INSPECTIONS AND SEARCHES INSPECTIONS AND SEARCHES

PREPARATION AND PREPARATION AND RESPONSERESPONSE

Richard E. Glaze, Jr.Richard E. Glaze, Jr.

Balch & Bingham LLPBalch & Bingham LLPAtlanta, GAAtlanta, GA

404-962-3566404-962-3566rglaze@balch.com

AWMAAWMA August 3, 2011August 3, 2011

ScopeScope

Civil vs. Criminal EnforcementCivil vs. Criminal Enforcement Enforcement MechanismsEnforcement Mechanisms Response to Enforcement Investigations Response to Enforcement Investigations

inspectionsinspections

information requestsinformation requests

subpoenassubpoenas

warrantswarrants

Many cases can be civil or Many cases can be civil or criminal criminal

Many as EPA cases could, theoretically, be Many as EPA cases could, theoretically, be either criminal or civileither criminal or civil

In theory, very fine line between civil and In theory, very fine line between civil and criminal for many violations – very low criminal for many violations – very low intent or knowledge thresholdintent or knowledge threshold

CRIMINAL PROSECUTION IS CRIMINAL PROSECUTION IS A GROWING THREATA GROWING THREAT

Emphasis on EnforcementEmphasis on Enforcement

Fewer Easy CasesFewer Easy Cases

Substantial ResourcesSubstantial Resources

COMMON ENVIRONMENTAL COMMON ENVIRONMENTAL VIOLATIONSVIOLATIONS

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 Discharges to Water or Pretreatment

System (CWA)System (CWA)

Associated Federal CrimesAssociated Federal Crimes

False StatementsFalse Statements ConspiracyConspiracy Obstruction of Justice Obstruction of Justice FraudFraud

Agency Enforcement Agency Enforcement OptionsOptions

Civil onlyCivil only Criminal onlyCriminal only Parallel enforcementParallel enforcement ConsecutiveConsecutive

AGENTS/INSPECTORSAGENTS/INSPECTORSAgency civil inspectors have authority granted by Agency civil inspectors have authority granted by

statute – confined to Environmentalstatute – confined to Environmental LawsLaws

CID Agents have full title 18 authority CID Agents have full title 18 authority – – guns guns warrants warrants arrest powerarrest power authority for all federal crimesauthority for all federal crimes Task force partnersTask force partners

Civil Case DevelopmentCivil Case Development

Inspections and Information RequestsInspections and Information Requests Statutory information gathering authority via Statutory information gathering authority via

InspectionsInspections Self monitoringSelf monitoring Information requests with mandatory answersInformation requests with mandatory answers

(no 5(no 5thth amendment protection for corporations) amendment protection for corporations) Note:Note: This information can be (and often is) This information can be (and often is)

used for criminal investigations/prosecutionsused for criminal investigations/prosecutions

Authority for Civil Authority for Civil InspectionsInspections

“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

Administrative WarrantsAdministrative Warrants

When civil inspectors are rebuffedWhen civil inspectors are rebuffed

Probable cause requirement much Probable cause requirement much less burdensome: specific evidence less burdensome: specific evidence of civil violations OR pursuant to of civil violations OR pursuant to neutral inspection schemeneutral inspection scheme

Criminal Case DevelopmentCriminal Case Development

Leads:Leads: Disgruntled EmployeesDisgruntled Employees CitizensCitizens EPA and state agency referrals from civilEPA and state agency referrals from civil Task forcesTask forces

Investigation (warrants, subpoenas Investigation (warrants, subpoenas interviews)interviews)

Referral to DOJReferral to DOJ ProsecutionProsecution

Legal Basis for Criminal Legal Basis for Criminal WarrantsWarrants

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.

PREPARATIONPREPARATION

- Compliance Compliance

- Keep production areas, materials and waste storage areas, and offices Keep production areas, materials and waste storage areas, and offices clean and organizedclean and organized

- Regulatory files segregated from operations files and financial files Regulatory files segregated from operations files and financial files physically and electronicallyphysically and electronically

- Document retention policy (limit paper)Document retention policy (limit paper)

- Strict compliance with email policies and limit emails when possibleStrict compliance with email policies and limit emails when possible

Be Prepared, cont.Be Prepared, cont.

Don’t ScrimpDon’t Scrimp

InfrastructureInfrastructure

Agency relationshipsAgency relationships

Legal counsel Legal counsel

Prepare EmployeesPrepare Employees

Designate employees: To Designate employees: To handle agency inspectors, handle agency inspectors, including agentsincluding agents

What to do when EPA What to do when EPA ArrivesArrives

Check credentialsCheck credentials Read warrant (make sure it is all there and correctly Read warrant (make sure it is all there and correctly

identifies the place)identifies the place) Accompany the agent/inspector and watch the agents Accompany the agent/inspector and watch the agents

carefully to protect your files carefully to protect your files Note what is inspected/searched/seizedNote what is inspected/searched/seized Be courteous but do not admit violations or volunteer Be courteous but do not admit violations or volunteer

unnecessary informationunnecessary information Take samples of what inspector samples or request splits Take samples of what inspector samples or request splits

(CID won’t split)(CID won’t split) Offer copies of critical documents instead of originalsOffer copies of critical documents instead of originals

EmployeesEmployees

Civil – go about your businessCivil – go about your business

Criminal – interview attemptsCriminal – interview attemptsDuring searchDuring searchAfter searchAfter search

Response to Initial Contact Can Response to Initial Contact Can Affect Enforcement DecisionAffect Enforcement Decision Dishonesty, hiding or delaying Dishonesty, hiding or delaying

production of informationproduction of information Refusal of EntryRefusal of Entry

Only in extreme circumstancesOnly 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?

On their way outOn their way out

- Get receipts for what was seized or - Get receipts for what was seized or copiedcopied

- Ask what they are seeking and why- Ask what they are seeking and why

get as much specific information as get as much specific information as possiblepossible

after they leaveafter they leave

Unless inspection revealed no violationsUnless inspection revealed no violationsimmediately assess potential violations immediately assess potential violations and your responseand your response

Corrective action is almost always Corrective action is almost always appropriate (to avoid multi day penalties appropriate (to avoid multi day penalties and knowing conduct)and knowing conduct)

Consider reporting the corrective action Consider reporting the corrective action before the agency makes demandsbefore the agency makes demands

After they leave, cont.After they leave, cont.

Obtain inspection report as soon as Obtain inspection report as soon as possible possible

Do not wait for report for corrective Do not wait for report for corrective action, howeveraction, however

Criminal warrant requires immediate Criminal warrant requires immediate action. action.

ConclusionsConclusions

Compliance Compliance Preparedness Preparedness ResponseResponse

Questions?Questions?

Richard Glaze, Jr.Richard Glaze, Jr.

Balch & Bingham LLPBalch & Bingham LLP

Atlanta, GAAtlanta, GA

404-962-3566404-962-3566

rglaze@balch.comrglaze@balch.com