Cruden Outlines Enforcement Priorities, Talks Deepwater Horizon, Next Gen, Budget

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Bloomberg BNA reporter Rachel Leven sat down with John Cruden, the assistant attorney general of the Justice Department's Environment and Natural Resources Division, March 13 to discuss the department's environmental enforcement agenda. Cruden, who was sworn in Jan. 5, discussed his priorities for the division, the fiscal year 2016 budget request, the Deepwater Horizon oil spill litigation, the division's Next Generation Compliance strategy and environmental justice efforts. This transcript has been edited for length and clarity.

BNA: What are your priorities for your division moving forward in the next year and the next two years?

Cruden: So I have been doing exactly what I said I would do in my confirmation hearing. They asked what my goals were, and I have things I clearly am interested in, but I've also been meeting with each element—there are 10 elements of the Environment and Natural Resources Division—to get their input, to get their thoughts, to get their goals, and we're working now and, at this moment, I have five general sorts of goals … I don't think these are too surprising.

First of all, without question, to enforce the nation's bedrock environmental laws that protect air, land and water for all Americans and so, in that context, obviously one of the sub-goals would be finishing the job of holding accountable those responsible for the Deepwater Horizon disaster … There's more, I mean, there are more things than that, but that's a goal.

Also, a goal of representing the United States in a federal trial in appellate courts, and those would include defending things like EPA's authority to address environmental challenges like climate change. So that's a goal not surprising.

You have to understand how ENRD works for this one to make complete [sense], why it's important to us, but protecting the “public fisc.” That's money issues. We get sued a lot. We defend a lot of cases where people are actually seeking money from the United States and so defending that process, making sure that if we're liable, that we pay an appropriate amount, but not more than we should. That's also a goal.

And then, advancing environmental justice and, in addition to that, promoting and defending tribal sovereignty, treaty obligations, rights of Native Americans….

And then finally, my fifth would be to provide effective stewardship of the nation's public lands, natural resources and animals, including fighting for the survival of the world's most protected and iconic species and working across the government and the globe to end the illegal trade in wildlife…But if you actually figure out those goals, you'll see that they involve all of the 10 parts of the environment division. The environment division is about half environmental, and by that I mean clean air, clean water, safe drinking [water]—those sorts of environmental statutes—and about half natural resources…

BNA: So you mentioned defending the federal government's actions regarding regulating pollutants and specifically regarding climate change. There have a been a number of significant laws that are being promulgated, such as the rules under the Clean Power Plan and the waters of the U.S. rule. I'm interested in hearing how you are working with the EPA on those rulemakings or with other agencies on other significant rulemakings to ensure that those rules are defendable in court.

Cruden: So obviously the policy part of all of this comes from those other federal agencies, which could be the Department of Interior, which clearly has rules that they do. The Environmental Protection Agency has many, but there are other federal agencies that do that. But those policy issues come from them. They're the ones who are proposing the rule and assembling it, going through the Administrative Procedure Act notice-and-comment process. If they are challenged, at least those that are within our jurisdiction, then we represent them

The interesting thing about the greenhouse gas rules, which are not final by [any] margin, is that they have already been challenged. So we are already in different courts defending EPA's proposed rules that are not even final yet. And so sometimes those type of things happen before [the rules] are final.

But again the policy issues come out of the agencies. We are their lawyers in federal court…

BNA: So you haven't had any interactions with the agency regarding maybe looking at the proposals earlier to make sure that they are in line with the law and something that you can defend?

Cruden: All of the proposed rules, every single one of the proposed rules, we see. We're not the approval authority by any means, but clearly we talk with the agencies about those rules at the appropriate times—so without question we do that. Just part of the normal process.

BNA: In an era when we've been seeing a lot of budget cuts, your division is asking for more funding. How do you plan to approach Congress with that request to boost your funding? What warrants your funding increase when so many other divisions and departments across the government are seeing budget cuts?

Cruden: So, the process by which the appropriations committees of Congress reviews our budget is an amazing process … and done of course at the department level, where they are in fact, not for just our part but for all parts of the department going to Congress and defending those requests.

