The Business, Entrepreneurship & Tax Law Review


In March of 2020, the Department of Justice (“DOJ”) adopted a policy that bars the use of supplemental environmental projects (“SEPs”) in settlements of environmental enforcement suits. A ban on SEPs can drastically impact both companies and the environment. The DOJ repeatedly rolled back the use of SEPs during the Trump Administration, but President Biden reversed the ban placed on SEPs in March 2020 under the previous administration. SEPs have long been used in environmental enforcement suits and have been extremely useful in the settlement process by giving companies more options when entering into settlement agreements, making settlements easier for both sides. The DOJ explained the rationale for this ban as a Constitutional issue, but this claim is unfounded. Over the years, the claim has been that SEPs were in violation of the Miscellaneous Receipts Act because Congress has not explicitly authorized SEPs, but Congress has gone as far as encouraging the use of them but has yet to pass a low regarding the use of SEPs. This means that with every change in administration, there could come a change in the policy regarding SEPs. This article explores the rationale behind this Constitutional issue, and why such a claim is unfounded. It also explores the detrimental impacts another ban could have on companies and the environment.

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