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32 ELR 11153 | Environmental Law Reporter | copyright © 2002 | All rights reserved Criminal Negligence Prosecutions Under the Federal Clean Water Act: A Statistical Analysis and an Evaluation of the Impact of Hanousek and HongSteven P. Solow and Ronald A. SarachanSteven P. Solow is a partner at Hunton & Williams, practicing in the Environment and Business Crimes Defense groups. Ronald A. Sarachan is a partner at Ballard Spahr Andrews & Ingersoll, L.L.P., practicing in the Government Enforcement White Collar Crime Group and the Environmental Group. The authors are two former chiefs of the U.S. Department of Justice Environmental Crimes Section. The prosecution of United States v. Hanousek, discussed in this Article, occurred during their tenures. The authors wish to thank the University of Maryland School of Law for providing critical research support for this Article during the time that Mr. Solow was a Visiting Professor. The authors also wish to thank Susan Ausborn for her outstanding research assistance. Portions of this Article were presented as part of the ALI-ABA Course of Study on the Criminal Enforcement of Environmental Laws in November 2001, and as a faculty forum at the University of Maryland School of Law in December 2001. The authors express their appreciation for the helpful responses provided by the attendees of both presentations. What can we learn about the use of the criminal negligence provisions of the federal Clean Water Act (CWA) by reviewing prior environmental crimes cases brought by the federal government? In an effort to answer that question, the authors have completed the first ever statistical analysis of all federal criminal negligence prosecutions brought since the CWA Amendments of 1987 created separate felony and negligence provisions. The results of that analysis are described below. It reveals clear patterns to past charging decisions of federal prosecutors, and suggests likely future trends. Virtually all federal pollution control statutes contain criminal enforcement provisions.1 Generally, the mental state that the government must prove for a conviction is that the defendant acted "knowingly," that is, the violative acts must be voluntary and intentional and not the result of an accident or mistake of fact.2 However, in addition to crimes based on knowing conduct, the CWA also makes certain violations a crime if committed negligently.3 The potential reach of these criminal negligence provisions is extremely broad.4 For example, any violation of a national pollutant discharge elimination system (NPDES) permit, or spill of a pollutant into waters of the United States attributable to negligent operation, training, or supervision, may theoretically meet the elements of the crime. The government has not applied these provisions that broadly, and the question therefore becomes: why are certain negligent violations of the CWA selected for criminal prosecution and others not? The importance of answering this question is great. Although criminal negligence under the CWA is only a misdemeanor, it is still a federal criminal conviction that can result in severe consequences, including a sentence of up to one [32 ELR 11154] year in prison. Moreover, sentences may be aggregated for a conviction involving multiple counts.5 Needless to say, the possible ramifications for a corporation or any of its officers or employees from any criminal conviction—felony or misdemeanor—are very serious. Our research was motivated, in part, by two decisions by U.S. courts of appeals that raise questions about the future use of the criminal negligence provisions of the CWA. Both cases arose in a posture that our research shows is unusual for negligence prosecutions—the defendants were both convicted following trials, rather than as a result of plea bargains. In United States v. Hanousek,6 the U.S. Court of Appeals for the Ninth Circuit provided the first explicit affirmation by a federal court of appeals for the use of a simple negligence standard in a criminal CWA prosecution. The court held that the appropriate standard of liability is one premised upon the failure to act with the reasonable care of an ordinary person under similar circumstances.7 The defendant in Hanousek unsuccessfully sought a ruling that a gross negligence standard is required where criminal sanctions are to be imposed.8 Equally significant, the appellate court's discussion of the case would suggest that the entire case against the defendant for violations of the CWA was based on the defendant's negligent supervision of others. The case arose from the rupture of an oil pipeline by a construction contractor working for a railway company. Edward Hanousek was the railway company's supervisor for the project. He did not direct or order the particular actions that caused the spill and in fact was not present at the site when the spill took place.9 In United States v. Hong,10 the defendant was sentenced to 36 months in prison, based on a combination of concurrent and consecutive sentencing for James M. Hong's multiple CWA negligence convictions.11 In addition, the U.S. Court of Appeals for the Fourth Circuit upheld Hong's conviction based on the defendant's criminal liability as a responsible corporate officer.12 This holding is noteworthy for two reasons. First, defendant Hong did not have a formal corporate position at the company in question. Hong argued that his lack of any formal position meant that he did not meet the statutory definition of a responsible corporate officer. The Fourth Circuit rejected this argument, holding that the test was not whether Hong held a corporate title, but whether he "bore such a relationship to the corporation that it is appropriate to hold him criminally liable for