ADR and Environmental Enforcement: Myths, Misconceptions, and Fallacies

Richard H. Mays

Richard H. Mays is Of Counsel to the law firm of Pettit & Martin, where he chairs the firm's Environmental Section. He was formerly Senior Enforcement Counsel and Acting Assistant Administrator for Enforcement and Compliance Monitoring at the U.S. Environmental Protection Agency in Washington, D.C.

[19 ELR 10099]

I rise (or, more appropriately, write) for a point of personal privilege! I have always wanted to use that phrase, filled as it is with righteous indignation. I am indebted to Professor Edward Brunet of the Lewis and Clark Law School for giving me the opportunity to do so.

In case you just tuned in, I authored an article regarding the use of alternative dispute resolution (ADR) techniques by the United States Environmental Protection Agency (EPA) in environmental enforcement cases that appeared in the March 1988 issue of this publication.¹ That article examined the need that I perceive for the use of ADR techniques in environmental enforcement, reviewed the impediments to such use, and provided a few modest proposals on how ADR might be promoted in this field.

The article was the subject of a critique/response by Professor Edward Brunet in the December issue.² Brunet concluded not only that ADR should not be used in environmental enforcement cases, but that I was guilty, among other sins, of fallacious arguments and an "anti-litigation bias."³ I can almost forgive him for the former conclusion, but he has gone too far in the latter.

Brunet is entitled to his opinions, but they bother me considerably. They bother me because his arguments are themselves fallacious, and demonstrate misconceptions of the subject matter and the point of my article.

Brunet conjures up four "myths" about ADR which he asserts underlie my conclusion that ADR should be used in environmental enforcement, and which he claims are fallacious. In presenting these "myths," Brunet makes statements that demonstrate a serious lack of understanding about environmental enforcement, the judicial process, and to some extent, the most common ADR techniques. I feel compelled to try to correct those misconceptions, for whatever it is worth, for my self-satisfaction and the reading public's edification.

"Myth" No. 1: ADR Techniques Are Procedural and Should Not Affect the Substantive Result of EPA Enforcement Efforts

The first of Brunet's alleged "myths" happens to be true. It is derived from my statement that "the proper use of ADR affects not the substance of the case against the violator, but merely the procedure by which the same result may be obtained as by using a traditional procedure."⁴ My statement is based upon the premise that environmental laws provide for certain standards of conduct and penalties for violations, and that these standards and penalties can be enforced through a variety of procedures. The procedure selected generally ought to be that which is the most effective, expeditious, and least resource-intensive for all parties for the particular conflict.

Brunet takes issue with this premise, contending that "mediation and other forms of ADR reach results antagonistic to existing substantive law,"⁵ whereas, on the other hand, "[l]itigation can be counted on to apply substantive principles to the facts of a dispute."⁶ He apparently fears that EPA and Department of Justice (DOJ) attorneys who would be involved in mediation, arbitration, and other forms of ADR are ignorant of the substantive law, and left to their own devices will agree to some lesser punishment that the law does not countenance. Those are not the competent, zealous government attorneys with whom I am familiar and have worked for years.

But that is not the worst of it. Brunet further fears that if ADR techniques are available as means by which to resolve environmental violations, "firms that know they have ability to mediate may choose to purposefully violate existing law and thereby create a dispute."⁷ This is a most astounding statement in view of the potential felony criminal provisions for knowing violations that have been added to many of the environmental statutes in recent years and the option the government always has to use judicial procedures to make examples of people foolish enough to agree with Brunet's reasoning.

Substantive law would, of necessity and by charge to the [19 ELR 10100] participants in the procedures, limit the range of options available to them, including any neutral third parties. It is possible that the boundaries of the substantive law may be exceeded on occasion in ADR proceedings, but courts occasionally do the same thing. There are remedies available for such excesses, and there is no reason to believe, assuming the parties are properly schooled in the law, that those boundaries will be exceeded in ADR any more frequently than in judicial proceedings.

