Lyons Quoted on SEPs Policy Change from DOJ

Partner Frank Lyons, a former Department of Justice (DOJ) environmental enforcement attorney and a former U.S. Environmental Protection Agency regional administrator, was quoted on the DOJ’s memorandum that changed a nearly 30-year policy on the use of supplemental environmental projects (SEPs) as an option in enforcement settlements for environmental violations involving state and local governments.

Frank said that SEPs have long been used as part of settlements with state and local governments in enforcement actions over violations like a water system discharging too much of a pollutant, adding that in such a case, a SEP might take the form of something like a nearby wetlands restoration.

“SEPs are very popular with settling parties who would rather perform a project and pay less money to the Treasury Department,” he said. “If you take away the ability to perform SEPs as part of a case resolution, you’re taking away flexibility for both the settling party as well as the Department of Justice case team.”

Frank also pointed out that SEPs have always been voluntary. He said that projects often arise from negotiations after it becomes clear that both sides would rather settle than litigate the enforcement matter, and the discussion turns to how much a penalty might be, what kind of SEP might be appropriate, and how much that project could offset the penalty amount.

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