause for “significant concern,” said Lois Schiffer, who led ENRD during the Clinton administration. “But this is all going to be revisited when he leaves, which is imminent.”

The incoming Biden administration is expected to review this and other Clark policies as soon as new political officials are installed. Cruden predicted that the memo, “like other similar efforts to reduce environmental enforcement options by this Administration, will soon find itself in the trash bin of history.”

The president-elect hasn’t yet announced a nominee to lead ENRD in the new administration.

‘Not a Blank Check’

Clark’s memo acknowledges courts’ power to order equitable relief, but says it’s “not a blank check.”

He cautioned attorneys in the environment division to weigh certain factors when considering such relief: that there’s a strong legal basis for mitigation; that there’s a geographic connection between a mitigation project and harm caused by a violation; that a project’s costs don’t outweigh its benefits; and that monetary penalties are still the first and primary form of relief sought.

The directive builds upon Clark’s 2018 memo barring the use of “supplemental environmental projects” in settlements. SEPs, unlike mitigation, are voluntary efforts alleged violators can take to benefit the environment—sometimes in exchange for lower fines. But the projects often don’t have as close a connection to the alleged violations as equitable mitigation relief.

“The exact line between permissible mitigation relief and illegal SEPs can be difficult to trace,” Clark wrote.

Sidley Austin LLP lawyer David Buente said this week’s memo “is kind of like the other shoe falling.”

“The memo, if it’s implemented, will undoubtedly lead to it being used in fewer cases,” he said of equitable mitigation. “It will lead to a narrowing of it, but it’s not prohibiting it altogether.”

Cruden offered harsher criticism of Clark’s policy.

“In lectures I often refer to the sign on my daughter’s elementary school class, saying that ‘if you make a mess you need to clean it up,’” he said in an email. “That mitigation is necessary, embraced by courts, and needs to be part of environmental enforcement litigation.”

(Adds Cruden comments throughout.)

To contact the reporter on this story: Ellen M. Gilmer in Washington at egilmer@bloomberglaw.com

To contact the editor responsible for this story: Anna Yukhananov at ayukhananov@bloombergindustry.com

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