"Myth" No. 2: Litigation Factfinding Is Inferior to ADR Decisionmaking

I am charged by Brunet with endorsing the "myth" that "[l]itigation factfinding is inferior to ADR decisionmaking."⁸ Brunet confuses factfinding and decisionmaking, which are separate, albeit related, processes. He seems to be arguing that the discovery procedures that are available in judicial cases are not available in ADR procedures, and therefore the decisions in any proceedings other than judicial are not likely to reflect the "truth." Indeed, he says:

[T]he facts produced in an environmental mediation are likely to be incomplete and inaccurate. This is particularly problematic given the factually complex nature of environmental disputes….⁹

Brunet's reference to "mediation" — an ADR procedure where parties negotiate with the aid of a neutral third party who has no decisionmaking authority and in which discovery is not normally a function supervised by the mediator — seems to confuse mediation with arbitration, in which factfinding may be an important function. The distinction is fundamental, and together with other similarly confusing misapplications of terminology by Brunet, seems to reflect a lack of understanding of fundamental ADR procedures.

Brunet misconceives the substance of my article (and that of others) in stating that "Mays and others [including Carol Dinkins, former Deputy Attorney General¹⁰] mistakenly laud the quality of ADR decisionmaking and criticize the nature of factfinding used in litigation. In fact, only formal litigation and adjudication provide a mechanism for accurate determination of facts."¹¹

I agree that discovery procedures provided by the Federal Rules of Civil Procedure and comparable state procedures are the most effective legal methods of compelling the production of documents and other information from recalcitrant parties. However, as any attorney with trial experience knows, they are no guarantee of full disclosure or that the factfinder (be it judge or jury) will be allowed to consider those facts if discovered. Above all, they are by no means the most efficient procedures that could be devised, assuming that the purpose of the participating parties is to achieve a resolution of the dispute, a condition for use of ADR.

The effectiveness of judicially supervised discovery, however meritorious or debatable, does not mean that ADR procedures are useless. The parties to an ADR proceeding may agree to discovery procedures, or ADR procedures may be used during the pendency of a judicial action in which discovery procedures have been employed by the parties to gather information. Finally, EPA and DOJ attorneys are not likely to agree to use of ADR procedures without some assurance that all necessary facts are available or can be obtained.

"Myth" No. 3: Litigation Results Are Nothing More Than Costly and Delayed Dispute Resolution

Perhaps the most outlandish assertion in Brunet's article is his "Myth No. 3," in which he states that:

Inherent in the Mays article is an attitude that litigation results are inevitably costly, that litigation will result in intractable delay, and that litigation has value only to the parties who are litigating. Indeed, Mays made few positive comments regarding litigation.¹²

Well, after all, my article was about ADR, which is new to the environmental field, and not about litigation, which has been around for a while and doesn't need promoting. That was the reason why I didn't devote equal time to the subject of litigation, which — let me hasten to add — has served EPA's enforcement program well in the past, and will continue to do so in the future. However, I did make the following statement early on in my article so that I would not be accused of the very thing that Brunet is now claiming:

While ADR should play a major role in environmental enforcement, there are cases in which the use of ADR will not be desirable, although in theory it could be used in any case. The cases in which ADR will not be desirable are those that should be tried before a court because (1) there are important precedential legal issues that need resolution; (2) an injunction or other court-supervised relief is necessary and the parties do not have the time for or interest in negotiating a consent decree; or (3) the conduct of one of the parties is so egregious as to make it in the public interest to subject that party to the most visible trial and punishment available.¹³

EPA files numerous cases in the federal district courts every year that do not fall into any of those categories. Those cases drain both government and private sector resources to the detriment of those that truly deserve judicial attention. Brunet claims that members of the regulated community other than the defendant receive a [19 ELR 10101] "guidance effect" from judicial decisions, and that is true. My guidelines for resort to judicial procedures leave plenty of room for cases that will provide "guidance effect."

However, not every case rises to that level of importance, and it is impossible for every EPA case to be judicially administered. Brunet seems to acknowledge this when he speaks of "prosecutorial discretion inherent in agencies with limited resources"¹⁴ in the selection of cases, and of "carefully selected" litigation,¹⁵ while, at the same time, disdaining the use of alternative measures for those cases that are not handled judicially. What would he do with those cases not selected for the judicial process? Without ADR or some alternative means of resolution, are they to be dropped completely?

As a practical matter, some alternatives must at least be experimented with, and, if they work, adopted to achieve more efficient administration of EPA's enforcement program. Consider these facts:¹⁶

In 1988, EPA referred a record 372 civil cases to DOJ for filing in federal district courts;

In the last four years, 1,545 civil judicial cases have been referred to DOJ, representing over one-half of all civil judicial cases initiated by EPA since the Agency's creation in 1970;

There are currently 847 EPA civil judicial cases in progress. That is up from 325 four years ago, and the number has been steadily rising each year. Of those, 521 are pending in federal district courts.

