Out of Bounds and Out of Control: Regulatory Enforcement at the EPA

Introduction

In theory, enforcement occupies a specific pigeonhole in an orderly regulatory universe. Congress passes a law mandating that specified actions be carried out, or avoided, by organizations and individuals in the private sector. Substantial authority is delegated to an agency, which promulgates rules to elaborate on Congress’s intent, resolve unsettled issues, and fill in legal gaps. The agency also establishes mechanisms to monitor and compel compliance—information collection systems, investigators, prosecutors, judges, rules of procedure, and penalty schedules.

If one asks how such an enforcement system is working, the questions are standard. Is it adequately funded? Are the people doing their jobs? Do regulated entities know what is required of them? Are they complying? Are the penalties imposed commensurate with our sense of justice? Is prosecutorial discretion exercised appropriately to allow for extenuating circumstances? Does the institution have a reasonable case selection process, given that it cannot pursue every violator? Are like cases treated alike? Do the institutional arrangements—such as the division of power between Washington and regional offices—foster efficiency and effectiveness? Are the enforcers corrupt, either directly or through political pressure?

These are fair questions to ask about EPA’s environmental enforcement procedures, and many analysts have indeed asked them.¹ However, this list of questions is seriously incomplete, because a deeper issue, more important than any of these, is not addressed: Are the agency’s enforcement procedures and activities consistent with the rule of law?

The phrase, ‘‘rule of law,’’ is frequently used but seldom defined. F. A. Hayek provided a definition directly relevant to the analysis of EPA regulatory enforcement when he said,

Nothing distinguishes more clearly conditions in a free country from those in a country under arbitrary government than the observance in the former of the great principles known as the Rule of Law. Stripped of all technicalities, this means that government in all its action is bound by rules fixed and announced beforehand—rules which make it possible to foresee with fair certainty how the authority will use its coercive powers in given circumstances and to plan one’s individual affairs on the basis of this knowledge.²

Judged by these criteria, EPA enforcement policy most certainly does not comport with the rule of law. The full array of environmental regulation is so detailed, obscure, and all-encompassing that no regulated entity can possibly ascertain and maintain full compliance with all mandates at all times. In consequence, EPA maintains broad discretion to define what is and is not a violation of the law. It fights vigorously to avoid any checks on this discretion. It often exercises its discretion retroactively or arbitrarily. It makes examples of people who dispute the agency’s interpretation of its power or who express doubts about the absolute primacy of EPA’s mission, such as those who assert the validity of economic values or who argue that tradeoffs between environmental and other values should be addressed.

EPA also blurs lines that separate legislative, executive, and adjudicatory functions. Using its vast powers to ‘‘interpret’’ vague statutes, it makes the laws that define its own powers, then investigates, prosecutes, adjudicates, and penalizes. Judicial checks are weak and sporadic. This panoply of power breeds regulatory zealotry and a disregard for the rights of the regulated.

Such a lack of dedication to the rule of law by a government agency is hardly a minor complaint. As Robert Conquest, the great scholar of 20th century totalitarianism, recently emphasized,

The mere creation of democratic institutions and electoral processes is nothing like enough to guarantee the survival of democracy unless and until an evolution of political attitudes, and an acceptance of consensual principles, really permeate the society in question, and above all the Rule of Law that represents and realizes these principles.³

To support these harsh judgments, this analysis proceeds in four steps: Chapter 1 is primarily descriptive. It describes EPA’s scope of authority, the universe of regulated entities, and the enforcement mechanisms that the agency brings to bear. It contains basic numbers on the enforcement activities—cases brought and concluded, money collected, matters referred to the Department of Justice. It examines the number of entities with which EPA must deal and provides basic data on the numbers and types of cases it processes.

Chapter 1 also makes a serious substantive point. While EPA public relations materials convey the image of an agency under siege, continually fighting recalcitrant industry, the agency’s own data create a rather different picture. In reality, compliance with the environmental laws by U.S. business appears to be quite good. The agency has to scramble to keep up its flow of enforcement cases, and most of its work involves not-very-significant violations of paperwork requirements or minor releases of pollutants. The agency’s shrill assaults on the regulated community are not justified by the information available on the actual extent of that community’s transgressions.

Chapters 2 through 7 provide a bill of particulars on EPA’s disregard for the rule of law. Those sections do not purport to be encyclopedic. They focus on a few areas that are particularly apt for purposes of illustrating what is wrong with the agency’s enforcement procedures and activities. The common thread throughout this discussion is that the agency’s approach to the rule of law goes beyond indifference; the EPA is actively hostile to it.

Chapter 2 considers the arbitrary nature of EPA enforcement practices. It finds that strict compliance with EPA regulations is extremely difficult and in many cases absolutely impossible. EPA is thus in a position to take action against virtually any regulated entity it chooses to attack. Moreover, the agency has total discretion over whether to treat a particular offense as a serious criminal case, a minor administrative matter, or something in between. Enforcement activities are thus inevitably arbitrary, and this arbitrariness not only violates the rule of law but actually undermines environmental protection.

Chapter 3 discusses EPA’s refusal to consider whether the targets of its enforcement activities actually intended to break the law. Although there are good reasons for the law to disregard intent in some cases, those reasons do not apply in environmental enforcement. The idea that a defendant should not be convicted of a criminal offense or assessed civil penalties if he could not, with reasonable diligence, figure out what the law required is fundamental to a civil society.

Chapter 4 examines the vague and inscrutable nature of many of the regulations imposed on industry. EPA frequently changes and revises its interpretation of those regulations without providing due notice to the regulated community that changes have been or will be made. This lack of fair warning often results in prosecutions for offenses that were not obviously illegal at the time.

Chapter 5 considers how changes in regulatory standards are promulgated through the enforcement process itself. EPA frequently ‘‘clarifies’’ its interpretation of rules in the course of prosecution, and these clarifications are often of a sweeping nature. The agency’s use of the enforcement process to make and revise laws and regulations also short-circuits the normal requirements of the rulemaking process and subverts the compromises that Congress struck between environmental protection and economic benefits. Examples of such actions include the ‘‘New Source Review’’ controversy concerning electric power plants, and EPA actions against the automobile industry and the diesel engine industry, all of which are reviewed briefly.

Chapter 6 continues in the same vein with an examination of how EPA, by changing the standard of evidence for what constitutes a violation of emissions regulations, effectively changes the law itself during its prosecution of cases. The so-called ‘‘Credible Evidence Rule’’ is a classic example of retroactive rulemaking.

Chapter 7 considers how EPA takes advantage of the vague language of environmental statutes and interprets them in such a way as to massively expand the intended scope of its operations. In effect, EPA has created entire programs out of thin air through its enforcement practices by creatively defining the language of the law. A leading example is the EPA and Army Corps of Engineers creation of the program of wetlands protection under the Clean Water Act.

Chapter 8 examines the tension created by the bifurcation of enforcement authority between the EPA and state governments. This bifurcated responsibility has encouraged partisan grandstanding, double jeopardy, and confusion in the regulated community. It has also stymied reasonable state attempts to limit the counterproductive zealotry of federal enforcement practices.

Chapter 9 reviews other civil liberties that are routinely disregarded by EPA in the course of its enforcement work. Warrantless searches and seizures, forced self-incrimination, and extortion of witnesses are common practices by environmental forces.

Chapter 10 explores various proposals for reform. Incremental reforms, proposed and occasionally adopted over the past 25 years, have accomplished little and ignore the fundamental problem: The agency has wide discretion and is not being adequately policed by the White House, the Congress, the courts, or the press. A return to the nondelegation doctrine is thus warranted. In the meantime, substituting civil for criminal charges for most violations, returning standard civil rights for defendants of agency prosecutions, and devolving enforcement to the states would be positive first steps.

1. The ABCs of Enforcement

Understanding EPA’s enforcement practices must start with a survey of the agency’s regulatory mission. As shown in Table 1-1, EPA administers a host of major and minor environmental statutes.

These laws are implemented by Title 40 of the Code of Federal Regulations, which contains 27 volumes and more than 20,000 pages. And this covers only the formal rules; further elaborations are provided by an ocean of administrative and judicial adjudications, formal guidance documents, informal letters and opinions, and interpretations delivered via meeting, telephone, e-mail, or hotline. For example, as noted in Chapter 5, EPA’s explications of the requirements governing ‘‘New Source Review,’’ which is one subprogram of a single program under the Clean Air Act, take up almost 4,000 pages.

This body of regulation applies to private entities of every type, conducting every possible type of activity. As shown in Table 1-2, EPA estimates that it deals with 1.4 million ‘‘core’’ facilities and 6.5 million ‘‘other’’ facilities, divided as indicated.

For some areas, EPA does not estimate how many entities it deals with. To do this for wetlands, for example, would require including every landowner in the United States, all of whom are actual or potential regulatees. The same would hold if lead paint, radon, used oil, or pesticides were included in the table. So even the large numbers shown in Table 1-2 do not provide a complete depiction of EPA’s scope