CHAPTER 4 PREPARING THE DEFENSE TO ADMINISTRATIVE ENFORCEMENT
| Jurisdiction | United States |
(Nov 1981)
PREPARING THE DEFENSE TO ADMINISTRATIVE ENFORCEMENT
Davis, Graham & Stubbs
Denver, Colorado
PART I
INTRODUCTION
I. AVOIDANCE
A. Gauging the Agency's Attitude
B. The Value of Self-Monitoring
C. Monitoring Agency Inspections
D. Building a Favorable Record
E. Changing the Context in Which Enforcement May Occur
II. EVALUATION
A. Judicial Review Will Be Deferential to the Agency
B. All Issues Must Be Raised at the Administrative Level
C. An Agency Must Follow Its Own Rules and Procedures But Its Interpretation Will Be Given Deference
D. The Agency Will Be Presumed to Have Acted Fairly and Honestly
E. The Technical Rules of Evidence Do Not Apply to Administrative Proceedings
F. An Opportunity for Hearing, Confrontation and Cross-Examination Must Be Affirmatively Pursued
G. Persuading the Decisionmaker in the Client's Favor Is the Most Important Consideration
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III. DISCOVERY
A. The Availability and Extent of Discovery May Lie in theAgency's Discretion
B. Due Process May Require Discovery
C. A Timely Demand Must Be Made for the Attendance of Witnesses Under the Agency's Control
D. The Freedom of Information Act Can Be Useful, Particularly in the Pre-Enforcement or Settlement Context
E. Under the FOIA an Agency Must Disclose Its "Working Law"
F. Balancing Is Utilized in Determining Whether Investigatory Materials Should Be Disclosed Under FOIA
G. Trade Secrets and Confidential Information Can be Withheld From Disclosure
H. Denial of an FOIA Request is Immediately Subject to Judicial Review
IV. SETTLEMENT
A. Reminding the Agency of Its Principal Mission to Obtain Compliance Rather Than Punish
B. Making Promises the Client Can Keep
C. Sizing-Up and Making Use of the Weaknesses of the Agency's Case
D. Using Settlement Discussions as An Opportunity to Refine Client's Case
V. RESISTANCE
A. Developing a Persuasive Theory of the Case
B. Pinning Down the Agency's Theory of the Case
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C. Preparing Direct and Cross-Examination of Experts
D. The Role of Pre-Hearing Conferences and Orders
E. The Availability of Declaratory Orders
F. Bias of the Decisionmaker
G. Utilizing Breach by the Agency of Its Own Rules and Procedures
H. Burden of Going Forward and Burden of Proof
I. Directing Presentation to Persuasive Equities of the Client's Case
J. Civil Penalties Must Not Be For Punitive Purposes
K. Cessation Orders Do Not Necessarily Have To Be Preceded By a Hearing in Emergency Circumstances
L. Administrative Warrants Should Be Obtained for the Inspection of Non-Public Portions of a Business Premises
M. When Concurrent State Proceedings Are Involved, A Federal Enforcement Proceeding May Be Stayed or Might Be Barred Altogether
CONCLUSION
FOOTNOTES 4-32
PART II
Hobbs, "Discovery and Judicial Review in State Administrative Practice, "Colorado Lawyer, Vol. 10, No. 10, p. 2491, October 1981 4-36
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The Rocky Mountain Mineral Law Foundation
November, 1981
INTRODUCTION
This paper is presented in two parts. The first centers on federal administrative law applicable to defending against administrative enforcement. The second part, a reprint of an October, 1981, Colorado Lawyer article, deals with discovery and judicial review in Colorado administrative practice. The author appreciates the cooperation of the Rocky Mountain Mineral Law Foundation and the Colorado Lawyer in the simultaneous pursuit of these projects. Time was not available for analysis of the administrative law in states other than Colorado, but hopefully the thoughts and research presented here will be useful as background and a starting point when counsel is called upon for advice regarding administrative enforcement.
Federal and state administrative enforcement cannot be considered separately, because laws in the natural resources regulatory field are generally counterpart in nature. During the intense legislative activity of the 1970's, Congress passed a myriad of statutes establishing
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national environmental-natural resources regulatory programs designed to be implemented and enforced by the states, with federal financial assistance and regulatory overview.1 Even where a particular state has not chosen to accept "delegation" of the federal program, the state often has its own permitting and enforcement systems.