The average length of time that those cases have been pending in federal district courts is 765 days, up from an average of 513 days in 1987. That number is also steadily rising each year.

EPA now has 450 active consent decrees that it must monitor, up from 200 active decrees just four years ago. Again, this number is constantly increasing.

EPA initiates an average of 3,000 administrative enforcement cases per year. There are no reliable figures on the average length of time those cases have been pending, but it is probably only slightly shorter than the pending time for judicial cases.

All of these enforcement cases must be handled by an enforcement staff limited in size relative to the number and complexity of the cases.

The point of my article — worth repeating here — was that EPA's enforcement program is growing substantially and will continue to grow as Congress adds new laws and the Agency develops new regulations. For example, on December 19, 1988, EPA filed 25 administrative complaints in an initial effort to enforce the new reporting requirement of the Emergency Planning and Community Right-To-Know Act (EPCRA),¹⁷ and more are expected. Yet, due to budget constraints, the size of EPA's enforcement staff is not likely to increase proportionately.

There is a real and present danger that the number of unresolved cases will continue to grow into a stagnant backlog. Evidence of this is the ever-increasing length of time in which filed cases have been pending in court. This, in turn, will result in cases being dismissed or settled for less than their original worth due to stale evidence and loss of prosecutorial interest. What "guidance effect" is there in that? The effect will be to undermine the credibility of EPA's enforcement program far more than the feared shortcomings in ADR procedures, assuming those short-comings did exist.

"Myth" No. 4: the ADR Process Can Not Produce Necessary Public Confidence in Results Reached by Agencies Such as EPA

Brunet claims that a "full-scale ADR program creates a substantial risk of a return to allegations of improper dealmaking"¹⁸ conducted in secret proceedings, while "[l]itigation is presided over by politically accountable judges."¹⁹ The federal judges who preside over EPA's cases are many things, but "politically accountable" is not one of them, nor is it supposed to be. His point, however overstated, is that the litigation process is usually open to the public, while ADR procedures, being voluntary, may be conducted in closed sessions.

One needs to distinguish between ADR procedures that are conducted solely between private parties (e.g., two companies in a dispute over a contract), and those conducted between a regulatory agency and a violator of that agency's regulations. The public may have no legitimate interest in the former, but does in the latter, especially in those ADR proceedings in which the government may be bound by the decision of a neutral third party. EPA and other federal agencies have the responsibility to provide the public an opportunity to attend the proceedings, to obtain a record of the proceeding, and to comment upon binding ADR proceedings.

In recent years, Congress and EPA have made numerous efforts to enable the public to participate in enforcement proceedings. Examples of this include EPA's proposed rules for use of arbitration in small cost recovery cases under the Comprehensive Environmental Response, Compensation, and Liability Act.²⁰ Those proposed rules provide for public notice and opportunity for comment prior to an award becoming final. EPA also requires advance public notice and opportunity to comment upon administrative settlements. There is no reason to believe, given theunique and unpleasant experiences of EPA in the early 1980s and the present enlightened attitude that exists at EPA regarding public participation, that EPA will suddenly be willing to risk new accusations of "sweetheart deals" by not providing opportunity for public scrutiny of and comment upon the products of ADR proceedings.

Miscellaneous Other "Myths" and Misconceptions

Brunet contends that ADR methods are most appropriate "where the law is extremely vague or nonexistent,"²¹ although this seems to conflict with his rationale against "Myth" No. 1, in which he counsels against giving attorneys and neutral third parties the opportunity to make up their own laws. To the contrary, ADR is best used in [19 ELR 10102] cases where the law is well-settled²² and the principal issue is how to apply that law to the facts of a particular case. It is for Congress, or in their absence, judges, to make law, rather than arbitrators. The opportunities for an arbitrator and government attorneys to reach results antagonistic to existing substantive law are reduced when the existing law is well-settled.

Brunet states that I am guilty of an "anti-litigation" bias.²³ As a veteran of several hundred jury trials and many-fold more non-jury trials; as a former senior enforcement official who oversaw and assisted in the revival of EPA's judicial enforcement program; and as a practicing attorney who holds himself out as a litigator, that came as something of a surprise to me. I expect that it would also come as a surprise to many companies who were the recipients of my "biases" while at EPA. The truth is that I do not consider myself biased for or against litigation or ADR. I am in favor of whatever procedure addresses the problems to be solved in the most expeditious, cost-effective manner.

