By Andrew H. Perellis, Patrick D. Joyce, and Craig B. Simonsen

Seyfarth Synopsis:  In another business-friendly move, the U.S. Department of Justice (DOJ) recently updated its Justice Manual to clarify that it “should not treat a party’s noncompliance with a guidance document as itself a violation of applicable statutes or regulations [or to] establish a violation by reference to statutes and regulations.”

We had blogged in early 2018 regarding Associate Attorney General Rachel Brand’s memorandum “Limiting Use of Agency Guidance Documents In Affirmative Civil Enforcement Cases.” (Brand Memo), which indicated that the Department would no longer prosecute cases based solely on violations of various agencies’ “guidance documents”.  Now DOJ has taken it a step further by adding a section to its Justice Manual (Manual) titled: “Limitation on Use of Guidance Documents in Litigation..”  The new section was effective in December 2018.

Under the updated Manual, DOJ (which effectively acts as “outside counsel” to departments and agencies including the DOL, EPA, OSHA, ATF and DEA, among others, in cases exceeding certain penalty thresholds and other criteria) may no longer prosecute cases against alleged violators unless the violations are of properly promulgated (through “notice and comment” rulemaking) regulatory requirements, not agency guidance documents or policies.

The Brand Memo itself was a follow-up to an earlier memo issued by Attorney General Jeff Sessions on November 16, 2017 (Sessions Memo), which instituted a new policy that prohibits the Department of Justice from using its civil enforcement authority to convert agency guidance documents into binding rules. The Sessions Memo “prevent[ed] the Department of Justice from evading required rulemaking processes by using guidance memos to create de facto regulations. In the past, the Department of Justice and other agencies had blurred the distinction between regulations and guidance documents.”

Under the DOJ’s new policy, DOJ civil litigators are “prohibited from using guidance documents—or noncompliance with guidance documents—to establish violations of law in affirmative civil enforcement actions.”  The Brand Memo also indicates that “the [Sessions Memo]. . . prohibits the Department from using its guidance documents to coerce regulated parties into taking any action or refraining from taking any action beyond what is required by the terms of the applicable statute or lawful regulation.”  Finally, the Brand Memo confirms that the DOJ “…should not treat a party’s noncompliance with an agency guidance document as presumptively or conclusively establishing that the party violated the applicable statute or regulation.”

While the Brand Memo applied only to affirmative civil enforcement actions brought by the DOJ, we see the updated Manual, Sessions Memo and the Brand Memo as welcome relief from arbitrary use of guidance by departments and agencies such as the DOL, OSHA, or EPA in enforcement proceedings of regulated industry.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Seyfarth OSHA Compliance, Enforcement & Litigation Team or the Environmental Compliance, Enforcement & Permitting Team.

By Jeryl L. OlsonPatrick D. Joyce, and Craig B. Simonsen

Seyfarth Synopsis:  In another business-friendly move, the U.S. Department of Justice (USDOJ) recently directed its Attorneys to not use its civil enforcement authority for violations based on agency guidance documents.

On January 25, 2018, Associate Attorney General Rachel Brand released an Department memo “Limiting Use of Agency Guidance Documents In Affirmative Civil Enforcement Cases.” (“Brand Memo”), directed to the Heads of Civil Litigating Components within the USDOJ directing that the Department no longer prosecute cases based solely on violations of various agencies’ “guidance documents”.

The USDOJ, (which effectively acts as “outside counsel” to departments and agencies including the DOL, EPA, OSHA, ATF and DEA, among others, in cases exceeding certain penalty thresholds and other criteria) may no longer prosecute cases against alleged violators unless the violations are of properly promulgated regulatory requirements, not agency guidance documents or policies. The practice of agencies, such as EPA, pursuing enforcement actions against companies who have failed to comply with “guidance” has long been a concern of the regulated community and their defense counsel; we frequently challenge and object to EPA’s efforts to enforce “guidance” that has not gone through public notice ad comment rulemaking. It is a relief that the USDOJ will no longer be a party to such enforcement cases.

The Brand Memo is a follow-up to an earlier memo issued by Attorney General Jeff Sessions on November 16, 2017 (“Guidance Policy” or “Sessions Memo”), which instituted a new policy that prohibits the Department of Justice from using its civil enforcement authority to convert agency guidance documents into binding rules. The Sessions Memo “prevents the Department of Justice from evading required rulemaking processes by using guidance memos to create de facto regulations. In the past, the Department of Justice and other agencies had blurred the distinction between regulations and guidance documents.”

The Brand Memo states that “…consistent with our duty to uphold the rule of law with fair notice and due process, this policy helps restore the appropriate role of guidance documents and avoids rulemaking by enforcement.” “Although guidance documents can be helpful in educating the public about already existing law, they do not have the binding force or effect of law and should not be used as a substitute for rulemaking.”

Under the USDOJ’s new policy, USDOJ civil litigators are “prohibited from using guidance documents—or noncompliance with guidance documents—to establish violations of law in affirmative civil enforcement actions.”The Brand Memo also indicates that “the Guidance Policy . . . prohibits the Department from using its guidance documents to coerce regulated parties into taking any action or refraining from taking any action beyond what is required by the terms of the applicable statute or lawful regulation.” Finally, the Brand Memo confirms that the USDOJ “…should not treat a party’s noncompliance with an agency guidance document as presumptively or conclusively establishing that the party violated the applicable statute or regulation.”

