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Sep 26 2016

Settling a TCEQ Enforcement Matter: Are You Getting the Best Result?

September 26, 2016 (Houston)

James SmithBy James Smith – “Environmental Alert” (Schirrmeister, Diaz-Arrastia, Brem LLP)

Companies ensnared in a Texas Commission on Environmental Quality (“TCEQ”) or other agency enforcement process often receive, early in the process, a proposed agreed order to resolve the matter.  Many companies, without the benefit of qualified counsel, accept these proposed settlements.

I recently discussed this phenomenon with Jed Anderson, a well-known Texas environmental lawyer. Jed specializes in air quality permitting, compliance and enforcement issues.

Do Not Treat These Enforcement Matters as Parking Tickets

Jed and I agree that companies often fail to get the best result, because they do not fully consider all potentially available legal, factual, and administrative defenses.

“Many companies treat these situations as if they were parking tickets,” Jed observed. “Companies often fail to look at key parameters that could affect the outcome, such as the agency’s underlying legal authority, legal and factual defenses, and appropriate categorizations in the penalty matrix.”

Jed’s firm sponsored creation of a database of TCEQ enforcement orders, which his firm uses to help clients identify areas of concern in proposed enforcement orders.

Jed TAEP PhotoIt Pays to Use Qualified Environmental Counsel

Jed and I have seen agency enforcement actions where the initially proposed administrative penalty has seemed relatively light, perhaps only in four figures, yet was still reduced in excess of the fees paid to qualified environmental counsel who have legal experience defending such matters. Also, we have seen the “ordering provisions,” analogous to injunctive provisions in a court order, softened due to arguments based on a good understanding of the circumstances and the often highly-complicated laws and rules involved.

Get Qualified Counsel Involved Early

Jed and I also agree that our effectiveness generally increases when we are involved at the earliest stages. For example, if clients utilize qualified environmental counsel in connection with exit interviews from TCEQ inspections, responses to Notices of Violations (“NOVs”), or in the preparation of Title V Deviation Reports, this can often minimize the eventual outcome of any enforcement.

Get the Best Settlement

To get the best outcome of a regulatory enforcement matter:

  1. Utilize qualified environmental counsel, do not treat the agency’s proposed resolution as a parking ticket;
  2. Push back in a smart way, based on thorough understanding of the complicated laws and rules involved, agency policies, settlements in similar cases, and a solid understanding of the facts;
  3. Study the ordering provisions with care, and propose alternatives that best consider cost-effectiveness and that do not place the company at risk for violating the ordering provisions and facing further enforcement; and
  4. Appreciate that the agency’s priorities are to ensure compliance, to resolve the matter, and to get the company moving forward in a manner consistent with the agency’s regulations and policies.

Acknowledgments: Thanks to Jed Anderson for his comments in this Alert. Jed can be contacted at (281)852-8064 or jed@allawgp.com.

Alert Updates: A recent Alert discussed PG&E’s conviction on five counts related to pipeline safety record keeping requirements. I gave a free presentation on this case to an energy company with a significant Houston, Texas presence. Contact me if your company would be interested in this free presentation.

Call The AL Law Group, PLLC.

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