failing to prevent the charged violations."13 More importantly, the application of the responsible corporate officer doctrine to a negligence case such as Hong raises the specter of prosecution of mere "status offenses."14 Previous decisions affirming convictions under the doctrine in environmental cases had all involved felony prosecutions. In the most recent of these, United States v. Iverson,15 the Ninth Circuit specifically held that an individual prosecuted for felony violations of the CWA as a responsible corporate officer must be shown to have had actual knowledge of the facts constituting the offense charged. The import of the responsible corporate officer doctrine in the felony context is that, if a corporate official has knowledge of the facts plus the authority to take action that would prevent a violation, then the individual can be held liable for his or her failure to act. While the doctrine dispenses with the need to prove that the defendant committed an affirmative criminal act, the government must prove that the defendant had "authority to exercise control over the corporation's activity that is causing [the violation]."16 In addition, the government must still prove the defendant's knowledge of the activity that constitutes the violation.17 By contrast, the potential use of the doctrine in the negligence context is far from clear. Under a simple negligence theory, criminal liability arises from the failure of a corporate official or manager to do what a reasonably prudent and careful manager would do under similar circumstances. In the environmental context, this generally means the failure to take reasonable precautions to prevent the violation from occurring. Since negligence theory already encompasses situations in which the defendant can be liable for his or her failure to act, and since negligence by definition does not require proof of knowing conduct, it is unclear what more the responsible corporate officer doctrine adds to the equation. The concern is that the doctrine will be used to hold corporate officials and managers criminally negligent by virtue of their status as officials and managers without regard to their knowledge of, or causal role in, an environmental violation. Following these appellate decisions, some commentators,18 including one of the authors of this Article, have questioned whether these cases reflect a change in the investigative or prosecutive decisionmaking of federal agencies regarding the use of the negligence provisions of the CWA, and whether the combination of the two decisions was likely to encourage future prosecutions of managers under a theory of "negligent supervision." Concerns over the possibility of ill-considered use of what could be called the "negligent supervision doctrine" may have several roots. First, in the context of environmental crime prosecutions (as in other white-collar crime offenses), it has been the stated policy of prosecutors in the past several administrations to seek to hold liable the highest level culpable officials of an entity that commits criminal violations.19 This policy is premised on the theory that when those in the positions of greatest power and authority in an entity are held responsible for violations, the deterrence impact of such prosecutions is the greatest.20 Moreover, a recent U.S. Department of Justice (DOJ) policy on corporate crime has made explicit that prosecution of a corporation is not a substitute for charging individual directors, officers, employees, and shareholders who are criminally culpable.21 Second, it has been the long-standing view of some members of the defense bar, the bench, and legal academia that the "knowing" standard is itself an overly relaxed standard that gives prosecutors far too much discretion to charge environmental violations as crimes.22 The decisions in Hanousek and Hong appear to greatly expand the discretion federal prosecutors already possess. To place Hanousek and Hong in broader context, this Article turns to the empirical analysis of past criminal negligence prosecutions under the CWA. That analysis reflects a history of very restrained use of the CWA negligence provisions by the government. The Article then returns to Hanousek and Hong and the question of whether the government's historic approach to CWA negligence prosecutions still provides a reliable indicator of future use of negligence in federal environmental crimes prosecution. The Article then sets forth several reasons why Hanousek and Hong are unlikely to represent a break with past practice. A Statistical History of Negligence-Based Prosecutions Under the CWA The starting point for the statistical analysis is the total number of negligence-based federal environmental crimes prosecutions compared to the total number of all federal environmental crimes prosecuted from 1987 to 1997. This 11-year period has been used because sufficiently reliable data on the total number of federal environmental crimes prosecutions has not been available for cases after 1997.23
[SEE ILLUSTRATION IN ORIGINAL] The above data reflects the extremely small number of negligence cases compared to the total number of prosecutions for environmental crimes. During the period from 1987 to 1997, there were only 86 negligence-based CWA prosecutions. Measured against all environmental crimes cases, these negligence cases account for only a very small fraction, less than 7%, of the total cases brought.24 While reliable data on total environmental crimes cases is not available for the years after 1997, we have been able to compile a reliable data set of negligence-based criminal prosecutions for the years 1987 to 2000. During these 14 years, there were only 117 negligence-based prosecutions, for an average of fewer than 9 per year in the entire United States.
