Top Ten Tips for Seeking Enforcement Discretion and Preserving a COVID-19 Force Majeure Affirmative Defense before the TCEQ

The Texas Commission on Environmental Quality (TCEQ) is busy issuing guidance for addressing environmental noncompliance resulting from COVID-19.  To date, the Commission has published guidance on its website extending reporting deadlines from March 31, 2020 to April 30, 2020 for specific programs.

Additionally, TCEQ has provided guidance via an industry email, covered in our alert, for seeking case-by-case enforcement discretion.  That email states that it will utilize its enforcement discretion when noncompliance is “directly due” to COVID-19, although TCEQ cites no regulatory basis to support that standard.  TCEQ further provides it will try to rule on those requests within 24-48 hours.

This article provides ten tips for navigating TCEQ’s guidance and preparing for future agency interactions during and after COVID-19.  Central themes include:  (1) take appropriate action; (2) communicate with candor; and (3) document those actions and communications.

Ten Tips for Preserving a COVID-19 Force Majeure Defense

1. Identify When the COVID-19/Force Majeure Circumstances Began For Your Facility.
2. Utilize And Know the Scope and Limits of Applicable COVID-19 Instruments.
3. Make Best Efforts to Comply with Rules and Permits.
4. Request Enforcement Discretion As Soon As Needed.
5. Don’t Overstate Your Case.
6. Keep in Mind That Requests for Enforcement Discretion Are Subject to the Public Information Act.
7. Comply with the Terms of the Enforcement Discretion and Make Best Efforts to Come Into Compliance.  
8. Know Your Compliance Posture and Prepare for Future Scrutiny and Potential Force Majeure Litigation.
9. Continue to Communicate with the Commission and Document that Communication.
10. Stay Abreast of Changing Orders and Guidance.

Considerations and Implications

Many companies will certainly need to request and rely on any enforcement discretion that TCEQ may grant, and should do so.  Companies should keep in mind that TCEQ can deny these requests, may not be able to grant those requests within their ambitious time frames if they present complex issues, and may later take an independent review of noncompliance through required routine reporting (for example, in Title V deviation reports).  Where additional facts in a look-back suggest that the noncompliance was part of a larger pattern or has other underlying root causes beyond COVID-19, TCEQ may reexamine, revise or retract its initial enforcement discretion.¹

In that instance, companies may need to pivot to the affirmative defense of Force Majeure under the Texas Water Code Section 7.215, which has a facially more stringent standard than “directly due.”  That standard provides:

If a person can establish that an event that would otherwise be a violation of a statute within the commission’s jurisdiction or a rule adopted or an order or a permit issued under such a statute was caused solely by an act of God, war, strike, riot, or other catastrophe, the event is not a violation of that statute, rule, order, or permit.  Tex. Water Code § 7.251 (emphasis added).

The Force Majeure standard is an affirmative defense and companies should be prepared to substantiate that defense.  Because a look-back investigation will likely happen well after the facts have become stale, memories have faded, and the current exigencies have waned, it is  important to take and document actions now to ensure the best chance for success.  Preparing the case file for making the Force Majeure affirmative defense will also help support requests for enforcement discretion, prepare for future enforcement defense or litigation and/or citizen suits.  Here are our top ten tips for preparing for success:​​

1. Identify When the COVID-19/Force Majeure Circumstances Began For Your Facility.  Because COVID-19 has spread at varying rates across Texas along with a patchwork of state, county and municipal responses, establishing when the COVID-19 impacts or Force Majeure circumstances arose will be important.  COVID-19 impacts/Force Majeure may arise at different times in different jurisdictions and for different types of industries depending upon when varying federal, state and local issued their declarations, orders or guidance.  Maintain all documentation that will help establish that Force Majeure conditions existed specifically at the facility or to the circumstances in question.

2. Utilize and Know the Scope and Limits of Applicable COVID-19 Instruments.  Although the Governor has issued the emergency disaster Proclamation setting forth the basis for seeking regulatory relief, Proclamation by the Governor of the State of Texas (Mar. 13, 2020), at the time of this writing, TCEQ has not requested that the Governor grant any waivers or suspensions of rules.  Even if the Governor grants rule suspension, if the past is any indicator, it is unlikely that all TCEQ environmental rules will be suspended.  And, while the enforcement discretion guidance TCEQ issued will be helpful, it does not require TCEQ to use its enforcement discretion.  Guidance that extends time periods for compliance is limited to specific industry and reporting obligation, and companies should not assume that other reporting deadlines will be extended.  Carefully review guidance, orders and suspensions to understand what has and has not been waived.

