EPA Raises Statutory Civil Monetary Penalty Amounts

Posted In Environmental

On July 1, 2016, the US Environmental Protection Agency (EPA) issued an interim final rule that modifies statutory civil monetary penalty amounts for statutes administered by the agency. EPA’s interim final rule, which becomes effective on August 1, 2016, implements requirements of the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Act) and, according to EPA, is designed to increase EPA’s statutory civil monetary penalties to reflect inflation – significantly, in some cases – and to ensure civil penalties maintain their deterrent effects. EPA has stated that its adjusted civil penalty amounts will not necessarily affect the process it uses to assess penalties or the amounts it will ultimately assess, but EPA’s adjusted statutory penalty amounts could result in significant penalties in some enforcement cases. In some cases, EPA now has authority to impose penalties of hundreds of thousands of dollars per day per violation.

Since 1990, the EPA, like other federal agencies, has been required to review and, as appropriate, to revise its statutory monetary penalty amounts every four years to account for inflation. In practice, however, certain agencies did not follow this quadrennial requirement. The 2015 Act provides that, beginning on January 15, 2017, federal agencies, including the EPA, will be required to provide for annual cost-of-living adjustments to their statutory penalty amounts to reflect inflation.

In the interim, however, the 2015 Act requires agencies to provide for initial “catch-up” cost-of-living adjustments for civil penalty amounts through their interim final rulemakings. The “catch-up” amounts may not, by statute, exceed 150 percent of the penalty amounts in effect on November 2, 2015.

Consistent with the 2015 Act and the Office of Management and Budget’s (OMB) February 24, 2016 guidance, EPA calculated “catch-up” amounts for over 66 statutory penalties and announced the adjusted penalties in Table 2 of the interim final rule. EPA’s new, adjusted statutory civil penalty amounts vary by penalty. For example, the interim final rule increases the previous maximum $37,500 per-day penalty for violating requirements of implementation plans or permits for affected sources, major emitting facilities, or major stationary sources under the Clean Air Act (CAA) to a maximum of $93,750 per day per violation. Similarly, the interim final rule increases EPA’s civil monetary penalty under the Clean Water Act (CWA) for oil or hazardous substance discharges – previously set at a maximum of $37,500 per day per violation – to $44,539 per day per violation.

The ranges of statutory civil penalties under Table 2 of the interim final rule are, by statute:

EPA-Administered Statute Range of Statutory Civil Penalties for Violations that Occurred After November 2, 2015 and Assessed on or After August 1, 2016
Clean Air Act $8,908 – $356,312
Clean Water Act $1,782 – $257,848
Comprehensive Environmental Response, Compensation, and Liability Act $53,907 – $161,721
Resource Conservation and Recovery Act $14,023 – $93,750
Safe Drinking Water Act $9,375 – $1,311,850
Toxic Substances Control Act $8,908 – $37,500

EPA can assess its adjusted penalty amounts on or after August 1, 2016 for statutory violations that occurred after November 2, 2015; parties should consult Table 2 of the interim final rule for guidance on penalty amounts for such violations. However, for statutory violations that occurred on or before November 2, 2015, or for violations that occurred after November 2, 2015 but for which EPA assesses penalties before August 1, 2016, parties should continue to consult EPA’s existing civil penalty amounts, located in Table 1 of 40 C.F.R. § 19.4.

Daphne W. Trotter
Daphne W. Trotter is an environmental litigator and transactional lawyer. Daphne frequently counsels clients on the role of environmental issues and the management of associated risks in corporate, real estate and lending transactions. In this role, she serves as lead environmental counsel for purchasers and sellers in mergers and acquisitions involving facilities in a variety of industries, including power generation, building material supply and manufacturing, petroleum and natural gas storage and transfer, hospitals, glass manufacturing and chemical manufacturing. Read Daphne Trotter's full bio.


Julie Herward McConnell
Julie H. McConnell has successfully represented clients in litigation, enforcement and compliance matters in federal and state courts and before the Federal Energy Regulatory Commission (FERC). Her experience includes complex energy and environmental cases involving the Federal Power Act, the Interstate Commerce Act and the Clean Air Act, as well as disputes involving the Civil Rights Act, the Fair Labor Standards Act, public accommodations under the Americans with Disabilities Act and state accessibility laws, tort claims and contract claims. Read Julie H. McConnell's full bio.

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