Top Ten Tips for Seeking Enforcement Discretion and Preserving a Weather Disaster Force Majeure Affirmative Defense before the TCEQ
The Texas Commission on Environmental Quality (TCEQ) has taken various actions and posted guidance to help regulated entities address operational issues and environmental noncompliance that resulted from power outages, water supply disruptions, and other weather-triggered challenges from the extended period of sub-freezing temperatures throughout Texas in February 2021. Along with other actions, the Commission obtained approval from the Governor, per the Governor’s February 12 disaster Proclamation, for the suspension of specified TCEQ rules; and obtained from the U.S. Environmental Protection Agency temporary fuel waivers for Texas Low Emission Diesel (TxLED) Program requirements applicable in 110 Texas counties, and the oxygenated gasoline requirements applicable in El Paso County. Additionally, TCEQ has established a Power Emergency Policy for requesting case-by-case enforcement discretion relating to the resulting power outages.
This article provides ten tips for navigating TCEQ’s guidance and preparing for future agency interactions regarding compliance issues that stem from the February 2021 extreme weather. These tips closely mirror those that we provided last year regarding compliance issues that industry is facing 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 Force Majeure Defense
- Identify When the Force Majeure Circumstances Began For Your Facility.
- Utilize And Know the Scope and Limits of Applicable Instruments.
- Make Best Efforts to Comply with Rules and Permits.
- Request Enforcement Discretion As Soon As Needed.
- Don’t Overstate Your Case.
- Keep in Mind That Requests for Enforcement Discretion Are Subject to the Public Information Act.
- Comply with the Terms of the Enforcement Discretion and Make Best Efforts to Come Into Compliance.
- Know Your Compliance Posture and Prepare for Future Scrutiny and Potential Force Majeure Litigation.
- Continue to Communicate with the Commission and Document that Communication.
- 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 grant those requests upon submittal 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 the weather disaster, 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:
- Identify When the Force Majeure Circumstances Began For Your Facility. Establishing when the weather disaster impacts or Force Majeure circumstances arose will be important. Maintain all documentation that will help establish that Force Majeure conditions existed specifically at the facility or to the circumstances in question.
- Utilize and Know the Scope and Limits of Applicable Instruments Issued Regarding the Weather Disaster. As noted above, per the Governor’s disaster Proclamation TCEQ obtained approval (per requests submitted February 13, 15, and 19, 2021) for the suspension of specified portions of the following chapters in Title 30 of the Texas Administrative Code:
- Chapter 101 (General Air Quality Rules),
- Chapter 106 (Permits by Rule)
- Chapter 111 (Control of Air Pollution from Visible Emissions and Particulate Matter)
- Chapter 114 (Control of Air Pollution from Motor Vehicles)
- Chapter 115 (Control of Air Pollution from Volatile Organic Compounds)
- Chapter 117 (Control of Air Pollution from Nitrogen Compounds)
- Chapter 285 (On-Site Sewage Facilities)
- Chapter 290 (Public Drinking Water)
- Chapter 305 (Consolidated Permits)
- Chapter 209 (Domestic Wastewater Effluent Limitation and Plant Siting)
- Chapter 312 (Sludge Use, Disposal, and Transportation)
- Chapter 319 (General Regulations Incorporated into Permits)
- Chapter 321 (Control of Certain Activities by Rule)
- Chapter 327 (Spill Prevention and Control)
- Chapter 330 (Municipal Solid Waste)
- Chapter 334 (Underground and Aboveground Storage Tanks)
- Chapter 335 (Industrial Solid Waste and Municipal Hazardous Waste)
The suspension applies only to those provisions specified in TCEQ’s request. And the suspension applies only to the extent that compliance would prevent, hinder, or delay necessary state efforts to respond to the severe winter weather event and efforts to cope with the declared disaster. It will remain in effect until terminated by the Governor or until the disaster declaration is lifted or expires. Carefully review the content of the rule suspensions and the Power Emergency Policy to understand the relief they might provide, and the procedural and substantive requirements for making enforcement discretion requests by either of those avenues.
- Make Best Efforts to Comply with Rules and Permits. Companies should try to comply with applicable rules and permits. Whether a company has done so will likely be an element in the Commission’s decision to exercise its enforcement discretion. If noncompliance must occur, consider whether there are regulatory mechanisms (such as authorization of new air emissions by permits by rule) that may offer compliance solutions.
- Request Enforcement Discretion As Soon As Needed. Once it becomes apparent that noncompliance related to the weather disaster is inevitable, immediately request enforcement discretion according to TCEQ guidance. The TCEQ Severe Cold Weather Event Response web page provides the following direction regarding the content of case-by-case enforcement discretion requests: The request should include a concise statement supporting the request, the anticipated duration of need for enforcement discretion, and citation to the rule and/or permit provision(s) for which enforcement discretion is requested. Additionally, TCEQ notes that companies must maintain records adequate to document activities related to the noncompliance, including details of the company’s best efforts to comply. 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.
- Don’t Overstate Your Case. Orders and guidance regarding enforcement discretion are not a blanket justification for noncompliance. While all companies should absolutely seek to request and utilize the regulatory relief they need based on the weather disaster, companies should not risk credibility by pointing to the situation as a pretext for unrelated noncompliance. Help TCEQ staff reach the best decision for your company by preparing a well-documented request for enforcement discretion and communicating with candor.
- 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.
- 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 date. Where the noncompliance 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 noncompliance 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.
- 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. See Tex. 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 noncompliance has other root causes beyond the weather disaster, especially where there may be environment impacts connected with an alleged violation. If a company’s actions prior to or during the weather disaster contributed to the alleged violation, the TCEQ may well retract or revise its extension of enforcement discretion.
- Continue to Communicate with the Commission and Document that Communication. Companies should continue communicating with TCEQ personnel during the period for which enforcement discretion is requested in order 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 the weather disaster. This documentation may later provide important context for understanding the company’s actions and its reliance upon TCEQ representations and approvals.
- Stay Abreast of Changing Orders and Guidance. The weather disaster is unfolding rapidly. It will be important to understand and comply will all orders and guidance as it is issued and amended and ultimately suspended. Maintain copies of applicable guidance (some guidance may only be posted on a website or sent via email and may not be readily available months or 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.
1By way of example, TCEQ has referred several enforcement cases arising from Hurricane Harvey based on its view that the company’s actions or omissions contributed to the noncompliance and were not solely due to the act of God circumstances of Hurricane Harvey. The Texas Office of the Attorney General brought suit on some of those cases based on its position that the alleged violations were not solely caused by the act of God.