Policy Priorities at the Justice Department's Environment and Natural Resources Division
Remarks as Prepared for Delivery
Thank you for the kind introduction. I am pleased to be the opening speaker for this respected conference on natural resources damages.
It is not unusual to hear someone refer simply to the “Environment Division.” But as you all know, that is not quite right. We are more than the Environment Division; we are the Environment and Natural Resources Division. Of course, ENRD does much more than protect and conserve the environment and natural resources. We are the nation’s land acquisition attorneys. We also represent the United States in takings litigation in the U.S. Court of Federal Claims. Our lawyers have significant roles in Indian Country, too.
Nevertheless, the protection and wise use of our nation’s natural resources is an essential and longstanding part of our Division’s mission—it is at the heart of what we do. In fact, our Division was established in 1909, on the heels of the administration of President Theodore Roosevelt, who reminded us, “The Nation behaves well if it treats the natural resources as assets which it must turn over to the next generation increased, and not impaired, in value.” Today, if you visit Theodore Roosevelt Island here in Washington, D.C., you can see that quote etched into the granite of his memorial.
This morning, I will discuss how our enforcement agenda relates to our NRD work. Before doing that, I would like to mention five specific concepts that I think are important for all of us to keep in mind as we do our NRD work.
First, a focus on natural resources and the laws that protect them.
As attendees of this conference know, Congress has created claims for NRD not only in CERCLA and the Clean Water Act, but also to remedy harms caused by oil pollution through the Oil Pollution Act, to protect federal lands through the Resource Protection Act, and to protect marine resources through the Marine Protection, Research and Sanctuaries Act.
All of these claims operate differently, but they share an important common characteristic: each claim allows for recovery associated with a “natural resource”—the land, fish, wildlife, air, water, and other resources that, to use the words in CERCLA, “belong to,” are “managed by,” “held in trust,” or “otherwise controlled by” governments at any level [42 U.S.C. 9601(16)].
This Administration recognizes the value of America’s natural resources, and at ENRD, we know it is part of our mission to protect and revitalize these resources through NRD claims. The recovery of funds from responsible parties to restore injured resources is consistent with this Administration’s principles, and will remain an active part of ENRD’s mission.
Second, engagement with NRD trustees.
Across the full range of environmental issues that we see at ENRD, it’s crucial that we consider the balance between federal, state, and local involvement. This is particularly true when it comes to seeking an NRD remedy. There are overlapping and mutually-dependent roles for federal trustees, state trustees and tribal trustees. Additionally, NRD remedies work best and most efficiently where those trustees are communicating with each other, and cooperating with the parties performing a restoration. I fully acknowledge that NRD restoration can be complex, and cooperation can be difficult. But the effort is worth it if the result is an efficient process that allows our nation’s natural resources to be restored in a manner that recognizes and respects state and local interests.
Third, taking a broad view.
ENRD manages all environmental enforcement and defensive litigation where the United States is a party. This means that we look at these issues with the broad interests of the United States in mind. The United States, as a defendant, is subject to the same rules and standards we enforce on behalf of federal trustees. Because we are subject to the standards that we enforce, our Division has a unique perspective on NRD policy decisions. In other words, we see NRD from the perspective of both the defendant who might be required to pay for these claims, as well as the law enforcement entity tasked with making recoveries. These dual roles help us bring a balanced viewpoint to NRD issues.
Fourth, sound science and valuations.
Our task under law is to address the right injuries in a lawful and scientifically sound way. No doubt, there is a line somewhere between inadequate restoration and excessive remedies, and it requires sound science, fidelity to the law, and lots of hard work to hit the right target.
As part of this effort, we all know that quantifying the value of natural resources or the cost of restoring such resources is inherently challenging. It is said, “Beauty is in the eye of the beholder.” Here, we might also be tempted to say that the value of a particular resource is “in the eye of the beholder.” Yet, our task under law is to pursue a reasonable valuation of resource damages. That is an objective task, but it can be challenging when there are so many “beholders” – trustees at the federal, state and tribal levels; environmental groups; experts retained by those involved in the NRD process; and, ultimately, the courts. All of these likely place different values on resources.
What, then, is our objective in valuation? How is this tied to our objectives in an NRD assessment? How do we know if we hit the right target?
This is difficult to do, and Congress does not provide specific instructions on how to determine the scope of resource damages. Trustees have to make this determination. Turning to CERCLA again to illustrate this point, the Department of the Interior has adopted regulations establishing how to assess NRD in a CERCLA context. If trustees conduct an NRD assessment pursuant to the federal CERCLA regulations, that assessment will “have the force and effect of a rebuttable presumption on behalf of the trustee in any administrative or judicial proceeding” under CERCLA. Because of this presumption, parties conducting a restoration are better off contributing their expertise on the front end of this process. If the science supports your position, introducing that science early, and allowing trustees to consider it, gives an avenue to potentially impact the trustees’ assessment. Challenging an assessment after it is complete is significantly more difficult.
