Any person or company that manages waste may be subject to regulation under Minnesota law. Violations of regulations or emissions in excess of permitted levels may subject a violator to an enforcement action.
The Minnesota Pollution Control Agency (MPCA) is the state agency with primary authority to investigate complaints, conduct inspections and determine if an enforcement action, including the assessment of a civil penalty, is appropriate. The MPCA has jurisdiction over air quality, solid and hazardous waste, feedlots, tanks, water quality and many other matters. Many cases where alleged violations are identified are resolved at the administrative level. Violations that pose a threat to the public health or the environment may result in careful and higher-level review by state regulators. In cases of serious or repeat violations the MPCA may seek to impose a civil penalty. Knowing violations of environmental laws can be prosecuted as environmental crimes.
Over time the MPCA's approach to enforcement has evolved. Currently the MPCA resolves most instances of violations through issuance of Administrative Penalty Orders (APOs). In approximately half of those actions the MPCA collects penalties, but the level of penalties sought by the MPCA has markedly decreased over time. In the era of COVID 19 the MPCA's enforcement authority continues to exist, but the MPCA has shifted its focus to regulatory flexibility.
MPCA Enforcement Authority
The State of Minnesota has statutory authority to seek penalties of $10,000 per day of violation of environmental statutes, regulations or permits in a civil action brought in state district court by the Minnesota Attorney General. See Minn. Stat. § 115.071. https://www.revisor.mn.gov/statutes/cite/115.071 If the alleged violations relate to the handling of hazardous wastes, the State may seek up to $25,000 per day of violation. For willful violations the State may seek an award of its attorney's fees.
Willful or negligent violations of statutes, regulations and permit terms may be prosecuted as misdemeanors. Knowing violations of environmental standards may be prosecuted by county attorneys as gross misdemeanors or felonies. See Minn. Stat. §609.671. https://www.revisor.mn.gov/statutes/cite/609.671 Sanctions for high-level criminal violations include substantial penalties (up to $1,000,000) and imprisonment.
When a regulated party finds itself in court in a matter brought by the MPCA, it may assert defenses and challenge the MPCA's actions. If the MPCA can prove violations of standards, regulations or permit terms, the state district court judge assigned to the matter has the discretion to determine whether a penalty should be imposed and what amount of civil penalty, if any, should be paid. Although the MPCA has the authority to refer matters to the Attorney General for prosecution, in recent years the enforcement option of a litigation referral has rarely been invoked. The MPCA may also choose to refer cases to the U. S. Environmental Protection Agency (EPA).
The vast majority of cases of environmental violations are resolved by the MPCA at an administrative level. The MPCA has been in existence since 1968. From the 1970s through the 1990s, the MPCA issued Notices of Violation and often negotiated Stipulation Agreements to address more serious or repeated environmental violations. A Stipulation Agreement is a negotiated out-of-court settlement that resolves alleged violations, provides for the payment of a civil penalty and, in most cases, requires completion of extensive corrective actions. Due to the nature of the allegations and the fact that the MPCA often seeks substantial civil penalties and corrective measures, Stipulation Agreement negotiations can be quite extensive. Often it can take months to resolve the matter and for the language of a Stipulation Agreement to be agreed to.
Administrative Penalty Order Authority
In 1987, in an effort to streamline the enforcement process and conserve agency resources, the MPCA asked the Minnesota Legislature to expand the MPCA's enforcement authority by grating the MPCA APO authority. Initially APO authority was designed to address low-level environmental violations. The law provided that the MPCA may elect to unilaterally issue an APO to a violator to resolve alleged violations observed during an inspection. See Minn. Stat. § 116.072. https://www.revisor.mn.gov/statutes/cite/116.072 Initially administrative penalties in APOs were capped at $10,000.
