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Lawsuit Filed Challenging DOJ’s Policy on Supplemental Environmental Projects

Linkedin_Steven_Siros_3130By Steven M. Siros

On October 8, 2020, the Conservation Law Foundation filed a lawsuit challenging a DOJ policy that barred the use of supplemental environmental projects (SEPs) in federal enforcement settlements with private parties.  SEPs have been used since the 1980s and typically involve a project intended to provide some tangible environmental or public health benefit that could not necessarily be compelled by U.S. EPA. 

DOJ, in a March 12, 2020 memorandum, announced that it was terminating its policy of allowing companies to agree to perform SEPs in exchange for reductions in civil penalties in environmental enforcement settlements.  According to DOJ, the practice of using SEPs in lieu of civil penalties violates the Miscellaneous Receipts Act, a statute that prevents cash from legal settlements being diverted from the Treasury to third parties.  As further described in the March 2020 DOJ memorandum, DOJ claims that the SEPs basically substitute payments to third parties for payments to the Treasury, circumventing Congress’ Constitutional power of the purse. 

The lawsuit claims that DOJ’s conclusion that the use of SEPs violates the Miscellaneous Receipts Act is arbitrary and capricious and otherwise lacks reasoned decision-making.  The lawsuit highlights U.S. EPA’s history of using SEPs and its various guidance documents encouraging the use of SEPs in environmental enforcement matters.  The lawsuit asks that the Court declare that DOJ’s March 2020 memo violates the Administrative Procedures Act, vacate the memo, and enjoin DOJ from implementing or relying on the memo in the future. . 

We will continue to provide updates on this lawsuit as well as other important environmental, health and safety issues on Jenner & Block’s Corporate Environmental Lawyer Blog.

TAGS: Climate Change, Consumer Law and Environment, Sustainability

PEOPLE: Steven R. Englund, Steven M. Siros