While the Brand Memo applies only to future affirmative civil enforcement actions brought by the Department, as well as, “wherever practicable,” those matters pending as of January 25, 2018, we see the Guidance Policy and the Brand Memo as welcome relief from arbitrary use of guidance by departments and agencies such as the DOL, OSHA, or EPA in enforcement proceedings of regulated industry.

For more information on this or any related topic please contact the authors, your Seyfarth attorney, or any member of the Seyfarth OSHA Compliance, Enforcement & Litigation Team or the Environmental Compliance, Enforcement & Permitting Team.

By James L. Curtis and Meagan Newman

The U.S. Department of Justice (DOJ) announced this week that it is creating a Whistleblower Ombudsperson position.  According to the DOJ news release, “Whistleblowers play a critical role in uncovering waste, fraud, abuse, and mismanagement.” This new position will enable the DOJ Office of the Inspector General (OIG) “to continue its leadership as a strong and independent voice within the Department of Justice on whistleblower issues.”

The Whistleblower Ombudsperson will focus on “training and educating employees within the DOJ about the role and importance of whistleblowers in improving the effectiveness and efficiency of the Department’s operations, as well as their legal rights and protections against retaliation.” The Whistleblower Ombudsperson also will be responsible for alerting Department officials and managers to the possible repercussions of retaliation against those who make protected disclosures. In addition, the  Whistleblower Ombudsperson will:

  • Ensure that whistleblower complaints are reviewed and addressed by the OIG in a prompt and thorough manner;
  • Communicate with whistleblowers about the status and resolution by the OIG of those complaints;
  • Monitor investigations of retaliation claims that are within the jurisdiction of the OIG; and
  • Serve as the OIG liaison to other U.S. Agencies and to nongovernmental whistleblower organizations and advocacy groups.

The DOJ’s announcement can be seen as a  political response to the Fast and Furious whistleblower debacle. However, it must also be reviewed in light of the Occupational Safety and Health Administration’s push toward more merit findings in favor of whistleblowers and the Department of Labor’s position to that government is not doing enough to protect whistleblowers. It follows a trend that private employers are also following–designating a person/office to oversee handling of whistleblower complaints internally. There are obvious benefits to doing so in that it shows that the employer is committed to whistleblower protection and encourages employees to raise concerns.

By Andrew H. Perellis and Craig B. Simonsen

The U.S. Department of Justice (DOJ) and The Ryland Group Inc. (Ryland Homes), have filed a proposed consent decree to resolve Clean Water Act violations. The complaint, filed simultaneously with the proposed consent decree in the U.S. District Court in Charlotte, N.C., alleged violations that were discovered through site inspections and from documentation submitted to the government by Ryland Homes.

As noted in the DOJ press release, the alleged violations included failure to obtain permits until after construction began, failing to obtain permits at all, and failing to comply with permit requirements at sites where Ryland Homes did obtain permits. The alleged permit violations included not developing complete stormwater pollution prevention plans, failure to conduct adequate inspections, and failure to install or implement adequate stormwater controls or practices.

Ryland Homes agreed to pay a civil penalty of $625,000 to settle the dispute. Ryland Homes will also invest in compliance programs to improve employee training and increase management oversight at all current and future construction sites. The company is also required to inspect its current and future construction sites routinely to minimize stormwater runoff from sites.  The Company will submit national compliance summary reports to the U.S. Environmental Protection Agency (EPA) based on quarterly oversight inspections.

By Andrew H. Perellis, Eric E. Boyd, and Craig B. Simonsen

Most environmental statutes allow suits challenging actions by the U. S. Environmental Protection Agency (EPA), and provide that successful plaintiffs in these actions can receive attorney fees and costs. The U.S. Government Accounting Office (GAO) recently released an analysis of Environmental Litigation: Cases Against EPA and Associated Costs Over Time. The GAO examined environmental litigation for the years 1995 through 2010, including payments to successful plaintiffs from the U.S. Department of Justice’s (DOJ) Judgment Fund and from the EPA appropriations. To conduct the review, GAO obtained and analyzed data from two DOJ databases on cases filed under ten key environmental statutes.  In addition, GAO interviewed representatives of environmental and industry groups, state attorneys general, and other experts.

According to the report, the number of cases filed in federal court varied over time. Generally, DOJ defended EPA in about 2,500 cases between 1995 and 2010, with an average of about 155 cases each year. Most cases were filed under the Clean Air Act (59 percent) and the Clean Water Act (20 percent).  The plaintiffs filing cases against EPA during the study included trade associations (25 percent), private companies (23 percent), local environmental groups and citizens’ groups (16 percent), and national environmental groups (14 percent).

The DOJ did spent $43 million (calculated in 2010 dollars), or $3.3 million annually, to defend the EPA in court during this time. In addition, due to statutory requirements to pay attorney fees and costs, the Treasury paid about $14.2 million from fiscal year 2003 through fiscal year 2010, or about $1.8 million per fiscal year, to successful plaintiffs in environmental cases. EPA paid approximately $1.4 million from fiscal year 2006 through fiscal year 2010, or about $280,000 per fiscal year, to successful plaintiffs for environmental litigation claims under relevant statutes.