When a state has adopted a counterpart regulatory program, the assumption is that the state enforcement agency will take the lead in pursuing compliance with the applicable standards. But the federal agency may often have independent enforcement authority, or may actively seek to influence the course of state enforcement decisions, or both. Januslike, the natural resources attorney must look both ways in alertly pursuing the client's interest.
For the sake of summary, the author delineates the elements to enforcement defense as follows: avoidance, evaluation, discovery, settlement, and resistance.
The goal of counsel is to dispose of the conflict or potential conflict with the agency with the least impact to the client from a financial, operational, and public relations standpoint. The impact of the agency action on future client operations must be considered. Hence, counsel is concerned not only with extricating the client from a present problem but also with laying a sound basis for avoidance of future problems
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I. AVOIDANCE
The best defense to an enforcement action is not having it brought. Avoidance in this sense means 1) compliance with statutes and regulations to avoid an occurrence that might result in enforcement, or 2) convincing the agency not to proceed with enforcement if an occurrence has arisen.
Counsel always desires to approach administrative or court litigation with the best case. The best case is having the facts to show that the alleged violation did not occur, or that the occurrence was an aberration due to a freak of nature or an unavoidable equipment breakdown for which the alleged violator should not be sanctioned. A history of compliance credibility in the eyes of the agency is always desirable.
A. Gauging the Agency's Attitude
Enforcement action on an administrative level may take the form of a warning, a notice of violation, an order requiring compliance, an assessment of civil penalites, license or permit revocation, or a decision to proceed to court for injunction, civil and/or criminal penalties. Enforcement in the judicial forum may follow the administrative action, or may be in lieu of administrative proceedings, depending on the statute involved. Often, the agency's
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statute, rules, or informal procedure involve opportunity for an exchange of information and views before formal enforcement proceeds. It is often in the best interest of the client to take advantage of, or to create, such an opportunity at an early stage; for example, as soon as a compliance inspection or a required self-monitoring report indicates a potential problem.
Attitudes of enforcement officers differ according to their individual temperaments and the policies set by superiors. Since enforcement in our legal system is generally discretionary even when a particular statute appears to require enforcement,2 one of the primary roles of counsel is to convince the agency not to proceed with the formal enforcement process. Normally, this is accomplished when the agency staff believes that it has achieved a satisfactory regulatory result without the need for resort to further action. In this context, the agency will want to be assured that appropriate equipment and operational practices are in place or will be put in place, in a reasonably expeditious fashion, to avoid recurrence.
B. The Value of Self-Monitoring
Self-monitoring and record keeping, whether voluntary or required, is a key avoidance device because the result should be the building of a defensible record of
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non-occurrence, de minimus occurrence, or quick and effective response to an occurrence.
On the other hand, if self-monitoring and record keeping show consistently poor regulatory performance and no voluntary corrective action is undertaken, the client is exposed to potentially serious civil or criminal enforcement action. As a protective device, self-monitoring testing equipment and methods should always be reliable, properly calibrated, regularly serviced, and conform to what is accepted by the agency and experts in the field. Written entry of results should be accompanied by contemporaneous notation of any unusual occurrences which might affect the accuracy or validity of the result from a regulatory stand-point, such as a breakdown in the process equipment, the control equipment, or monitoring equipment, or a shutdown resulting from regulatory requirements of a different local, state or federal agency.
The retention of self-monitoring results and/or reporting of such results to the agency may be governed by applicable statutes and regulations. The United States Supreme Court recently held that required self-monitoring reports made to an agency can be utilized as a basis for imposition of civil penalties.3 When such reports are not required, the client will have to decide whether to keep or routinely dispose of monitoring or testing results. If the
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results support a good record, the client's interest may best be served by retention. Selective destruction of poor results is dangerous, since this can adversely reflect on the client's credibility in the administrative or judicial forum.
C. Monitoring Agency Inspections
Avoidance should also take into account client record keeping of agency inspections and client follow up to agency inspections. The Colorado Supreme Court has held that constitutional due process requires agency notification of inspection results to be made to the operator reasonably...
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