Because of this presumption in support of the trustees’ assessment, potentially liable parties have every incentive to work with the trustees. This approach can minimize factual disputes, resulting in less litigation. And trustees can help to shape the NRD assessment process, hopefully through scientific debate in a less contentious setting. Agencies also benefit from cooperative assessments. Often industries involved in restoring a site have significant knowledge about the history of the site, including, for example, any hazardous substances they used in their operations. As trustees make use of that knowledge, the NRD process is improved.
Clearly, we should all seek to avoid inflated damage calculations, and we should be equally vigilant to avoid deficient or deflated damage calculations. In the early days of NRD work, damage calculations were often much lower than today. There are obvious reasons for that; but with NRD costs going up, the incentive to litigate endlessly goes up as well. That poses a growing challenge that ENRD and trustees should consider, which leads me to my next point.
Fifth, achieving early settlements and following-through.
Clearly, it is a win-win if all trustees and parties find a way to avoid protracted litigation while achieving the lawfully required level of restoration. But how do we find a path to early settlement? One way is to do what we have just talked about – focus on the natural resources as defined in law; use sound science; and try our best to get the valuation right. Agreeing on a process up front for those actions can help. Another key step is exploring innovative solutions for restoration that can save time and money while also doing the job.
But I readily acknowledge that trustees sometimes must advance NRD claims through litigation. Litigation usually arises because there is a fundamental disagreement over the NRD assessment. Figuring out the scope of natural resource damages at a site can be complicated. Figuring out an appropriate remedy is even more complicated. This is true even where there is a single trustee. The process becomes more difficult where multiple trustees are involved. Add liable parties to this mix, throw in some legal and factual disputes, and you have a recipe for a decade or more of litigation. This is particularly true where conflict, rather than a spirit of cooperation, defines the relationship between parties.
What can help? Trustee coordination helps. But it is also crucial to minimize factual disputes. Again, we can do that by ensuring that we are all using the best scientific information to reach as objective an assessment as possible.
We also need to make sure that NRD funds go to appropriate restoration work and are not diverted to help supplement state or federal government coffers. This requires discipline by everyone involved in the process, from start to finish.
On all of these five points, I would welcome the thoughts or ideas from the experts in this conference. If there are ways we can do our NRD work better, we’d like to hear them.
So I have just spent the first part of my remarks identifying five NRD-specific principles at a high level. Now, I would like to place our NRD work in the broader context of our Division’s environmental enforcement work by highlighting a few of the environmental enforcement principles we are emphasizing at this time.
The first principle is the impartial rule of law. Like all law enforcement activities in our system of justice, federal environmental enforcement is focused on the pursuit of the truth of a case wherever the facts may lead. This is the responsibility of everyone who is involved in pursuing an enforcement case. Deputy Attorney General Rod Rosenstein recently explained it this way:
The rule of law is not just about words on paper. The words mean nothing without people who apply them. The rule of law depends upon the character of the people who enforce the law. If they uphold it faithfully, the result will be a high degree of consistency and predictability. Those features are among the primary reasons our nation has thrived.
As ENRD seeks to advance the rule of law through federal enforcement of NRD claims, we do so impartially, without special treatment for, or animus against, any particular person, industry, group or interest.
What does this mean, in practice? Congress has clearly defined NRD claims in various statutory settings. Congress has empowered the executive branch to take certain actions, under law, to preserve our nation’s natural resources. We will do so, as directed, seeking to apply the principles set out by Congress, as developed by executive agencies through notice and comment rulemaking. We will seek to apply these rules in an objective and neutral way. Clear standards and consistent enforcement not only provide regulatory certainty; it also allows for efficient and effective protection of our natural resources.
I believe a good example of the appropriate application of an NRD claim is ENRD’s recent settlement of claims against E.I DuPont de Nemours Co. (formerly DuPont). On July 28, 2017, the District Court of the Western District of Virginia approved our $50 million natural resource damages settlement. This case involved damages to Virginia’s South River ecosystem – damage that stems from decades of toxic discharges into that system from a DuPont facility in Waynesboro, Virginia. Under the settlement, DuPont will make a cash payment of just over $42 million to government natural resource trustees, who will oversee the implementation of projects compensating the public for the natural resource injuries and associated losses in ecological and recreational services, such as fishing access. In addition, DuPont will directly implement significant renovations at the Front Royal Fish Hatchery, estimated to cost up to $10 million. DuPont worked for over a decade with trustees from the Commonwealth of Virginia and the U.S. Fish and Wildlife Service to develop the natural resource damages assessment.
Another enforcement principle we emphasize is cooperative federalism. Cooperative federalism is a cornerstone of federal environmental law and guides ENRD enforcement activities. Under most federal environmental statutes, states and tribes share responsibilities with the United States as co-regulators. We are committed to full and robust engagement with states and tribes in fulfilling our joint environmental enforcement mission.
