CHAPTER 6 ENFORCEMENT ACTIONS UNDER SECTION 404 OF THE CLEAN WATER ACT1
| Jurisdiction | United States |
(Jan 2002)
ENFORCEMENT ACTIONS UNDER SECTION 404 OF THE CLEAN WATER ACT1
Holland & Hart LLP
Denver, Colorado
I. Introduction
The stated purpose of the Clean Water Act ("CWA") is "to restore and maintain the chemical, physical, and biological integrity of the Nation's waters."2 To achieve this purpose, the CWA prohibits the discharge of a pollutant into waters of the United States by any person without a permit.3 The CWA permits certain discharges of dredged or fill material under Section 404.4 The CWA provides that a Section 404 permit acts as a shield to enforcement actions, as long as the permittee complies with all of the terms of the permit.5 Since the CWA is a strict liability statute, violators may be held liable for unpermitted discharges, regardless of the violator's knowledge of the legal requirements or intent to comply with or violate the law. The CWA does not provide any statutory defenses. The United States Environmental Protection Agency ("EPA"), the Army Corps of Engineers ("Corps") and the United States Department of Justice ("DOJ") share enforcement authority under the CWA and its Section 404 Program.
During the past decade, due to concern about the loss of wetlands, enforcement of Section 404 and other CWA provisions has increased. The Corps, EPA and DOJ have pursued violators aggressively, using an array of administrative and judicial enforcement mechanisms. A description of the regulatory authorities' enforcement authority, the enforcement mechanisms available to them and the framework for settling Section 404 enforcement actions follows.
II. EPA's Enforcement Initiative
The Corps and the EPA announced a joint Wetlands Enforcement Initiative (the "Enforcement Initiative") in December 1990.6 The Enforcement Initiative emphasized the government's commitment to Section 404 enforcement. The Enforcement Initiative identified several categories of cases as enforcement priorities, including: 1) cases involving discharges into high value wetlands; 2) cases which would have a high deterrence value in the district; or 3) cases involving a discharge by a repeat or flagrant
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violator.7 Since 1990, as the number and magnitude of the actions pursued increased, enforcement actions were not limited to these categories,. Regulatory agency guidance and other policy documents have provided the foundation for aggressive enforcement of Section 404 violations since the announcement of the Enforcement Initiative.
III. Enforcement Authority
On January 19, 1989, EPA and the Corps entered into a Memorandum of Agreement that delineates the scope of each agency's enforcement authority.8 The main objective of the Enforcement MOA is "to strengthen the Section 404 enforcement program by using the expertise, resources and initiative of both agencies in a manner which is effective and efficient in achieving the goals of the CWA."9
The Enforcement MOA states that the Corps will conduct the majority of the initial on-site investigations of potential violations because it has more field resources.10 EPA, if it so requests and with prior notification to the Corps, will be the investigating agency for unpermitted activities occurring in specially defined geographic areas, such as a particular wetland type.11 The investigating agency will make geographic jurisdictional determinations for a specific case, with each agency advising the other of any problem trends that it becomes aware of through case-by-case determinations. It is also the responsibility of the investigating agency to make violation determinations.12
The Enforcement MOA provides that the Corps shall be the lead enforcement agency for all Corps-issued permits.13 With respect to unpermitted discharge violations, EPA will be the lead agency if the violation involves one of the following: 1) a repeat violator; 2) a flagrant violation; 3) if EPA has requested a class of cases or a particular case; or 4) the Corps recommends that an EPA administrative penalty action may be warranted.14 The Corps will be the lead enforcement agency for all unpermitted discharges that do not fall under any of these four categories.15 Where EPA notifies the Corps that it will not take action on a particular case, due to limited resources or otherwise, the Corps may act in accordance with its own resource availability.16
Conversely, if the Corps notifies EPA that it will not take action on a permit due to limited staff resources or other reasons, EPA may take action commensurate with its
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resource availability.17 However, a determination by the Corps that the activity is in compliance with the permit shall be the final enforcement decision for the case.18