So, its kind of hard for me to say the success of or any of all of that. But I do know that the competition inside of the department is quite significant for those things that you're going to ask for—for additional money. And I also know that many times we don't get those additional requests. But I still think those two areas—again, pollution on Native American land and illegal wildlife trafficking—are issues of bipartisan concern. Everybody would look at that and say, ‘those are things that we should be doing.' We have trust responsibilities for Native American land that is quite significant there. The illegal wildlife trafficking, we've all seen the pictures of what is happening to the rhinoceroses and elephant traffic and I don't think there is a single person that [wants] to live in a world or have to tell people what it used to be like when we had elephants and rhinoceroses. We all want to actually have some effort to protect that. So in any case, we made the proposal for that, the department supports that proposal, the administration supports that. Having all of the different competing issues they have gone through, every one of them, and they still think those two modest amounts, that those two are, in fact, worth supporting and we just hope that Congress agrees with that.

By the way, if we don't get funding, it doesn't mean we'll do nothing in those areas. Those are still important areas. But obviously additional resources would help us.

BNA: One of the priorities that was mentioned in the budget request this year is environmental enforcement related to oil and gas extraction on Indian Country lands. What prompted the boost in funding for that portion of the budget request? What kinds of violations are you all looking at enforcing in that area?

Cruden: … In the environment division's budget request…what we've asked for is additional people and additional resources in two areas.

One of them would be pollution on Native American lands, so it's not narrow to any particular type. It's pollution on Native American lands. And the second is illegal wildlife enforcement. Those are the two areas that we asked for, probably not a lot according to the budget, but would actually help us with additional people and additional resources. So obviously we need the people and the resources before we can do anything with them.

But we've long thought that Native American land—Native Americans often lack the resources themselves to ferret out pollution activity. It could be just relatively standard things, which is to say, tanks that have VOCs—volatile organic chemicals—coming out of them that are not controlled adequately or lagoons that run over and spill pollution into waters of the United States or pipelines that break, all relatively common things that occur in a lot of places, but we've never had the resources to really adequately look at that, and we'd like to. We'd like to be able to do that.

The second is illegal wildlife trafficking. It's another area that we would like to have more resources for. First of all, it's a priority of not only the United States, but internationally, to try to reduce the demand, and the United States is actually an area where illegal wildlife comes into the United States and goes out of the United States and sometimes through the United States and that requires more people looking at where that is happening. It could involve customs issues, it could involve auction houses. We did a case recently—a criminal prosecution of an auction house. All of those are possibilities, but those two areas—pollution on Native American land and wildlife trafficking—we did ask for additional money.

By the way, we have no idea if we will actually get that additional money. But nonetheless, we saw those two areas as places we could use additional assistance and the administration supported it, so its part of the budget request that went to Congress.

BNA: Are you at all worried about becoming collateral damage regarding those budget requests, seeing all of the climate change rhetoric and the political back-and-forth that's gone on over environmental laws on Capitol Hill?

Cruden: I don't see either of these requests triggering any of the other concerns that might be present on the Hill. … There's competing priorities. I understand that. There's a lot of associated issues. But at least the subject matter—this is the kind of subject matter that I think every American gets behind. I see these as bipartisan concerns, notwithstanding the fact that I do understand that it's a time where every dollar in the budget matters, and so I can't predict complete success, but I do not see [what we're asking for] as particularly controversial—only whether or not the resources are available to let us do that.

BNA: Another area that was discussed in the budget request is the toll and the amount of resources that the BP Deepwater Horizon spill has taken on this department. How has that affected the kinds of cases that your division has been able to take from other agencies? Has it affected the amount of cases or the types of cases that you have been able to take on or the speed at which you've been able to effectively prosecute those cases?