Finally, Brunet closed his article with a paean to litigation as "a quality product possessing multiple attractive features that may be unavailable through the presently trendy ADR methods."²⁴ I have no argument with the "multiple attractive features" of litigation, but had no idea that ADR — forms of which have been in use for hundreds of years — was "presently trendy." It almost sounds like a yuppie invention — and me without a single BMW to my name.

Conclusion

The use of ADR procedures in environmental enforcement cases (and in other governmental regulatory actions) is inevitable. The particular suitability of environmental cases to the utilization of ADR procedures and the promise of resource savings to all parties to environmental disputes will ultimately assure the use of ADR in many such matters. The only uncertainty is how rapidly ADR procedures will begin to be used. That depends largely on the willingness and leadership of EPA, DOJ, and the private environmental bar to experiment with those procedures.²⁵

Rather than demonstrating the cost of environmental ADR, as its title proposed, Professor Brunet's article confirms that ADR procedures — especially as they may be applied to environmental enforcement — are generally misunderstood. The general misunderstanding of ADR and its various procedures has been a greater impediment to the use of ADR than any valid legal or public policy objection.

There are important public policy and legal issues that must be considered in the use of ADR by government regulatory agencies, but they are not insurmountable. The benefits promised by the use of ADR far outweigh the time and effort that would be required to deal with those issues. Critics of ADR claim that its benefits in environmental enforcement are unknown, and may be overstated. We will never know unless we experiment and gain experience with the procedures.

1. Mays, alternative Dispute Resolution and Environmental Enforcement: A Noble Experiment or a Lost Cause?, 18 ELR 10087 (Mar. 1988).

2. Brunet, The Cost of Environmental Alternative Dispute Resolution, 18 ELR 10515 (Dec. 1988).

3. Brunet, supra note 2, at 10517.

4. Mays, supra note 1, at 10094 (emphasis in original).

5. Brunet, supra note 2, at 10515.

6. Id.

7. Id. (emphasis in original).

8. Id. at 10516.

9. Id.

10. See Ms. Dinkins' excellent article, Shall We Fight or Will We Finish: Environmental Dispute Resolution in a Litigious Society, 14 ELR 10398, 10399 (1984), in which she discusses the relative roles of litigation and ADR procedures:

[W]hile litigation provides the most certain and efficient method to resolve disputes relating to the law, it is an undeniably cumbersome and inefficient mechanism to deal with facts. Once the legal ground rules are established, once the relative rights and responsibilities of the parties are precisely defined, litigation is not a satisfactory means to resolve disputes. The adversary process is not designed to quickly and fairly sort out the facts of a case. Rather, in litigation, facts are developed through a complex discovery process, in which each side typically will provide as little information as possible. Throughout the process, attorneys present their cases so that the court record is most favorable to their client's interest, and not necessarily to present a clear picture of what happened. Alternative mechanisms for dispute resolution could be of great use in helping resolve factual disputes once litigation has clarified the requisite legal framework provided by Congress.

11. Brunet, supra note 2, at 10516.

12. Id.

13. Mays, supra, note 1, at 10089.

14. Brunet, supra note 2, at 10516.

15. Id.

16. U.S. Environmental Protection Agency news release (Nov. 8, 1988) (on enforcement achievements for fiscal year 1988). ENVIRONMENTAL PROTECTION AGENCY, CONSOLIDATED DOCKET ENFORCEMENT SYSTEM REPORT OF ACTIVE CIVIL CASES (Dec. 20, 1988.)

17. 42 U.S.C. §§ 11301-11053, ELR STAT. 001-012. EPCRA is Title III of the 1986 amendments to the Comprehensive Environmental Response, Compensation, and Liability Act.

18. Brunet, supra note 2, at 10516.

19. Id. at 10517.

20. EPA Proposed Rule: Arbitration Procedures for Small Cost Recovery Claims, 53 Fed. Reg. 29428 (Aug. 4, 1988).

21. Brunet, supra note 2, at 10517.

22. See Dinkins, supra note 10.

23. Brunet, supra note 2, at 10517.

24. Id.

25. For an analysis of impediments to the use of ADR, and recommendations for actions to remove those impediments, see Mays, supra note 1.