On June 11, 2008, the EPA’s recent crackdown on the construction industry resulted in a series of settlements with some of the nation’s top home builders who agreed to pay more than $4 million in civil penalties for violations of the Clean Water Act. The violations included a failure to obtain NPDES permits, failure to develop adequate Storm Water Pollution Prevention Plans (SWPPPs), and failure to correctly install storm water controls or implement best management practices. The EPA explains its current crackdown on the industry by citing the potential for erosion due to land disturbance, and harmful sediment-laden runoff and storm water discharges.

Centex Homes, KB Home, Pulte Homes and Richmond American Homes must pay between $795,000 and $1.4 million each, and will be required to develop pollution prevention plans, inspections, and reporting systems that go beyond the current regulatory requirements. These June settlements follow a $1.3 million fine levied against Home Depot earlier this year and a $3.1 million fine against Walmart in 2004 for similar violations.

Under NPDES, construction sites of one acre or larger must develop and implement stormwater pollution prevention plans, and must obtain permits for stormwater discharge. Given the current targeting of the construction industry, home builders and construction site operators are advised to undertake a rigorous evaluation of their operations to ensure that they meet all regulatory requirements.

For further information, please contact your regular Hinshaw attorney.

This alert has been prepared by Hinshaw & Culbertson LLP to provide information on recent legal developments of interest to our readers. It is not intended to provide legal advice for a specific situation or to create an attorney-client relationship.