November 5, 2012  On October 22, 2012 the Minnesota Pollution Control Agency (MPCA) reported the results of enforcement cases during the third quarter of 2012, the period from from July 1, 2012 to September 30, 2012.  The enforcement results for the third quarter of 2012 are consistent with recent trends in MPCA enforcement.  Although 78 matters were resolved, the vast majority of cases were resolved with civil penalties assessed at less than $10,000.  

The top six Minnesota cases – two involving stormwater violations, two involving solid waste violations and one for air quality violations and another for water quality violations – resulted in total civil penalties paid of $355,931.  In the remaining 72 cases a total of $184,069 of civil penalties were collected.  The average civil penalty in these remaining 72 matters was $2,556.51.
The third quarter report reflects the MPCA’s continued reliance on Administrative Penalty Orders to resolve most of its pending enforcement matters.  The top six cases were resolved through Stipulation Agreements which are negotiated settlements between the MPCA and a regulated party.  In the balance of the cases – 72 in number – the MPCA issued Administrative Penalty Orders unilaterally citing parties for various alleged rule and permit violations.  In these cases, the MPCA proceeded unilaterally to issue a penalty order to address noncompliance.  In some cases, the Administrative Penalty Orders contained corrective actions requirements.
The MPCA noted that 25% of the cases resolved in the third quarter of 2012 involved allegations of stormwater violations.  The MPCA noted that improper stormwater management, during or after construction projects can cause erosion and allow sediment-laden runoff to enter lakes, rivers, streams and wetlands.  By contrast MPCA enforcement in other areas – particularly hazardous waste cases – have again fallen off considerably from past levels.  In the third quarter of 2012 there was only one hazardous waste settlement, a case involving an outstate generator of hazardous waste where  penalty of $4,118 was assessed.
 
A copy of the MPCA’s recent press release can be found at: http://www.pca.state.mn.us/index.php/about-mpca/mpca-news/current-news-releases/mpca-completes-78-enforcement-cases-in-third-quarter-of-2012.html  
 
Why does MPCA enforcement matter?
 
The MPCA conducts random and complaint inspections.  If the MPCA inspects and finds conditions which it believes constitute violations, an investigation will occur and the regulated party will need to dedicate its resources to responding.  Response to an MPCA or any governmental agency is critically important.  It may be possible to refute alleged violations or present information that can mitigate or reduce any future penalties. Because the response involves technical and legal issues, it is prudent to consider involving an attorney. It is possible that in certain cases violations can be refuted and the MPCA may reevaluate its case and decide not to proceed formally.  In most cases the MPCA seeks some type of corrective action.  These corrective actions often involve significant expense.  
 
Once a party settles a case or pays a penalty under an Administrative Penalty Order, the resolution of the case becomes pat of that party’s “enforcement history.”  The MPCA will use past history of noncompliance to seek higher levels of penalties in future cases.  The MPCA’s Civil Penalty Determination Policy has an enhancement factor that permits the escalation of future environmental actions and higher penalties to be collected.  
 
One of the aspects that regulated parties should consider is how an inspection, a finding of violations and an enforcement may reflect on their reputation in the community.  For cases involving penalties in excess of $10,000 or where a Stipulation Agreement is negotiated, the MPCA has a policy of issuing a press release announcing the settlement to news media outlets.  The MPCA makes no exceptions to this policy.  The MPCA will not negotiate the contents of its press releases.  In addition to press releases about individual cases, the MPCA issues its quarterly enforcement results via press release.  This release is sent to media outlets through the State of Minnesota.  Often local newspapers pick up and publicize stories about MPCA enforcement matters.  Unfortunately, these press releases present summary information – the regulated party’s name, the type of violation(s) involved in the action and the amount of penalty paid – without explaining the circumstances of a case or permitting the regulated party to tell its side of the story about what happened.  
 
One of the incidental effects of a penalty action and a determination that a violation has occurred is that a record of noncompliance is created.  If a business tries to sell its business or a particular facility the noncompliance incident will be part of the public record. A prospective purchaser may require disclosures or further investigation of such matters.  If a party conducts a Phase I Environmental Site Assessment, the noncompliance will show up in a database search related to the property.  Noncompliance may affect the value of a business or of the real property where a business operates.  
 
For more information on the the MPCA enforcement actions, please visit the MPCA’s website at:
 
Environmental law attorney Joseph Maternowski advises businesses, units of local government and individuals on enforcement and permitting matters. We regularly assist clients whose facilities or sires have been inspected and who have received notice of a pending enforcement action.   
 
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