In a memo directed to all federal law enforcement officials, including the Assistant Attorney General for the Environment and Natural Resources Division, the U.S. Department of Justice (DOJ) outlined a new policy that prioritizes the prosecution of individuals for corporate misconduct. Traditionally, DOJ has pursued companies -- not individual corporate officials and managers -- for alleged corporate wrongdoing. In its new policy, DOJ makes it clear that law enforcement officials will also target the individuals responsible for alleged company misconduct. Notably, these changes will be implemented in DOJ's U.S. Attorneys Manual (USAM). This formal revision to the USAM reflects a concerted effort to fully implement the new policy outlined in the memo in future investigations. Because violations of environmental laws may lead to both civil and criminal enforcement by EPA and DOJ, this shift will have a direct impact on corporations and the individuals within those corporations that are responsible for environmental management decisions.
The USAM revisions add a number of policies that strengthen DOJ's pursuit of individuals for alleged corporate wrongdoing. These policies, which address the imposition of both criminal and civil penalties, entail the following:
- In order to be eligible for any cooperation credit in an environmental investigation, a corporation must disclose to DOJ all non-privileged relevant facts related to the individuals involved or responsible for the corporate misconduct.
- The revisions direct U.S. attorneys to "focus on individual wrongdoing from the inception of the investigation," whether the investigation begins civilly or criminally.
- DOJ indicates that it will provide individuals protection from liability through corporate resolution "only in extraordinary circumstances."
- DOJ directs civil attorneys to consider factors beyond the "ability to pay" when deciding whether to bring suit against an individual, such as whether the individual's misconduct was serious, actionable, and whether the evidence is admissible.
Although this policy affects a number of federal law enforcement agencies, it is particularly significant in the context of environmental compliance. Under this new approach, DOJ may potentially hold liable not only "responsible officials," but also any individual—regardless of position, status, or seniority—whose actions are deemed to have caused environmental violations. The inclusion of civil penalties in the USAM revisions is also significant. While individual criminal misconduct is relatively rare in environmental enforcement, civil penalties are commonly pursued by EPA and DOJ. Thus, traditional civil environmental investigations could now be extended to include any individual within a corporation who is involved in making environmental compliance decisions. Based on the new guidelines, EPA/DOJ could pursue a civil penalty against a corporation and seek separate penalties from any individual deemed responsible for the violation.
DOJ's announcement provides even more incentive for companies to re-examine existing environmental compliance management practices to fully address potential liability for both the company and individuals. DOJ's policy can be found here.
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