Total Negligence Cases 1987 - 2000 [SEE ILLUSTRATION IN ORIGINAL] The changing numbers within such a small group can appear to evidence wide swings in investigative or prosecutorial approaches. That would be misleading.25 The numbers are too small for the variations from year to year to be reliable indicators of trends.26 In any case, the numbers do not suggest a trend. For example, there has been no marked increase or decrease in the numbers of cases with time. Instead, there have been two periods of above-average numbers, during the years 1990 to 1994 and again in 1999. The data also show a relatively even balance between individual and corporate defendants in negligence-based prosecutions. The following table and graph give a breakdown of the negligence cases according to whether the convictions were of individuals, corporations, or both.
[SEE ILLUSTRATION IN ORIGINAL] In about one-half of the cases (56 out of 117) at least 1 individual and the corporation were charged. In approximately one-third of the cases (38 out of 117) a corporation only was charged, and in approximately one-fifth of the cases (23 out of 117) only 1 individual was charged. Approximately two-thirds of the negligence cases include individuals as defendants (79 out of 117 or about 68%). That fraction is a little smaller than the current fraction for environmental crimes prosecutions generally.27 An important fact revealed by the case data is that many of the negligent cases involved charges and convictions based on both negligence and knowing conduct. The following table and graph give a breakdown of the negligence cases according to whether the convictions were for negligent conduct only or for both negligent (misdemeanor) and knowing (felony) conduct.
[SEE ILLUSTRATION IN ORIGINAL] Overall, over 45% of the negligence cases involved convictions for both negligent and knowing conduct. In each year, there have been both cases having a combination of negligence and knowing charges and cases charging negligence alone. There may be a trend toward more negligence cases combining negligence and knowing charges, rather than negligence charges alone. For example, from 1989 through 1994, the number of negligence-only cases exceeded the combination negligence and knowing cases every year, in four of those years by ratios of more than two or three to one. However, in the more recent period from 1995 to 2000, the ratios generally reverse, with the number of combined cases exceeding the number of negligence-only cases in four of the six years. To better understand the 53 combined cases, the data was further broken down by categories of defendant. As the following table shows, in only 10 of the 53 cases were the negligence and knowing charges against the same defendant.
