31 ELR 11340 | Environmental Law Reporter | copyright © 2001 | All rights reserved

The Changing Face of Federal Environmental Criminal Law: Trends and Developments — 1999-2001

Mr. Buente and Ms. Thomson are partners in the environmental group of Sidley, Austin, Brown & Wood's Washington, D.C., office. Mr. Buente served as Chief of the Environmental Enforcement Section, Environment and Natural Resources Division, U.S. Department of Justice from 1985-1990.

[31 ELR 11340]

According to well-settled legal principles and policies, criminal prosecution under our federal environmental laws traditionally was reserved for the most egregious and flagrant offenses, i.e., for those alleged offenses that constituted willful or knowing violations of the law or demonstrated reckless disregard for the law. Thus, a prosecutor was generally required to prove that the defendant understood that his or her actions ran afoul of the law and that the defendant intended to violate that law before the defendant could be convicted of a federal crime.¹ It also meant that the punishment typically seemed appropriate to the crime committed.

This approach to criminal enforcement made sense because, as the federal courts have long observed, not every wrong or perceived violation of moral standards should be treated as a criminal, let alone civil, violation of a legal duty, regardless of whether it is distasteful to a prosecutor or society as a whole.² Further, it was this measured approach to criminal prosecution under our federal environmental laws that the U.S. Environmental Protection Agency (EPA or the Agency) and the U.S. Department of Justice (DOJ or the Department) generally advocated until the mid-1990s.³

Despite these long-standing principles and policies, the late 1990s witnessed a blurring of the line between civil and criminal liability almost to the point of extinction under many federal environmental statutes. Federal prosecutors, assisted by the courts, are largely responsible for this sea of change, spurred on by aggressive enforcement agendas and an increasingly vocal citizenry. Over the past decade, the mens rea requirement has all but disappeared as an element of proof from many statutes; EPA's and the DOJ's enforcement priorities and policies have shifted dramatically; and the penalties associated with criminal convictions have become much harsher and more substantial. As a consequence of all these factors, it is far more challenging today to counsel corporations and their employees as to how they should conduct themselves so as to avoid criminal investigation or prosecution and to defend clients once a criminal investigation has commenced.

This Dialogue highlights a number of recent developments in environmental and criminal law of which the regulated community should be aware as it attempts to navigate itself through the increasingly complicated thickets of our federal environmental laws.⁴ The Dialogue first reviews traditional principles regarding the scope and application of criminal laws generally, then narrows its focus to the current enforcement accomplishments and goals of the United States with respect to environmental laws. The Dialogue next discusses prevailing federal enforcement policies and summarizes the latest and most significant developments in the environmental criminal case law and plea agreements, as well as the application of the U.S. Sentencing Guidelines (USSG or Sentencing Guidelines) to environmental crimes.

Traditional Legal Principles Regarding the Scope and Application of Criminal Laws

Historically, prosecutors have been guided by long-standing criminal jurisprudence in their investigation and prosecution of federal environmental crimes. Strict adherence to this jurisprudence generally prevented or at least significantly discouraged the indiscriminate exercise of prosecutorial discretion, while ensuring that persons who intentionally or recklessly flouted the law were held criminally responsible for their actions. To provide important context for the discussion that follows, two of these fundamental legal tenets — the doctrine of fair warning and congressionally imposed enforcement constraints — are summarized below.

The Right to "Fair Warning"

The U.S. Constitution guarantees that no person shall "be deprived of life, liberty, or property, without due process of law."⁵ To satisfy the due process mandate of the Constitution, courts have traditionally held that where a statute or regulation makes a violation of its provisions a criminal offense, the statute or regulation must provide clear, explicit warning of the conduct proscribed.⁶ Moreover, the Due Process [31 ELR 11341] Clause demands that criminal statutes must be strictly construed and that any ambiguities concerning the ambit of criminal provisions must be resolved in the defendant's favor.⁷ Recently, the U.S. Supreme Court reaffirmed this fundamental doctrine, emphasizing that the fair warning requirement dictates that no person shall be held criminally liable for conduct that an ordinary person would not consider prohibited.⁸

The federal courts most recently embraced the fair warning requirement, specifically the doctrine of lenity, in the environmental context in United States v. Plaza Health Laboratory, Inc.⁹ Plaza Health involved an appeal from a conviction for failure to obtain a Clean Water Act (CWA)¹⁰ national pollutant discharge elimination system (NPDES)¹¹ permit. On appeal, the defendant challenged his conviction on the grounds that a human being cannot be a "point source" under the CWA for the purposes of imposing liability.¹² Applying the doctrine of lenity, the Second Circuit agreed with the defendant and reversed his conviction. The court, quoting the Supreme Court, reasoned that "before a man can be punished as a criminal under the Federal law his case must be 'plainly and unmistakably' within the provisions of some statute."¹³ The Plaza Health court concluded that because "the criminal provisions of the CWA did not clearly proscribe [the defendant's] conduct," they "did not accord him fair warning of the sanctions the law placed on that conduct."¹⁴

Federal prosecutors and the courts continue to acknowledge the existence of this constitutional right. However, it has become, as the discussion below highlights, more and more challenging for defendants to mount a successful "fair warning" defense.

Congressional Determination of the Boundaries of Criminal Liability

In accordance with the separation-of-powers provisions of the Constitution, Congress is charged with defining the boundaries of our federal criminal laws.¹⁵ Because "the policies favoring strict construction of criminal statutes oblige [the courts] to carry out congressional intent [only] as far as the Constitution will admit,"¹⁶ neither the courts nor the executive branch may broaden the scope of a criminal statute, regardless of the need to protect human health and the environment. Indeed, as the Supreme Court recently held, even the broad remedial purposes of a statute or the existence of important societal goals do not justify abrogation of the unequivocal enforcement constraints placed on an agency by Congress.¹⁷ Furthermore, while an agency's interpretation of a statute it administers is generally entitled to deference, no deference is required where its interpretation goes beyond the statutory parameters established by Congress.¹⁸

Although cognizant of these enforcement constraints, both EPA and the DOJ continue to press for more expansive readings of federal environmental criminal provisions. As discussed below in the section Declining Mens Rea Required for Criminal Convictions — Recent Cases, in many instances, they have successfully applied these provisions to criminalize activities never before considered to merit criminal prosecution.

Initial EPA Enforcement Policies

Mindful of the importance of the legal principles set out above, EPA, in its first official pronouncement regarding the use of criminal enforcement discretion, sought to ensure that the Agency used its powers responsibly and fairly.¹⁹ Acknowledging that EPA can avail itself of a broad range of enforcement mechanisms, EPA's Office of Criminal Enforcement cautioned federal investigators that the office "has an obligation to the American public, to our colleagues throughout EPA, the regulated community, Congress, and the media to instill confidence that EPA's criminal program has the proper mechanisms in place to ensure the discriminate use of the powerful law enforcement authority entrusted to us."²⁰ EPA further emphasized that "congressional intent underlying the environmental criminal provisions is unequivocal: criminal enforcement authority [31 ELR 11342] should target the most significant and egregious violators."²¹ And, EPA advised:

At the conclusion of the case selection process, [the Office of Criminal Enforcement] should be able to articulate the basis of its decision to pursue a criminal investigation, based on the case selection criteria. Conversely, cases that do not ultimately meet the criteria to proceed criminally, should be systematically referred back to the Agency's civil enforcement office for appropriate administrative or civil judicial action, or to a state or local prosecutor.²²

Investigators and federal prosecutors tended to adhere to these principles until the mid-1990s, targeting the most serious and flagrant offenders for criminal investigation and prosecution. Nonetheless, emboldened by a few key successes beginning in the mid-1990s, investigators and prosecutors have largely abandoned or stretched the limits of this policy of reason and restraint. Instead, they are now pursuing cases that they believe, regardless of the severity or harm associated with an alleged violation or the intent, or lack thereof, of an alleged offender, come within the boundaries of the criminal provisions of federal environmental statutes. The DOJ's and EPA's recent enforcement initiatives and accomplishments reflect this trend.

Current Enforcement Accomplishments and Goals

Sparked initially by EPA's guidance on The Exercise of Investigative Discretion, the trend of aggressive criminal enforcement began in the mid-1990s and continues today. In fiscal year (FY) 1994, EPA referred 220 matters to the DOJ for criminal prosecution, representing a 36% increase from the record set just a year earlier in 1993.²³ In addition, EPA brought criminal charges against 250 individual and corporate defendants (a 40% increase from FY 1993), and, through the courts and plea agreements, imposed 99 years worth of incarceration — a 25% increase from FY 1993.²⁴ The criminal enforcement program also assessed $ 36.8 million in fines — a 19% increase from FY 1993.²⁵

With each passing year, EPA and the DOJ tout bigger and more significant achievements in the area of environmental criminal enforcement. According to EPA and the DOJ, 1999 and 2000 were no exception. In 1999, EPA and the DOJ reported vigorous enforcement activity, resulting in record enforcement actions and penalties for the year.²⁶ The results achieved include 241 cases referred by EPA for criminal prosecution, the assessment of $ 61.6 million in criminal fines and a record 208 years of incarceration imposed.²⁷ Moreover, in 2000, EPA continued its aggressive enforcement efforts, referring 236 cases for criminal prosecution and charging 360 defendants under a number of federal environmental statutes.²⁸ During FY 2000, federal courts imposed 146 years of criminal sentences, and the United States almost doubled the fines collected in FY 1999 by assessing $ 122 million in criminal penalties, the second highest in the history of the program.²⁹

The DOJ credits its key criminal enforcement initiatives, including its Laboratory Fraud Initiative, its Underground Storage Tank (UST) Initiative, and its Vessel Pollution Enforcement Effort for much of the significant results obtained in FY 2000, and its more than 80% conviction rate for yielding these dramatic results.³⁰ For example, the DOJ's efforts in the past several years have yielded the longest prison sentence ever for an environmental crime in which a businessman was sentenced to 17 years of imprisonment and ordered to pay $ 6 million in restitution to the family of one of his employees who suffered severe brain damage as a result of being ordered to clean up a tank containing sodium cyanide without wearing appropriate protective gear.³¹

Also contributing to these enforcement results is the fact that both EPA and the DOJ have increased substantially the number of investigators and prosecutors dedicated to criminal matters in the past decade. For instance, between 1992 and 1998, the number of investigators employed by EPA increased from 72 to 200.³² Similarly, the DOJ has increased the number of prosecutors in the Environmental Crimes [31 ELR 11343] Section from 3 in 1982 to approximately 35 in 2001,³³ and it can call upon the U.S. Attorneys' Offices for additional support as needed.

In addition to assisting the DOJ's Environmental Crimes Section, individual U.S. Attorneys' Offices, as a result of their considerable discretionary authority, contribute in their own right to the increasing number of crimes prosecuted and the changing nature of such prosecutions. This authority stems partly from a redelegation of authority to prosecute "lower priority cases" to the individual U.S. Attorneys' Offices in 1994 by former U.S. Attorney General Janet Reno, while retaining at the DOJ the primacy to investigate and prosecute cases of "national" significance.³⁴ This division of prosecutorial responsibilities has given local prosecutors far greater autonomy in determining which cases merit criminal investigation and prosecution and, in large measure, is responsible for much of the vigorous criminal enforcement activities seen in the past seven years.

It is clear that EPA's and the DOJ's enforcement efforts continue apace and that the agencies plan to further expand their enforcement efforts at least in FY 2002.³⁵ To that end, EPA is seeking a budget of $ 356.6 million for FY 2002, a 3.4% increase over its FY 2001 budget projection for enforcement activities.³⁶ Under the 2001 budget, EPA has been allocated $ 99.2 million for civil enforcement and $ 41.8 million for criminal enforcement. The budgeted amounts represent a 1% decrease for civil enforcement and a nearly 3% increase for criminal enforcement over the prior year.³⁷ In FY 2002, EPA plans to conduct 15,000 inspections, 400 criminal investigations, and 200 civil investigations³⁸

Specific civil and criminal priorities for this year include:

. monitoring CWA compliance with wet weather requirements related to sewer overflows, stormwater runoff, and animal feed lots;

. ensuring compliance with microbial contamination regulations for drinking water and increasing activities in watersheds where drinking water sources are threatened or contaminated;

. targeting companies that handle hazardous waste but illegally evade the Resource Conservation and Recovery Act (RCRA), with a focus on the mineral processing sector, foundries, and fertilizer manufacturers; and

. focusing efforts on the petroleum refining sector and the metal services industrial sector.³⁹

Further, proposed priorities for 2002 and 2003 include:

. continuing to focus on discharges from cruise ships;

. targeting automotive salvage yards which often release waste oils, gas, mercury, polychlorinated biphenyls (PCBs), and lead into the environment;

. addressing operations at federal facilities, such as hospitals, laboratories, and treatment plants that release hazardous waste that affect air, soil, groundwater, and surface water;

. protecting against adverse impacts resulting from misuse, misapplication, and mislabeling of indoor-use only and worker protection-regulated pesticide products;

. monitoring the rising number of "temporary" storage facilities that lack permits and the converse problem of "old" storage facilities which may become Superfund concerns with hazardous wastes leaching onto land and into water; and

. focusing on excessive emissions of particulate matter, particularly in current nonattainment areas.⁴⁰

Prevailing Federal Enforcement Policies and Guidelines

EPA's and the DOJ's criminal enforcement accomplishments and their enforcement priorities are shaped to a large extent by prevailing policies and guidelines. In 1999, the DOJ issued several policy documents that pertain to the enforcement of environmental criminal matters, including a Global Settlement Policy, Integrated Enforcement Policy, and Guidelines for Criminal Prosecution of Corporations. For the most part, these documents establish procedural, not substantive, enforcement agendas. In a clear shift from earlier guidelines, a direction to prosecutors to reserve criminal enforcement for the most serious, the most offensive, and the most egregious violations of law is noticeably absent from these new policies. Furthermore, the aim of the policies is to facilitate aggressive enforcement efforts, not to ensure that the rights of criminal defendants are adequately protected.

Global Settlement Policy

In 1999, the Environment and Natural Resources Division (ENRD or the Environment Division) of the DOJ issued its Global Settlement Policy, Directive 99-20, pursuant to its authority under 28 C.F.R. § 0.130.⁴¹ The policy identifies criteria by which the Assistant Attorney General will assess, as required by the U.S. Attorney General's manual, requests for approval of "global settlements" that address or compromise both civil claims and criminal charges.⁴² The Global Settlement Policy states that:

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. criminal plea agreements and civil settlements should generally be negotiated separately, with criminal attorneys handling criminal plea agreements and civil attorneys handling civil settlements;

. each part of the settlement must separately satisfy the appropriate criminal and civil criteria, including the Principles of Federal Prosecution, DOJ policies, and policies of affected agencies;

. all affected agencies must approve civil settlements;

. separate documents should memorialize the criminal plea agreement and the civil settlement; and

. a defendant may not trade civil relief in exchange for a reduction in criminal penalty.

In addition, the policy disfavors last minute global settlements where ongoing parallel proceedings have not been conducted to address both the civil and criminal allegations.

Integrated Enforcement Policy

In its Integrated Enforcement Policy, Directive 99-21,⁴³ the ENRD sets forth principles concerning the coordination of civil and criminal enforcement by attorneys. The goal of the policy is to "assure that the [Environment] Division's exercise of civil and criminal enforcement authority will address the effects of violations, deter future violations by the violator and others, and impose appropriate penalties for violations of the law."⁴⁴ Where parallel civil and criminal proceedings are appropriate, the policy instructs, civil and criminal attorneys in the Environment Division should exchange information and evidence as early as possible, conduct joint investigations, and consult on an ongoing basis subject to legal and ethical constraints. In particular, the policy provides that:

. the administrative and civil discovery process may not be used as a pretext to obtain information for a criminal investigation;

. any information obtained as the result of legitimate civil and administrative discovery may be freely shared with criminal enforcement;

. the Rules of Criminal Procedure governing the disclosure of information relating to a grand jury proceeding must be strictly adhered to at all times;

. information obtained in a criminal investigation may be shared with civil attorneys if it was obtained for a criminal enforcement purpose and if the disclosure does not violate the Rules of Criminal Procedure;

. after a grand jury has been convened, criminal attorneys may not share with civil attorneys information obtained from the criminal investigation unless it is documented as part of the pre-grand jury record; and

. criminal prosecution will not be used as a threat to obtain a civil settlement and civil enforcement will not be used as a threat to resolve a criminal matter.

Directive 99-21 also advises that civil attorneys should remain alert for information indicating criminality, including evidence of falsification of data or concealment of evidence, or repeated violations by the same individual or company. Similarly, the policy encourages criminal attorneys to watch for potentially appropriate civil enforcement, particularly where it appears that an injunction or remedial action is necessary, or where an investigation reveals a violation of law but insufficient evidence of criminal intent exists.

Federal Guidelines Regarding Criminal Prosecution of Corporations

The DOJ also provided guidance in June 1999, regarding the factors that federal prosecutors generally should consider in deciding whether to criminally charge a corporation in a particular case.⁴⁵ The guidance notes that to hold a corporation criminally liable, the government must establish that the illegal action of the corporation's agent was both within the scope of the agent's duties and intended, at least in part, to benefit the corporation.

The factors to be considered in determining whether to prosecute a corporation include those factors normally considered in the prosecution of individuals, i.e., sufficiency of evidence; likelihood of success at trial; probable deterrent, rehabilitative, and other consequences of conviction; and adequacy of noncriminal approaches. Additional factors unique to the prosecution of corporations include:

. the nature and seriousness of the offense, and any applicable policies governing the prosecution of corporations for particular categories of crimes;

. pervasiveness of wrongdoing within the corporation and the complicity of corporate management;

. criminal, civil, and regulatory enforcement history of the corporation;

. voluntary and timely disclosure of wrongdoing and willingness to cooperate in the investigations of the corporation's agents, including waiver of the corporate attorney-client and work product privileges;

. existence and adequacy of corporate compliance programs;

. remedial actions taken by the corporation;

. collateral consequences of prosecution, including disproportionate harm to shareholders and employees not proven personally culpable; and

. the adequacy of noncriminal remedies.

The guidance directs that all of the factors identified above should be considered by prosecutors in all cases involving corporate wrongdoing. Where an individual corporation is engaged in unlawful conduct that is widespread within the industry, the guidance suggests that criminal prosecution of a corporation in the industry presents a means of achieving "deterrence on a massive scale." Prosecution of a corporation is not, however, to be used as a substitute [31 ELR 11345] for the prosecution of criminally culpable individuals, inside or outside of the corporation. Under the guidance, prosecutors should seek a plea to the most serious, readily provable offense charged when negotiating plea agreements. Except under special circumstances, prosecutors should not accept a corporate guilty plea in exchange for nonprosecution or dismissal of charges against individual officers or employees.⁴⁶

Declining Mens Rea Required for Criminal Convictions — Recent Cases

Environmental cases decided since late 1998 signal the continuing erosion of the mens rea, or scienter, requirements under federal environmental laws. The following section describes the most significant.

The Responsible Corporate Officer Doctrine

The responsible corporate officer doctrine allows the government to impute the actual knowledge of lower level employees who were involved in or were aware of alleged violations to individuals in corporate management.⁴⁷ This doctrine, which is codified in CWA § 309(c),⁴⁸ was recently applied by the Ninth Circuit in United States v. Iverson,⁴⁹ heard by the Eleventh Circuit in United States v. Hansen,⁵⁰ and at issue in a petition for certiorari recently filed in the Supreme Court.⁵¹ The cases should be studied carefully by the officers, directors, and management-level employees of corporations. At a minimum, these cases hint that such individuals may be held liable for environmental crimes merely because of their position in a company, even if they had no specific involvement in or knowledge of alleged violations.⁵²

In Iverson, the defendant, a founder and former president and chairman of the board of a chemical blending company, was convicted in federal court of discharging, through lower level employees, wastewater from drum cleaning operations into sewer drains in violation of CWA §§ 309(c) and 402.⁵³ Although Iverson had announced his "official retirement" from the company by the time of the alleged wrongdoing, the lower court found, and the Ninth Circuit accepted as true, that Iverson continued to receive money from the company, to conduct business at the company's offices, and to direct the work of the company's employees. In addition, the company continued to list Iverson as its president in documents filed with governmental authorities. Moreover, on occasion Iverson was present at the facility at the time of the unauthorized discharges and was close enough to "see and smell the waste."⁵⁴

In upholding the conviction and sentence, the Ninth Circuit opined that, under CWA § 309(c)(2),⁵⁵ a person may be held criminally liable for violations merely as a "'responsible corporate officer' if the person has authority to exercise control over the corporation's activity that is causing the discharges."⁵⁶ In reaching this decision, the Ninth Circuit soundly rejected Iverson's contention that liability should attach only if he had in fact exercised authority over the discharges or if the corporation had charged him with overseeing the activity at issue.

In 1999, the Eleventh Circuit was asked to interpret the responsible corporate officer doctrine in Hansen.⁵⁷ The case involved the appeal of the conviction of three corporate officers under the CWA and RCRA.⁵⁸ At trial, the officers argued that they could not be held criminally liable for the company's violations that occurred after the company declared bankruptcy because the officers had limited ability to control the company's actions after that point in time. On appeal, the defendants also maintained that the trial judge's instructions to the jury impermissibly removed the mens rea requirement from the CWA and RCRA offenses, allowing the jury to convict the defendants based solely on their positions with the company.⁵⁹ The Eleventh Circuit affirmed the convictions on August 24, 2001,⁶⁰ and at least one of the defendants intends to seek a rehearing before the Eleventh Circuit on the ground that the court improperly extended the scope of the responsible corporate officer doctrine to impose liability on an office for post-tenure acts.⁶¹

Finally, a defendant convicted of a CWA violation has filed a petition for a writ of certiorari with the Supreme Court, appealing the Fourth Circuit's interpretation of the responsible corporate officer doctrine in United States v. Ming Hong.⁶² The defendant/petitioner warns that the Fourth Circuit's holding "dangerously extends criminal liability … to persons who are not de jure officials of the corporation."⁶³ [31 ELR 11346] The Fourth Circuit affirmed the defendant's conviction for misdemeanor violations of the CWA on the basis of the nature of his relationship to the corporation and not on the basis of his status as an officer with "supervisory responsibility over the specific corporate functions" that led to the illegal discharge.⁶⁴ If the Supreme Court grants certiorari, a decision interpreting the responsible corporate officer doctrine will have significant effects on federal environmental enforcement efforts.

The Public Welfare Doctrine

Under the public welfare doctrine, statutes deemed to be public welfare laws do not require specific knowledge or intent in order to assign liability for violations of the statute. In two recent decisions, the Ninth and Tenth Circuits have upheld convictions for seemingly unintentional violations of the law in United States v. Hanousek⁶⁵ and United States v. Unser⁶⁶ pursuant to this doctrine. The Hanousek and Unser cases are disconcerting because the defendants were subject to significant criminal sanctions for actions that most would consider to be wholly innocent.

United States v. Hanousek

In Hanousek, the Ninth Circuit upheld the conviction and six-month prison sentence of a railroad employee charged with negligently discharging a harmful quantity of oil into a navigable water of the United States in violation of CWA §§ 309(c)(1)(A) and 311(b)(3).⁶⁷ The undisputed material facts of the Hanousek case, which formed the basis for Hanousek's conviction, are troubling. Hanousek worked as the roadmaster of a railroad that runs between Skagway, Alaska, and Whitehorse, Yukon Territory, Canada. Under the terms of his employment contract, Hanousek was responsible "'for every detail of the safe and efficient maintenance and construction of track, structures and marine facilities of the entire railroad … and [was to] assume similar duties with special projects."⁶⁸ One of these special projects was a rock quarrying project alongside the railroad that was intended to realign a sharp curve in the track. Hanousek's employer hired another contractor to provide the equipment and labor for the project under Hanousek's oversight.

An oil pipeline, owned by a sister company of Hanousek's employer and located above ground and within just a few feet of the track, ran alongside the railroad for approximately six miles. In order to protect the approximately 1,000-foot pipeline during the project, a work platform was constructed on which to operate the backhoe. Initially, the contractor covered approximately 300 feet of the pipeline to protect it from damage. After Hanousek took charge of the project, however, the contractor stopped covering it, except for areas near the backhoe's work platform.

After noticing that rocks had fallen near the tracks close to the pipeline, an employee of the backhoe contractor removed the backhoe from the work platform, drove it to the area of the fallen rocks and began sweeping the rock from the tracks. While moving the rocks, the employee struck the pipeline, rupturing it and releasing between 1,000 and 5,000 gallons of oil into the Skagway River. Hanousek, off duty at the time, was charged with one count of negligently violating CWA §§ 309(c)(1)(A) and 311(b)(3)⁶⁹ and one count of conspiring to provide false information to investigators in violation of 18 U.S.C. §§ 371 and 1001. The government did not file charges against the company or the backhoe operator.

At trial, the jury convicted Hanousek of the misdemeanor charge of violating the CWA, but acquitted him of conspiring to provide false information.⁷⁰ On appeal, Hanousek urged the Ninth Circuit to overturn his conviction on the grounds that the trial court erred:

(1) by failing to instruct the jury that the government must prove that he acted with criminal negligence as opposed to ordinary negligence, (2) by failing to instruct the jury that he could not be found vicariously liable, (3) by failing to instruct the jury properly on causation, and (4) by incorrectly applying the United States Sentencing Guidelines.⁷¹

Additionally, Hanousek argued that, to the extent CWA § 309(c)(1)(A) authorizes convictions for "ordinary negligence," that provision of the law violates constitutional due process protections.⁷²

The Ninth Circuit rejected Hanousek's arguments, determining that the CWA is a public welfare statute⁷³ and that such statutes may subject a person to criminal liability for his or her ordinary negligence without violating the due process protections afforded by the Constitution. Relying on Supreme Court precedents,⁷⁴ the court observed that:

Public welfare legislation is designed to protect the public from potentially harmful or injurious items, and may render 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."⁷⁵

The Ninth Circuit further rejected Hanousek's contentions, opining that because CWA § 309(c)(1)(A)⁷⁶ does not define the term "negligent," the court must construe the term based on its ordinary meaning. The court concluded [31 ELR 11347] that "the ordinary meaning of the term 'negligently' is a failure to use such care as a reasonably prudent and careful person would use under similar circumstances."⁷⁷ As additional support for its interpretation of the CWA, the court observed that when Congress had intended to impose a heightened negligence standard under the CWA, it had explicitly done so, citing CWA § 311(b)(7)(D)⁷⁸ as an example of a provision establishing a "gross negligence" standard or "willful misconduct" standard under the statute.⁷⁹

Following the Ninth Circuit's decision, Hanousek filed a petition for a writ of certiorari with the Supreme Court, asserting that a split in the circuits merited review of his case.⁸⁰ Hanousek asked the Supreme Court to consider three discrete issues, including: (1) whether the CWA is, as the Ninth Circuit found, a "public welfare statute"; (2) whether the Due Process Clause allows the elimination of a mens rea requirement for offenses punishable by significant terms of imprisonment of one year or longer; and (3) whether the term "negligent" as it appears in CWA § 309(c)(1)(A) means negligence in the "ordinary sense" or negligence in an "aggravated criminal sense."⁸¹

Although the Supreme Court denied Hanousek's petition, two of the Justices — Justice Sandra Day O'Connor and Justice Clarence Thomas — filed a short dissenting opinion, signaling their discomfort with the Ninth Circuit's decision.⁸² The dissenting Justices, acknowledging that a split existed amongst the circuits as to whether the CWA is a public welfare statute, clearly sided with the Fifth Circuit in stating that "it is erroneous to rely, even in small part, on the notion that the CWA is a public welfare statute."⁸³ Indeed, as Justice Thomas, observed:

Although provisions of the CWA regulate certain dangerous substances, [the Hanousek] case illustrates that the CWA also imposes criminal liability for persons using standard equipment to engage in a broad range of ordinary industrial and commercial activities. This fact strongly militates against concluding that the public welfare doctrine applies…. "even dangerous items can, in some cases, be so commonplace and generally available" that we would not consider regulation of them to fall within the public welfare doctrine … we should be hesitant to expose countless numbers of construction workers and contractors to heightened criminal liability for using ordinary devices to engage in normal industrial operations.⁸⁴

The dissent also found that the substantial penalties associated with a misdemeanor violation of the CWA counseled against classifying the CWA as a public welfare statute.⁸⁵ Justices O'Connor and Thomas went on to warn that the decision would improperly expand the scope of the doctrine "to virtually any criminal statutes applicable to industrial activities."⁸⁶

Finally, the dissent concluded that, to the extent that any of the Supreme Court's prior decisions were creating confusion within the courts of appeals and resulting in an overly broad interpretation of the public welfare doctrine, those prior decisions were ripe for reconsideration.⁸⁷

United States v. Unser

In Unser,⁸⁸ the Tenth Circuit applied the public welfare doctrine to uphold a conviction for unlawful possession and operation of a motor vehicle within a National Forest Wilderness Area.⁸⁹ According to the undisputed facts of the case, Unser, driving a snowmobile, lost his way in a blizzard and inadvertently entered a protected National Forest Wilderness Area. The judge convicted Unser of a misdemeanor violation of 16 U.S.C. § 551 on the grounds that the statute was a public welfare law and did not require any showing of mens rea for conviction. Unser subsequently appealed.

Although the Tenth Circuit conceded that the facts of his case were unfortunate, the court nevertheless upheld Unser's conviction. In reaching its decision, the Tenth Circuit held that the statute in question did fall within the public welfare doctrine and that, because the amount of the penalty was so low — $ 75 in this case — the lack of a mens rea standard did not implicate Due Process Clause concerns.⁹⁰

Mistake of Fact

United States v. Kelly I,⁹¹ decided by the Seventh Circuit, provides a recent example of the use of the mistake of fact defense. In Kelly I, the Seventh Circuit affirmed the trial [31 ELR 11348] court's conviction and imposition of a 41-month sentence for the improper transportation and disposal of hazardous waste in violation of RCRA. The Seventh Circuit held that, under RCRA,⁹² the lower court properly instructed the jury that it needed to find only that the defendant knowingly transported a substance that fit within the parameters of "hazardous waste," as defined by the statute. The jury did not need to find that the defendant had knowledge of the hazardous nature of the material or that he understood that the material being transported constituted "waste."⁹³

According to the facts of the case, Kelly owned and operated a business specializing in UST removal. In 1989, in connection with a contract to remove, clean, and dispose of USTs from a convenience store, Kelly's business removed the tanks, pumped out the remaining contents and then filled in the land where the tanks had been located, leaving behind a number of barrels containing gasoline that had been removed from the tanks. Several months later the owner of the convenience store, prompted by state and local authorities, contacted Kelly and asked him to remove the barrels immediately, and a representative from the Wisconsin Department of Natural Resources suggested to Kelly that he dispose of the waste in a permitted hazardous waste facility. Instead, Kelly arranged to have his employees take the barrels to an auto salvage yard, as he previously had done with barrels located on his own property found to contain hazardous waste. The federal government subsequently charged Kelly with knowingly transporting and disposing of hazardous waste in violation of RCRA § 3008(d)(1) and (d)(2).⁹⁴

At trial, Kelly relied on a "mistake of fact" defense, claiming that he believed that the material in the barrels was not "hazardous waste" because the barrels contained gasoline, which he did not consider to be "waste."⁹⁵ He argued that he therefore could not be held criminally liable for illegally transporting or disposing of hazardous waste. The district court disagreed and instructed the jury that the government must only prove that: (1) Kelly knowingly transported or caused to be transported hazardous waste; (2) Kelly knew the waste had the potential to harm human health or the environment; (3) the waste materials were transported to a facility that did not have a RCRA hazardous waste treatment, storage, or disposal permit; and (4) Kelly knew that the facility did not have the requisite permit. The jury subsequently convicted Kelly.

The Seventh Circuit also upheld the district court's jury instructions, opining that the jury did not need to find that Kelly knew the material met the definition of a "hazardous waste" under RCRA's hazardous waste regulations in order to render a conviction.⁹⁶

According to the Seventh Circuit, by providing the jury with the statutory definition of "hazardous waste," the district court assured that had the jury believed that Kelly thought he was merely transporting nonhazardous gasoline, as Kelly argued, he would have been acquitted. While the Seventh Circuit did not reject the "mistake of fact" defense per se in Kelly I, the decision, broadly construed, might result in the conviction of a defendant who understands that the waste he or she is handling is not innocuous, but does not understand the waste to be a "hazardous waste" subject to RCRA.

Due Process

In United States v. M/G Transport Services, Inc.,⁹⁷ the Sixth Circuit reversed a lower court's partial acquittal of three defendants' convictions for discharging pollutants without a permit. One of the issues on appeal was whether the defendants' due process rights had been violated by virtue of the fact that they were convicted of discharging pollutants without a permit, even though a permit authorizing such a discharge could never be issued. The court held that no due process violation had occurred.

The case involved the prosecution of a company, along with its marine superintendent and tug captains, for a variety of environmental crimes stemming from the unprompted discharge of incinerated boat refuse. In overturning the acquittal, the appeals court rejected the district court's application of United States v. Dalton,⁹⁸ in which the Tenth Circuit held a defendant's prosecution for failure to register a firearm that, by law, could not be registered under any circumstances, ran afoul of due process protections. The court found the circumstances of the case to be qualitatively different. In particular, the circuit court noted that permits are available for the discharge of pollutants, and that, in this case, government officials simply testified that the quantity of untreated pollutants dumped by the defendants would not have been allowed, not that a permit for such a discharge did not exist. Because sufficient evidence supported the jury's original conviction of the defendants, the court remanded the case for additional sentencing.⁹⁹

United States v. Shurelds¹⁰⁰ involved a due process argument as well. In Shurelds, the defendant argued before the Sixth Circuit that the Clean Air Act (CAA) provision under which he was convicted should be void for vagueness. Specifically, Shurelds argued that CAA § 7413(c)(1) and (h) create [31 ELR 11349] conflicting mental state standards for criminal liability because § 7413(c)(1) criminalizes "knowing" violations while § 7413(h) refers only to "knowing and willful" violations. Moreover, Shurelds asserted that the provisions are vague because the statute does not define "normal activities."

In rejecting Shurelds' argument that the two subsections of the CAA created conflicting standards, the court opined that § 7413(h) provides an exception to the criminal provision of § 7413(c)(1). Specifically, the court held that no conflict exists between the mental states referenced in the two subsections. The court explained that a

knowing violation establishes criminal liability unless the defendant establishes that he was "an employee who is carrying out his normal activities and who is acting under orders from the employer." If the defendant establishes that defense, the government must show a "knowing and willful violation" by the defendant to establish criminal liability.¹⁰¹

The court also rejected Shurelds' argument that the CAA provisions are vague because the statute does not define "normal activities" in § 7413(h).¹⁰² The Sixth Circuit explained that because the defendant never invoked the affirmative defense expressly provided in § 7413(h) — that he was "an employee who is carrying out his normal activities and who is acting under orders from his employer," he was not entitled to that defense.¹⁰³ Moreover, the court considered Shurelds' argument to be an untimely facial challenge to the vagueness of a criminal statute, which, outside of First Amendment claims, the court does not entertain.

Invited Error Doctrine

In United States v. Ellis,¹⁰⁴ the Fourth Circuit affirmed the conviction and two and one-half-year prison sentence for violations of the CAA¹⁰⁵ and the CWA.¹⁰⁶ In Ellis, the defendant was found guilty of improperly removing and disposing of asbestos, failing to provide proper notice of asbestos removal, and dumping debris and petroleum products while dismantling and recycling a Navy surplus vessel in the Baltimore Harbor. In upholding the conviction, the Fourth Circuit determined that under the invited error doctrine, the defendant could not claim a jury instruction that referred to "regulated asbestos-containing material," rather than "friable asbestos," as used in the indictment, was erroneous because the defendant had requested the instruction at trial.¹⁰⁷

In addition, the defendant argued that the jury instructions were erroneous in light of United States v. Wilson,¹⁰⁸ a decision issued seven months after Ellis' conviction. The Fourth Circuit recognized that under Wilson the government must prove the defendant had knowledge of facts meeting each essential element of the substantive offense, including that: (1) the defendant was discharging a substance; (2) the defendant correctly identified the substance he was discharging; (3) the defendant knew the method of discharge; (4) the defendant knew the characteristics of the environmental media into which the substance was discharged; (5) the defendant knew the link between the location of the discharge and waters of the United States; and (6) the defendant knew he lacked a permit.¹⁰⁹ Because Ellis' case predated the Wilson decision, the law at the time required only that the jury find the defendant knowingly discharged a harmful quantity of oil or a pollutant without a permit into a water of the United States.

In reaching its decision, the Ellis Court noted that, although it may reverse itself where it finds a plain and obvious error under existing law that affects substantial rights, it may do so only if the error seriously affects the fairness, integrity, or public reputation of the judicial proceedings. Applying this rule, the Fourth Circuit determined that the lower court's jury instructions were, indeed, plainly erroneous and affected a substantial right, but found that no miscarriage of justice occurred because of the overwhelming evidence of the defendant's knowledge of every element of the offense. The court stated that to remand the conviction for a determination of whether the defendant knew his property was along the harbor or knew that the harbor was a water of the United States would be a nonsensical exercise at great public expense.¹¹⁰

Other Cases Involving "Knowing" Violations of Law

In the majority of instances, a prerequisite to criminal liability under the federal environmental statutes is that the violation be committed "knowingly."¹¹¹ For example, RCRA's criminal liability provisions impose liability for knowingly transporting listed hazardous wastes to unpermitted facilities; knowingly treating, storing, or disposing of hazardous waste without a permit or in violation of a material condition of a permit; knowingly submitting false reports; and other knowing violations.¹¹² Similar provisions exist under other federal environmental statutes, including the CAA and the CWA.¹¹³ The following cases are examples of how various circuit courts recently have applied the "knowing" requirement to defendants charged with violating federal environmental laws.

United States v. Elias¹¹⁴

In Elias, the jury convicted the defendant, an Idaho fertilizer manufacturer, of knowingly exposing his workers to cyanide gas by ordering them to clean a tank without providing them with protective gear. Specifically, the jury found Elias guilty of three counts of violating RCRA § 3008(d) and (e)¹¹⁵ and making false statements to the Occupational Safety and Health Administration. In early 2000, the trial [31 ELR 11350] court sentenced Elias to 17 years imprisonment, the longest prison sentence imposed under RCRA to date.¹¹⁶

Although at trial Elias had planned to argue that he did not know that he was violating and believed, in "good faith," that he was complying with the law, the United States successfully moved to exclude those arguments.¹¹⁷ The court ruled that the knowledge requirement under RCRA applies only to (1) knowledge of disposal and (2) knowledge that the waste was potentially harmful. The court found that the United States did not have to prove Elias had knowledge that the waste at issue was a "hazardous waste" as defined by RCRA or that the defendant had knowledge that he lacked a required permit. It was enough to show that the waste was in fact regulated "hazardous waste" and that the defendant did not have the required permit. Although Elias has appealed his conviction to the Ninth Circuit, no decision has yet been rendered.

United States v. Hines¹¹⁸

In an unpublished opinion, the Tenth Circuit affirmed convictions ranging from 20-35 years imprisonment for the illegal transport of hazardous waste, conspiracy to transport hazardous waste in violation of RCRA, and drug trafficking. Defendants challenged their RCRA convictions on the grounds that the government did not meet its burden to prove that each defendant "knowingly" transported and stored hazardous materials in violation of the law. The court, in reaching its decision, explained that in order to prove the defendants knew the hazardous nature of the materials at issue, "the government need only prove [each] defendant knew the material was hazardous in the sense of being potentially harmful to persons or the environment."¹¹⁹

United States v. Fiorillo¹²⁰

In Fiorillo, two defendants convicted at trial of wire fraud and violations of the hazardous waste provisions of RCRA appealed their convictions to the Ninth Circuit. The defendants, Fiorillo and Krueger had contracted to dispose of hazardous waste for the Diversey Corporation, an industrial cleaning firm. The Diversey Corporation agreed to pay one-half of the contract costs upon the waste's arrival at Fiorillo's warehouse for temporary storage and the other one-half upon submission of compliance documents certifying disposal at an approved hazardous waste facility.

The indictment charged Fiorillo and Krueger with knowingly storing hazardous waste in violation of RCRA § 3008(d)(2)¹²¹ and knowingly transporting or causing to be transported hazardous waste in violation of RCRA § 3008(d)(1).¹²² At trial, the jury found that Fiorillo and Krueger properly disposed of only 2 of the 11 waste shipments from the company, and improperly stored the rest of the waste in a warehouse facility owned by Fiorillo. Neither Fiorillo nor Krueger engaged in the actual transportation of the waste from the company to Fiorillo's warehouse, though they made arrangements for the transportation. The jury convicted both defendants of these charges.

On appeal, Fiorillo and Krueger argued that they could not be convicted of violating RCRA § 3008(d)(1) because they did not "transport" or "cause to be transported" any hazardous waste within the meaning of the statute. Specifically, Fiorillo and Krueger maintained that § 3008(d)(1) does not apply to persons who merely receive hazardous waste; rather, the defendants argued that the provision applies only to waste generators.¹²³

Although the Ninth Circuit agreed with the defendants that § 3008(d)(1) does not apply to persons who do nothing more than receive hazardous waste, it declined to accept defendants' argument that the provision applies only to waste generators who arrange for transportation of their waste. In evaluating the language and structure of § 3008(d)(1) and its legislative history, the court found that Congress clearly intended the language "causes to be transported" in § 3008(d)(1) to cover any person who is "responsible for initiating, arranging for, or actually performing the transportation of waste."¹²⁴ Nevertheless, the Ninth Circuit decided that, based upon the evidence adduced at trial, "the jury reasonably could have determined that Fiorillo and Krueger did much more than simply receive the hazardous waste and store it."¹²⁵ In fact, defendants had proposed, and the generating company had agreed, that the defendants would make arrangements for transporting the waste in addition to storing the waste prior to disposal. For that reason, the Ninth Circuit affirmed the conviction under RCRA § 3008(d)(1).

Sentencing, Sentencing Guidelines, and Plea Agreements

In 1999, 2000, and thus far this year, EPA and the DOJ have continued the trend of seeking and winning harsher and more substantial criminal penalties and prison terms for those convicted of violating federal environmental laws and for those entering plea agreements to avoid prosecution. The matters addressed below represent the most important cases to construe the application of the U.S. Sentencing Guidelines and some of the most significant fines and sentences imposed and plea agreements reached in recent years.

Application of the U.S. Sentencing Guidelines

United States v. Van Loben Sels¹²⁶

In Van Loben Sels, the Ninth Circuit found that the district court's lenient application of the USSG¹²⁷ to a defendant [31 ELR 11351] who pleaded guilty to the misdemeanor charge of negligently discharging benzene-contaminated oily wastewater into the Los Angeles sanitary sewer system in violation of the CWA and local regulations was clearly erroneous. The defendant, an owner and chief executive officer of a facility specializing in the treatment and disposal of used oil and tank bottom wastes, had for more than two years been aware of and authorized the transport of one million gallons of wastewater per month from his company's facilities to a bulk liquid transfer facility that allowed the wastewater to be discharged into the sanitary sewer system without prior benzene treatment.

A 92-count indictment charged Van Loben Sels and two other individuals with transporting hazardous waste without a proper manifest in violation of RCRA § 3008(d)(5)¹²⁸ and negligently discharging pollutants into the waters of the United States in violation of CWA §§ 309(c)(1)(A) and 307(d).¹²⁹ A jury convicted defendant Van Loben Sels, and the court sentenced him to one month community confinement, five months home detention, waiver of a $ 25 fine, and restitution in the amount of $ 35,000.

In determining Van Loben Sels' sentence, the district court refused to apply the six-level upward adjustment under the Sentencing Guidelines for continuous emissions into the environment, even though the district court found that it was undisputed that the defendant continuously discharged benzene into the environment, which included sanitary sewer systems linked to publicly owned treatment works (POTWs). The district court based its refusal on a finding that the government failed to prove the percentage of total benzene introduced into the sewer system attributable to the defendant's businesses and on test results that showed no benzene was ultimately discharged from the POTW. The United States subsequently appealed the decision to the Ninth Circuit.

Based upon a de novo review, the Ninth Circuit reversed the district court's interpretation and application of the USSG to Van Loben Sels' case. Specifically, the appeals court found that the district court improperly reduced the defendant's sentence based on the toxicity of the wastewater at the time it left the POTW, rather than at the point where it was initially discharged into the sanitary sewer system prior to treatment. Although the Sentencing Guidelines require a showing that some amount of hazardous substance in fact contaminated the environment to justify an offense level increase, "in most cases reasonable inferences from available evidence will suffice to support the conclusion that the illegal acts resulted in contamination."¹³⁰ Accordingly, the Ninth Circuit determined the defendant's offense level under the Sentencing Guidelines should have been adjusted upwards by six levels, while still allowing the district court to depart two levels in either direction depending on the resulting nature and extent of the harm associated with the violation and the duration of the violation.¹³¹

United States v. Hoffman¹³²

In Hoffman, the Fourth Circuit applied Van Loben Sels to affirm a six-level sentence enhancement for "an ongoing, continuous, or repetitive discharge, release, or emission of a hazardous or toxic substance or pesticide into the environment."¹³³ According to the Fourth Circuit, because the defendants "engaged in a continuous practice of discharging contaminated waste water into the local sewer system … environmental damage can be assumed."¹³⁴

United States v. Cunningham¹³⁵

Similarly, in Cunningham, the Eleventh Circuit permitted the enhancement of a sentence pursuant to USSG § 2Q1.2(b)(1). In that case, the Eleventh Circuit affirmed a salesman's conviction and four and one-half-year prison sentence for illegally conspiring to transport, transporting, and disposing of hazardous waste in violation of RCRA § 3008(d)(1) and (d)(2).¹³⁶ The court held that the government need not prove actual environmental contamination in order to apply the six-level enhancement permitted under USSG § 2Q1.2(b)(1).¹³⁷

In Cunningham, the salesman and several family members ran a chemical company at the family farm through which they sold a chrome removal machine that produced a waste sludge. The company assured its customers that it would properly collect and recycle the sludge generated by the customers but failed to do so. The defendant claimed that the sludge was not regulated as a "hazardous waste" under RCRA because it was being recycled through a facility in Georgia. Further investigation revealed that the defendant's sale of the sludge for recycling was a sham and that the 317 tons of waste at the family farm in fact had been transported to a parking lot in Georgia. After being discovered by Ohio EPA, the defendant then arranged to have the waste removed from the parking lot and dumped at a sanitary landfill by a local truck driver whose vehicle broke down at the landfill, revealing the disposal scheme. In addressing the application of USSG § 2Q1.2(b)(1), the court conceded that the circuit courts disagree over whether the six-level enhancement requires a showing of actual contamination of the environment or merely that a discharge of hazardous substances into the environment occurred. The court observed that both the Second Circuit and the Fifth Circuit have held that no proof of actual contamination is required,¹³⁸ while the Ninth Circuit requires a showing of actual contamination before applying the enhancement.¹³⁹ Rejecting the position of the Ninth Circuit, the Eleventh Circuit [31 ELR 11352] joined the Second and Fifth Circuits in holding that if the government has demonstrated that a discharge, release, or emission of hazardous substances occurred, actual environmental contamination will be assumed for purposes of sentencing. The court further noted that the sentencing guideline for a six-level enhancement for continuous releases takes environmental contamination as a given, but allows for a two-level departure in either direction depending on the potency, size, or duration of the contamination.

In addition, the Eleventh Circuit determined that the trial court properly applied a four-level enhancement under USSG § 2Q1.2(b)(3) for offenses that necessitate a cleanup that requires a substantial expenditure because the owner of the parking lot incurred almost $ 150,000 in disposal fees for the waste sludge left there by the defendant. The court noted that the simplicity with which the sludge was treated — disposal in a regular landfill after the addition of lime and water — did not mean the sludge was not hazardous and did not impact whether a substantial expenditure was incurred in cleaning it up.

United States v. Weintraub¹⁴⁰

In Weintraub, the defendant objected to the U.S. Probation Office's calculation of an offense level relating to defendant's conviction for conspiring to violate the CAA and six counts of violating the CAA's work practices standards. With respect to the Sentencing Guidelines, the defendant filed an objection to the imposition of a four-level sentence enhancement under USSG § 2Q1.2(b)(4) based on an unrelated Connecticut regulation that required authorization for disposal of asbestos waste. The United States contended that the enhancement was appropriate because the defendant had disposed of the asbestos without prior written authorization from the Connecticut Department of Environmental Protection as required under the state's regulations. The United States conceded that no applicable permit requirement existed under the CAA or any other pertinent federal regulations and that failure to obtain a prior authorization under the regulation was not a crime in Connecticut. However, it relied on the general proposition that other courts have applied a "no permit" adjustment despite the fact that the permits at issue were rooted in state or local law.¹⁴¹

Although the court acknowledged other cases involving the CWA in which enhancements were upheld because the applicable state law was incorporated into the federal statute, the court sustained the objection to application of the four-level enhancement for failure to obtain a permit (see Sentencing Guideline § 2Q1.2(b)(4)) for a permit rooted in state law, but not incorporated into federal law. The Weintraub Court reasoned that the CAA did not have a permit requirement or any delegation or incorporation of a state permit requirement and therefore the "no permit" adjustment that applied in several CWA cases did not apply to the CAA. Specifically, the court held that the independent Connecticut regulation which is unrelated to any federal regulatory scheme could not serve as the basis for a sentencing enhancement for CAA convictions.

United States v. Rapanos¹⁴²

In Rapanos, the Sixth Circuit held that the trial judge's disagreement with Sentencing Guidelines and defendant's acceptance of responsibility without consistent pretrial action did not justify departure from the Sentencing Guidelines. The defendant was convicted in the U.S. District Court for the Eastern District of Michigan for filling wetlands in violation of CWA § 404. The district court judge granted two additional one-level downward departures from the Sentencing Guidelines based on his fundamental disagreement with the guidelines pertaining to environmental crimes. In addition, the court also granted the defendant a two-level decrease based on the defendant's acceptance of responsibility pursuant to USSG § 3E1.1. The United States appealed the decision to the Sixth Circuit, arguing that the district court improperly granted the two-level downward departures because of the judge's disagreement with the Sentencing Guidelines and that the decrease for acceptance of responsibility did not apply.

The Sixth Circuit used an abuse of discretion analysis to determine whether the district court's departure from the Sentencing Guidelines was proper. It stated that under 18 U.S.C. § 3553(b), a sentencing court should not deviate from the sentence prescribed by the guidelines "unless the court finds that there exists an aggravating or mitigating circumstance of a kind, or to a degree, not adequately taken into consideration by the Sentencing Commission in formulating the guidelines."¹⁴³ If a factor is not mentioned in the guidelines, the district court should consider "whether it is sufficient to take the case out of the [Sentencing Guidelines'] heartland."¹⁴⁴ The court noted that "such cases will be highly infrequent."¹⁴⁵

The court concluded that the district court's downward departure, based primarily on a fundamental disagreement with the Sentencing Guidelines, constituted an abuse of discretion. In remanding the case for resentencing, the Court relied on the Commentary to § 5K2.0 of the Sentencing Guidelines and admonished, that a fundamental disagreement with the law is not a permissible consideration in granting downward departures under the Sentencing Guidelines. Furthermore, the Sixth Circuit found that the defendant's statements and conduct before trial did not clearly demonstrate acceptance of responsibility and therefore the two-level reduction also was in error.

United States v. Kelly II¹⁴⁶

In Kelly II, the defendant was convicted in the U.S. District Court for the Western District of Tennessee of 20 misdemeanor violations of § 136 of the Federal Insecticide, Fungicide, [31 ELR 11353] and Rodenticide Act (FIFRA).¹⁴⁷ Although the sentencing range for the violation under the Sentencing Guidelines was 41 to 51 months imprisonment, the district court granted defendant's request for a downward departure pursuant to § 5K2.0 of the guidelines and sentenced Kelly to 600 days or 20 months imprisonment. The district court based its departure on the combination of two factors. First, the court found that the defendant did not fully appreciate the severity of the harm that the substance at issue caused. Second, the court decided that the misdemeanor nature of the crime did not warrant the severe sentence recommended in the Sentencing Guidelines.

In analyzing on appeal whether the departure from the Sentencing Guidelines was appropriate, the court considered whether the Sentencing Commission has forbidden or allowed departures based on the two factors deemed significant by the trial court.¹⁴⁸ The court found that the commission considered misdemeanor cases when crafting the Sentencing Guidelines and therefore did not remove such cases from the ambit of those guidelines. Further, in analyzing whether defendant's lack of understanding of the severity of the harm supported a downward departure, the court stated that lack of knowledge regarding the severity of the harm is not specifically encouraged as a basis for departure. The "knowing" element of FIFRA required that the defendant knew he was spraying methyl parathion,¹⁴⁹ and the defendant had admitted that he sprayed methyl parathion but claimed that he did not know it was against the law. The court followed the general rule that "ignorance of the law or a mistake of law is no defense to criminal prosecution," and held that a downward departure based on the defendant's ignorance of the law was improper.¹⁵⁰ The case was reversed and remanded for resentencing consistent with this opinion.

United States v. Merino¹⁵¹

In Merino, the defendant appealed from an order of the U.S. District Court for the Central District of California that imposed a four-level upward adjustment to his sentence for unlawful transportation and storage of hazardous waste because the cleanup required "substantial expenditure." Under the Sentencing Guidelines, a four-level increase is required if the "offense resulted in disruption of public utilities or evacuation of a community, or if cleanup required a substantial expenditure."¹⁵² The district court concluded that "substantial" should be measured by whether the amount would be a substantial expenditure by a reasonable person. Using this standard, the lower court held that the expense for the cleanup — $ 32,000 — did not constitute a "substantial expenditure."

On appeal to the Ninth Circuit, the defendant argued that environmental cleanups are commonly in the six or seven figure range, and a middle five-figure cleanup such as the one in the case is small rather than "substantial" when compared with the expense for common cleanups. The Ninth Circuit agreed with the defendant and held that for an "expenditure to be 'substantial' in this context, it ought to be of the same order of magnitude in its impact on the community."¹⁵³ The court based its findings on the fact that the magnitude of the defendant's actions did not disrupt public utilities nor did it cause the evacuation of a community. The defendant's sentence was vacated and the case was remanded to the district court for resentencing.

Recent Plea Agreements

With the recent proliferation of convictions for environmental violations of the erosion of the mens rea requirement, it is not surprising that many parties under investigation or indictment choose to reach plea agreements with the United States. Below are some of the major plea agreements reached in the past two years.

United States v. Koch Petroleum Group, Ltd. Partnership¹⁵⁴

In this case, Koch Petroleum Group entered into a plea agreement with the United States and the state of Texas to resolve alleged violations of the CAA regulations that limit emissions of benzene and alleged concealment of such violations from the government with respect to its Corpus Christi, Texas, facility. Under the terms of the agreement, Koch will pay a total of $ 20 million dollars ($ 10 million in criminal fines and $ 10 million for projects to improve the environment). The agreement also requires Koch to complete a five-year probation and implement and adhere to an environmental compliance program.¹⁵⁵

United States v. Central Industries, Inc.¹⁵⁶

In November 2000, the U.S. District Court for the Southern District of Mississippi ordered Central Industries, a poultry [31 ELR 11354] waste processing company, to pay $ 14 million in fines and restitution arising out of a guilty plea resolving alleged violations of the CWA. This is the fifth largest CWA penalty in U.S. history. The United States and the state of Mississippi asserted that Central Industries and four of its former executives and directors violated the CWA by discharging plant process waste and byproducts from poultry slaughtering in violation of the company's wastewater discharge permit limits between 1990 and 1995. The company pleaded guilty to 25 specific CWA violations and conspiring to violate the CWA. The executives and directors also entered into plea agreements and were sentenced separately to pay substantial fines (ranging from $ 25,000 to $ 300,000) and house arrest and/or probation.

United States v. Guide Corp.¹⁵⁷

In this case, Guide Corporation, an Indiana automotive lighting manufacturer, agreed to pay $ 14 million to settle claims that it violated the CWA by discharging toxic chemicals that killed thousands of fish. On 10 separate occasions, Guide Corporation employees released approximately 1.6 million gallons of wastewater containing hazardous substances into a sewer system without testing it, causing the local POTW to experience an interference in its activated sludge and nitrification process. According to the DOJ and EPA, the discharges killed more than 100 tons of fish and other aquatic life along the White River in Indiana. Guide Corporation agreed to pay $ 10 million to settle civil claims under the CWA and $ 4.1 million in fines, asset forfeiture, and restitution for criminal violations of the Act.

United States v. Royal Caribbean Cruises, Ltd.¹⁵⁸

In 1999, the DOJ achieved the largest and most significant plea agreement and sentence to date against a corporate defendant, Royal Caribbean Cruises, Ltd. (RCCL). Under the plea agreement, which arose out of an extensive investigation and prosecution sparked by the DOJ's Vessel Initiative, RCCL pleaded guilty to 21 violations, including deliberately dumping a variety of pollutants from its ships into the seas in violation of the CWA and the Oil Pollution Act,¹⁵⁹ making false statements to U.S. Coast Guard officials, and storing waste without a RCRA hazardous waste permit. Under the terms of the plea agreement, RCCL agreed to pay a record $ 18 million in criminal fines.

United States v. Nuyen¹⁶⁰

In July 2001, a landlord in the Washington, D.C., area pled guilty to six felony counts, including obstructing justice and making false statements to federal officials in order to conceal violations of the federal Lead Hazard Reduction Act.¹⁶¹ The United States also alleged that the landlord failed to notify tenants in low-income rental properties of the presence and risks associated with lead-based paints. Although the landlord has not yet been sentenced, this case is significant because it is the first-ever criminal prosecution under the Lead Hazard Reduction Act.

United States v. Elias¹⁶²

As noted above, in April 2000, a federal district court in Idaho delivered the longest sentence ever for an environmental crime. Elias, who was convicted on two counts of illegal disposal of cyanide waste and making false statements to government officials in order to conceal a knowing endangerment to his workers, was sentenced to 17 years imprisonment. He was also ordered to pay $ 6 million to the family of an employee who suffered permanent brain damage as a result of his exposure to cyanide and $ 400,000 in remedial costs.

United States v. AMR¹⁶³

In this case, AMR, a subsidiary of American Airlines, pled guilty and was sentenced to pay $ 8 million in fines and undertake a court-supervised compliance program at every airport in the United States and abroad where AMR accepts cargo for transportation. AMR admitted that, during a four-year period, it failed to follow federal hazardous materials regulations that strictly control the shipment of hazardous materials on passenger aircraft and that the company had, in fact, improperly stored and shipped hazardous materials in violation of those rules.

United States v. Caleb Brett U.S.A., Inc.¹⁶⁴

In September 2000, Caleb Brett (a laboratory) and three of its managers pled guilty to fraudulent testing of petroleum products (including reformulated gasoline) and fraudulent reporting of test results to EPA. Under the terms of the plea agreement, Caleb Brett published an apology in the New York Times, admitted that its employees concealed information from federal investigators, and paid a $ 1 million fine.

Conclusion

While it is too early in the Bush Administration to determine whether and, if so, how environmental enforcement priorities might change as compared to previous years, it is likely that aggressive enforcement of environmental criminal law will continue apace and will not be limited to one or two of the federal environmental laws. Consequently, the regulated community must consider very seriously how to anticipate, avoid, and defend against potential criminal enforcement [31 ELR 11355] actions under the various federal environmental laws. In addition to minimizing or eliminating exposure to federal criminal liability, corporations and their employees should also be mindful of the potential implications that criminal liability may have on a corporation's ability to do business with the federal government, as well as the potential for criminal enforcement under state and local environmental laws.

1. See, e.g., United States v. X-Citement Video, Inc., 513 U.S. 64 (1994); Staples v. United States, 511 U.S. 600 (1994); Ratzlaf v. United States, 510 U.S. 135 (1994).

2. See, e.g., Phillips v. Lane, 787 F.2d 208, 213 (7th Cir. 1986).

3. See, e.g., Memorandum from Earl Devaney, Director, EPA Office of Criminal Enforcement, to All EPA Employees Working in or in Support of the Criminal Enforcement Program, The Exercise of Investigative Discretion (Jan. 12, 1994), at http://es.epa.gov/oeca/ore/aed/comp/acomp/all.html. This was the first comprehensive guidance issued by EPA that established criminal investigative criteria.

4. This Dialogue focuses primarily on federal enforcement actions. Corporations must also be aware of state-level enforcement of environmental regulations. See, e.g., Washington State Agency Imposes $ 7 Million Fine for 1999 Bellingham Pipeline Explosion, Daily Env't Rep. (BNA), June 21, 2001, at A-12 (the Washington Department of Ecology fined three companies at a total of $ 7.86 million for a June 1999 pipeline spill and explosion that killed three people).

5. U.S. CONST. amends. V and XIV.

6. See, e.g., United States v. Gradwell, 243 U.S. 476, 485 (1917); Rewis v. United States, 401 U.S. 808, 812 (1971); United States v. Resnick, 299 U.S. 207, 209 (1936); United States v. Beam, 686 F.2d 252, 258 (5th Cir. 1982) (conviction for failure to obtain "assembly and special event []" permit reversed on appeal). See also David Gerger, Environmental Crime, THE CHAMPION, Oct. 2000, at 34.

7. See id.

8. See United States v. Lanier, 520 U.S. 259 (1997). The Court in Lanier instructed:

There are three related manifestations of the fair warning requirement. First, the vagueness doctrine bars enforcement of "a statute which either forbids or requires the doing of an act in terms so vague that men of common intelligence must necessarily guess at its meaning and differ as to its application." Second, as a sort of "junior version of the vagueness doctrine," H. Packer, The Limits of the Criminal Sanction 95 (1968), the canon of strict construction of criminal statutes, or rule of lenity, ensures fair warning by so resolving ambiguity in a criminal statute as to apply it only to conduct clearly covered. Third, although clarity at the requisite level may be supplied by judicial gloss on an otherwise uncertain statute, due process bars courts from applying a novel construction of a criminal statute to conduct that neither the statute nor any prior judicial decision has fairly disclosed to be within its scope (Id. at 266-67). In each of these guises, the touchstone is whether the statute, either standing alone or as construed, made it reasonably clear at the relevant time that the defendant's conduct was criminal.

9. 3 F.3d 643, 23 ELR 21526 (2d Cir. 1993).

10. 33 U.S.C. §§ 1251-1387, ELR STAT. FWPCA §§ 101-607.

11. Id. § 1342, ELR STAT. FWPCA § 402.

12. See Plaza Health, 3 F.3d at 644, 23 ELR at 21526.

13. Id. at 649, 23 ELR at 21528 (quoting United States v. Gradwell, 243 U.S. 476, 485 (1917)).

14. Id.

15. U.S. CONST. art. I, § 1; see also United States v. Lanier, 520 U.S. 259, 267 n.6 (1997) (citing United States v. Kozminski, 487 U.S. 931, 939 (1988); United States v. Wiltberger, 18 U.S. (5 Wheat.) 76, 95, (1820)).

16. Lanier, 520 U.S. at 267 n.6 (citing Kozminski, 487 U.S. at 939; Huddleston v. United States, 415 U.S. 814, 831 (1974); United States v. Morris, 39 U.S. (14 Pet.) 464, 475 (1840)).

17. See FDA v. Brown & Williamson Tobacco Corp., 529 U.S. 120, 161 (2000) (determining that important public health interests do not justify an agency's unilateral expansion of its statutory authority where the statutory grant of authority is clear).

18. See, e.g., Chevron, U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837, 842, 14 ELR 20507, 20512 (1984) (finding that deference to agency interpretation not required where agency's interpretation conflicts with congressional intent).

19. See The Exercise of Investigative Discretion, supra note 3; see also OFFICE OF ENFORCEMENT AND COMPLIANCE ASSURANCE, U.S. EPA, OPERATING PRINCIPLES FOR AN INTEGRATED EPA ENFORCEMENT AND COMPLIANCE ASSURANCE PROGRAM, 2 (1996), available at http://es.epa.gov/oeca/princip.paf (reiterating the principles espoused in The Exercise of Investigative Discretion and stressing that the government response to violations must be "fair, predictable and increasingly severe as the scope, duration, significance, wilfulness [sic] and economic advantage gained by violators increases").

20. The Exercise of Investigative Discretion, supra note 3.

21. Id. (emphasis added).

22. Id. at 3.

23. See U.S. EPA, FY 1994 ENFORCEMENT AND COMPLIANCE ASSURANCE ACCOMPLISHMENTS REPORT (SECTION 4.2) (undated), available at http://es.epa.gov/oeca/94accomp.pdf.

24. See id.

25. See id.

26. See Press Release, U.S. EPA, EPA Sets Enforcement Records in 1999 (Jan. 19, 2000), at http://es.epa.gov/oeca/fy99press.pdf. See also Environment & Natural Resources Div., U.S. DOJ, Fiscal Year 1999, Summary of Litigation Accomplishments (Nov. 1999), at http://www.usdoj.gov/enrd/FY99sum.htm. The DOJ summarized its criminal enforcement accomplishments for 1999 as follows:

We obtained convictions, substantial jail sentences and criminal fines against violators who intentionally exposed employees and customers to toxic gases, asbestos, and pesticides. We have been at the forefront of several major initiatives against environmental crime. Vessels that dump waste oil and other chemicals into the ocean are a major problem in coastal areas, and we have obtained guilty pleas, an agreement to operate for the next five years under a court-supervised environmental compliance plan, and record fines from a major cruise line for its desecration of our oceans in this manner. We have also obtained over [80] convictions in connection with smuggling into the United States chlorofluorocarbons, which destroy the protective ozone layer in the atmosphere.

Id. at 4. See, e.g., United States v. Peters, No. 1:98CR129 (E.D. Tex. Dec. 9, 1999) (in the first conviction for violation of the Clean Air Act's (CAA's) complicated benzene standards (42 U.S.C. §§ 7401-7671q, ELR STAT. CAA §§ 101-618), two former managers of a chemical plant in Port Arthur, Texas, were convicted for violation of the CAA for knowingly operating an industrial wastewater tank that discharged dangerous levels of benzene, conspiring to conceal information from federal and state regulators, and falsifying documents submitted to EPA).

27. See U.S. EPA Press Release, supra note 26 at 1.

28. See Press Release, U.S. EPA, EPA Releases FY 2000 Enforcement and Compliance Assurance Data (Jan. 19, 2001), at http://yosemite.epa.gov/opa/admpress.

29. See id.

30. See U.S. DOJ, Strategic Goal One: Keep America Safe by Enforcing Federal Criminal Laws, in FY 2000 Performance Report and FY 2002 Performance Plan (Apr. 2001), at http://www.usdoj.gov/ag/annualreports/pr2000/NewSGl.htm.

31. See Press Release, Environment and Natural Resources Div., U.S. DOJ, Idaho Man Given the Longest-Ever Sentence for Environmental Crime (Apr. 29, 2000), at http:/www.usdoj.gov/enrd/elaissentence.htm.

32. See David G. Dickman, Preparing for the Worst Case Scenario — Criminal Enforcement of Environmental Laws in the Maritime Context, ALI-ABA Course of Study Materials, Criminal Enforcement of Environmental Laws (May 11-12, 2000).

33. See J. Cooney et al., Criminal Enforcement of Environmental Laws, in ENVIRONMENTAL CRIMES DESKBOOK 7 (Envtl. L. Inst. 1996). See also U.S. DOJ, Organizations With More Than 100 Attorneys (visited June 27, 2001), at http://www.usdoj.gov/oarm/JDBROSIT/JDBROSIT/compl.htm.

34. See Office of the Attorney General, Bluesheet Revision to the U.S. Attorneys' Manual on Environmental Crimes (Aug. 23, 1994). Issues of national interest include cases that present novel issues of law; simultaneous investigations in multiple federal jurisdictions; cases with foreign policy implications; and urgent or sensitive issues, such as those of particular interest to Congress or the president. See id. at 3.

35. See U.S. EPA, EPA SUMMARY OF THE 2002 BUDGET PROPOSAL, available at http://www.epa.gov/ocfopage/budget/2002/2002bib.pdf (visited June 27, 2001).

36. See id. at 113.

37. See id. at 117.

38. See id. at 116.

39. 65 Fed. Reg. 58273, 58274 (Sept. 28, 2000).

40. Id.

41. Functions Common to Heads of Organizational Units, 28 C.F.R. § 0.130.

42. See U.S. DOJ, DIRECTIVE 99-20, GLOBAL SETTLEMENT POLICY (1999), available at http://www.usdoj.gov/enrd/global.htm.

43. U.S. DOJ, DIRECTIVE 99-21, INTEGRATED ENFORCEMENT POLICY (1999), available at http://usdoj.gov/enrd/integrated.htm. This policy was also issued in 1999 pursuant to the DOJ's authority under 28 C.F.R. § 0.130.

44. Id.

45. See Memorandum from Eric Holder Jr. to Heads of the DOJ, Bringing Criminal Charges Against Corporations (June 16, 1999), available at http://www.usdoj.gov/criminal/fraud/policy/charging.corps.html.

46. In this regard, the recent plea agreement reached in United States v. Koch Petroleum Group, L.P., No. C-00-325(S) (S.D. Tex. Jan. 11, 2001), is notable. Under the terms of that agreement, Koch pled guilty to covering up environmental violations at its oil refinery in Corpus Christi, Texas, and agreed to pay a total of $ 20 million dollars in criminal fines and funding for special environmental projects in exchange for U.S. willingness to drop the indictment against Koch and certain of its employees. No criminal sanctions were imposed on the employees. See, e.g., Press Release, U.S. DOJ, Koch Pleads Guilty to Covering Up Environmental Violations at Texas Oil Refinery (Apr. 9, 2001), at http://www.usdoj.gov/enrd/kochpleafinal.htm.

47. See, e.g., United States v. Brittain, 931 F.2d 1413, 1419, 21 ELR 21092, 21094-95 (10th Cir. 1991) (A responsible corporate officer, to be held criminally liable, would not have to willfully or negligently cause a violation. Instead, the willfulness or negligence of the actor would be imputed to the corporate officer by virtue of his position of responsibility).

48. 33 U.S.C. § 1319(c), ELR STAT. FWPCA § 309.

49. 162 F.3d 1015, 29 ELR 20367 (9th Cir. 1998).

50. No. 99-11638 (11th Cir. Oct. 1, 1999).

51. See United States v. Ming Hong, 242 F.3d 528 (4th Cir. 2001), petition for cert. filed, 69 U.S.L.W. 49 (U.S. June 26, 2001) (No. 00-1867).

52. See also United States v. Cooper, 173 F.3d 1192, 1201, 29 ELR 21044, 21046-47 (9th Cir. 1999), cert. denied, 528 U.S. 1019 (1999) (acknowledging that the phrase "any person" in the CWA is broad and includes any responsible corporate officer, permittees and nonpermittees, though the responsible corporate doctrine was not at issue in that case).

53. 33 U.S.C. §§ 1319(c) and 1342, ELR STAT. FWPCA §§ 309(c) and 402.

54. United States v. Iverson, 162 F.3d 1015, 1019, 29 ELR 20367, 20368.

55. 33 U.S.C. § 1319(c)(2), ELR STAT. FWPCA § 309(c)(2).

56. Iverson, 162 F.3d at 1025, 29 ELR at 20370-71.

57. No. 99-11638 at *1.

58. 42 U.S.C. §§ 6901-6992k, ELR STAT. RCRA §§ 1001-11011.

59. See 11th Circuit to Review Conviction Standard for Alleged "Responsible Corporate Officers," Daily Env't Rep. (BNA), Oct. 28, 1999, at A-5.

60. No. 99-11638, 2001 WL 965090 (11th Cir. Aug. 24, 2001).

61. See Corporate Officer Will Challenge Ruling on Criminal Liability for Continuing Acts, Daily Env't Rep. (BNA), Sept. 17, 2001 at A-5.

62. 242 F.3d 528 (4th Cir. 2001), petition for cert. filed, 69 U.S.L.W. 49 (U.S. June 26, 2001) (No. 00-1867).

63. Petition for a Writ of Certiorari at 13 (Ming Hong) (No. 00-1867).

64. See 242 F.3d at 530 (sentencing Hong to three years imprisonment, one year of supervised release, and a $ 1.3 million fine).

65. 176 F.3d 1116, 29 ELR 21049 (9th Cir. 1999), cert. denied, 528 U.S. 1102 (2000).

66. 165 F.3d 755 (10th Cir. 1999).

67. 33 U.S.C. §§ 1319(c)(1)(A) and 1321(b)(3), ELR STAT. FWPCA §§ 309(c)(1)(A) and 311(b)(3).

68. Hanousek, 176 F.3d at 1119, 29 ELR at 21049-50 (omission and alteration in original).

69. 33 U.S.C. §§ 1319(c)(1)(A) and 1321(b)(3), ELR STAT. FWPCA §§ 309(c)(1)(A) and 311(b)(3).

70. See Hanousek, 176 F.3d at 1120, 29 ELR at 21050. The United States brought the same charges against another individual, an officer of the company which employed Hanousek. That individual was tried jointly with Hanousek but was acquitted on both charges. See id.

71. Id. at 1118, 29 ELR at 21049.

72. See id.

73. The court based this conclusion on its previous holding in United States v. Weitzenhoff, 35 F.3d 1275, 1286, 24 ELR 21504, 21510 (9th Cir. 1994).

74. The Ninth Circuit relied principally on the holdings in the following Supreme Court cases: Staples v. United States, 511 U.S. 600 (1994); Liparota v. United States, 471 U.S. 419 (1985); Morisette v. United States, 342 U.S. 246 (1952); United States v. Balint, 258 U.S. 250 (1922).

75. Id.

76. 33 U.S.C. § 1319(c)(1)(A), ELR STAT. FWPCA § 309(c)(1)(A).

77. Hanousek, 176 F.3d at 1120, 29 ELR at 21050.

78. 33 U.S.C. § 1321(b)(7)(D), ELR STAT. FWPCA § 311(b)(7)(D).

79. See Hanousek, 176 F.3d at 1121, 29 ELR at 21050-51. In addition, the court held that the jury instruction on causation "required the jury to find that Hanousek's conduct had a 'direct and substantial connection' to the discharge of oil" and that the instruction adequately addressed both the proximate cause and cause in fact elements of causation. Though Hanousek admittedly was not a permittee under the CWA, he was aware of the presence of the pipeline and did not claim to be unaware of the dangers posed by operating heavy equipment near the pipeline. See id. at 1123-24, 29 ELR at 21051-52.

80. See Petition for a Writ of Certiorari, Hanousek v. United States, 528 U.S. 1102 (2000) (No. 99-323). While the U.S. Courts of Appeals for the Sixth and Ninth Circuits have both determined that the CWA is a public welfare statute and, therefore, that its criminal provisions should be interpreted liberally, see United States v. Kelley Tech. Coatings, Inc., 157 F.3d 432, 439, 29 ELR 20022, 20024 (6th Cir. 1998) (concluding that the CWA is a public welfare statute); see Hanousek, 176 F.3d at 1121, 29 ELR at 21050-51 (reaffirming earlier decision in United States v. Weitzenhoff, 35 F.3d 1275, 24 ELR 21504 (9th Cir. 1993) which held that the CWA is a public welfare statute), the Fifth Circuit has expressly rejected that argument. See United States v. Ahmad, 101 F.3d 386, 391, 27 ELR 20557, 20560 (5th Cir. 1996).

81. Petition for a Writ of Certiorari at i, Hanousek v. United States, 528 U.S. 1102 (2000) (No. 99-323).

82. See Hanousek v. United States, 528 U.S. 1102 (2000) (Thomas, J. dissenting).

83. Id.

84. Id. at 1103 (citation omitted) (first alteration in original) (quoting Staples v. United States, 511 U.S. 600, 611 (1994)).

85. See id. at 1104.

86. Id. In particular, the dissenting Justices stated that:

We have never held that any statute can be described as creating a public welfare offense so long as the statute regulates conduct that is known to be subject to extensive regulation and that may involve a risk to the community. Indeed, such a suggestion would extend this narrow doctrine to virtually any criminal statute applicable to industrial activities.

Id.

87. See id. at 1105.

88. 165 F.3d at 755.

89. See 16 U.S.C. § 551 and 36 C.F.R. § 261.16(a) (It is unlawful to possess or use a motor vehicle, motorboat, or motorized equipment in a National Forest Wilderness Area except as authorized by federal law or regulation.).