Cruden: Yeah, I mean, without question Deepwater Horizon has taken lots of resources. It takes expert witnesses. It takes trial lawyers. It takes paralegals. It takes people managing terra-bytes of information of documents that we have received. The division has been involved in Deepwater Horizon from almost the minute that it happened, and so we have had defensive cases. We have had, of course, the huge offensive case we are bringing. And many agencies are involved. So, you know, clearly the Department of the Interior is involved, the Environmental Protection Agency is involved, the Commerce Department is involved because of NOAA [the National Oceanic and Atmospheric Administration]. The department's resources and all of those agencies' resources have been mightily involved in the case.

On the other hand, this is the most significant environmental tragedy of probably most of our lives, and what has happened on the ground to the Gulf—the economic impact on the five Gulf states, the ecological impact was so significant—it's the kind of thing that Americans want for there to be some help for the environment and some restoration capability.

And of course we have a ruling by the district court judge of gross negligence by BP, and now we're fulfilling the next part of that. That's the liability ruling, but we have not had the penalty ruling, and that's just what we did. What we did is the final phase, which was to seek a penalty from BP and others for that, and because of a specific congressional act called the RESTORE Act, 80 percent of that penalty money will go back into the restoration of the Gulf.

So notwithstanding that, it's cost us resources for sure and time, and it's not over by [any] margin—it is absolutely not over. We have a lot more to do in that particular case. It's worth it. It's worth it because it would be like the equivalent of a dozen cases, not just one case, because we have many different states, many different areas, and what we get out of it is more significant than a whole series of other cases would be.

I mean, after all, we've already gotten a fair amount. BP has already contributed $1 billion in what I think of as ‘early restoration,' and that money's getting spent in the Gulf and positive things are happening. Some of it is already occurring, but there's a lot more to do.

BNA: So you actually were in the department when the Exxon Valdez oil spill occurred. Obviously every situation is unique, but have there been any ‘lessons learned' that you're going to be pulling from that to really efficiently work on the BP case?

Cruden: You know, that's a fun question because I started here in 1991 as chief of environmental enforcement. … I was not here when the spill occurred in 1989, but I was here when we were resolving Exxon Valdez, and so I actually approved the final consent decree there. When Deepwater [Horizon] arose and almost immediately, not just me but also several others went to New Orleans. We went to the site. We flew to the oil as it was gushing out—remember it gushed out there for nearly three months. We went back and pulled some of the people that had done Exxon Valdez. We used some of the same protocols that we had developed there in Deepwater Horizon, and some of those things are really paying off right now because there was an expertise, a base that we were able to draw from. Some of the people involved in the [Deepwater] litigation were also involved in Exxon, and that was quite helpful. And so if something like this occurs in the future, the fact that we actually put a lot of resources into a lot of attorney and paralegal time and expert time also means that we created a body of expertise that might be available if a tragedy like this occurs in the future. But without question, we've been able to draw from what we did here in the division many years ago in Exxon…

BNA: So I'd like to shift over to Next Generation Compliance. Cynthia Giles has called for Next Gen to be incorporated into as many settlements as possible and appropriate. But there hasn't been a lot of discussion as to what that will look like. What is the Justice Department's role going to be in incorporating those types of tools into settlements, and what does it look like?

Cruden: I have met with Cynthia Giles now on several occasions to talk over her plans. Not just her, I mean, it's the entirety of the EPA because I've also spoken with the administrator about Next Generation activities. They are all completely in support, as I am. I really think this is quite creative, very innovative what they're doing, and it's broader than what we would do in our settlements. But I can think of a number of areas, and we're having these discussions so that we are, in fact, supportive of the concept.

But at the heart of some of it is the more effective use of advanced technology, particularly monitoring technology … So that's one area. Second, and we promote this as well, but it's still a great idea: more third-party verification of what happens in a consent decree. So some of these consent decrees are hugely technical, go on for pages. And then the question is how do you actually know it's being complied with. And part of what EPA is suggesting, which we have already done in some instances, is to incorporate into the settlement that this be verified and then reported by a third-party, which leads me to the third one. And that is, just doing more that informs the public—more transparent, more information going to the public because then they become a check-and-balance of the process, as well.

