1. INSPECTIONS AND SEARCHES PREPARATION AND RESPONSE Richard E. Glaze, Jr. Balch & Bingham LLP Atlanta, GA 404-962-3566 rglaze@balch.com AWMA August 3, 2011 August 3, 2011

2. Scope Civil vs. Criminal Enforcement Civil vs. Criminal Enforcement Enforcement Mechanisms Enforcement Mechanisms Response to Enforcement Investigations Response to Enforcement Investigations inspections inspections information requests information requestssubpoenas warrants warrants

3. Many cases can be civil or criminal Many as EPA cases could, theoretically, be either criminal or civil Many as EPA cases could, theoretically, be either criminal or civil In theory, very fine line between civil and criminal for many violations – very low intent or knowledge threshold In theory, very fine line between civil and criminal for many violations – very low intent or knowledge threshold

4. CRIMINAL PROSECUTION IS A GROWING THREAT Emphasis on Enforcement Emphasis on Enforcement Fewer Easy Cases Fewer Easy Cases Substantial Resources Substantial Resources

5. COMMON ENVIRONMENTAL VIOLATIONS Hazardous Wastes (RCRA) Hazardous Wastes (RCRA) Clean Air Act Clean Air Act Release Reporting (CERCLA, EPCRA) Release Reporting (CERCLA, EPCRA) Pesticide Misuse (FIFRA) Pesticide Misuse (FIFRA) Asbestos Removal (CAA) Asbestos Removal (CAA) Discharges to Water or Pretreatment System (CWA) Discharges to Water or Pretreatment System (CWA)

6. Associated Federal Crimes False Statements False Statements Conspiracy Conspiracy Obstruction of Justice Obstruction of Justice Fraud Fraud

7. Agency Enforcement Options Civil only Civil only Criminal only Criminal only Parallel enforcement Parallel enforcement Consecutive Consecutive

8. AGENTS/INSPECTORS Agency civil inspectors have authority granted by statute – confined to Environmental Laws CID Agents have full title 18 authority – guns guns warrants warrants arrest power arrest power authority for all federal crimes authority for all federal crimes Task force partners Task force partners

9. Civil Case Development Inspections and Information Requests Inspections and Information Requests Statutory information gathering authority via Statutory information gathering authority via Inspections Inspections Self monitoring Self monitoring Information requests with mandatory answers (no 5 th amendment protection for corporations) Information requests with mandatory answers (no 5 th amendment protection for corporations) Note: This information can be (and often is) used for criminal investigations/prosecutions Note: This information can be (and often is) used for criminal investigations/prosecutions

10. Authority for Civil Inspections “the Administrator or his authorized representative (including an authorized contractor acting as a representative of the Administrator), upon presentation of his credentials - (i) shall have a right of entry to, upon, or through any premises in which an emissions source is located or in which any records required to be maintained under paragraph 1 of this section are located, and (ii) may at reasonable times have access to and copy any records, inspect any monitoring equipment or methods required under paragraph 1 and sample any emissions which the (owner or operator of the source) is required to sample under paragraph (1). Clean Air Act Section 114 (a) (3), 42 U.S.C. § 7413

11. Administrative Warrants When civil inspectors are rebuffed When civil inspectors are rebuffed Probable cause requirement much less burdensome: specific evidence of civil violations OR pursuant to neutral inspection scheme Probable cause requirement much less burdensome: specific evidence of civil violations OR pursuant to neutral inspection scheme

12. Criminal Case Development Leads: Leads: Disgruntled Employees Disgruntled Employees Citizens Citizens EPA and state agency referrals from civil EPA and state agency referrals from civil Task forces Task forces Investigation (warrants, subpoenas interviews) Investigation (warrants, subpoenas interviews) Referral to DOJ Referral to DOJ Prosecution Prosecution

13. Legal Basis for Criminal Warrants FOURTH AMENDMENT to US CONSTITUTION The right of the people to be secure in their persons, houses, papers, and effects, against unreasonable searches and seizures, shall not be violated; and no Warrants shall issue but upon probable cause, supported by Oath or affirmation, and particularly describing the place to be searched, and the persons or things to be seized.

14. PREPARATION - Compliance - Keep production areas, materials and waste storage areas, and offices clean and organized - Regulatory files segregated from operations files and financial files physically and electronically - Document retention policy (limit paper) - Strict compliance with email policies and limit emails when possible

15. Be Prepared, cont. Don’t Scrimp Infrastructure Agency relationships Legal counsel

16. Prepare Employees Designate employees: To handle agency inspectors, including agents Designate employees: To handle agency inspectors, including agents

17. What to do when EPA Arrives Check credentials Check credentials Read warrant (make sure it is all there and correctly identifies the place) Read warrant (make sure it is all there and correctly identifies the place) Accompany the agent/inspector and watch the agents carefully to protect your files Accompany the agent/inspector and watch the agents carefully to protect your files Note what is inspected/searched/seized Note what is inspected/searched/seized Be courteous but do not admit violations or volunteer unnecessary information Be courteous but do not admit violations or volunteer unnecessary information Take samples of what inspector samples or request splits (CID won’t split) Take samples of what inspector samples or request splits (CID won’t split) Offer copies of critical documents instead of originals Offer copies of critical documents instead of originals

18. Employees Civil – go about your business Civil – go about your business Criminal – interview attempts Criminal – interview attempts During search During search After search After search

19. Response to Initial Contact Can Affect Enforcement Decision Dishonesty, hiding or delaying production of information Dishonesty, hiding or delaying production of information Refusal of Entry Refusal of Entry Only in extreme circumstances Only in extreme circumstances Can you fix it? Can you fix it? Will you have to disclose it anyway? Will you have to disclose it anyway?

20. On their way out - Get receipts for what was seized or copied - Get receipts for what was seized or copied - Ask what they are seeking and why - Ask what they are seeking and why get as much specific information as possible get as much specific information as possible

21. after they leave Unless inspection revealed no violations immediately assess potential violations and your response Corrective action is almost always appropriate (to avoid multi day penalties and knowing conduct) Consider reporting the corrective action before the agency makes demands

22. After they leave, cont. Obtain inspection report as soon as possible Do not wait for report for corrective action, however Criminal warrant requires immediate action.

23. Conclusions Compliance Compliance Preparedness Preparedness Response Response

24. Questions? Richard Glaze, Jr. Balch & Bingham LLP Atlanta, GA 404-962-3566rglaze@balch.com