Finally, as the following table and graph show, of the total number of negligence cases, 104 or approximately 90% were completely resolved by pleas of guilty, while 7 went to trial, and 6 involved multiple defendants and were resolved by a combination of pleas and trials. The percentage of cases [32 ELR 11158] resolved by guilty pleas is comparable to federal white-collar prosecutions generally.28
[SEE ILLUSTRATION IN ORIGINAL] As noted above, the number of environmental violations that potentially could be prosecuted under the CWA negligence provisions are far too numerous to count. However, the statistical review shows that negligence cases represent only a very small fraction of all federal environmental criminal cases. The small number of negligence cases actually brought over the past 14 years supports the view that, collectively, federal prosecutors have exercised considerable restraint in this area. In addition to the statistical analysis, we have undertaken a case-by-case review of the negligence cases. This more detailed review included the facts underlying individual cases. Our review of these cases reveals clear charging patterns that further evidence prosecutors' restraint and selectiveness in bringing negligence prosecutions. Of particular significance is that the past CWA negligence cases can be categorized as falling into just four categories: (1) extraordinary environmental harm or human injuries; (2) very serious harm and gross negligence; (3) "compromise" cases in which negligence charges serve as a means to reach a plea agreement; and (4) "combination" cases in which negligence charges are combined with felony charges under environmental statutes and/or traditional Title 18 criminal charges. The first category—cases of extraordinary harm—is exemplified by the Exxon Valdez29 case. Exxon Corporation and Exxon Shipping were criminally charged for the Valdez tanker spill under the CWA based on the negligent discharge of crude oil from the Exxon Valdez into waters of the United States. Thankfully, cases of extreme harm, and resulting negligent prosecutions, remain rare.30 The second category of negligence cases consists of a combination of serious environmental harm and gross negligence. In these situations, there is a substantial discharge of pollutants into the environment resulting from the disregard of a known risk by company employees that such a discharge was likely to occur. One recent example is the June 2001, plea to charges of criminal negligence by a manufacturer of automotive signal lighting. The defendant plead to seven CWA criminal negligence offenses, following a release of over 1.5 million gallons of industrial wastewater that killed over 100 tons of fish along a 40-mile stretch of the White River in Indiana. The government's criminal information (filed with a civil consent decree that detailed the environmental harm from the spill) alleged conduct that could be characterized as gross negligence. The information alleged that employees significantly reduced the treatment of the company's wastewater, failed to test the wastewater to determine whether it still fell within discharge limitations, and then on 10 separate occasions discharged hundreds of thousands of gallons of inadequately treated wastewater.31 In the third category—compromise cases—the negligence crime provides a convenient compromise for purposes of reaching a plea bargain. The use of the negligent [32 ELR 11159] charge allows the defendant to plead to a misdemeanor rather than a felony. A clear example of a compromise case arises when an individual employee is charged with a CWA felony. Based on hornbook law of corporate liability, as long as the employee acted within the scope of his or her employment and for the benefit of the corporation, the corporation is also guilty of the same felony.32 However, in a number of cases the government has entered into an agreement permitting the corporation to plead instead to the negligent-based CWA misdemeanor. These cases are captured in Table 5 above.33 The fourth category—combination cases—involves a combination of negligent and knowing violations, such as knowing environmental violations, false statements, and obstruction of justice. Unlike the compromise cases where a negligent misdemeanor is charged in lieu of a felony, in the combination cases the negligent misdemeanors are "add-on" charges brought by the government as lesser offenses in cases where the defendants are also facing felony charges. An important consideration here is that the government believes that a felony/knowing violation has occurred and that there is sufficient evidence to proceed on that basis. The negligence add-on charges are roughly analogous to the lesser included offenses commonly seen in other types of criminal cases. Review of the CWA negligence cases is also enlightening for identifying those categories of cases that do not exist. Significantly, federal prosecutors as a rule have not based prosecutions on a theory of negligent supervision. Hanousek and Hong, however, break with the past in their reliance on the defendants' negligent supervision. The remainder of this Article examines four factors that inform our assessment of the likely reach of those two cases: a closer factual analysis of Hanousek and Hong; a comparison of the negligence standard approved of in Hanousek with the DOJ's prior position on the appropriate legal standard to be applied to criminal negligence prosecutions under the CWA; the investigative discretion policies of the key federal agencies that investigate the vast majority of