So there's probably others, but those are the ones I can think of off-hand, which is advanced monitoring, third-party compliance issues and more transparency, more available information to the public so you're actually using them as well as a check and balance. So those are the kinds of things that we're certainly talking about, which is not the only thing in Next Generation, but part. You asked me narrowly about settlement discussions, and those are the kind of things that we can do in settlements.

BNA: You said one of your goals is to advance environmental justice and, in December, DOJ came out with a new environmental justice strategy. I'm interested in hearing what your environmental justice approach will look like. What will we see in the next year or so?

Cruden: … So I've said several times that, for me, the whole significant part of environmental justice is simply giving voice to those communities and individuals who really lack a voice. For poor or disadvantaged or minority populations, many of them who actually live very close to polluting sources, many of them have disproportionate effects just because of where they live. Actually, I think probably a lot of our environmental enforcement probably has an effect on that, because if we're cleaning up polluting activity and requiring a company to put on pollution abatement equipment that affects everybody. … It certainly helps minority communities where kids have asthma and things that are probably caused by that activity. So part of what we're doing is giving a voice to the community.

We have tools available to us that allow us to actually seek the involvement of the community. One of the very interesting parts of our practice is that almost every one of our consent decrees and certainly every one of them that has injunctive relief goes up for public comment. Every one of them we seek [public] views. You don't have to have a lawyer. You can write it on a postcard, you can do anything you want, and we read every single one of those. Not only do we read them, we respond to them in terms of whether or not we want to go through or change the consent decree that we have.

Second, … there's prioritizing things that we do. So we do a lot of sewer cases, upgrading from combined-sewer overflow and sanitary sewer overflow, which are largely working with cities, and very often those events disproportionately affect minority communities. So what sequence of events you do when you're requiring the cleanup, getting the community to be involved in that and trying to do worst first, actually helps.

And finally, and we're looking at that right now, what is our capability in terms of supplemental environmental projects, which are beyond the penalty, beyond the injunctive relief, but really could do something very special for disadvantaged communities that were hurt by the polluting activity, but what we could do as a special project would not otherwise be encompassed in the injunctive relief. Those are things that we're looking at—not just for environmental justice, for other areas, as well—to help out communities. That would be part of my goals for the future.

BNA: Do you find that you alter injunctive relief in response to comments often? What types or volumes of comments do you consider to alter something that you have already put so much work and time into?

Cruden: So I can't give you any examples in the more recent history because I haven't been here, but I can give you [examples] for the past. That is a very important process. We go through a process that we call lodging, where we lodge the consent decree with the court so that it is signed, but not final. And we tell the court ordinarily that we are seeking public comment. That consent decree goes on our webpage. You could access right now the Department of Justice's webpage, and you would find consent decrees where public comment is occurring. And we very often get public comment. By the way, very often we get public comments that are very supportive of the consent decree. But sometimes they're telling us; We wish you had done other sorts of things or you should have considered other sorts of things. In my lifetime here at the department, I've seen a number of times where those comments made a difference. They made a difference in how it was implemented. Maybe it didn't change the consent decree, but how it was implemented, it made a difference in the feedback that we gave to the community. So the community said, ‘we just don't know' and we said, ‘that's a good point.' It's not the kind of thing that you necessarily would put in the consent decree, but in the implementation of that through other places we could actually make sure that they know.

But in some cases, they could change. They could change because there was a mistake. They could change because there were things we just did not think of. Now these are consensual. It is a consent decree. And so when that happens, you have to go back to the other parties and they have to agree. Once that happens, then all of those comments go to the court. There's an explanation of whether you agree or disagree in the moving document, and then you ask the court to enter the consent decree. Once its entered, then it is an order of the court. So it's very powerful at that stage. Its more powerful than a normal settlement because a normal settlement is just between several different parties and then the case goes away. This is not that way. When that finally happens, then it's an order of the court and, if you violate that consent decree, you're not only violating the contract, you're violating an order of the court. So it's more significant at that stage than a normal settlement decree. And that's the normal process that we go through in our enforcement consent decrees.