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EPA-DOJ "Global Settlement" Approach to Civil and Criminal Liability

Date: May 17, 2007

According to the U.S. Department of Justice (DOJ) Directive 99-20, a "global settlement" addresses or compromises both civil claims and criminal charges. The DOJ and many United States Attorneys' Offices have parallel proceedings policies that provide civil and criminal attorneys with flexibility to share information, to consult on legal issues, to conduct investigations jointly, and to pursue parallel proceedings. These coordinated efforts may result in both civil and criminal claims and remedies, either by adjudication or settlement. In the settlement context, it may be advantageous to enter into global settlements that address both tracks, for example:1

 

Defense counsel may ask in settlement negotiations in either a civil or criminal case for a global settlement in which the defendant receives releases from both civil and criminal liability. These requests, when made late in the negotiation process and when the government has pursued the case civilly or criminally, but not both, pose issues for the agency. Experience has demonstrated that these eleventh-hour global resolutions can be problematic because there is insufficient time to marshal all the information needed to address the terms of the resolution fully and to obtain needed agency authorization for civil resolutions, thus putting the government at risk in the negotiations. For these reasons, last-minute global settlements where there has not been an ongoing parallel proceeding are disfavored by EPA.

Defense counsel may seek to negotiate civil resolutions with criminal prosecutors, including waivers of any further civil liability; similarly, defense counsel sometimes seek to resolve criminal matters, including waivers of criminal liability, with civil government attorneys. The government is put at risk when its criminal prosecutors agree to civil terms with which they may not be familiar or may not fully understand, and vice versa. This policy seeks, in part, to ensure that the interests of the people of the United States are represented in each case in which there may be a global settlement by a government attorney with the appropriate training and expertise.

Each global settlement proposal must be evaluated on its own merits, and the AAG's approval will depend on an assessment of all the circumstances. Generally, approval of such settlements requires that the following important conditions have been met: 2

Criminal plea agreements must be handled by criminal attorneys and civil settlements by civil attorneys. The criminal plea agreements and civil settlements should generally be negotiated separately. Each resolution - criminal and civil - should be negotiated by attorneys who have the appropriate (civil or criminal) training and who are working within the appropriate unit of ENRD or a U.S. Attorney's Office.

Each part of the settlement must separately satisfy the appropriate criminal and civil criteria. The criminal plea agreement must satisfy the criteria set out in the Principles of Federal Prosecution and in other Department of Justice policies for consideration of a plea agreement. The civil settlement must satisfy the policies of the Justice Department, and in addition should to the same extent as other civil settlements conform to the policies of affected client agencies.

With respect to a civil settlement, all affected client agencies must approve the settlement. Other agencies may have their own requirements for approval of civil settlements. For example, an agency may require headquarters approval of global settlement. If the affected client agencies require concurrence, such concurrence must be obtained from them prior to entering into a global settlement.

There should be separate documents memorializing the criminal plea agreement and the civil settlement. The criminal plea agreement and the civil settlement should be set out in separate documents. Criminal releases should be made only in the criminal plea agreement documents, and civil releases in the civil documents.

A defendant may not trade civil relief in exchange for a reduction in criminal penalty. As noted in #2., above, the criminal plea agreement must satisfy the appropriate Department criteria.

There have been a couple of "global settlements" under EPA's refinery initiative, but also under stand alone inspections. For example, in the largest Clean Water Act case ever taken against a soft drink bottler, the company agreed to pay more than $1 million in criminal and civil fines for industrial stormwater and wastewater violations at its soft drink bottling plants. Under the terms of this global settlement, the company paid a $600,000 criminal penalty and a $428,250 civil penalty for illegal discharges.

For further information, please contact J.C. Walker at walker@khlaw.com or (202) 434-4181.

 

1U.S. Department of Justice Directive 99-20, Global Settlement Policy,
2Id.