3. Make Best Efforts to Comply with Rules and Permits. TCEQ’s enforcement discretion guidance emphasizes that all companies should try to comply with applicable rules and permits, suggesting that whether a company has done so will likely be an element in the Commission’s decision to exercise its enforcement discretion.  For example, if a compliance obligation is usually one that is out-sourced to vendors who can no longer visit the site, consider whether your company can complete that work internally.  If it cannot, document why internal completion was infeasible.  If non-compliance must occur, consider whether there are regulatory mechanisms (such as permits-by-rule) that may offer compliance solutions.

4. Request Enforcement Discretion As Soon As Needed.  Once it becomes apparent that non-compliance that is directly due to COVID-19 is inevitable, immediately request enforcement discretion according to the TCEQ guidance.  In making a request, outline and document all relevant facts so that the basis on which TCEQ has granted remains clear.  Companies should anticipate good faith reliance on TCEQ’s exercise of enforcement discretion, but only on the basis on which it is requested; omission of critical facts may significantly jeopardize or curtail the scope of that initial decision.

5. Don’t Overstate Your Case.  Orders and guidance granting COVID-19 enforcement discretion are not a blanket justification for non-compliance.  While all companies should absolutely seek to request and utilize the regulatory relief they need during this unprecedented time, companies should not risk credibility by pointing to COVID-19 as a pre-text for unrelated non-compliance.  Agency resources are themselves taxed by COVID-19 challenges and managing the new abnormal.  Help TCEQ staff reach the best decision for your company by preparing a well-documented request for enforcement discretion and communicating with candor.

6. Requests for Enforcement Discretion Are Subject to the Public Information Act.  As with most communications with TCEQ, requests for enforcement discretion are subject to the Texas Public Information Act.  The media, NGOs, individual citizens and other enforcement authorities may obtain information provided in requests for enforcement discretion.  Citizen groups have been especially active in Texas in the past few years and companies should expect scrutiny of that information, especially where TCEQ exercises its discretion. Prepare the enforcement discretion requests with an eye toward maintaining CBI and the attorney-client privilege.

7. Comply with the Terms of the Enforcement Discretion and Make Best Efforts to Come Into Compliance.  Companies should comply with any conditions TCEQ requires as a condition of its enforcement discretion and document that compliance.  Companies should also return to compliance (or partial compliance if full compliance is not possible) as soon as possible.  For example, if a performance test cannot be completed on schedule, identify the soonest practicable date to reschedule that performance test and make best efforts to meet that data.  Where the non-compliance results in unauthorized emissions, companies should immediately take and document corrective actions to mitigate, where possible.  Omnibus and general duty provisions to follow pollution control practice standards, see e.g., 40 CFR § 60.11(d) (related to good air pollution control practices) continue to govern during periods of non-compliance and companies should document how those omnibus standards have been maintained.  Appropriate action and documentation will help ensure that any enforcement discretion granted remains preserved.

8. Know Your Compliance Posture and Prepare for Future Scrutiny and Potential Force Majeure Litigation.  TCEQ investigators are not required to use enforcement discretion and may later review whether a company’s own actions or omissions contributed to an alleged violation.  If TCEQ denies a request for enforcement discretion, companies may need to bring other affirmative defenses, in particular Force Majeure, which provides a broad “act of God” defense, among others.  SeeTex. Water Code § 7.251; 30 Tex. Admin. Code § 70.7(a).  Some observers have suggested that the Force Majeure standard is impossible to demonstrate and even then, is easily forfeited.  Companies should anticipate that TCEQ regional investigators may probe whether the non-compliance has other root causes beyond COVID-19, especially where there may be environment impacts connected with an alleged violation (for example if contractor delays prevent compliance with a permit term or compliance deadline).  If a company’s actions prior to or during the COVID-19 pandemic contributed to the alleged violation, the TCEQ may well retract or revise its extension of enforcement discretion.

9. Continue to Communicate with the Commission and Document that Communication.  In light of the length of time that COVID-19 circumstances are likely to remain, companies should continue communicating with TCEQ personnel to clarify and amend these requests, as necessary.  Companies should document all oral communications, and ideally, confirm those communications in contemporaneous, follow-up written correspondence.  Maintain written documents that show that TCEQ has utilized its enforcement discretion or is aware of a company’s actions in response to COVID-19.  This documentation may later provide important context for understanding the company’s actions and its reliance upon TCEQ representations and approvals.

10. Stay Abreast of Changing Orders and Guidance.  The COVID-19 situation is unfolding rapidly and state, county and municipal governments are providing continuously evolving guidance and requirements.  It would not be surprising if TCEQ were to issue additional enforcement guidance on COVID-19 similar to guidance it has granted in connection with other emergencies, such as hurricanes and weather events.  It will be important to understand and comply will all guidance as it is issued and amended.  This is no easy task given the multiplicity of requirements, many of which overlap.  Maintain copies of applicable guidance (some guidance may only be posted on a website or sent via email and may not be readily available several years from now).  Interpretative decisions in the grey areas of guidance should be documented for subsequent legal defensibility and to demonstrate company good faith efforts to comply with the law.