Later at the request of the MPCA, the Legislature increased the level of penalties that may be assessed. The MPCA may now seek a penalty of up to $20,000 in an APO for all violations observed during an inspection and also order specified corrective actions. In the case of serious or repeated violations, the MPCA may determine that the penalty is nonforgivable. For other violations the MPCA may forgive the penalty provided that required corrective actions are completed. For the MPCA's description of how it uses APOs and the process for issuance of APOs please see: https://www.pca.state.mn.us/sites/default/files/gp2-01.pdf
Currently the MPCA resolves most violations that it finds through APOs. The MPCA compiles statistics as to the number of enforcement actions taken. https://www.pca.state.mn.us/regulations/mpca-enforcement-actions-penalties In the last half of 2019 the MPCA entered into a total of six Stipulation Agreements. Two involved violations of aboveground storage tanks. The remaining four matters involved air quality, underground tanks, subsurface sewage treatment systems and industrial wastewater violations, respectively. Penalties in those cases ranged from $10,000 to $61,680. In the last half of 2019 the MPCA issued 104 APOs. Fifty APOs included penalties and 54 APOs had a forgivable penalty or no penalty assessment.
The data for 2020 collected through April 3, 2020 appear to indicate that the number of enforcement actions has decreased from prior years. In the first quarter of 2020 the MPCA reports it issued 25 APOs, three citations and only one Stipulation Agreement. This may be in part due to limitations on state resources, including a lack of inspectors in the field as a result of the COVID 19 pandemic or other factors. The MPCA publishes a biannual list of MPCA enforcement actions taken, which identifies cases by regulated party, environmental media, type of enforcement action (Stipulation Agreement or APO) and the level of penalty that was assessed and paid. https://www.pca.state.mn.us/regulations/biannual-summary-enforcement-actions
Other Minnesota agencies observed the MPCA's use of its APO authority to address noncompliance situations. The Minnesota Department of Health, the Minnesota Department of Labor and Industry and other agencies sought and received the authority to issue APOs.
Seeking Review of an Administrative Penalty Order
Prior to issuance of an APO the MPCA typically sends a regulated party an Alleged Violations Letter or a Ten-Day Letter where the MPCA explains the results of its inspection and describes alleged violations. The MPCA typically asks a regulated party to provide any additional information or otherwise respond to the allegations. Because of the implications of receiving an APO and the potential for a penalty to be assessed, regulated parties should carefully review the matter and consider reviewing the response with an attorney.
A party receiving an APO may seek judicial review in state district court or through an expedited administrative hearing before an Administrative Law Judge (ALJ) assigned by the Minnesota Office of Administrative Hearings. Upon hearing the evidence, the ALJ makes a recommendation which is returned to the MPCA for final action. The vast majority of the enforcement cases brought by the MPCA are now resolved with APOs where regulated parties paid $20,000 or less to resolve violations. As noted above Stipulation Agreements are now generally reserved for the most serious cases or where extensive corrective measures are required.
Areas of alleged violations noted by the MPCA in APOs include: air quality, asbestos, hazardous wastes, solid waste, water quality, construction stormwater, industrial stormwater, feedlots, underground storage tanks, and individual sewage treatment systems. When a penalty is imposed in an APO, the average penalty paid is typically under $5,000. In cases where violations were noted and resolved through either a Stipulation Agreement or an APO, the MPCA reserves the right to enhance penalties for future violations.
Enforcement in the Era of COVID 19 - Regulatory Flexibility
Meanwhile, as of mid-June 2020 the MPCA has received 530 requests for regulatory flexibility under its COVID 19 policy. The MPCA reports it approved 504 requests and rejected 9 requests. Other requests are under review or were withdrawn. https://www.pca.state.mn.us/covid-19/requests-mpca-regulatory-flexibility-due-covid-19
If you or your business receives an inspection notice, Alleged Violations Letter, Ten-Day Letter, Notice of Violation (NOV), Request for Information (RFI), Stipulation Agreement, an APO or similar notice from the MPCA, the EPA or another federal or state agency, we recommend that you immediately seek the advice of qualified counsel prior to responding. The MPCA and the EPA often use these notices as discovery tools where they seek admissions.
Hessian & McKasy’s Environmental Law Attorney Practice Group has extensive experience in defending enforcement actions brought by federal and state authorities, such as the MPCA and the EPA. Please see the disclaimer at the bottom of this page that relates limitation on this blog and to legal advice. For information related to responding to inspections, notices and APOs please contact: