25 ELR 10525 | Environmental Law Reporter | copyright © 1995 | All rights reserved

Criminal Enforcement of Environmental Laws: Part II—The Knowledge Element in Environmental Crimes

Editors' Summary: In this second of a three-part series, the authors examine the knowledge element in environmental crimes. They point out that while mens rea—or "guilty knowledge"—is a required element of most criminal offenses, a distinguishing feature of environmental crimes is that they require minimal proof of knowledge to sustain a conviction. In analyzing environmental crimes as general intent offenses, the authors first describe the public welfare offense doctrine, under which courts have interpreted the term "knowingly" to require only general awareness that a defendant was dealing with a substance likely to be regulated and knowledge that the conduct constituting the offense occurred. They contrast cases interpreting the knowledge elements of nonenvironmental statutes, which generally require proof of actual knowledge of illegality. The authors then survey significant decisions construing the knowledge element in environmental crimes, focusing on what the defendant must know about applicable legal requirements and the conduct in question. In particular, they analyze the intent element for permit offenses. Next, the authors discuss methods of proving knowledge for corporate and individual defendants, including direct and circumstantial evidence. The authors discuss in detail how prosecutors use the responsible corporate officer doctrine to impose liability on individuals at high corporate levels. Finally, the authors analyze the effectiveness of litigation strategies that focus on the difficulties regulated persons and entities face in understanding the complex environmental regulatory schemes under which they operate.

[25 ELR 10525]

The "existence of a mens rea is the rule of, rather than the exception to, the principles of Anglo-American criminal jurisprudence.¹ The critical feature that distinguishes environmental crimes from other white-collar criminal offenses is the minimal proof of knowledge required, especially in light of the complexity and technical nature of the underlying violations. The major federal environmental statutes require proof that the defendant "knowingly" violated the law. The government need not prove premeditation or intent to violate the law. Rather, courts have interpreted these provisions to require only a showing of general intent for conviction. This minimal knowledge element has blurred the distinction between civil and criminal cases to the point that virtually every environmental violation is theoretically subject to criminal prosecution.

Background

Using the "public welfare offense" doctrine,² courts have interpreted the term "knowingly" to require only general awareness that the defendant was dealing with a substance likely to be regulated and knowledge that a discharge was occurring. This standard almost always will be met by facilities that have obtained a discharge permit for their [25 ELR 10526] operations. Thus, environmental case law has been characterized as imposing a species of strict liability.³

As environmental felony prosecutions expand to include technical regulatory violations, substantial reconsideration is being given to whether the minimal intent element is appropriate, especially for charges of violating the terms of a permit.⁴ The legal issue is whether the bare fact that an industrial process is subject to regulation provides sufficient notice to an operator of a particular action's illegality, when the substantive standards are frequently complicated and arcane. The policy concern is that courts have applied the lower knowledge standard in a manner that may ironically impose a de facto strict liability standard on companies that have made the greatest efforts to comply with their environmental obligations.

While reading the knowledge element expansively, courts have not expanded liability indiscriminately, however. In particular, courts have given cool reception to the government's argument that criminal liability might attach to senior corporate officials based solely on their positions in the company, without proof of their actual knowledge of, or involvement in, the illegal acts. Further, concerns about the appropriateness of criminal punishment, which might otherwise have found expression through a narrow reading of the knowledge element, are being articulated instead through strict judicial interpretations of the substantive elements of offenses.

Environmental Crimes as General Intent Offenses

All federal environmental laws except the Refuse Act⁵ prohibit "knowing" violations of their provisions, without further defining that term.⁶ Consequently, courts have had to give that term meaning on a case-by-case basis. In the process, they have reduced the knowledge element to a minimum in the environmental area under the judicially created public welfare offense doctrine.

The Public Welfare Offense Doctrine

The public welfare offense doctrine applies when the substance involved is so inherently dangerous that the defendant's knowledge of legal issues can be presumed. The doctrine originated with substances such as drugs and munitions,⁷ and was first extended to the environmental area in United States v. International Minerals & Chemical Corp.⁸

International Minerals involved a prosecution for knowing violation of an Interstate Commerce Commission rule that required a shipper to disclose the presence of hazardous chemicals on a container's label. The U.S. Supreme Court upheld the validity of a criminal information that failed to allege that the defendant had actual knowledge of the rule it allegedly violated. The Court stated that when

dangerous or deleterious devices or products or obnoxious waste materials are involved, the probability of regulation is so great that anyone who is aware that he is in possession of them . . . must be presumed to be aware of the regulation.⁹

$=I

The Court recognized two possible defenses under the public welfare offense doctrine. First, a factual defense is available if a "person thinks in good faith that he was shipping distilled water when in fact he was shipping some dangerous acid . . . ."¹⁰ Second, the Court recognized that products that are not obviously dangerous, such as "pencils, dental floss, [and] paper clips may also be regulated," and that "substantial due process questions" might be raised if the statute did not require thatmens rea be present as to each ingredient of the offense for such materials.¹¹ But the Court concluded that the corrosive liquids involved in the information — sulfuric acid — were obviously dangerous. Therefore, the potential due process limiting principle was not implicated in International Minerals.

At this time, the public welfare offense doctrine is limited only by the Due Process Clause's requirement that the statute give the regulated entity due notice that an act has been made criminal.¹² To date, this concern has been more theoretical than real, as no environmental conviction has ever been overturned on this basis.¹³

The Knowledge Requirement in Nonenvironmental Cases

To understand the significance of applying the public welfare offense doctrine in environmental cases, it is important to contrast how courts have interpreted the knowledge requirement in nonenvironmental cases.

Under the doctrine of Liparota v. United States,¹⁴ regulatory crimes outside the environmental area require proof [25 ELR 10527] of actual knowledge of illegality. Liparota concerned the mental element of the crime of knowingly possessing food stamps without authorization. The question before the Supreme Court was whether Congress intended to dispense with proof that the defendant knew that his or her possession was unauthorized. The Court recognized that defining the elements of a criminal offense is reserved to Congress. Absent evidence of contrary congressional intent in the statute's language or legislative history, the normal default setting for the knowledge element in criminal cases — as well as the rule of lenity¹⁵ — requires a showing that the defendant knew that his or her possession was unauthorized.¹⁶ Because the food stamp statute in Liparota was silent, the Court held that proof of mens rea was required — especially because a rule that did not require knowledge of illegality would criminalize a broad range of apparently innocent conduct.¹⁷

In overturning the conviction, the Court rejected the government's argument for extending the public welfare offense doctrine to this crime. It noted that "in most previous instances, Congress has rendered criminal a type of conduct that a reasonable person should know is subject to stringent public regulation and may seriously threaten the community's health or safety."¹⁸ The Court concluded, however, that food stamps "can hardly be compared" to a hand grenade or drugs, materials to which the public welfare offense doctrine properly may apply.¹⁹

The reasoning in Liparota is unsatisfactory for two reasons. First, as a jurisprudential matter, the Court provided no justification for why — absent proof of congressional intent to apply a diminished knowledge requirement under a particular statute — federal courts should pick and choose among different criminal statutes with the same standing and change the default setting for the mens rea element, based on their subjective judgments that certain crimes should be placed in different categories. Second, the Court did not provide meaningful guidance as to how the lower courts should go about determining which crimes justify changing the default setting. For example, the Federal Water Pollution Control Act (FWPCA) prohibits the unpermitted discharge of "pollutants" that range from known carcinogens to heat or sand.²⁰ The presumption of knowledge of regulation may fairly apply to many, but not necessarily all, of the covered substances. Under Liparota, however, the default setting may be changed as to all if some of the materials would provide actual notice of likely regulation.

In 1994, the Supreme Court decided four cases that defined the mens rea requirement of nonenvironmental statutes.²¹ In each instance the Court imposed a heavier burden of proof on the knowledge element than the government believed was appropriate. In particular, the Court expressed a strong reluctance to dispense with a mens rea requirement for felony statutes, absent explicit congressional directions.²² The Court observed, however, that notwithstanding the limits it had imposed, the public welfare offense doctrine remains viable and may be applied to "dangerous and deleterious devices that will be assumed to alert an individual that he stands in 'responsible relation to a public danger.'"²³

Significant Decisions Construing the Knowledge Element

In assessing the adequacy of proof of the mental element of environmental crimes, courts have focused on whether the defendant must know: (a) that the conduct will violate the applicable law or regulation; (b) that the activity requires a permit; (c) of the underlying material facts; or (d) that the conduct will violate the terms and conditions of a permit. In order to sustain a criminal conviction, courts have required—with minor exceptions — proof only that the defendant was aware of his or her own activities.

Knowledge of the Law or Regulations

This issue has been litigated most frequently. It is well-established that the defendant need not have actual knowledge of the requirements of the statute or the U.S. Environmental Protection Agency (EPA) implementing regulations in order to satisfy the "knowingly" element.

United States v. Frezzo Bros.²⁴ The district court held, and the Third Circuit affirmed, that proof of specific intent is not required under the FWPCA in order to sustain a conviction under §§ 301 and 309(c) for willfully or negligently dumping pollutants into navigable waters without a permit.

United States v. Hayes International Corp.²⁵ The defendants were convicted of illegally transporting hazardous waste in violation of Resource Conservation and Recovery Act (RCRA) § 3008(d)(1).²⁶ Rejecting the proposed affirmative defense that the defendants misunderstood RCRA's implementing regulations, the court held that the knowledge element did not require proof that the defendants knew that the wastes were classified as hazardous under the regulations.²⁷ The court found, however, that the defendants must have knowledge of the permit status of the facility to which the waste was transported, and that sufficient knowledge was proved by circumstantial evidence.²⁸

United States v. Hoflin.²⁹ The court held that interpreting RCRA § 3008(d)(2)(A)'s knowledge requirement as a general intent provision was consistent with the express [25 ELR 10528] language of the statute.³⁰ The prosecution could prove that the waste disposed of was hazardous by showing that the material "had the potential to be harmful to others or to the environment," and was not required to prove that the defendant knew the wastes were classified as hazardous under the regulations.³¹

United States v. Dee.³² The court upheld the defendants' convictions under RCRA § 3008(d) for unpermitted disposal of hazardous waste, holding that a "knowing" violation of RCRA did not require a showing of specific intent to violate the law or that the defendants knew that the implementing regulations defined the material as hazardous waste.³³

United States v. Buckley.³⁴ In order to sustain a conviction for failure to notify authorities of an asbestos release under § 103(b)(3) of the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA),³⁵ the government need only prove that the defendant knew of the release of more than one pound of asbestos. It need not prove that the defendant knew of the notification requirement or that asbestos was one of the substances whose release had to be reported.³⁶ Similarly, to justify a conviction under §§ 112(c)(1)(B) and 113(c)(1)(C) of the Clean Air Act (CAA), the government need only prove the defendant's knowledge of the asbestos emissions themselves, and not that the defendant knew that the emissions were illegal or that they presented hazards to human health or the environment.³⁷

United States v. Baytank (Houston), Inc.³⁸ Upholding a conviction under RCRA § 3008(d)(2)(A) for illegal storage of hazardous waste, the court held that the government need not prove that the defendants knew that the wastes were defined as hazardous under RCRA. The court rejected the argument that the jury should have been instructed that the defendants must have known that the wastes were identified by EPA rules as hazardous.³⁹

United States v. Dean.⁴⁰ The court affirmed a plant manager's conviction under RCRA § 3008(d)(2)(A) for illegal storage and disposal of hazardous waste, holding that the government did not have to prove that the defendant had knowledge of RCRA's permit requirements. Agreeing with Hoflin, the court held that the word "knowingly" in § 3008(d)(2)(A) applied only to treatment, storage, and disposal of the hazardous waste, and not to the permit requirement for these activities.⁴¹

United States v. Goldsmith.⁴² The court upheld the defendant's convictions under RCRA § 3008(d)(1) and (d)(2)(A) for transporting hazardous waste to an unpermitted facility and illegally storing waste without a permit, even though the government did not prove that the defendant actually knew that EPA defined the chemical as hazardous waste. The court held that an instruction requiring knowledge that the material in question had the potential to be harmful to humans or the environment was "sufficient to inform the jury that it must find that a defendant knew the substance he disposed of was hazardous."⁴³

Knowledge of the Permit Requirement

This is the one area in which there is some divergence among the decisions. In particular, for conviction under RCRA § 3008(d)(1) for knowingly transporting hazardous waste to an unpermitted facility, some courts require proof that the defendant had actual knowledge that the facility was unpermitted.

United States v. Johnson & Towers, Inc.⁴⁴ The court held that in order to sustain an indictment under RCRA § 3008(d)(2)(A) for illegal disposal of hazardous waste without a permit, the government must allege that the defendant had knowledge of each element of the offense. Thus, the indictment must assert that the defendant knew that it was required to obtain a permit and that the defendant knew that it did not possess a permit.⁴⁵ With respect to the defendant's knowledge of the law, however, the court held that "the government need only prove knowledge of the actions taken and not of the statute forbidding them."⁴⁶

United States v. Speach.⁴⁷ The court reversed a conviction under RCRA § 3008(d)(1) for knowingly transporting hazardous waste to an unpermitted facility, because the government failed to prove that the defendant knew or willfully failed to determine that the facility to which the hazardous waste was transported lacked a RCRA disposal permit. The court distinguished Hoflin, finding that the defendant there was in "the best possible position" to determine if the facility had a permit, so that it was reasonable to impose on him the risk of ascertaining the permit status of his own facility.⁴⁸ But because the allegedly illegal act in Speach involved knowledge of another entity's permit status, the court required proof of actual knowledge.⁴⁹

[25 ELR 10529]

United States v. Laughlin.⁵⁰ The court upheld a conviction under RCRA § 3008(d)(2)(A) for illegal disposal of hazardous wastes, holding that the government need only prove that the defendant had a general awareness that he was performing the acts proscribed by the law. The court held that RCRA does not require proof that the defendant had actual knowledge of the lack of permit or that the specific waste involved was listed under RCRA.⁵¹

United States v. Wagner.⁵² The district court held that the government did not have to prove that the defendant had actual knowledge of RCRA's permit requirements. The Seventh Circuit affirmed, in a well-reasoned interpretation of RCRA § 3008(d)(2)'s knowledge requirements.⁵³

The fact that [Congress] used "knowingly" in subsection (2) and subsidiary subsections (2)(B) and (2)(C) but omitted it from subsidiary subsection (2)(A), the permit requirement language at issue, is telling. To read "knowingly" as used in subsection (2) to apply to subsidiary subsections (A), (B), and (C) would render its use in (B) and (C) mere surplusage.⁵⁴

Although this interpretation is consistent with prior environmental decisions, the necessary implication is that proof of a greater degree of mens rea than general intent should be required for a RCRA permit violation under § 3008(d)(2)(B), which requires a "knowing violation" as well as proof of knowing treatment, storage, or disposal.

Knowledge of Material Facts

In upholding the general knowledge requirement, several courts have noted that International Minerals preserved the possible defense that the accused believed that he or she was dealing with an innocuous substance.⁵⁵ However, there has been little actual litigation concerning this theoretical "good-faith mistake of fact" defense. Perhaps the closest case is Hayes International. There, the issue was whether the defendants believed in good faith that the waste involved was being recycled, and thus exempt from the RCRA regulations. The court noted that "had the wastes been recycled, then no violation of the statute would have occurred."⁵⁶ The court found that once the defense of good-faith mistake is raised, the defendant bears the burden of persuasion. The government is "not required to disprove the [defendants'] mistake of fact defense."⁵⁷

Violations of Permit Terms

The two leading cases in this area are United States v. Weitzenhoff,⁵⁸ and United States v. Hopkins.⁵⁹ They are discussed at length below. Two other decisions are significant:

United States v. Self.⁶⁰ The court upheld the defendant's conviction under RCRA § 3008(d)(2)(B) for illegally storing hazardous waste, holding that his knowledge of prior illegal storage constituted sufficient circumstantial evidence to satisfy the knowledge requirement. The court also held, however, that § 3008(d)(2)(B) "ensures that a good faith belief that a permit allows a particular manner of treatment, storage or disposal of hazardous waste, when in fact [the permit] does not, is a defense to a criminal charge."⁶¹

United States v. Heuer.⁶² The court reversed a conviction under RCRA § 3008(d)(2)(B) for illegal disposal of hazardous waste, because there was no express provision in the facility's permit that prohibited it from disposing of wastes generated at other facilities. The court held that the defendant facility manager could not be held guilty based on "implied conditions" allegedly included in the disposal permit.⁶³

The Intent Element for Permit Offenses

Currently, the most hotly debated question in the environmental crimes area is whether the diminished knowledge requirement under the public welfare offense doctrine may be applied to charges of violating a discharge permit. The issues involved are clearly presented by the Weitzenhoff and Hopkins cases, in which the courts have affirmed criminal convictions while expressing some discomfort at the results.

United States v. Weitzenhoff

In Weitzenhoff, the managers of a sewage treatment plant were convicted of multiple felonies under the FWPCA for knowingly discharging partially processed sewage into the ocean, in violation of the plant's permit limits on discharging total suspended solids and biochemical oxygen demand.⁶⁴ While the pollutants the defendants discharged are certainly objectionable, they are not inherently toxic. Discharging these materials was illegal only because it exceeded by 6 [25 ELR 10530] percent over a 14-month period the quantities allowed under the plant's permit.⁶⁵

The government proceeded on a conventional public welfare offense theory. The defendants argued that the phrase "knowingly violates" in FWPCA § 309(c)(2)⁶⁶ differentiated this offense from other FWPCA criminal charges. They claimed that this phrase requires the government to prove that the defendants knew that the release violated permit limits.⁶⁷

The defense also argued that the FWPCA is not a generic public welfare statute, but that Congress had enacted a specially tailored law under which the term "knowingly" must be interpreted to require proof of actual knowledge.⁶⁸ They argued that FWPCA § 309 establishes a six-tier hierarchy of enforcement provisions, including:

. two levels of administrative penalties;

. civil penalties enforceable in court;

. misdemeanor offenses;

. ordinary felonies; and

. aggravated felonies (knowing endangerment).⁶⁹

Under this carefully calibrated scheme, all elements of the various levels of offense are essentially the same except for the mental element. No showing of intent is required for administrative penalties or civil penalties. The misdemeanor provision requires proof that the defendants "negligently" violated a permit,⁷⁰ while the aggravated felony provision requires proof of a "knowing" violation plus proof that the defendant "knows at the time that he thereby places another person in imminent danger."⁷¹ The defendants argued that the FWPCA's structure thus suggests that the ordinary felony provision requires proof of some degree of mental intent beyond negligence.⁷² In the context of the surrounding provisions, this standard would seem to require proof of some degree of actual knowledge that the action would exceed permit limits.

The district court denied the defendants' request for a jury instruction that would have required the government to prove that the defendants knew that their acts were unlawful. The court also refused to submit to the jury the defendants' proposed affirmative defense that they mistakenly believed that the permit authorized their behavior in order to avoid a catastrophic plant failure.⁷³

In August 1993, a panel of the Ninth Circuit affirmed the convictions, finding that the district court had properly interpreted the phrase "knowingly violates" as requiring proof only that the defendants were aware that they were discharging pollutants, and not proof of actual knowledge that their acts violated the permit.⁷⁴ The panel concluded that the FWPCA felony provision was properly characterized as a public welfare offense, and that "International Minerals rather than Liparota controls" because § 309(c) was intended to protect the public from the potential consequences of water pollution.⁷⁵

The panel also held that the trial court had correctly refused to charge the jury on the proposed affirmative defense concerning the knowledge element. It found, however, that the district court had erred in admitting evidence about the meaning of the permit, because that was a pure question of law. The court nonetheless held that this "error was harmless because, under a proper interpretation of the permit, the discharges . . . necessarily violated the permit."⁷⁶

The defendants petitioned for rehearing en banc, and the court held the matter under review for almost one year. In the interim, the Supreme Court decided Staples v. United States,⁷⁷ and two other cases interpreting nonenvironmental statutes⁷⁸ to require a stronger showing of intent than the government believed was required. In August 1994, the Ninth Circuit finally denied rehearing, over a strong dissent by five judges.⁷⁹

The panel substantially amended its prior opinion to deal with Staples and the other intervening decisions. The panel noted that the public welfare offense doctrine survived Staples and could justify dispensing with proof of knowledge in cases of products properly classified as "obnoxious waste materials."⁸⁰ The panel reasoned that the unregistered machine guns at issue in Staples were not covered by this rationale, but that the nonhazardous waste products discharged in Weitzenhoff were. The panel also noted that while the Supreme Court had expressed concern over the imposition of enhanced penalties for public welfare offenses, it had not prohibited application of the doctrine to felonies.⁸¹

The dissenters would have held that the phrase "knowingly violates" requires proof of actual knowledge. Their conclusion was based on the plain language of FWPCA § 309(c) and the structure of the Act, especially reading the felony provision in conjunction with the negligence standard for misdemeanors.⁸² The dissenters also challenged the panel's finding that discharge of the pollutants involved could properly be classified within the ambit of the public welfare offense doctrine.⁸³ They contrasted offenses properly [25 ELR 10531] classified as public welfare offenses, which are unambiguously wrong, with the conduct involved here, which often was innocent and indeed explicitly lawful in many circumstances. The dissent argued that persons of good conscience could discharge 6 percent more pollutants than their permit allowed without recognizing the wrongfulness of the conduct when they engaged in it. Therefore, they would have found that International Minerals does not "justify more aggressive criminalization without a plain statutory command."⁸⁴

Because the Supreme Court ultimately denied certiorari, Weitzenhoff remains the leading case on applying the knowledge element to permit offenses.⁸⁵

United States v. Hopkins

The other major case interpreting the intent element for permit offenses is Hopkins. The defendant in Hopkins was convicted, among other things, under FWPCA § 309(c)(2)(A) for violating the restrictions of a permit with respect to zinc discharges, and under 18 U.S.C. § 371 for conspiracy to violate § 309(c)(2)(A). On appeal, the defendant arguedthat the jury should have been instructed that the government was required to prove that he knew he was acting in violation of the permit. The Second Circuit rejected this argument, finding that "the purpose and legislative history of [FWPCA § 309(c)(2)(A)] indicate that Congress meant that that section would be violated if the defendants' acts were proscribed, even if the defendant was not aware of the proscription."⁸⁶ Following circuit precedent in Laughlin, the panel applied the public welfare offense doctrine and its "presumption of awareness of regulation" to a permit violation.⁸⁷ The court noted that the "vast majority" of the substances to which the FWPCA applies "are of the type that would alert any ordinary user to the likelihood of stringent regulation. Moreover, the very fact that a governmental permit has been issued enhances the user's awareness of the existence of regulation."⁸⁸

Hopkins completes the development of the knowledge element over the last 20 years. For facilities with discharge permits, environmental statutes are essentially strict liability offenses because the "enhanced awareness" of regulation implicit in receiving a permit virtually eliminates any possible knowledge defenses. The "enhanced awareness" factor may also mean that entities operating within the permit system are held to a higher standard than those operating outside the realm of environmental controls, a reversal of long-standing policy and prosecutorial guidance.

The de minimis nature of the knowledge requirement recognized in Weitzenhoff and Hopkins also eliminates important defenses that companies generally rely on in the white-collar crime area. For example, good-faith reliance on the advice of counsel about what the EPA rules require is not a valid affirmative defense under the International Minerals doctrine. Similarly, reliance on the advice of environmental consultants or engineers about necessary steps to attain compliance is not a legally sufficient defense. Although these factors may be relevant to the prosecutor's decision whether to indict, they are irrelevant to the legal issues at trial, which focus only on whether an illegal discharge occurred.⁸⁹

Developments Since Weitzenhoff

After the Ninth Circuit denied rehearing in Weitzenhoff, federal prosecutors took full advantage of the reaffirmation of the public welfare offense doctrine to advance pending cases. For example, in one FWPCA case pending in the Eastern District of California, the prosecution filed a superseding indictment that stripped out all references to the defendants' knowledge or state of mind that had been included in the prior indictment; submitted proposed jury instructions that would diminish the required knowledge element so that the government need prove only that the defendants knew that they operated a facility from which the discharges occurred; and sought jury instructions that the defendants could be convicted of conspiracy on the same showing of knowledge necessary for conviction of the underlying offense—that is, that the defendants could be convicted of conspiracy without proof that any one of them knew what the law required or that any one of them actually intended to violate the law.⁹⁰

In sum, as the case law has developed, the issue of knowledge has significance only for the prosecutor's decision whether or not to file criminal charges. Even then its role is discretionary, and its import may be outweighed by other factors. Once criminal charges are filed, however, the knowledge element has only a vestigial function in the case. Except in those isolated areas—such as RCRA transport charges and knowing endangerment cases—in which the statute contains a second knowledge element, proof of knowledge will not present a meaningful obstacle to the prosecution's ability to obtain a conviction.

Methods of Proving Knowledge

Corporate Defendants

Prosecutors can rely on several approaches to prove a corporation's guilty knowledge. Under the doctrine of respondeat [25 ELR 10532] superior, a corporation may be held criminally liable for the actions of its employees if the acts were done on behalf of the company and were within the scope of the employees' authority.⁹¹ Criminal liability may be imputed even if the company has an explicit policy against the activity.⁹² The company's establishment of an environmental policy, without diligent internal enforcement efforts, does not suffice to take the acts of the employee outside the scope of his or her employment.⁹³

Under the doctrine of collective knowledge, the aggregate knowledge of all employees may be imputed to the corporation. Thus, a company may be found to have knowingly engaged in conduct constituting a crime based on proof that one employee knew facts relating to one element of the offense and other employees had knowledge relating to other essential elements, even though no one person had knowledge of all necessary facts.⁹⁴

Individual Defendants

For individual defendants, prosecutors also have several avenues through which they can prove sufficient knowledge.

Direct Evidence

The most effective means of proving criminal knowledge is through direct evidence that the individual personally was involved in the commission of the offense or personally aided and abetted the violation. A corporate officer who instructs his or her subordinates to perform acts that violate environmental laws is liable for such violations, even if the officer does not directly participate in the prohibited conduct.⁹⁵ For example, in Hoflin, the defendant was convicted of violating RCRA on proof that he instructed his employees to bury drums containing hazardous wastes after receiving warnings that such disposal would violate certain permits. Similarly, in United States v. Carr,⁹⁶ the defendant was convicted under CERCLA for failing to report a release of a hazardous substance, based on evidence that he instructed workers to dump a truckload of paint cans into a pond, and then told the workers to dump earth into the pond.

Willful Blindness/Conscious Avoidance

The government may prove that the defendant intentionally avoided learning, or was willfully blind to, the truth. For example, in Hayes International, the court held that a corporate employee's willful failure to determine the permit status of a facility to which hazardous waste had been shipped satisfied the requirement of knowledge of permit status under RCRA.⁹⁷

The government may also attempt to obtain a conviction by showing that the defendant consciously avoided learning the truth after receiving substantial warning signs, and therefore had the equivalent of knowledge. "A conscious avoidance charge is appropriate (a) when the element of knowledge is in dispute, and (b) the evidence would permit a rational juror to conclude beyond a reasonable doubt 'that the defendant was aware of a high probability of the fact in dispute and consciously avoided confirming that fact.'"⁹⁸

Circumstantial Evidence

Knowledge of environmental crimes can be proved by circumstantial evidence. For example, in Hayes International, a corporation and one employee were charged with knowingly transporting hazardous waste to an unpermitted facility in violation of RCRA § 3008(d)(1). The government proved that the employee knew that the facility to which the paint waste was shipped derived no economic benefit from it, and that he failed to follow internal corporate procedures requiring disposal of wastes lacking resale value only at EPA-approved sites. Even though the government failed to present direct proof that the employee knew that the waste was not being recycled, the court held that this circumstantial evidence successfully proved guilty knowledge.⁹⁹ The court recognized, however, that the employee's good-faith belief that the material was being recycled, if proved, would be a valid affirmative defense.¹⁰⁰

In particular, the knowing endangerment provisions of RCRA, the CAA, and the FWPCA expressly provide that in proving knowledge, circumstantial evidence may be used, including evidence that the defendant took affirmative steps to shield itself from relevant information.¹⁰¹

Other courts have permitted the inference of criminal knowledge to be based on what the defendant would have known through the exercise of reasonable diligence, when the defendant had some affirmative duty to know the facts or to investigate the situation. For example, in Dee, the court found that knowledge could be inferred with respect [25 ELR 10533] to one of the defendants from evidence that he was informed by safety inspectors and employees of problems with stored chemicals. The defendant did not respond but merely "told staff to clean it up as best they could."¹⁰² The court also found that knowledge could be inferred from evidence that the defendant was in charge of operations at the plant, had previously taken action with respect to the chemicals' storage, repeatedly ignored warnings, and took no actions to comply with RCRA.¹⁰³

The Responsible Corporate Officer Doctrine

[] Background. In cases in which the government has had difficulty proving knowledge through traditional means, the U.S. Department of Justice (Justice) occasionally has relied on the responsible corporate officer doctrine as a substitute for proof of actual knowledge. Some courts have been receptive to the argument that showing that the individual occupied a supervisory position in the company might be sufficient to impute criminal knowledge from a subordinate employee with guilty knowledge to the supervising officer who was unaware of the violations.¹⁰⁴ The First Circuit has concluded, however, that the responsible corporate officer doctrine may provide an additional piece of circumstantial evidence with which to prove criminal knowledge, but does not, by itself, provide a conclusive means of imputing guilty knowledge to senior officials.¹⁰⁵ Justice policy announcements appear to have accepted as a matter of charging policy the substantive limitations on application of this doctrine established by the First Circuit.¹⁰⁶

The most significant aspect of the responsible corporate officer doctrine is its potential for imposing liability on officials at corporate headquarters who have no direct responsibility for the operation of the offending facility. For example, in United States v. Pennwalt Corp.,¹⁰⁷ four corporate officers were indicted for FWPCA violations based on their failure to prevent the collapse of a chemical holding tank. The indictment charged that there was a known structural weakness in the tank, and that the officers knew of that defect and failed to respond to it. Three of the officers were based several thousand miles from the facility. They nonetheless were indicted under the responsible corporate officer doctrine, because they had received a memorandum identifying the defect and had failed to assure remedial action.¹⁰⁸

Congress has incorporated the responsible corporate officer concept in the criminal provisions of the CAA and the FWPCA without explaining how it is meant to apply.¹⁰⁹ In this vacuum, Justice has argued that the doctrine permits imposing criminal liability on (1) a corporate officer, (2) who is directly responsible within management for the conduct in question, and (3) who knew that the type of improper activity allegedly committed by his or her subordinates was occurring.¹¹⁰ The government has claimed that corporate officers should be held criminally responsible for the misconduct of those who work under their supervision, even if the officers' knowledge of such conduct is minimal.

[] Origin of the Doctrine. The responsible corporate officer doctrine developed from two Supreme Court cases decided under the Federal Food, Drug, and Cosmetic Act,¹¹¹ a strict liability statute whose violation is subject to misdemeanor penalties.

In United States v. Dotterweich,¹¹² the Supreme Court held that the president of a company could be convicted of illegally distributing adulterated drugs through acts committed by his subordinates. The Court held that no showing of mens rea was necessary to establish culpability under this public welfare statute. The Court recognized that when applied to individuals acting on behalf of a company, the statute might be read to "sweep . . . within its condemnation any person however remotely entangled in the proscribed shipment."¹¹³ The Court, however, narrowed the range of individuals subject to liability by finding that "the offense is committed . . . by all who [have] a responsible share in the furtherance of the transaction which the statute outlaws."¹¹⁴ But the Court declined to define the class of employees bearing a "responsible share" in the offense, leaving this definition to "the good sense of prosecutors, the wise guidance of trial judges, and the ultimate judgment of juries."¹¹⁵

Three Justices dissented, arguing that absent express congressional authority, it was improper for the Court to impose criminal liability on a corporate officer who did not participate in, and had no knowledge of, the offense.¹¹⁶ In the dissent's view, although the stockholders could have sued the president for negligence and mismanagement, the imposition of vicarious criminal liability was unfounded.

In United States v. Park,¹¹⁷ the chief executive officer (CEO) of a large national retail food operation was convicted of illegally distributing rodent-infested food, which was discovered at a corporate warehouse. The evidence showed [25 ELR 10534] that the Food and Drug Administration had previously notified the officer of a similar problem at a different warehouse, and that he had notice of the problem at the warehouse where the contaminated food was found. The government also showed that one vice president was in charge of sanitation for both facilities, and that the defendant had previously conferred with that subordinate and other officers to ensure that corrective action would be taken.¹¹⁸

The CEO did not participate in the acts causing the violation, but was nonetheless convicted under this strict liability provision. On appeal, he claimed that he was denied due process by being convicted without proof of wrongful action on his part. The Court held that the government could establish liability by demonstrating "that the defendant had, by reason of his position in the corporation, responsibility and authority either to prevent in the first instance, or promptly to correct, the violation complained of, and that he failed to do so."¹¹⁹ The Court found that the conviction was proper because the defendant was aware that the company's internal system for ensuring the sanitary conditions was not working, but failed to restructure that system once notified that similar sanitary problems had arisen at two warehouses.¹²⁰ The Court recognized, however, that the officer could have raised an affirmative defense that he was powerless to prevent the violation, and that he could have sought a jury instruction requiring the government to prove beyond a reasonable doubt that he was capable of preventing the violation.¹²¹

As in Dotterweich, three Justices dissented. They argued that the jury was provided no meaningful guidance as to what constituted a "responsible relation" to the offense, and could have convicted based solely on the defendant's corporate position.¹²² The dissenters were particularly concerned that the decision permitted imposing criminal liability on the officer for conduct that was unaware of and did not participate in. They argued:

The standardless conviction approved today can serve in another case tomorrow to support a felony conviction and a substantial prison sentence. However highly the Court may regard the social objectives of the Food, Drug, and Cosmetic Act, that regard cannot serve to justify a criminal conviction so wholly alien to fundamental principles of our law.¹²³

[] Application of the Doctrine in Environmental Cases. Justice inevitably sought to apply the responsible corporate officer doctrine in environmental cases. First, courts have held these provisions to be public welfare laws, like the applicable statute in Dotterweich and Park. Second, the CAb. and the FWPCA expressly include the term "responsible corporate officer" in their definition of persons who can be liable.¹²⁴ The statutes, however, do not define the class of individuals that may be considered responsible corporate officers, and the legislative history does not provide any further guidance. As a result, courts have had difficulty translating the doctrine to the environmental area. Complications arise partly because federal environmental laws require a minimal showing of knowledge, and partly because of the ambiguous standards announced in Dotterweich and Park.

In the environmental context, the critical question is whether the government may prove a corporate officer's criminal knowledge simply by showing that the officer would have known that environmental violations were occurring had the officer been fulfilling his or her duties properly. The question also arises whether this characterization of the responsible corporate officer doctrine could allow imposition of vicarious criminal liability for corporate negligence and mismanagement, thereby reading the requirement of criminal knowledge out of these laws.

Three recent decisions apparently define the limits of the doctrine in environmental cases.

United States v. White.¹²⁵ A company and several employees were indicted under RCRA and the Federal Insecticide, Fungicide, and Rodenticide Act for loading a truck with pesticide-contaminated water and then spraying the material on a field. One defendant was indicted under the responsible corporate officer doctrine on the ground that he "had direct responsibility to supervise the handling of hazardous waste by [corporate] employees. He is liable for the acts of all other agents and employees of [the company] in handling the hazardous waste at [its] facilities which he knew of or should have known of."¹²⁶

The defendant moved to strike this charge, claiming that it would improperly permit the government to obtain a conviction based solely on a theory of respondeat superior. The court agreed and dismissed. It distinguished Dotterweich and Park on the basis that the statute at issue in those cases contained no mens rea requirement.¹²⁷

United States v. Brittain.¹²⁸ The defendant, who was a city's public utilities director with general supervisory authority over theoperation of its wastewater treatment plant, was charged with two misdemeanor counts under FWPCA §§ 301(a) and 309(c)(1) for unlawful discharges into navigable waters. The evidence showed that staff had advised the director that pollutants were being discharged into a local creek in violation of permit limits. He also personally observed the discharges on two occasions, but instructed the plant supervisor not to report them to the EPA, contrary to the city's permit requirement.

The trial court rejected the government's argument that the director could be held criminally liable for the violations under the responsible corporate officer doctrine. Consequently, this theory of liability was not submitted to the [25 ELR 10535] jury.¹²⁹ On appeal, the director argued that there was no evidence that he personally caused the unlawful discharge, and the only proof of his involvement with the discharge was his relationship to the discharging entity. The director claimed, therefore, that he could not be held liable under the Act's definition of an "individual," and could only be found liable if the government proved that he was the permittee or a responsible corporate officer — a charge that had not been submitted to the jury on the defendant's objection.¹³⁰

The Tenth Circuit affirmed the convictions, holding that the FWPCA's use of the term "responsible corporate officer" did not narrow the range of "individuals" subject to criminal liability.¹³¹ Although the evidence would have permitted the court to treat the case as one in which the defendant was directly involved in the violation, the court chose to address the issue in responsible corporate officer terms:

We think that Congress perceived this objective [restoration of the integrity of the nation's waters] to outweigh hardships suffered by "responsible corporate officers" who are held criminally liable in spite of their lack of "consciousness of wrongdoing." . . . Under this interpretation, a "responsible corporate officer," to be held criminally liable, would not have to "willfully or negligently" cause a permit violation. Instead, the willfulness or negligence of the actor would be imputed to him by virtue of his position of responsibility.¹³²

Because the jury was charged on an actual knowledge theory, the broad language about imputation of willfulness or negligence is dictum. Further, the case involved misdemeanor convictions, not felonies, so its precedential significance may be limited for most environmental prosecutions. Nevertheless, Brittain is the strongest support to date for an aggressive interpretation of the responsible corporate officer doctrine.

United States v. MacDonald & Watson Waste Oil Co.¹³³ A corporation and its president were convicted on two counts each of knowingly transporting hazardous waste to a facility that did not have a permit, in violation of RCRA § 3008(d)(1). The evidence showed that hazardous waste hadbeen illegally transported to an unpermitted site operated by the company, under the supervision of a corporate employee. The evidence further showed that the company president had participated in the day-to-day management of that site and had been warned on other occasions that his company had illegally disposed of hazardous waste. However, there was no direct evidence that the president knew of the particular unlawful shipment charged in the indictment.

The trial court issued the following instruction on the responsible corporate officer doctrine:

When an individual defendant is also a corporate officer, the government may prove that individual's knowledge in either of two ways. The first way is to demonstrate that the defendant had actual knowledge of the act in question. The second way is to establish that the defendant was what is called a responsible officer of the corporation committing the act. In order to prove that a person is a responsible corporate officer three things must be shown.

First, it must be shown that the person is an officer of the corporation, not merely an employee.

Second, it must be shown that the officer had direct responsibility for the activities that are alleged to be illegal. Simply being an officer or even the president of a corporation is not enough. The government must prove that the person had a responsibility to supervise the activities in question.

And the third requirement is that the officer must have known or believed that the illegal activity of the type alleged occurred.¹³⁴

$=I

The First Circuit overtunred the president's conviction, holding that the district court had improperly applied the responsible corporate officer doctrine "as a substitute means of proving the explicit knowledge element of this RCRA felony."¹³⁵ The court held that the charge was defective because it instructed the jury "that proof that [the president] was a responsible corporate officer would conclusively prove the element of his knowledge."¹³⁶ The court rejected the government's argument that the instruction merely permitted use of the doctrine to raise the inference of guilty knowledge, and observed that the instructions on willful blindness and circumstantial evidence

would have sufficed had it merely been the court's purpose to point out that knowledge could be established by circumstantial evidence, although the court could, had it wished, have elaborated on the extent to which [the president's] responsibilities and duties might lead to a reasonable inference that he knew of the [illegal disposal].¹³⁷

Thus, absent proof that the president had actual knowledge of the specific shipments charged in the indictment, the conviction had to be overturned.

In sum, MacDonald & Watson appears to have established that the responsible corporate officer doctrine provides an additional piece of circumstantial evidence to prove criminal liability. It does not, however, provide an independent means by which guilty knowledge may be imputed from an employee with direct responsibility for an environmental violation to a supervising employee or an officer at headquarters.¹³⁸

[25 ELR 10536]

[] Practical Impact of the Doctrine. Although there are legal and policy limits on the reach of responsible corporate officer doctrine, the theory nonetheless continues to play a critical role in environmental investigations. The government's ability to use the doctrine as circumstantial proof of actual knowledge reduces the quantum of evidence otherwise necessary to prove actual knowledge on behalf of senior officials at corporate headquarters. It therefore constitutes a significant threat to senior corporate officials and a substantial weapon in the prosecutor's arsenal.

For example, members of the headquarters staff may receive reports or memoranda from plant officials indicating that violations have occurred at a facility. Under Justice policy, if corporate officials fail to investigate or take effective remedial action in response to such reports, they may be vulnerable to individual prosecution.¹³⁹ Their exposure is enhanced if their awareness is combined with other indicia of involvement, such as conversations with subordinates.

Even officials outside the division directly involved in the violation may be implicated under the responsible corporate officer doctrine. For example, a request for a capital allocation to redress an environmental violation might be reviewed by employees in the environmental compliance, finance, engineering, purchasing, and legal departments, as well as senior management. Few events can raise the level of concern within a corporation as effectively as subpoenas from the grand jury fortestimony from these officials. And any headquarters official who demonstrably opposed a request to cure an environmental violation will be on perilous ground indeed if the official has to defend an investigation on the ground that he or she was not actually "responsible" for the employees who broke the laws, but merely had an advisory or policy formulation role.

Litigation Strategies Addressing the Reduced Intent Requirement

With the diminishment of the knowledge element, defense strategies in environmental cases tend to focus on difficulties in understanding how the complex regulatory schemes work and on challenges to the government's scientific proof. In recent years, although several such approaches have worked, broader lessons can be drawn from cases in which courts have rejected proffered defenses.

At the appellate level, the following five cases stand out as examples of successful regulatory defenses.

United States v. Plaza Health Laboratories, Inc.¹⁴⁰ The court held that the key definitional term "point source" in the FWPCA is ambiguous. Applying the rule of lenity,¹⁴¹ the Second Circuit held that a human being is not a point source and reversed criminal convictions under FWPCA §§ 301(a) and 309(c)(2) for disposing of vials containing tainted blood in navigable waters.

United States v. Heuer.¹⁴² The court reversed a conviction under RCRA § 3008(d)(2)(B) for illegal disposal of hazardous waste, holding that in order "to support [criminal] liability under [§ 3008(d)(2)(B)] a condition, express or implied, must be clear on the face of a permit."¹⁴³ There was no express provision in the facility's permit that prohibited it from burning wastes that were generated at other facilities, and this condition could not be implied from prior course of dealings between the regulator and the permit holder or be deemed incorporated by reference.

United States v. Self.¹⁴⁴ The court found that EPA's RCRA regulations were ambiguous as to whether natural gas condensate burned as fuel was classified as a hazardous waste. The court interpreted the ambiguous language against the government and reversed several RCRA convictions predicated on this ground.

United States v. Goodner Bros. Aircraft.¹⁴⁵ The Eighth Circuit overturned criminal convictions that had been premised on the RCRA mixture rule, which the D.C. Circuit had since invalidated based on EPA's failure to comply with the Administrative Procedure Act in promulgating the rule.¹⁴⁶

Adamo Wrecking Co. v. United States.¹⁴⁷ This case establishes a narrow exception to the preclusive review provision, which provides that the validity of EPA emissions standards may be challenged only by civil suits filed in the D.C. Circuit immediately after the rules are promulgated.¹⁴⁸ Adamo involved a criminal prosecution under the CAA in which the defendant challenged EPA's authority to issue a work practice standard for asbestos in place of a rule. The appellate court held that the preclusive review provision barred his defense that EPA had authority only to issue an emissions standard, not a work practice standard. The Supreme Court reversed, holding that the defendant's objection that the work practice standard was invalid was not subject to the preclusive review provision, and that the district court had jurisdiction to entertain this objection to the indictment.¹⁴⁹

With far greater frequency, courts have rejected broad challenges to the validity of criminal charges. For example:

United States v. Louisville Edible Oil Products, Inc.¹⁵⁰ The court rejected the double jeopardy argument that the federal government could not bring criminal charges against a company against whom a local environmental [25 ELR 10537] agency had already imposed large fines for violations of the CAA and CERCLA.

United States v. Mills.¹⁵¹ The court rejected the defendants' argument that Congress had unconstitutionally delegated to an administrative agency the power under the FWPCA to define "waters of the United States" as including "wetlands."

United States v. Ellen.¹⁵² The court rejected arguments that uncertainty over the definition of wetlands denied the defendant due process and violated the Ex Post Facto Clause.

United States v. Boldt.¹⁵³ The court held that the FWPCA does not recognize a defense of economic or business necessity. Thus, the issue of whether the only alternative to noncompliance was closure of the plant could not be presented to the jury.

United States v. Marathon Development Corp.¹⁵⁴ The court rejected arguments that provisions in the FWPCA authorizing states to impose more stringent water quality standards than those required by EPA denied criminal defendants equal protection of the law.

Finally, in several instances counsel have raised the defense of entrapment by estoppel, arguing that the defendant acted in reliance on instructions or guidance from a state or federal official about how to comply with the environmental rules governing the conduct that was the subject of the indictment. This is a familiar defense in other regulatory fields.¹⁵⁵ As far as can be determined, however, this defense has never been successfully invoked at the trial or appellate stages of an environmental case.

Conclusion

As long as environmental crimes continue to be subject to a de minimis knowledge requirement, defendants will have little prospect of defeating the government at trial on the issue of intent, which ordinarily is the centerpiece of a white-collar criminal case. This harsh reality gives prosecutors substantial leverage to compel targets to enter into plea agreements, either at the completion of the investigation or before trial. Accordingly, in most cases the only realistic means of avoiding liability will be through successful defense of the environmental investigation.¹⁵⁶ It is in this area that seasoned environmental crimes counsel can make a significant difference in the outcome. From experience, counsel should understand what kind of proof can meaningfully be presented to a lay jury concerning a technical offense, and whether the government has developed that proof in its investigation. Further, environmental criminal counsel may be able to "reverse engineer" the tradeoff in the environmental prosecutor's mind between traditional law enforcement concepts of conviction, punishment, and deterrence, and the environmental concern with obtaining prompt and full remediation of pollution.

John F. Cooney, Judson W. Starr, Joseph G. Block, and Thomas J. Kelly Jr. are partners in the Washington, D.C., law firm of Venable, Baetjer, Howard & Civiletti. Mr. Cooney is a former Deputy General Counsel in the Office of Management and Budget, and a former Assistant to the Solicitor General, U.S. Department of Justice. Mr. Starr is a former Chief of the Environmental Crimes Section, U.S. Department of Justice. Mr. Kelly is a former Assistant U.S. Attorney.

Andrew R. Herrup, Valerie K. Mann, and Gregory Braker are associates at the Washington, D.C., law firm of Venable, Baetjer, Howard & Civiletti.

1. United States v. U.S. Gypsum Co., 438 U.S. 422, 436 (1978).

2. See United States v. International Minerals & Chem. Corp., 402 U.S. 558 (1971). The public welfare offense doctrine is discussed in more detail infra.

3. As Justice Thomas pointed out in Staples v. United States, use of the term strict liability is technically a misnomer. 114 S. Ct. 1793, 1798 n.3 (1994). While courts have eliminated the requirement of mens rea, they do require that the defendant know that he or she is dealing with a "dangerous or deleterious substance." Id.

4. See, e.g., Richard Lazarus, A New Fault Line — Mens Rea, ENVTL. F., May/June 1995, at 9.

5. 33 U.S.C. § 411.

6. The legislative history of environmental statutes rarely contains guidance as to what "knowingly" violates means. See United States v. Weitzenhoff, 35 F.3d 1275, 1283-84, 24 ELR 21504, 21506 (9th Cir. 1994), cert. denied sub nom. Mariani v. United States, 115 S. Ct. 939 (1995); id. 35 F.3d at 1295-96, 24 ELR at 21513-14 (Kleinfeld, J., dissenting). The exception is the Ocean Dumping Act, 33 U.S.C. § 1411(a), for which the Senate Report provides that the term "refers to a conscious act or conscious omission . . . which amounts to a violation of law, regulation or permit." S. REP. No. 451, 92d Cong., 1st Sess. (1971), reprinted in 1972 U.S.C.C.A.N. 4234, 4249. On this basis, courts have held that the Ocean Dumping Act requires mere consciousness of the action, and not proof that the defendant had knowledge of the relevant statutory provision. United States v. Reilly, 827 F. Supp. 1076, 1078, 24 ELR 20097, 20098 (D. Del. 1993), aff'd, 33 F.3d 1396 (3d Cir. 1994).

7. See, e.g., United States v. Freed, 401 U.S. 601 (1971) (possession of unregistered grenade); United States v. Balint, 258 U.S. 250 (1922) (possession of narcotics).

8. 402 U.S. 558 (1971).

9. Id. at 565.

10. Id. at 563-64.

11. Id. at 564.

12. See Kolender v. Lawson, 461 U.S. 352, 357 (1983); Jordan v. DeGeorge, 341 U.S. 223, 230 (1951); United States v. International Minerals & Chem. Corp., 402 U.S. 558 (1971).

13. The knowledge issue has proved particularly difficult to resolve in cases that involve discharges from facilities possessing the requisite permits, when an individual may believe in good faith that he or she is acting in accordance with the provisions of those complex, technical documents. In such cases, the constitutional limit on the public welfare offense doctrine recognized in International Minerals may be implicated.

14. 471 U.S. 419 (1985).

15. The rule of lenity demands that ambiguities in criminal statutes be resolved in favor of the defendant. E.g., Ratzlaf v. United States, 114 S. Ct. 655, 663 (1994).

16. Liparota, 471 U.S. at 424-28.

17. Id. at 426.

18. Id. at 433.

19. Id.

20. 33 U.S.C. § 1362(6), ELR STAT. FWPCA § 502(6).

21. Ratzlaf v. United States, 114 S. Ct. 655 (1994); Posters 'N' Things Ltd. v. United States, 114 S. Ct. 1793 (1994); Staples v. United States, 114 S. Ct. 1793 (1994); United States v. X-Citement Video, Inc., 115 S. Ct. 464 (1994).

22. Staples v. united States, 114 S. Ct. 1793, 1804 (1994).

23. Id. at 1801 n.6.

24. 546 F. Supp. 713, 12 ELR 21133 (E.D. Pa. 1982), aff'd, 703 F.2d 62, 13 ELR 20584 (3d Cir. 1983), cert. denied, 464 U.S. 829 (1983).

25. 786 F.2d 1499, 16 ELR 20717 (11th Cir. 1986).

26. 42 U.S.C. § 6928(d)(1), ELR STAT. RCRA § 3008(d)(1).

27. Hayes International, 786 F.2d at 1502-03, 16 ELR at 20718-19.

28. Id. at 1503-04, 16 ELR at 20719. Compare United States v. MacDonald & Watson Waste Oil Co., 933 F.2d 35, 21 ELR 21449 (1st Cir. 1991) (upholding convictions because the evidence supported the inference that the defendants knew that the waste was regulated under RCRA).

29. 880 F.2d 1033, 19 ELR 21140 (9th Cir. 1989), cert. denied, 493 U.S. 1083 (1990).

30. Accord United States v. Sellers, 926 F.2d 410, 21 ELR 20787 (5th Cir. 1991) (prosecution need not prove the defendant knew that the waste was classified as hazardous within the meaning of the RCRA rules).

31. Hoflin, 880 F.2d at 1039, 19 ELR at 21143.

32. 912 F.2d 741, 21 ELR 20051 (4th Cir.), cert. denied, 499 U.S. 919 (1991).

33. When "'dangerous . . . materials are involved, the probability of regulation is so great that anyone who is aware that he is in possession of them . . . must be presumed to be aware of the regulation.'" Id. at 745, 21 ELR at 20053 (quoting United States v. International Minerals & Chem. Corp., 402 U.S. 558, 565 (1971)); see supra note 9 and accompanying text.

34. 934 F.2d 84, 21 ELR 21113 (6th Cir. 1991).

35. 42 U.S.C. § 9603(b)(3), ELR STAT. CERCLA § 103(b)(3).

36. Id. at 89, 21 ELR at 21115.

37. 42 U.S.C. §§ 7412(c)(1)(B), 7413(c)(1)(C), ELR STAT. CAA §§ 112(c)(1)(B), 113(c)(1)(C); Id. at 88, 21 ELR at 21115.

38. 934 F.2d 599, 21 ELR 21101 (5th Cir. 1991).

39. Id. at 612, 21 ELR at 21107.

40. 969 F.2d 187, 22 ELR 21296 (6th Cir. 1992), cert denied, 113 S. Ct. 1852 (1993).

41. Id. at 191, 22 ELR at 21297.

42. 978 F.2d 643, 23 ELR 20281 (11th Cir. 1992).

43. Id. at 646, 23 ELR at 20282.

44. 741 F.2d 662, 14 ELR 20634 (3d Cir. 1984), cert. denied sub nom. Angel v. United States, 469 U.S. 1208 (1985).

45. Id. at 669, 14 ELR at 20638.

46. Id.

47. 968 F.2d 795, 22 ELR 21498 (9th Cir. 1992).

48. Id. at 797, 22 ELR at 21500.

49. Id.

50. 10 F.3d 961, 24 ELR 20221 (2d Cir. 1993), cert. denied sub nom. Goldman v. United States, 114 S. Ct. 1649 (1994).

51. The court suggested that in the future, the jury instruction should provide that the government must prove that the material the defendant stored or discarded did not have a mere potential to cause harm to humans or the environment, but that it had a substantial potential to be harmful. Id. at 967, 24 ELR at 20225.

52. 29 F.3d 264, 24 ELR 21353 (9th Cir. 1994).

53. RCRA § 3008(d)(2) provides criminal penalties for any person who

knowingly treats, stores or disposes of any hazardous waste identified or listed under this subchapter —

(A) without a permit under this subchapter . . .; or

(B) in knowing violation of any material condition or requirement of such permit; or

(C) in knowing violation of any material condition or requirement of any applicable interim status regulations or standards . . . .

42 U.S.C. § 6928(d)(2)(A)-(C), ELR STAT. RCRA § 3008(d)(2)(A)-(C).

54. Wagner, 29 F.3d at 266, 24 ELR at 21353.

55. E.g., Staples v. United States, 114 S. Ct. 1793, 1798 n.3 (1994).

56. Hayes International, 786 F.2d at 1506, 16 ELR at 20720.

57. Id.

58. 1 F.3d 1523, 23 ELR 21322 (9th Cir. 1993), reh'g denied, opinion amended, 35 F.3d 1275, 24 ELR 21504 (1994), cert. denied sub nom. Mariani v. United States, 115 S. Ct. 939 (1995).

59. 53 F.3d 533, 25 ELR 21178 (2d Cir. 1995).

60. 2 F.3d 1071, 23 ELR 21301 (10th Cir. 1993).

61. Id. at 1091, 23 ELR at 21309.

62. 4 F.3d 723, 23 ELR 21357 (9th Cir. 1993), cert. denied, 114 S. Ct. 1190 (1994).

63. Id. at 730-31, 23 ELR at 21359-60.

64. United States v. Weitzenhoff, 1 F.3d 1523, 23 ELR 21322 (9th Cir. 1993), reh'g denied, opinion amended, 35 F.3d 1275, 24 ELR 21504 (1994), cert. denied sub nom. Mariani v. United States, 115 S. Ct. 939 (1995).

65. 35 F.3d at 1294, 24 ELR at 21513 (Kleinfeld, J., dissenting).

66. Under § 309(c)(2), it is a felony to "knowingly violate . . . any permit condition or limitation implementing any of [certain enumerated] sections in a permit issued under [§ 402]." 33 U.S.C. § 1319(c)(2), ELR STAT. FWPCA § 309(c)(2).

67. In United States v. Hopkins, which is discussed infra, the court agreed that "as a matter of abstract logic, it would seem that a statute making it unlawful to 'knowingly violate[]' a given statutory or permit provision would require proof that the defendant both violated and knew that he violated that provision." 53 F.3d 533, 537, 25 ELR 21178, 21179 (2d Cir. 1995).

68. Weitzenhoff, 35 F.3d at 1283, 24 ELR at 21506.

69. See Petition for Writ of Certiorari at 19-23, Mariani v. United States, No. 94-6683 (filed Dec. 29, 1994).

70. 42 U.S.C. § 1319(c)(1), ELR STAT. FWPCA § 309(c)(1).

71. Id. § 1319(c)(3), ELR STAT. FWPCA § 309(c)(3).

72. Weitzenhoff, 35 F.3d at 1283-84, 24 ELR at 21506-07.

73. Id. at 1283, 24 ELR at 21506. The evidence likely would have permitted the government to obtain a conviction under either standard, because it showed that the defendants released the illegal material at night and instructed their employees to keep quiet. Id. at 1281-82, 24 ELR at 21505-06.

74. Id. at 1283-84, 24 ELR at 21506.

75. Id. at 1286, 24 ELR at 21508.

76. Id. at 1288, 24 ELR at 21509.

77. 114 S. Ct. 1793 (1994).

78. Posters 'N' Things Ltd. v. United States, 114 S. Ct. 1747 (1994) (Mail Order Drug Paraphernalia Control Act); Ratzlaf v. United States, 114 S. Ct. 655 (1994) (antistructuring provision of money-laundering statute).

79. United States v. Weitzenhoff, 35 F.3d 1275, 24 ELR 21504 (9th Cir. 1994).

80. Id. at 1280, 24 ELR at 21507.

81. Id. at 1281, 24 ELR at 21508.

82. Id. at 1293-95, 24 ELR at 21512-13 (Kleinfeld, J., dissenting).

83. Id. at 1296-98, 24 ELR at 21514-15.

84. Id. at 1296, 24 ELR at 21514.

85. The defendants' petition for certiorari attracted substantial support from industry coalitions. The government filed a 27-page brief in opposition. The government's detailed legal arguments essentially said all that could be argued if review had been granted. This undertaking reflects the seriousness of the challenge presented to applying the public welfare offense doctrine.

86. Hopkins, 53 F.2d at 540, 25 ELR at 21181.

87. Id. at 538, 25 ELR at 21180.

88. Id. at 539, 25 ELR at 21180.

89. In addition, any evidence to support such defenses will be vulnerable to a motion in limine to preclude its introduction.

90. United States v. Liquid Sugars, Inc., No. S-93-302 (E.D. Cal. filed Dec. 16, 1994) (superseding indictment). The government's proposed jury instruction demonstrates the difficulty of defending against an environmental criminal charge on knowledge grounds. The proposed charge on the substantive offense provided that the government must prove only:

First, that on the dates alleged in the indictment, the defendants knowingly operated a source by discharging or causing the discharge of pollutants;

Second, that the defendants knew the general nature and character of the pollutants discharged . . . [; and]

Third, that the pollutants discharged on those dates by the defendants in fact [violated the EPA rules]. . . .

Government's Supplemental Jury Instruction Re: Knowledge at 9 (Apr. 21, 1995).

91. See, e.g., United States v. Marathon Dev. Corp., 867 F.2d 96, 19 ELR 20683 (1st Cir. 1989) (corporation found criminally liable for actions of a vice president who caused wetlands to be filled without a permit).

92. E.g., United States v. Hilton Hotels Corp., 467 F.2d 1000, 1004-07 (9th Cir. 1972), cert. denied, 409 U.S. 1125 (1973) (corporation liable for action of its agents even if they violated company policy in committing the act that constituted the crime).

93. See United States v. Beusch, 596 F.2d 871, 877-78 (9th Cir. 1979) (corporation may be liable for acts of employees done contrary to express instructions and policies, but existence of such policies may be considered in determining whether employee in fact acted to benefit the corporation).

94. E.g., United States v. Bank of New England, N.A., 821 F.2d 844, 856 (1st Cir.), cert. denied, 484 U.S. 943 (1987) (collective knowledge instruction for corporation; the aggregate knowledge obtained by corporate employees constitutes the corporation's knowledge).

95. See, e.g., United States v. Johnson & Towers, Inc., 741 F.2d 662, 668, 14 ELR 20634, 20638 (3d Cir. 1984), cert. denied, 469 U.S. 1208 (1985).

96. 880 F.2d 1550, 19 ELR 21137 (2d Cir. 1989).

97. In United States v. Pacific Hide & Fur Depot, Inc., however, the Ninth Circuit reversed a conviction under the Toxic Substances Control Act (TSCA), where the trial court's instructions had allowed the jury to convict the defendant of knowing violations on the basis of mere reckless conduct. 768 F.2d 1096, 15 ELR 20851 (9th Cir. 1985). The court held that although liability for knowing violations of TSCA could be based on willful blindness, "it is not enough that [the] defendant was mistaken, recklessly disregarded the truth, or negligently failed to inquire." Id. at 1098, 15 ELR at 20853.

98. United States v. Hopkins, 53 F.3d 533, 542, 25 ELR 21178, 21181 (2d Cir. 1995) (citations omitted); see also United States v. Buckley, 934 F.2d 84, 88, 21 ELR 21113, 21115 (6th Cir. 1991).

99. Hayes International, 786 F.2d at 1506-07, 16 ELR at 20720-21.

100. Id. at 1506, 16 ELR at 20720.

101. 42 U.S.C. § 6928(f)(2), ELR STAT. RCRA § 3008(f)(2); id. § 7413(c)(5)(B), ELR STAT. CAA § 113(c)(5)(B); 33 U.S.C. § 1319(c)(3)(B), ELR STAT. FWPCA § 309(c)(3)(B).

102. United States v. Dee, 912 F.2d 741, 747, 21 ELR 20051, 20054 (4th Cir. 1990).

103. Id. at 747-48, 21 ELR at 20054-55.

104. See, e.g., United States v. White, 766 F. Supp. 873, 22 ELR 20050 (E.D. Wash. 1991); United States v. Brittain, 931 F.2d 1413, 21 ELR 21092 (10th Cir. 1991).

105. United States v. MacDonald & Watson Waste Oil Co., 933 F.2d 35, 21 ELR 21449 (1st Cir. 1991).

106. See infra note 138.

107. No. 88-55T (W.D. Wash., corporation sentenced May 2, 1989; manager sentenced May 19, 1989).

108. Charges against these officers were ultimately dismissed on entry of the corporation's plea.

109. See 42 U.S.C. § 7413(c)(6), ELR STAT. CAA §113(c)(6) (for purposes of criminal offenses, "the term 'person' includes . . . any responsible corporate officer"); 33 U.S.C. § 1319(c)(6), ELR STAT. FWPCA § 309(c)(6) ("responsible corporate officer" included within term "persons" for purposes of knowing endangerment provision). There appears to be no legislative history of the use of this term in the 1972 FWPCA. In the 1977 CAA Amendments, Congress simply based the language on a counterpart FWPCA provision. S. REP. NO. 94-717, 94th Cong., 2d Sess. 40 (1976) ("the Committee intends that criminal penalties be sought against those corporate officers under whose responsibility a violation has taken place, and not just those employees directly involved in the operation of the violating source").

110. United States v. White, 766 F. Supp. 873, 894, 22 ELR 20050, 20060 (E.D. Wash. 1991); United States v. MacDonald & Watson Waste Oil Co., 933 F.2d 35, 53, 21 ELR 21449, 21455 (1st Cir. 1991).

111. 21 U.S.C. §§ 301-392.

112. 320 U.S. 277 (1943).

113. Id. at 284.

114. Id. (emphasis added).

115. Id. at 285.

116. Id. at 286-87 (Murphy, J., dissenting).

117. 421 U.S. 658 (1975).

118. Id. at 664.

119. Id. at 673-74.

120. Id. at 678.

121. Id. at 676-77.

122. Id. at 679-80 (Stewart, J., dissenting).

123. Id. at 683 (Stewart, J., dissenting).

124. See supra note 109 and accompanying text.

125. 766 F. Supp. 873, 22 ELR 20050 (E.D. Wash. 1991).

126. Id. at 894, 22 ELR at 20060.

127. The court also considered language in United States v. Johnson & Towers, Inc., stating that criminal knowledge of each element of a RCRA offense "may be inferred by the jury as to those individuals who hold the requisite responsible positions within the corporate defendant." Id. at 895, 22 ELR at 20061 (citing Johnson & Towers, 741 F.2d 662, 670, 14 ELR 20634, 20638 (3d Cir. 1984), cert. denied sub nom. Angel v. United States, 469 U.S. 1208 (1985)). The Court found that this statement was "clearly" dictum, and held that inclusion of the responsible corporate officer doctrine in the charge would improperly allow a conviction without the requisite intent. White, 766 F. Supp. at 895, 22 ELR at 20061.

128. 931 F.2d 1413, 21 ELR 21092 (10th Cir. 1991).

129. Id. at 1420 n.5, 21 ELR at 21095 n.5.

130. Id. at 1419, 21 ELR at 21094.

131. Id., at 1419, 21 ELR at 21094-95.

132. Id. at 1419, 21 ELR at 21095.

133. 933 F.2d 35, 21 ELR 21449 (1st Cir. 1991).

134. Id. at 50-51, 21 ELR at 21454 (capitalization modified).

135. Id. at 52, 21 ELR at 21455.

136. Id.

137. Id.

138. Justice apparently has accepted the holding in MacDonald & Watson, and has stated publicly that it will not bring indictments against corporate or municipal officials based solely on their line responsibility for supervising the employees who committed the knowing violations. In August 1993, Charles A. DeMonaco, Assistant Chief of the Environmental Crimes Section, announced at the Annual Meeting of the American Bar Association that as a matter of policy and notwithstanding the broader interpretation suggested by some courts, corporate officers would not be prosecuted for knowing violations of the environmental laws unless they meet the liability standards of MacDonald & Watson. Corporate Officer's Prosecution Should Rest on Real Knowledge, According to DOJ Official, 23 Env't Rep. (BNA) 5 (Aug. 25, 1993). See also A.B.A. SEC. NAT. RESOURCES, ENERGY & ENVTL. L., THE YEAR IN REVIEW: 1993, at 145-46.

139. Use of this theory has not been limited to the private sector. Justice has argued that senior officials of federal departments could be subject to criminal prosecution under the same theory, if they fail to seek or approve increased appropriations to accelerate the cleanup of known environmental violations at federal facilities their agencies manage. Justice ultimately abandoned this argument when the Office of Management and Budget offered to submit to Congress a supplemental appropriations for cleanup funds that would "bust" the President's budget and be characterized as mandatory spending pursuant to Justice's legal opinion.

140. 3 F.3d 643 (2d Cir. 1993), cert. denied sub nom. United States v. Villegas, 114 S. Ct. 2764 (1994).

141. See supra note 15 and accompanying text.

142. 4 F.3d 723, 23 ELR 21357 (9th Cir. 1993), cert. denied, 114 S. Ct. 1190 (1994).

143. Id. at 731, 23 ELR 21360.

144. 2 F.3d 1071, 23 ELR 21301 (10th Cir. 1993).

145. 966 F.2d 380, 22 ELR 21201 (8th Cir. 1992), cert. denied, 113 S. Ct. 967 (1993).

146. See Shell Oil Co. v. Environmental Protection Agency, 950 F.2d 741, 22 ELR20305 (D.C. Cir. 1991, amended 1992).

147. 434 U.S. 275, 8 ELR 20171 (1978).

148. 42 U.S.C. § 7607(b), ELR STAT. CAA § 307(b).

149. Adamo, 434 U.S. at 285, 8 ELR at 20173.

150. 926 F.2d 584, 21 ELR 20690 (6th Cir.), cert. denied, 112 S. Ct. 177 (1991).

151. 817 F. Supp. 1546, 23 ELR 21096 (N.D. Fla. 1993).

152. 961 F.2d 462, 22 ELR 21282 (4th Cir. 1992).

153. 929 F.2d 35, 21 ELR 20998 (1st Cir. 1991).

154. 867 F.2d 96, 19 ELR 20683 (1st Cir. 1989).

155. See, e.g., United States v. Brebner, 951 F.2d 1017 (9th Cir. 1991) (false statement on application to purchase firearm).

156. The conduct of, and response to, environmental criminal investigations will be discussed in detail in the third installment of this Article.

25 ELR 10525 | Environmental Law Reporter | copyright © 1995 | All rights reserved