90. See Unser, 165 F.3d at 757-58, 767.

91. 167 F.3d 1176, 29 ELR 20572 (7th Cir. 1999).

92. 42 U.S.C. §§ 6901-6992k, ELR STAT. RCRA §§ 1001-11011.

93. See Kelly, 167 F.3d at 1180-81, 29 ELR at 20573-74. This decision is consistent with the majority of circuits that have addressed this issue under RCRA. See, e.g., United States v. Williams, 195 F.3d 823 (6th Cir. 1999) (upholding conviction where defendant knew or was aware that the waste being handled had the potential to harm human health or the environment); United States v. Dee, 912 F.2d 741, 745, 21 ELR 20051, 20052 (4th Cir. 1990) (government need not prove that defendants knew that violation of RCRA was a crime nor did they need to know of existence of specific regulations or requirements).

94. 42 U.S.C. § 6928(d)(1), ELR STAT. RCRA § 3008(d)(1) (pertaining to knowing transportation of hazardous waste) and § 6928(d)(2), ELR STAT. RCRA § 3008(d)(2) (pertaining to knowing disposal of hazardous waste).

95. See Kelly, 167 F.3d at 1179, 29 ELR at 20573.

96. Indeed, the court remarked that:

Kelly apparently would have us establish a rule that mandates instructions be given in a RCRA case which divides the term "hazardous waste" into two separate components, each with its distinct definition. We do not agree that this proposed division is required because Congress has enacted legislation that clearly defines the term. What is necessary is that the jury find Kelly knowingly transported "hazardous waste" as defined by RCRA, and the jury instructions accomplished that goal ….

Id. at 1180, 29 ELR at 20573.

97. 173 F.3d 584, 29 ELR 21097 (6th Cir. 1999).

98. 960 F.2d 121 (10th Cir. 1992).

99. See id. at 591.

100. No. 97-6265, 1999 U.S. App. LEXIS 3521 (6th Cir. Mar. 2, 1999) (unpublished opinion).

101. Id. at *6.

102. See id. at *7.

103. Id.

104. 172 F.3d 864, 29 ELR 20621 (4th Cir. 1999).

105. 42 U.S.C. § 7413(c), ELR STAT. CAA § 113.

106. 33 U.S.C. §§ 1311(a), 1319(c)(2)(A), and 1321(b)(3), ELR STAT. FWPCA §§ 301(a), 309(c)(2)(A), and 311(b)(3).

107. See Ellis, 172 F.3d at 864, 29 ELR at 20623-24.

108. 133 F.3d 251 (4th Cir. 1997).

109. See Ellis, 172 F.3d at 864, 29 ELR at 20625.

110. See id.

111. ENVIRONMENTAL LAW PRACTICE GUIDE § 7.08 (2001).

112. See id.

113. See id.

114. No. 98-0070-E-BLW, 30 ELR 20558 (D. Idaho Apr. 26, 2000).

115. 42 U.S.C. § 6928(d), (e), ELR STAT. RCRA § 3008(d), (e).

116. See Press Release, supra note 31. The previous longest sentence, 13 years, was given in United States v. Benkovitz, Nos. 97-331, 98-349 (M.D. Fla. Aug. 16, 1999). See also Office of Enforcement and Compliance Assurance, U.S. EPA, FY 1999: EPA Enforcement and Compliance Assurance Highlights, Major Civil and Criminal Enforcement Cases for FY 1999 (undated), at http://www.es.epa.gov/oeca/1999acco.pdf (containing summaries of all 1999 criminal convictions and plea agreements that EPA considers significant).

117. Elias, 172 F.3d at 864, 30 ELR at 20623.

118. Nos. 98-7095, 98-7097, 2000 U.S. App. LEXIS 6263 (10th Cir. Apr. 5, 2000) (unpublished opinion).

119. Id. at *11 (citations omitted).

120. 186 F.3d 1136, 29 ELR 21396 (9th Cir. 1999).

121. 42 U.S.C. § 6928(d)(2), ELR STAT. RCRA § 3008(d)(2).

122. Id. § 6928(d)(1), ELR STAT. RCRA § 3008(d)(1).

123. See Fiorillo, 186 F.3d at 1146, 29 ELR at 21398.

124. Id. at 1149, 29 ELR at 21399-400.

125. Id. at 1152, 29 ELR at 21401.

126. 198 F.3d 1161, 30 ELR 20305 (9th Cir. 1999).

127. 18 U.S.C. § 2Q1.2(b)(1)(A).

128. 42 U.S.C. § 6928(d)(5), ELR'STAT. FWPCA § 3008(d)(5).

129. 33 U.S.C. §§ 1319(c)(1)(A) and 1317(d), ELR STAT. FWPCA §§ 309(c)(1)(A) and 307(d).

130. Id. See also U.S. SENTENCING GUIDELINES MANUAL § 2Q1.2(b)(1)(A) (1999).

131. Id.

132. Nos. 99-4515 et al., 2000 U.S. App. LEXIS 5183 (4th Cir. Mar. 27, 2000).

133. See U.S. SENTENCING GUIDELINES MANUAL § 2Q1.2.

134. See Hoffman, 2000 U.S. App LEXIS 5183, at *3 (citing United States v. Van Loben Sels, 198 F.3d 1161, 1165-66, 30 ELR at 20305, 20307 (9th Cir. 1999).

135. 194 F.3d 1186, 30 ELR 20202 (11th Cir. 1999).

136. 42 U.S.C. § 6928(d)(1) and (d)(2), ELR STAT. RCRA § 3008(d)(1) and (d)(2).

137. U.S. SENTENCING GUIDELINES MANUAL § 2Q1.2(b)(1).

138. See United States v. Liebman, 40 F.3d 544, 550-51, 25 ELR 20591, 20593-94 (2d Cir. 1994); United States v. Goldfaden, 959 F.2d 1324, 1331, 22 ELR 21069, 21071-72 (5th Cir. 1992).

139. See United States v. Ferrin, 994 F.2d 658, 663, 23 ELR 20854, 20856-57 (9th Cir. 1993).

140. 96 F. Supp. 2d 135, 136 (D. Conn. 2000).

141. See, e.g., Goldfaden, 959 F.2d at 1324, 22 ELR at 21069.

142. 235 F.3d 256, 31 ELR 20357 (6th Cir. 2000). The Supreme Court recently granted defendant's petition for a writ of certiorari, vacated the judgment against-the defendant, and remanded the case to the Sixth Circuit for further consideration in light of Solid Waste Agency of N. Cook County. v. Corps of Eng'rs, 531 U.S. 159, 31 ELR 20382 (2001). Rapanos v. United States, Nos. 98-2424 et al., 2001 U.S. App. LEXIS 4531 (U.S. June 18, 2001).

143. Id. at 259.

144. Id. (quoting Koon v. United States, 518 U.S. 81, 96 (1996)).

145. Rapanos, 235 F.3d at 259, 31 ELR at 20357 (quoting U.S. SENTENCING GUIDELINES MANUAL ch. 1 pt. A, at 6).

146. No. 99-5327, 2000 U.S. App. LEXIS 34043 (6th Cir. Dec. 28, 2000) (unpublished opinion).

147. 7 U.S.C. § 136, ELR STAT. FIFRA § 2.

148. See Kelly, 2000 U.S. App. LEXIS 34043, at *7 (citing Koon, 518 U.S. at 95). Compare United States v. Jones, No. 99-2433, 2000 U.S. App. LEXIS 27620, at *4 (6th Cir. Oct. 26, 2000):

A district court's decision not to effect a downward departure is generally not reviewable on appeal. In the absence of ambiguous statements by the district court concerning its discretion, there is a presumption that the court was aware of the law it was called upon to apply and it should be assumed that the court, in the exercise of its discretion, found the downward departure unwarranted."

149. See Kelly, 2000 U.S. App. LEXIS 34043, at *13. See also United States v. Corbin Farm Serv., 444 F. Supp. 510, 519-20, 8 ELR 20333, 20339 (E.D. Cal. 1978), aff'd, 578 F.2d 259 (9th Cir. 1978) ("The mens rea requirement in the word 'knowingly' would protect a person believing in good faith that he was dealing with distilled water ….").

150. Kelly, 2000 U.S. App. LEXIS 34043, at *15. See also United States v. Tomlinson, No. 99-30020, 1999 U.S. App. LEXIS 16758 (9th Cir. July 16, 1999). Defendant in Tomlinson argued that the language of CAA § 7413(c)(1) compelled the prosecution to demonstrate that he know that the hazardous substance was regulated and what those regulations required. In upholding the sentencing enhancements, the Ninth Circuit held that the defendants only had to be aware that they were discharging the pollutants in question, not that they were violating the terms of the statute.

151. 190 F.3d 956, 30 ELR 20134 (9th Cir. 1999).

152. U.S. SENTENCING GUIDELINES MANUAL § 2Q1.2(b)(3).

153. Merino, 190 F.3d at 958, 30 ELR at 20135.

154. No. C-00-325(S) (S.D. Tex. Jan. 11, 2001).

155. See Press Release, U.S. DOJ, Koch Pleads Guilty to Covering Up Environmental Violations at Texas Oil Refinery (Apr. 9, 2001), at http://www.usdoj.gov/enrd/kochpleafinal.htm.

156. No. 3:00-CR-18WS (S.D. Miss. Nov. 2, 2000); see also Water Pollution, Mississippi Poultry Waste Processor to Pay $ 14 Million for Polluting Stream, Daily Env't Rep. (BNA), Nov. 6, 2000, at A-3; Water Pollution, Mississippi Poultry Company Executive Sentenced to House Arrest, Must Pay Fine, Daily Env't Rep., (BNA), Mar. 7, 2001, at A-8; Water Pollution, Two Poultry Operation Executives Sentenced for Role in CWA Violations, Daily Env't Rep. (BNA), Apr. 10, 2001, at A-5; Water Pollution, Poultry Rendering Plant Executive Sentenced for Role in Environmental Case, Daily Env't Rep. (BNA), June 12, 2001, at A-6.

157. No. IP01-73-CR-01 (S.D. Ind. June 18, 2001).

158. See FY 1999: EPA Enforcement and Compliance Assurance Highlights, Major Civil and Criminal Enforcement Cases for FY 1999 (undated), at http://www.es.epa.gov/oeca/99activity.html (containing summaries of all 1999 convictions and plea agreements that EPA consider significant).

159. 33 U.S.C. §§ 2701-2761, ELR STAT. OPA §§ 1001-7001 (Oil Pollution Act).

160. Nos. DKC-2001-0134, -0370 (D. Md. July 2001); No. unavailable (D.D.C. July 2001).

161. 42 U.S.C. § 4852d.

162. No. 98-0070-E-BLW, 30 ELR 20558 (D. Idaho Apr. 26, 2000). See also FY 2000 Summary of Litigation Accomplishments, supra note 26.

163. No. 99-00902-CR-Highsmith (S.D. Fla. Dec. 16, 1999). See also FY 2000 Summary of Litigation Accomplishments, supra note 26.

164. No. CR00-622 (HAA) (D.N.J. Sept. 25, 2000).

31 ELR 11340 | Environmental Law Reporter | copyright © 2001 | All rights reserved