Member Article

The U.S. Department of Justice (“DOJ”) recently signaled its intent to prioritize prosecuting individuals who commit corporate environmental crimes. In conjunction with recent changes announced by Deputy Attorney General Lisa Monaco, the Assistant Attorney General (“AAG”) for the DOJ’s Environment and Natural Resources Division (“ENRD”), Todd Kim, announced that the ENRD will shift focus to criminal prosecutions of individuals to encourage environmental compliance.

Environmental prosecutions reached an all-time low during the Trump Administration, and the vast majority were misdemeanors and petty offenses. The new approach announced by AAG Kim reflects changes by the Biden Administration to disavow the regulatory approach taken by the Trump Administration. In a speech given on December 14, 2021, at the ABA’s National Environmental Enforcement Conference, AAG Kim announced the new policies the ENRD will adopt.

AAG Kim explained that the ENRD will prioritize prosecuting individuals who commit and profit from environmental misconduct. He stated that “A genuine threat of criminal prosecution can and will change the conduct of individuals and corporations who would not be deterred by the threat of civil enforcement alone.” The ENRD will focus not only on criminal prosecutions under federal environmental statutes but include Title 18 crimes of fraud, conspiracy, and obstruction of justice charges that are often parts of the environmental misconduct.

In the assessment of corporate culpability, the ENRD will look towards all documented history of wrongdoing that “a corporation’s relevant track record may not be limited to its environmental misdeeds.” As an example, AAG Kim pointed to the Lacey Act (16 U.S.C. §§ 3371-3378), a statute that prohibits the unlawful trade of timber, fish, and other wild animals. This change reflects the DOJ’s revitalization of the Yates Memo, requiring companies seeking cooperation credit to identify all individuals involved, including those outside the company in the supply chain. This broad view will likely result in higher exposure risks for companies under federal environmental laws.

The ENRD will also focus on non-compliant facilities in industrial sectors. This policy means that if entire sectors of industry are having trouble with compliance, then individual facilities are likely to be targeted for enforcement actions as examples. In line with other recent DOJ announcements, AAG Kim also discussed the benefits of corporate monitors and the ENRD’s intent to continue utilizing them where appropriate. Companies should ensure their existing compliance programs have effective mechanisms in place to detect and prevent misconduct to avoid DOJ pursuit of monitorships as a method of resolving civil liability issues.

In adopting these policies changes, the ENRD aims to motivate corporate compliance by highlighting the threat of criminal enforcement. The ENRD urges that agency inquiries be taken more seriously and inspectors receive more cooperation during on-site inspections. In response, companies should be carefully reviewing their compliance policies regarding environmental statutes to ensure that they have the means to identify and rectify any weaknesses that could allow for such misconduct to occur.

If you have any questions about the information in this alert, please contact Jonathan Feld (312-627-5680 or [email protected] ), Grant Gilezan (313-568-6789 or [email protected] ), Todd Schebor (313-568-6672 or [email protected] ), Dylan Robinson (312-627-2507 or [email protected] ), or your Dykema relationship attorney.