August 29, 2012   The Minnesota Pollution Control Agency (MPCA) recently provided information in response to a Minnesota Data Practices Act request that sheds some light on MPCA enforcement efforts from 2009 to present.  Based on the MPCA’s data and disclosure, a clear trend emerges:

Enforcement actions filed by the MPCA against regulated parties across all environmental programs have declined steadily since 2009.

The following table, which summarizes the MPCA’s data, shows the overall decline in enforcement actions.  A number of factors may be at play here.  Regulated parties may be managing compliance issues and correcting issues before they are detected.  The reduction of enforcement actions may be attributed to changes occurring at the MPCA.  Budget reductions and staff attrition may mean fewer inspectors in the field.  The MPCA may be shifting resources to cover other priorities.  In times of economic distress, state regulators may simply have less of an appetite to take enforcement action against Minnesota businesses.  What does the reduction of MPCA enforcement this mean for businesses, individuals and units of government that are subject to inspection and potential enforcement actions?

The graph above depicts total MPCA enforcement actions from 2009 to present where civil penalties have been collected.  During this four-year period total completed enforcement actions ranged from a high of 282 actions in 2009 to a low of 157 actions in 2011.  Projections for 2012 actions, based on total actions taken as of June 28, 2012, dip even further to a projected 118 total actions for the entire year.  The data relates in part to issuance of Administrative Penalty Orders, an enforcement tool that was added to MPCA enforcement authority in 1987.  With Administrative Penalty Orders, the MPCA can act quickly to address alleged noncompliance and streamline the enforcement process.  Over the four-year period, the MPCA’s use of Administrative Penalty Orders has declined sharply – from a total of 243 Administrative Penalty Orders issued in 2009 to a total of just 119 Administrative Penalty Orders in 2011.  Some of the decline in 2011 may be explained by the state government shutdown over budget issues.  However, the extrapolated data for 2012 confirms the trend showing a continued marked decline in completed enforcement actions.  Projected data for Administrative Penalty Orders to be issued by the MPCA in 2012 shows a projected total of only 88 Administrative Penalty Orders issued for the entire year.  Negotiation of Stipulation Agreements remained fairly steady at under 40 actions over the four-year period.  Nonetheless, projected data for calendar year 2012 points to a reduction here as well to only 30 completed Stipulation Agreements.

Background Information About the MPCA Enforcement Data  

In response to a Minnesota Data Practices Act request, the MPCA produced data reflecting annual totals for various types of MPCA enforcement actions, including Letters of Warning, Notices of Violation, Administrative Penalty Orders and Stipulation Agreements, broken down across all environmental media.  The media covered included air quality (including asbestos), emergency response, hazardous waste, multimedia, solid waste (including asbestos disposal), tanks (above ground and underground tanks), water quality (including feedlot, individual septic treatment systems and stormwater).  The data for the current 2012 year was partial data collected by the MPCA through June 28, 2012.

The MPCA’s raw data that is summarized in the graph reflects a subset of data from completed enforcement actions.  Administrative Penalty Orders and Stipulations Agreements were highlighted because the MPCA uses these enforcement actions to collect civil penalties.  Presumably use of these enforcement tools reflects the most serious types of violations of environmental statutes, regulations or permit terms.  As noted above, the data for 2012 provided by the MPCA was, according to the agency, valid through June 28, 2012.  The 2012 data in the above graph has been extrapolated and reflects an estimate if MPCA enforcement actions were to continue at the same pace as they did in the first half of the 2012 calendar year.  Note:  Penalties are not assessed or collected by the MPCA with either the Letter of Warning or Notice of Violation. These enforcement tools are used by the MPCA to note allegations of non-compliant conditions and are often sent to a regulated party before an Administrative Penalty Order or Stipulation Agreement is issued or proposed.

MPCA’s Authority to Collect Civil Penalties

Under Minnesota Statutes § 116.072 the MPCA may require the payment of penalties for alleged violations of up to $20,000 per inspection in an Administrative Penalty Order.  The MPCA has the discretion to include a penalty in an Administrative Penalty Order or to forgive a penalty if corrective actions are completed in a timely manner.

For cases where the MPCA deems the alleged violations to be more serious or where certain types of corrective actions are required, the MPCA may propose that a regulated party enter into a Stipulation Agreement.  Minnesota Statutes § 115.071 provides that the State of Minnesota, after filling a civil action, may ask a judge to impose civil penalties of up to $10,000 per day of violation and $25,000 per day of violation if the violation relates to hazardous waste.  Cases are filed in state district court and brought by the Minnesota Attorney General’s Office in the name of the State of Minnesota.

The MPCA uses the threat of a referral for such a court filing as a means to compel private parties (businesses and individuals) and units of government to enter into Stipulation Agreements, which are out-of-court settlements.  When a party declines to settle, the MPCA reserves the right to refer the case to the Attorney General for filing or make a referral of the matter to the U.S. Environmental Protection Agency (EPA) for review and possible enforcement.

What Are the Implications for Minnesota Businesses Subject to Environmental Regulation?

