State Environmental Audit Privilege Laws: Can EPA Still Access Environmental Audits in Federal Court?

Article excerpt

I. INTRODUCTION

Over the last twenty-five years Congress, states, and administrative agencies have woven a complex web of environmental laws and regulations.(1 )Facing fines, criminal prosecutions of employees, and bad publicity if they are labeled as "polluters," diligent companies are seeking ways to protect themselves from this web. One method of protection is to conduct an internal investigation, or environmental audit, to self-evaluate compliance with federal and state environmental laws and regulations before regulators cover a violation.(2) Companies perform environmental audits by reviewing both records and operational practices. The Environmental Protection Agency (EPA) encourages companies to conduct these audits as a way to enhance the protection of the human health and the environmental.(3) The documents produced by such an audit, however, can be a double-edged sword for companies. While the identification of deficiencies allows the companies to correct problems, it can also create an incriminating paper trail for civil or criminal enforcement actions, serving as evidence that the companies were not in compliance with environmental laws.(4)

One answer to this dilemma is to develop an evidentiary privilege for environmental audits that would exclude them as evidence in enforcement actions or litigation.(5) Privilege advocates argue this protection will encourage companies to continue these rigorous self-inspections and ultimately improve compliance with environmental laws.(6 ) Currently, however, there is no federal statutory privilege for these audit documents. Nor do environmental audits easily fit into traditional federal common law privileges.(7) States, therefore, have taken matters into their own hands.(8) Since 1993, seventeen states have passed legislation creating a privilege for voluntary environmental audits.(9) These state privilege laws, however, conflict with federal environmental legislation that explicitly authorizes EPA access to such information.(10)

This Comment will analyze whether a federal court should uphold a state privilege law for environmental audits where EPA seeks access to such documents under its statutory authority. While not bound by state privilege law in federal question cases, federal courts can consider the policy reasons for granting such a privilege and adopt a new federal common law privilege.(11) Therefore, how federal courts decide to weigh these state statutory privileges in cases based on federal law will have a significant effect on EPA'S information-seeking authority when requesting environmental audits.

Part II explains in more detail what environmental audits are and why state privilege laws for these audits conflict with EPA's ability to access information as authorized in federal environmental laws. Part III analyzes how federal courts apply privileges. Part IV discusses how environmental audits do not fit into currently recognized federal common law privileges. Part V suggests why federal courts should not create a new federal common law privilege for environmental audits. Part VI concludes that state privilege statutes for environmental audits should not apply when EPA attempts to gain access to environmental information in federal courts.

II. How State Privilege Laws For Environmental Audits Conflict with Federal Environmental Laws

A. Environmental Audit Basics

Companies conduct internal environmental audits to assess compliance with environmental laws and regulations. Companies inspect their own operations or hire contractors to perform the review and the companies compare their actual practices against 'applicable environmental regulations."(12) Over the past decade, companies have increasingly used environmental audits to track their compliance records.(13)

While there is no correct format or method for such audits, the various definitions of environmental audits have similar elements. …