Post on 03-Jul-2015
How to Be Ready for an NOV –and What to Do Once it Lands on Your Desk!
Katherine Roek, Lindquist & Vennum
Jeff Hayward, The Valspar Corporation
Dana Wagner, Liesch Associates, Inc.
November 6, 2012
What is an NOV?• Notice of Violation
– If your business holds a permit, license or approval containing conditions to operate, or operates in a regulated industry, and you violate any applicable conditions or regulations, you may receive an NOV
• Examples: air permit, stormwater permit, hazardous waste generator license, product content / labeling requirements
– NOVs are generally part of doing business in heavily regulated industries
– Format / process may vary per agency; this presentation will provide general recommendations
Presentation Overview
1. Before – How Can You Prepare?
2. During – What Should You Do When You Receive an NOV?
3. After – What Steps Can You Take to Prevent Another Violation?
Before: How to Prepare for an NOV
• Know Your Business
– Set the tone at the top
• Make safety a priority
• As in-house counsel, educate employees about your role
– Identify all permits / licenses / approvals your company holds
• If in doubt, bring in a consultant to perform a comprehensive compliance assessment
– Identify other "hot topics" in your industry• e.g., OSHA
Before: How to Prepare for an NOV
• Know Your People
– Who is in charge of environmental, health and safety (EHS) matters?
• Assign responsibilities, hold personnel accountable
• Permit / license application identifies a point of contact
• Type of business will dictate expertise needed
– Consider the role of consultants.
• Conduct periodic self-audits
• Consider role of Environmental Management System (EMS)– Self-disclosed violations may eliminate gravity-based penalties
Before: How to Prepare for an NOV
• Know Your Regulators
– Who issued the permit / license?
• Often overlapping agency responsibilities – fed/state/local
• Be aware of (and try to stay out of!) turf wars
– Each regulator has a personality and an agenda
– Understand agency philosophies
– Establish and maintain relationships with key officials.
• Invite them to tour your facility
• Share with them results of self-audits or performance tests
During: NOV Appears on Your Desk
• Set the Tone at the Top (Part 2!)
– Best way to prepare for an NOV: don't get one.
– But if you do … react appropriately!
– Commit appropriate resources to determine:
• Did the violation actually occur?
• How can it be fixed, and fixed correctly?
During: NOV Appears on Your Desk
• Demonstrate internal support, commit appropriate resources to fixing problem
– Identify Knowledgeable People
• Involve in-house counsel
• Responsible person identified in permit / license application
• Corporate officer must sign most transmittals
• EHS manager, field / plant staff, contractors – anyone who touched the issue
During: NOV Appears on Your Desk
• Demonstrate internal support, commit appropriate resources to fixing problem (con't…)
– Compile Relevant Information
• Review the applicable permit / license
• Review the spill report / test report that led to the violation
• Review the applicable statute / regulation / ordinance
During: NOV Appears on Your Desk
• Call outside counsel (and consultants!)
– Remember that the NOV will paint the worst picture of the situation
– You have rights! You're expected to contradict any erroneous information that the agency presents.
– If you have any question about the permit, license, applicable regulatory authority, etc. –outside counsel and consultants have been through this drill many times.
After: Respond, and Follow-Up
• Tell Your Story (and Establish the Record!)
– "Preliminary Response" – take each item in NOV
• Everything you say can and will be used against you –resist the urge to overshare!
• Don't be afraid to ask for an extension
– Provide additional information, if necessary
• Does your company have unique operations?
• Have you taken mitigating steps since the violation?
After: Respond, and Follow-Up
• Tell Your Story (continued …)
– Make sure that everyone who is familiar with the issue reviews and comments on the response
– Understand attorney/client privilege and work product doctrine relating to communication between counsel and the company
• When it applies
• When (and how) to invoke it
– Request an in-person meeting with the agency once you send in the response
After: Respond, and Follow-Up
• Finalize the Agreement
– In Minnesota, the MPCA will use either:
• Administrative Penalty Order (APO)
• Stipulation Agreement
• Consent Decree
– Think about Supplemental Environmental Projects
– Counties, other local agencies may have their own form of agreement
After: Respond, and Follow-Up
• Finalize the Agreement (continued …)
– Final agreement will contain:
• Penalty (which is negotiable!)
• Corrective actions
– Take this opportunity to consider future changes in business operations
• Otherwise known as, don't agree to something to which you can't commit
• Or: if the agreement requires you to get a new permit, consider whether there are other changes to incorporate into the permit application
After: Respond, and Follow-Up
• Follow-Up, Maintain Relationships
– Are there internal changes / improvements that you can make?
– Share every accomplishment with your new friends, the regulators
• Request their input, if applicable
• Make sure you have a common understanding of when the agreement obligations terminate