EPA Increases Penalties for NSR Violations

On January 13, 2020, EPA issued its newest update under the Federal Civil Penalties Inflation Adjustment Act of 1990 (FCPIAA), as amended by the FCPIAA Improvements Act of 2015, which adjusts penalties for inflation. Under the newest update, the statutory maximum for NSR violations is now $101,439 for violations that occur after November 2, 2015 and which are assessed after January 13, 2020. This is an increase from the prior $99,681.

ANALYSIS

The final rule is promulgated at 85 Fed. Reg. 1751 (Jan. 13, 2020).

COMMENTARY

The statutory maximum penalty is now $3,043,170 per 30 days, $37,025,235 per year, and $185,126,173 for a single NSR permitting error if the DOJ's "continuing violation" theory is accepted, which fortunately many courts reject. To its credit, EPA usually offers a more reasonable penalty in administrative proceedings. Penalties in this range effectively foreclose litigation because the consequences of loss are too great. The country needs to reflect on whether relying so heavily on effectively unreviewable discretion lives up to its ideal of due process of law and equal justice.

A better approach would be for Congress to prescribe a more realistic penalty for initial violations, perhaps correlated to the size or sophistication of the alleged violator, with per day penalties reserved only for cases where a violator actively sought to prevent discovery.