Internal EPA Memorandum stresses “Compliance First” in enforcement; Limits SEPs and injunctive relief

What Does the Memorandum do?

The Memorandum is effective immediately and directs EPA civil enforcement staff to prioritize compliance over lengthy negotiated enforcement actions, without altering the Superfund early action approach. Fundamentally, the Memorandum eemphasizes swift resolution and compliance, clear interpretation of the law and consistency across the agency over prolonged investigations.

Key elements of the Memorandum include:

• Compliance First Orientation: The Memorandum requires EPA employees responsible for civil, judicial, and administrative enforcement and compliance to ensure compliance “in the most efficient and quickest means possible,” prioritizing compliance assistance tools such as proactive outreach, technical assistance, and training, and promoting voluntary compliance initiatives such as self-reporting and voluntary audits over enforcement. The Memorandum also stresses the need for enforcement to “be tailored to achieve compliance quickly” and to avoid aggressive positions or overreach that could delay negotiations, resolution, and actual compliance.
• Elevation of Regulated Entities’ Questions Regarding Statutory or Regulatory Interpretation: The Memorandum repeatedly stresses that agency enforcement and compliance activities must rely on “the clearest interpretation of our legal mandates” and “the ‘best reading’ of the relevant statute and regulation” to avoid delays in compliance and costs associated with litigating statutory or regulatory interpretations. Significantly, the Memorandum also provides that “[w]here a regulated entity raises concerns about how EPA has applied a statute or regulation to its specific case . . . such questions must be elevated immediately for further analysis.” The Memorandum does not specify a decision maker for such questions raised beyond “at a national level” or, in regional cases, directing that the relevant Office of General Counsel and OECA offices should be consulted.
• Deference to States in the Absence of a “Clear Federal Interest”: The Memorandum emphasizes deference to states authorized to administer federal environmental laws. OECA’s role, as envisioned in the Memorandum, is primarily to support state co-regulators and to ensure consistency in the application and enforcement of federal environmental laws. The Memorandum also indicates that “OECA’s enforcement efforts must be based on a clear federal interest,” but does not explain what types of issues would implicate such interests.
• Limitations on Broad Injunctive Relief & Supplemental Environmental Projects: The Memorandum officially retracts EPA’s 2021 guidance on “Using All Appropriate Injunctive Relief Tools in Civil Enforcement Settlements” and reinstates the first Trump Administration’s prohibition on supplemental environmental projects (SEPs) in settlement agreements until additional guidance on the use of SEPs is issued. This prohibition on SEPs—projects which are often included in settlements to benefit those affected by a violation, but go beyond what EPA could require an entity to do under the law—is likely to impact negotiations for existing enforcement actions where a SEP had been contemplated as part of the settlement. Importantly, the Memorandum goes beyond the first Trump Administration’s SEP prohibition and placing further limits on injunctive relief. For example, the Memorandum disapproves of expansive monitoring or reporting requirements and requires OECA Assistant Administrator approval of any proposed settlement containing mitigation or stipulated remedy provisions. The Memorandum also requires OECA Assistant Administrator approval to initiate negotiations with a regulated entity regarding certain injunctive relief such as third-party audits, verification, or monitoring. Finally, proposed settlements that could include mitigation (in cases involving issues of national significance) or stipulated remedies will now require prior approval from the OECA Assistant Administrator until additional guidance is issued.
• Open Communication. The Memorandum also repeatedly stresses the vitality of clear and open communication with stakeholders and indicates that, consistent with OECA guidance issued earlier this year (which we previously wrote on here), the agency’s compliance assurance and enforcement activities must be aligned with Administration priorities as articulated in executive orders and the “five foundational pillars” of the “Powering the Great American Comeback” initiative. Personnel are encouraged operate in a “no surprises” framework to accelerate compliance by avoiding resource-intensive disputes over process and procedures.

Implications for Regulated Entities

Regulated entities should no longer expect to negotiate SEPs as part of settlement (a return to the first Trump Administration’s position), and the Memorandum clearly signals that injunctive relief will be curtailed. While the unavailability of broad injunctive relief could lead to higher penalties, the Memorandum suggests that formal enforcement will be deprioritized in favor of compliance assistance tools and informal enforcement. This could mean more emphasis on administrative resolutions, more no-penalty Administrative Orders on Consent, and fewer judicial referrals.

It is uncertain whether the Memorandum represents a genuine shift in policy or merely formalizes what the agency already does. For example, although previously there was no formal requirement for “elevation” of questions or to obtain approval for proposed mitigation or stipulated remedies, historically, the OECA Assistant Administrator has approved the vast majority of the agency’s enforcement actions, including those involving injunctive relief. In any event, the Memorandum currently remains an internal memorandum and does not create any rights available to regulated entities.

While the Memorandum is intended to speed up enforcement and ensure timely compliance, it has raised concerns that the policies will result in delayed or reduced compliance. The requirement to elevate legal questions to EPA headquarters could delay enforcement actions, and limitations on injunctive relief reduce flexibility in negotiations to “get to yes.” The Memorandum also signals a shifting of responsibility to states at a time when EPA has already reduced its workforce and is likely to face significant budget cuts (which will in turn limit the funding EPA can provide to state programs).

What Should Regulated Entities Do?

Stakeholders should continue to closely monitor as EPA publishes additional guidance and track emerging enforcement trends. To align with the Administration’s “compliance-first” framework, companies should take a proactive approach to compliance by continuing to ensure compliance programs are effectively designed and implemented, appropriately resourced and up to date. Companies should consider consulting counsel to conduct confidential and privileged risk assessments and oversee voluntary self-audits to adopt a “find and fix” approach while maintaining attorney-client privilege. When faced with findings of violation with novel claims or expansive regulatory interpretations, companies should work with counsel to evaluate strategies related to elevating concerns with EPA. For ongoing enforcement matters where settlements may include third-party audits, monitoring, mitigation, or stipulated remedies, Companies should confirm how this Memorandum impacts those settlement elements and whether EPA personnel have obtained appropriate approvals from OECA. Finally, companies should not expect settlements to involve SEPs until additional guidance is issued.

Authored by Emily Kimball, Katherine Vanderhook-Gomez, and Misty Howell.