U.S. Department of Justice Announces New Office of Environmental Justice and Return of Supplemental Environmental Projects
May 15, 2022
On May 5, 2022, the United States Department of Justice (USDOJ) announced a series of actions to inaugurate a comprehensive strategy aimed at enhancing environmental justice efforts. The announcement, and accompanying agency memorandums, mark the USDOJ’s and United States Environmental Protection Agency’s (USEPA) joint strategy to prioritize enforcement against environmental harm caused in “overburdened and underserved communities” (“Enforcement Strategy”). Attorney General Merrick B. Garland and USEPA Administrator Michael S. Regan outlined the key measures the Agencies are to implement, including creation of a new environmental justice enforcement office and reinstitution of supplemental environmental projects (SEPs) in settlements with the federal government.
Contemporaneously, Associate Attorney General Vanita Gupta issued an enforcement strategy (Enforcement Strategy) to guide the USDOJ in advancing environmental justice through the enforcement of federal laws. The Enforcement Strategy was created pursuant to Executive Order 14008, Tackling the Climate Crisis at Home and Abroad and directs USDOJ attorneys to: (1) prioritize cases that will reduce public health and environmental harms to overburdened and underserved communities; (2) make strategic use of all available tools to address environmental justice concerns; (3) engage with impacted communities; and (4) be transparent about environmental justice efforts and the results of those efforts. The USDOJ announced the creation of the Office of Environmental Justice (OEJ) within the Environmental and Natural Resources Division (ENRD) of the USDOJ as a resource to implement the aforementioned Enforcement Strategy.
Finally, the USDOJ issued an Interim Final Rule that restores the use of SEPs, subject to the Attorney General’s May 5, 2022 “Guidelines and Limitations For Settlement Agreements Involving Payments to Non-Governmental Third Parties” (2022 SEP Guidelines). In 2017, the former Attorney General prohibited USDOJ components from entering into settlement agreements that direct or provide for payments to non-governmental third parties via SEPs, which typically involve monies that would be otherwise paid to the United States Treasury as a penalty being diverted to local environmental projects often implemented by, or involving, non-governmental third parties. Prior to the 2017 prohibition, USDOJ settlement of criminal and civil matters often included SEPs. The 2022 SEP Guidelines rescind the 2017 prohibition and restore USDOJ’s authority to enter into settlements that include SEP components, subject to new guidelines and limitations.
The 2022 SEP Guidelines include: (1) defining the nature of the scope of the funded project(s); (2) a nexus requirement between the project(s) and the alleged federal law violation; (3) USDOJ not proposing selection of any particular third party to receive payments; (4) any settlement must be executed before an admission or finding of liability in favor of the United States; (5) no settlement shall satisfy any existing statutory obligation; and (6) no settlement will be solely for general public educational or awareness projects. Importantly, the Guidelines’ criterion that any settlement must be executed before an admission or finding of liability in favor of the United States is intended to resolve any potential or construed conflict between SEP use in a settlement and the Miscellaneous Receipts Act (“MRA”), which requires that “an official or agent of the Government receiving money for the Government from any source shall deposit the money in the Treasury as soon as practicable without deduction for any charge or claim.” (31 U.S.C. § 3302(b).) USDOJ has previously interpreted this language to require that funds be deposited in the Treasury in instances where the government has the ability to accept funds; the monies need not actually “change hands” to trigger the requirement. Thus, inclusion of a “no admission of liability” provision in a settlement with the federal government is an essential element, should a party wish to divert funds to a SEP, rather than to the United States Treasury as directed by the MRA and/or enforcement statutes.
The Interim Final Rule invites public comment on the 2022 SEP Guidelines, including comments to inform any future changes to the USDOJ’s approach to using SEPs.