Administrative Penalty Order in the United States

Administrative Penalty Order (APO) in Environmental Law

A document that requires a regulated person to pay a penalty for violating the law or the terms of a permit. Congress instituted administrative penalty orders in some statutes because they provide a quick, cheap, and efficient way of enforcing the law when the violation is not significant enough to warrant a lawsuit. The agency administrator may only assess a penalty if the statute being enforced provides for it, and the maximum penalties allowable in a penalty order will generally be smaller than if the case were taken to court.

Because an administrative penalty order demands the payment of money for an alleged violation of environmental law, the person subject to it is entitled to a hearing before the order becomes final. Thus the order is prepared initially as a proposed penalty order, and at that point the regulated person must be informed of the right to a hearing. Administrative penalty proceedings may be instituted by the Environmental Protection Agency (EPA), but the Corps of Engineers and Coast Guard also have that right when they are enforcing certain environmental laws.

Administrative Penalty Provisions in Environmental Laws

The first major environmental statute that provided for administrative penalties was the Toxic Substances Control Act (TSCA). The Administrative Procedure Act and the EPA’s own Consolidated Rules of Practice provide the structure for the procedure. Under the Clean Water Act (CWA) revisions of 1987, the administrator issues a proposed penalty order. Two classes were established, Class I and Class II, and the formality of the hearings depends on the class of penalty. Class I penalties are lower than Class II. The maximum penalty under Class I is $25,000, but a Class II penalty may be as high as $125,000. Therefore, if a Class II penalty is sought, the alleged violator is entitled to more procedural protections than if a Class I penalty is at issue. Typically, the administrator will also issue a compliance order, requiring the alleged violator to begin complying with the law, at the same time the penalty order is proposed.

The Oil Pollution Act (OPA) specifies two penalty options for violators: the Clean Water Act’s penalties or alternative measures based on a fee per barrel of oil. The Coast Guard and the Department of Transportation are among the agencies with power to assess a penalty for these violations. The Emergency Planning and Community RightToKnow Act (EPCRA) and the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) have similar schemes for penalties in some sections. A Class I penalty may be no greater than $25,000; a Class II penalty may be up to $25,000 per day.

The Clean Air Act Amendments of 1990 added the flexibility of the Clean Water Act administrative penalty provisions to the Clean Air Act (CAA). The penalty under this statute can be as large as $200,000, provided that the attorney general agrees with the EPA administrator. This new section replaces an earlier, less comprehensive portion of the CAA that allowed penalty assessment. See also administrative law judge; administrative order.
Based on “Environment and the Law. A Dictionary”.