If a violation exists, the investigating agency must prepare a field investigation report that provides a description of the illegal activity, the existing environmental setting, the initial view on potential impacts and a recommendation on the need for initial corrective measures.19 This investigation report must be provided to the agency selected as the lead on the case.20 Once the investigation establishes that a violation exists, the investigating or lead enforcement agency must inform the responsible parties of the violation and inform them that all illegal activity should cease pending further federal action.21
The lead enforcement agency may choose from multiple enforcement options, including an administrative order, an administrative penalty complaint, a civil judicial referral or a criminal judicial referral.22 The lead agency must also make a determination that a violation has been resolved and make arrangements for monitoring of any remedy, compensatory mitigation or other corrective measures.23 The Enforcement MOA does not create any rights or defenses for violators.24 A decision of the lead agency regarding any issue in a particular case, including a no enforcement action decision, is final for that case.25
IV.Enforcement Mechanisms
A. Administrative Compliance Orders
EPA and the Corps may issue orders to violators, requiring the violators to cease the unauthorized activities or take remedial steps to correct the violations. EPA issues administrative orders; the Corps issues cease and desist orders. An EPA administrative order requires the violator to comply with the CWA while a Corps cease and desist order requires compliance with CWA section 404.26 The orders must specify the nature of the violation and the deadline for compliance. In most cases, compliance within 30 days of issuance of the order is required.27
Enforcement orders are not independently enforceable, but require judicial action, if the violator refuses to comply with the order; upon referral of the violation, DOJ may initiate civil or criminal judicial enforcement action. A violator must act promptly in response to receipt of an EPA or Corps order; non-compliance with an order may be
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considered a separate violation and subject the violator to additional penalties. Numerous courts have held that cease and desist orders are not subject to judicial review.28 Review of such orders is not available until the agency assesses civil penalties or brings its own enforcement action.29 As with cease and desist orders, the decision of the EPA to issue a compliance order is not subject to judicial review.30 Neither agency is required to issue a compliance order before bringing a civil enforcement action.31
B. Administrative Penalties
In addition to issuing administrative compliance orders, EPA and the Corps both have the authority to assess administrative penalties.32 These penalties are divided into Class I and Class II civil penalties. Class I penalties may not exceed $10,000 per violation or a total of $25,000 for multiple violations while Class II penalties, which are directed at more egregious violations, may neither exceed $10,000 per day or $125,000 in the aggregate.33
With respect to Class II violations, the violator may incur penalties for each day that the violation continues.34 A violator has the right to merely an informal hearing in connection with a Class I penalty. In contrast, the CWA provides a formal adjudicatory hearing in accordance with the Administrative Procedure Act for a Class II penalty. The amount of Title I and Title II penalties are based upon the following factors: 1) the nature, circumstance, and gravity of the violation; 2) the violator's ability to pay; 3) prior conduct of the violator; 4) the violator's degree of culpability; and 5) economic benefit resulting from the violation.35 EPA encourages settlement through pre-hearing conferences.36
The Corps has promulgated regulations relating to Class I penalties.37 There are no administrative appeals beyond the district engineer for a Class I administrative penalty
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order.38 The Corps has limited its enforcement ability by establishing a policy that if it pursues an administrative penalty, it will not pursue a judicial action for civil penalties.39
Administrative penalty orders are subject to judicial review. Class I penalties are subject to review in district court, while Class II penalties are reviewable in the court of appeals.40
C. Civil Enforcement
The DOJ is the legal counsel for the EPA and Corps in civil enforcement actions in federal court. Through a civil action, DOJ may seek injunctive relief and civil penalties. Courts have broad discretion in setting penalties. Civil penalties may be awarded in the amount of up to $25,000 per day per violation.41 For civil penalty purposes, a violator may be liable for penalties for each day the fill remains in place; the violation continues until the fill is removed. The criteria for establishing the penalty amount are similar to those used for establishing the amount of administrative penalties.
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