NRD is an excellent example of an area of law where states and tribes share responsibilities with the United States as co-regulators. Consider CERCLA. That statute uses the term “trustee” to designate the entities authorized to recover natural resource damages. Trustees are able to sue to seek damages for natural resources within their trusteeships that have been harmed. CERCLA directs the President to designate federal trustees to pursue NRD claims, and the president has done so. State and tribal governments also have similar federal enforcement authorities. Some states have even created their own state law authorities to recover natural resource damages.
Though federal trustees were largely responsible for the early development of NRD law, many States and tribes, especially in recent years, have become very active seeking NRDs within their jurisdictions. Often the State and local governments live with the contamination, and live with the cleanup in a way that the federal government does not. As a result, States and local governments may be in a better position to understand the nuances of a site and the relationship of resource restoration to the local economy and local businesses.
One example of a recent NRD matter where state involvement has been key is the Onondaga Lake settlement. Throughout most of the 20th Century, many companies discharged mercury and other hazardous substances into Onondaga Lake in New York, impacting a range of natural resources including water, sediments, fish, reptiles, birds and mammals. For many years, the U.S. Fish and Wildlife Service and the New York State Department of Environmental Conservation worked closely together and, cooperatively with a potentially responsible party, Honeywell, to finalize a Natural Resource Damages Assessment. Trustees from the State of New York also took a true leadership position during that process. The assessment was finalized in August 2017. In December of 2017, an NRD settlement was finalized with Honeywell.
The proposed settlement requires Honeywell to implement and maintain 20 projects to restore and protect wildlife habitat and water quality, and increase recreational opportunities at Onondaga Lake. Honeywell will also pay over $5 million for future restoration projects to be undertaken by the federal and state trustees, Department of Interior, and the Commissioner of Environmental Conservation, and pay $1.25 million allocated for the trustees’ future oversight and stewardship activities to protect and maintain restoration projects. Onondaga County will operate, repair, maintain, and monitor five of these restoration projects located on or adjacent to County parklands for 25 years. The total value of this proposed settlement is $26 million. I want to applaud the excellent work of all of the parties to achieve this good outcome.
The final enforcement principle I will address is employment of the full range of enforcement tools. When federal enforcement is warranted, we must apply available tools in a manner that is appropriate for the violation of law. In the environmental statutes that ENRD enforces, Congress has given federal agencies (and by extension, the Department of Justice) a wide range of options to enforce the law. In this context, let me focus on an issue that has received some attention lately; that is, the role of third parties in ENRD settlements.
In June of 2017, Attorney General Sessions issued a memorandum restricting the use of settlement payments to third parties. That memorandum recognized that the goals of any settlement are, primarily, to compensate victims, redress harm, or to deter unlawful conduct. In the past, some settlements with the United States would incorporate payments to third-party organizations that had no other role in the case. As Attorney General Sessions explained when announcing the policy, the fundamental reason for establishing this new policy is to ensure that the settlements entered into by the United States are fair, impartial, and free from undue political influence.
The Attorney General’s June memorandum contains limited exceptions. One exception is that the policy does not apply to a payment or loan that “directly remedies the harm sought to be redressed, including, for example, harm to the environment.” Another exception—the third-party payment prohibition does not apply to “payments expressly authorized by statute.” Both of these can come into play in NRD cases.
I recently issued a memo to help clarify the application of the Attorney General’s third party payment memo to ENRD matters, including cases involving NRD. As set forth in the memo, ENRD interprets the exceptions outlined by the Attorney General to allow for payments to third parties to implement NRD restoration in appropriate circumstances. First, payments of NRD monies that comply with NRD statutory standards are considered “payments expressly authorized by statue,” and are permissible. For example, Section 107(f)(1) of CERCLA provides that natural resource damages recovered on behalf of a federal trustee “shall be retained by the trustee, without further appropriation, for use only to restore, replace, or acquire the equivalent of such [injured] natural resources.” Section 1006(f) of the Oil Pollution Act similarly requires trustees to retain NRD recoveries “without further appropriation, for use only to reimburse or pay the costs incurred by the trustee.” Second, payments of NRD monies that directly remedy the environmental harm are also permissible under the June memorandum.
We recognize, in the NRD context, that third party expertise is sometimes necessary, and is sometimes the most efficient way to achieve an appropriate remedy. The application of these exceptions allow for funds from NRD settlements to be used to pay third parties, such as land or habitat conservation specialists, to implement selected restoration projects. But this is a very limited exception and exists solely because of the statutory framework uniquely applicable in NRD cases.
So, as we do our affirmative enforcement work at ENRD, including our NRD work, we will be emphasizing the impartial rule of law, enhancing cooperative federalism, and employing the full range of enforcement tools. This obviously is not an exhaustive list but hopefully it provides some insights for all of you here today.
In closing, with these principles in mind, I firmly believe NRD settlements can achieve the important work of restoring our nation’s resources. I think we can get more done sooner, which will be better for everyone and better for our nation’s natural resources. To that end, I appreciate the work of everyone here today on this worthy mission. As President Theodore Roosevelt well understood, we should bear in mind that future generations of Americans will benefit from our work now to wisely steward our nation’s resources.