March 01, 2015

Consent decree negotiations

Charles Wehland

Negotiating a consent decree to resolve environmental violations is a complex job that takes a long time. Five to ten years can elapse between the time the regulatory agency issues a notice of violation and the court enters a consent decree. What should you do when representing a client snared in this process?

  • Know the facts and law. You earn credibility with your client and with the people on the other side of the table by demonstrating mastery of the issues. The government has an information advantage in enforcement initiatives because it has access to all of the facts and settlement negotiation results from previous cases. If you represent the target of an enforcement initiative case, spend time getting familiar with previous settlements. (EPA keeps most of them available on its enforcement initiative website.) Counsel for parties that already settled can be a good source of information not only about the relevant facts and law but also about the positions and strategies enforcement staff may use in negotiations.
  • Expect the people to change. In a negotiation that takes years, the people conducting the negotiation will change over time. This fact has real consequences because the new people need to be educated about what issues have been resolved, how they were resolved, and what issues remain open. New people also bring a fresh perspective to the negotiating table that can overcome previous stumbling blocks. And new people also question the fundamental decision about whether to negotiate or litigate.
  • Prepare to negotiate in fits and starts. It is not unusual for several months to elapse while one of the parties considers its position or develops information. You need to have a way to remind yourself and your client which issues are on the table when negotiations resume. A detailed issues list that summarizes the parties’ negotiating positions can be helpful.
  • Understand your client’s objectives. Does your client want to settle at all costs or is it willing to litigate? Are there timing considerations that affect the client’s ability to install control equipment? Does the client have plans to expand or modify the process that is the target of enforcement? Can settlement conditions give your client a competitive advantage by, for example, agreeing to requirements that will be difficult or expensive to meet for competitors facing the same enforcement initiative? Understanding the answer to these and other similar questions will help you negotiate a settlement that serves your client’s interests.
  • Build consensus. Individuals within the client organization will have different views on the importance and relevance of the objectives. Some will want to settle, some will want to litigate, and some will say they want to litigate. Obtaining a clear management consensus and direction on how to proceed is essential, but be prepared for people who question the direction to continue promoting alternative perspectives. The need to work for consensus and clear direction is never over.
  • Develop rapport. You need to have a good working relationship with the key people on the other side of the table (usually the DOJ attorney, the OECA attorney, and the EPA technical lead). There will inevitably be significant hiccups in negotiations that take years to resolve. Items that were thought to be resolved will unexpectedly have to be negotiated again for some good reason. Those difficult negotiations can be completed only if the negotiators have a reasonable reservoir of good will between them.
  • Remember, the law will change. Important legal developments that significantly affect your position will occur during the negotiations. Whether it is a new EPA rule that changes the method for calculating emission increases or a new judicial decision on the statute of limitations or the availability of injunctive relief, you will have to be on top of the developments as they occur. You must be prepared to interpret them for the client and evaluate whether negotiating positions should change as a result.

Negotiating a consent decree is a long and sometimes arduous journey. It is filled with unexpected developments that cannot be foreseen with clarity at the outset of the process. Keeping these negotiating tips in mind as the process unfolds may make it easier to navigate some of the shoals.



Charles Wehland

Charles Wehland is a partner with Jones Day in Chicago, representing clients in a variety of environmental matters. He recently concluded the negotiation of a consent decree that was part of EPA’s new source review enforcement initiative against acid manufacturing plants. The negotiation took almost seven years from start to finish.