Some may see the trend of reduced MPCA enforcement as a positive development.  Many businesses have noted that the cost of complying with environmental regulations adversely impacts their bottom line. Environmental laws have been on the books for many years and it could be argued that the vast majority of Minnesota businesses are doing a good job in complying with environmental laws.  However, as anyone who works in the field of environmental management knows, maintaining compliance with environmental regulations is difficult and requires dedicated staff, efforts and resources.

However, the trend away from MPCA enforcement may be a classic case of “be careful of what you wish for.”  When it comes to environmental enforcement, the MPCA is not the only game in town.

In many cases the U.S. Environmental Protection Agency (EPA) has the authority to bring its own action seeking to enforce federal environmental laws.  Many state laws are patterned after their federal counterparts (Clean Air Act, Clean Water Act and Resource Conservation and Recovery Act).  The EPA also has the authority to overfile, or take its own independent action even after the State acts, to address what federal authorities believe to be non-compliant situations.  The EPA is increasingly active in Minnesota and other states in the Upper Midwest.

In 2011 the MPCA relinquished to the EPA its lead role monitoring the cleanup at a Superfund site in Fridley, Minnesota noting that it lacked resources to handle the matter.  EPA has asserted its jurisdiction on the regulation of haze in northern Minnesota insisting that taconite plants adopt costly emission controls.  The EPA is funding vapor intrusion investigation and mitigation work on multiple projects in Minnesota, once again stepping in where the State does not have adequate resources.  Recently, we noted in this blog that the EPA took action against a Minnesota contractor who was working on a North Dakota highway project citing the company for stormwater violations.  EPA has also taken steps to correct what it deemed to be insufficient state action by Iowa environmental authorities with regard to the regulation of concentrated animal feeding operations (CAFOs) or feedlots.

The U.S. Attorney’s Office has a long record of investigating environmental matters and has the authority to file actions on behalf of the EPA or to bring criminal charges.  Most federal environmental laws contain provisions that provide that knowing violations of federal environmental laws may be prosecuted as federal crimes.  The U.S. Attorney’s Office in Minnesota has established cooperative relationships with the MPCA and other local partners wielding its prosecutorial power on numerous occasions. The U.S. Attorney’s Office has the necessary resources – manpower, expertise and funding – to conduct investigations of environmental crimes and, where appropriate, prosecute cases.  For a party subject to such an inquiry, responding to a criminal investigation and potential charges is a major undertaking with potentially devastating consequences.  In many of these federal cases, prosecutors have charged individuals, both low level employees and so-called responsible corporate officers, in addition to the businesses themselves.  The potential for significant penalties and the loss of one’ s individual liberty should be a cause of concern for anyone who may be involved.  Earlier this year the U.S. Attorney’s Office announced that a Minnesota aluminum smelting operation pled guilty to two criminal charges of filing false statements and would pay a penalty of $600,000 to address air quality violations.

Minnesota businesses located in the Twin Cities metropolitan area may also expect continued and even increased scrutiny from county regulators.  For example, metropolitan counties have the authority to implement their own hazardous waste regulatory programs.  In recent years the MPCA has ceded much of its hazardous waste inspection role in the metropolitan area and permitted the counties to take the lead on inspections.  County ordinances typically do not provide a mechanism for collecting civil penalties.  However, counties may issue corrective orders, choose to refer cases to their respective County Attorneys for prosecution or even refer matters directly to the EPA.  Under state law, Minnesota Statutes §§ 609.671 and 115.071, hazardous waste violations can be prosecuted as felonies, gross misdemeanors or misdemeanors.  Exposure to potential criminal charges has obvious implications for the businesses and owners or managers that may be cited.

Finally, when government fails to act it is possible for concerned members of the public to file a citizen’s suit and seek redress through the judicial process.  An example of such an action was recently filed by a lake association in the Twin Cities metropolitan area who is concerned about the effect of feedlot discharges on a nearby lake.

What Should Minnesota Businesses Do In this Changing Regulatory Environment?

Although the trend shows that the MPCA is bringing fewer enforcement actions, businesses that are subject to environmental laws should nonetheless be aware of their potential liability.  Other government agencies on the federal or local level may step in to fill the void left by MPCA inaction.  Third parties who learn about contamination or are concerned about releases or exposure may also take action.  In this evolving regulatory environment, what steps should Minnesota businesses take?

*          Given the potential for penalties and liability exposure, businesses should remain vigilant and dedicate adequate resources – staffing, supervision, monitoring and training – to maintain and ensure compliance with environmental health and safety requirements.

*          As a check on compliance, it may be prudent for businesses to conduct audits of their environmental, health and safety functions.

*          Often a third party audit conducted by a qualified consultant under attorney client privilege may reveal deficiencies that have gone undetected for years.

*          Minnesota and the EPA each have audit policies and programs that permit a regulated party to avoid or mitigate penalties if alleged violations discovered during an audit are self-disclosed.

Joseph Maternowski’s past experience, initially in the public sector with the Minnesota Attorney General’s Office where he represented that MPCA and now in private practice, allows him to assist clients in managing issues related to environmental liability and compliance.  Joe regularly assists clients on permitting and enforcement matters involving state regulators, such as the MPCA, and with the EPA.   For information on Joe’s background and practice, please visit his You Tube site and watch two videos at: and

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