The U.S. Department of Justice (DOJ) has issued new policies that appear likely to increase the prospect of multiple enforcement actions against companies for the same environmental violation(s), yet decrease the prospect of companies successfully settling such actions in a one-time global fashion. In other words, DOJ may have significantly complicated defense strategy for many companies subject to environmental investigations, and substantially reduced the ability of companies to effectively gauge their ultimate exposure for a specific environmental violation (or series of violations).
Integrated Enforcement Policy. Almost every major federal environmental statute allows the government to pursue criminal and civil penalties for an environmental violation (assuming that the violation arguably meets the diluted mens rea requirement for environmental criminal prosecution). Such simultaneous criminal and civil enforcement actions against the same defendant for the same set of facts (often referred to as “parallel proceedings”) can cause a number of complications for companies under investigation.
Most noteworthy, the government may use the expansive domain of civil discovery to readily obtain information that would otherwise be more difficult to obtain under the restrictive rules of criminal discovery. So long as the government pursues civil discovery in good faith and does not do so exclusively for the purpose of furthering its criminal investigation, courts have allowed the use of civil discovery in furthering a criminal investigation.
In addition, if civil actions precede parallel criminal actions, Fifth Amendment problems sometimes arise. When company employees exercise their Fifth Amendment privilege during the civil action (in order to preserve the privilege for purposes of the later criminal action), the civil trier of fact is permitted to draw an adverse inference from the individual's failure to testify.
The new DOJ Integrated Enforcement Policy replaces the 1987 DOJ Policy on Parallel Proceedings. The main differences between the two policies — foreshadowed by the shift in terminology from “parallel proceedings” to “integrated enforcement” — are subtle, but important.
The 1987 policy generally encouraged a stay of civil proceedings until the criminal case had been completed. Likewise, the 1987 policy endorsed parallel proceedings only when compelling reasons for early civil action were appropriate — namely, when a civil injunction (or other action) was necessary to prevent ongoing violations posing hazards to public health or the environment.
The new policy, while generally maintaining the former guidance, now (1) encourages undertaking joint investigations early on (prior to the grand jury process); (2) advises DOJ attorneys to remain alert during their investigations for opportunities to refer the case to their civil or criminal counterparts; and (3) provides more mechanisms for facilitating consultation and sharing of information between civil and criminal attorneys within DOJ. Notably absent, however, is any clear guidance on when it is appropriate to pursue both criminal and civil sanctions in a case. In the absence of such guidance, the new policy increases the likelihood of consecutive criminal and civil enforcement.
Global Settlement Policy. Companies under environmental investigation often find it advantageous to seek simultaneous, comprehensive settlement of their criminal and civil liabilities. However, orchestrating such a global settlement is extremely difficult because of the number of government agencies (and diverging interests) often involved in an environmental case. The new DOJ Global Settlement Policy does little to rectify these impediments.
Rather, the new policy focuses on ensuring that criminal plea agreements and civil settlements are negotiated separately and memorialized in separate documents that satisfy the DOJ criteria established for criminal plea agreements and civil settlements, respectively. The policy also requires approval of all affected agencies prior to final acceptance of civil settlement, leaving the success or failure of the negotiated settlement in the hands of parties who may not have participated in the settlement negotiations. (Similarly, the Assistant Attorney General of the Environment and Natural Resources Division must approve any global settlement.) In addition, the policy prohibits defendants from trading civil relief in exchange for reduction in criminal penalty.
Conclusion. DOJ's new policies on integrated environmental enforcement and global settlement reflect a continuing trend on the part of federal enforcement authorities to prosecute environmental violations aggressively and to their fullest, while making it very difficult for companies (and individuals) to negotiate a complete resolution of their potential liabilities.
Integrated Enforcement Policy. Almost every major federal environmental statute allows the government to pursue criminal and civil penalties for an environmental violation (assuming that the violation arguably meets the diluted mens rea requirement for environmental criminal prosecution). Such simultaneous criminal and civil enforcement actions against the same defendant for the same set of facts (often referred to as “parallel proceedings”) can cause a number of complications for companies under investigation.
Most noteworthy, the government may use the expansive domain of civil discovery to readily obtain information that would otherwise be more difficult to obtain under the restrictive rules of criminal discovery. So long as the government pursues civil discovery in good faith and does not do so exclusively for the purpose of furthering its criminal investigation, courts have allowed the use of civil discovery in furthering a criminal investigation.
In addition, if civil actions precede parallel criminal actions, Fifth Amendment problems sometimes arise. When company employees exercise their Fifth Amendment privilege during the civil action (in order to preserve the privilege for purposes of the later criminal action), the civil trier of fact is permitted to draw an adverse inference from the individual's failure to testify.
The new DOJ Integrated Enforcement Policy replaces the 1987 DOJ Policy on Parallel Proceedings. The main differences between the two policies — foreshadowed by the shift in terminology from “parallel proceedings” to “integrated enforcement” — are subtle, but important.
The 1987 policy generally encouraged a stay of civil proceedings until the criminal case had been completed. Likewise, the 1987 policy endorsed parallel proceedings only when compelling reasons for early civil action were appropriate — namely, when a civil injunction (or other action) was necessary to prevent ongoing violations posing hazards to public health or the environment.
The new policy, while generally maintaining the former guidance, now (1) encourages undertaking joint investigations early on (prior to the grand jury process); (2) advises DOJ attorneys to remain alert during their investigations for opportunities to refer the case to their civil or criminal counterparts; and (3) provides more mechanisms for facilitating consultation and sharing of information between civil and criminal attorneys within DOJ. Notably absent, however, is any clear guidance on when it is appropriate to pursue both criminal and civil sanctions in a case. In the absence of such guidance, the new policy increases the likelihood of consecutive criminal and civil enforcement.
Global Settlement Policy. Companies under environmental investigation often find it advantageous to seek simultaneous, comprehensive settlement of their criminal and civil liabilities. However, orchestrating such a global settlement is extremely difficult because of the number of government agencies (and diverging interests) often involved in an environmental case. The new DOJ Global Settlement Policy does little to rectify these impediments.
Rather, the new policy focuses on ensuring that criminal plea agreements and civil settlements are negotiated separately and memorialized in separate documents that satisfy the DOJ criteria established for criminal plea agreements and civil settlements, respectively. The policy also requires approval of all affected agencies prior to final acceptance of civil settlement, leaving the success or failure of the negotiated settlement in the hands of parties who may not have participated in the settlement negotiations. (Similarly, the Assistant Attorney General of the Environment and Natural Resources Division must approve any global settlement.) In addition, the policy prohibits defendants from trading civil relief in exchange for reduction in criminal penalty.
Conclusion. DOJ's new policies on integrated environmental enforcement and global settlement reflect a continuing trend on the part of federal enforcement authorities to prosecute environmental violations aggressively and to their fullest, while making it very difficult for companies (and individuals) to negotiate a complete resolution of their potential liabilities.