Settling Federal Environmental Enforcement Claims — Some Payments to Third Parties May Be Allowed (But Not Many)

Earlier this month, Jeffrey Wood, Acting Assistant Attorney General for Environment and Natural Resources issued a memorandum expanding on Jeff Sessions’ memorandum of June 5, 2017, generally barring payments to third parties as part of government settlements.  (And, yes, I know there should be another “s” after the apostrophe, but I’m hereby announcing a new rule; if I can’t pronounce it, I’m not writing it!) The Wood Memorandum affirms – of course – the June 5 Memorandum, but attempts to set forth in a little more detail what types of payments are exempt from the prohibition.  It also requires approval by the Assistant Attorney General of any settlements containing third-party payments.

The examples given in the memorandum are useful and should be carefully reviewed by practitioners.  The bottom line is that the scope of such payments will certainly be more limited than under prior administrations.

What I particularly liked about the Wood Memorandum was this language, repeated numerous times:

Care should be taken to ensure that the project does not mitigate harm out of proportion with the harm that resulted from the unlawful conduct.

I’m glad that ENRD will take care to ensure that defendants never make any 3rd party payments that would result in any extra remediation or mitigation!

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