federal environmental criminal cases; and the norms underlying the traditional exercise of prosecutorial discretion. Factual Analysis of Hanousek and Hong One reason why Hanousek and Hong may not auger an overall change in past practice is revealed by a careful review of the factual backgrounds of both cases. Factually, they appear to be well within the heartland of environmental crimes cases that are typically selected for prosecution. The heart of the government's charges in Hanousek were actions allegedly taken after the spill to falsely conceal its magnitude from the government, and the charges in the indictment included obstruction of justice and destruction of evidence.34 While the defendant was acquitted of those charges, they help explain why the government viewed the case as criminal. Thus, the Hanousek case falls into the fourth category of traditionally charged negligence cases as a case in which the defendant was charged (albeit unsuccessfully) with both knowing- and negligence-based conduct. In the Hong case, the fact finder found that the defendant (despite his lack of a formal corporate title) substantially controlled the operation of the company in question, was personally involved in the actions that led to the violations and knew about the problems that caused the violations, was present when violations occurred and made a conscious decision to refuse to take actions to abate the violations, including denying employee requests for needed equipment to properly filter the company's effluent. It was on the basis of these findings that the Fourth Circuit affirmed his conviction.35 Given these facts, it seems unlikely that these two cases signal a sea change in the government's overall approach to environmental criminal enforcement. The DOJ's Position on the Legal Standard for Negligent Violations of the CWA While the very existence of Hanousek and Hong may serve as precedent for bringing "negligent supervision" prosecutions, another possibility is that prosecutors will feel emboldened by the Hanousek court's affirmation of the simple negligence standard. This would be an understandable conclusion except for the fact that federal prosecutors have long acted on the presumption that simple negligence is the appropriate intent standard for negligent violations of the CWA. Notably, in one of the first ever federal environmental criminal trials held over 20 years ago, United States v. Frezzo Bros.,36 the government sought and obtained an instruction essentially the same as the one given in Hanousek. The district court instructed the jury in Frezzo Bros. that "[criminal] negligence is the doing of some act which a reasonably prudent person would not do."37 This was a simple negligence instruction. The U.S. Court of Appeals for the Third Circuit affirmed the convictions, although it never directly addressed the jury instructions.38 Furthermore, the authors' experience as the two prior chiefs of the DOJ's Environmental Crimes Section, and one of the author's earlier experience as an assistant U.S. Attorney, [32 ELR 11160] reflects that the simple negligence standard has long been the accepted standard in both DOJ and U.S. Attorneys' offices enforcing the CWA. Thus, the decision in Hanousek should not be seen as giving federal prosecutors a legal tool that they thought they previously lacked. As such, the decision's holding by itself is not likely to lead to a shift in the exercise of prosecutorial discretion. By contrast, Hong may be the only decision addressing the responsible corporate officer doctrine in the context of the negligent provisions of the CWA.39 However, how or even whether that doctrine will really find root in negligence cases remains far from clear after Hong. The only issue raised and decided by the court of appeals regarding the doctrine was whether Hong could be a responsible corporate officer without a formal corporate title. The court held that whether the defendant was a responsible corporate officer was a fact question based not on formal titles but on whether the defendant had "responsibility and authority either to prevent . . . or promptly to correct, the violation."40 Although the defendant was charged only with negligence, the court did not discuss the operation of the doctrine in the context of negligence. Moreover, in reviewing the sufficiency of the evidence, the court pointed to facts that appear to establish that the defendant had actual knowledge of the violations: "Hong was regularly present at the . . . site, and discharges occurred openly while Hong was present."41 Agency Policies on Investigative Discretion The key agencies involved in the investigation of environmental crimes over the past several years have been the U.S. Environmental Protection Agency's (EPA's) Criminal Investigation Division, the Federal Bureau of Investigation (FBI), and the U.S. Coast Guard. Following the terrorist events of September 11, 2001, and the various proposals to reorganize government agencies, it is difficult to predict the extent to which these agencies will dedicate resources to environmental crimes prosecutions. The shifting national priorities of the moment may well affect the allocation of already scarce investigative resources and impact case selection criteria as well. On the other hand, increasing awareness about the need for care in the handling and control of hazardous waste and hazardous materials may well bring increased inspection and enforcement efforts and may reasonably be expected to lead to some changes in the regulatory or statutory controls over these materials.42 At present, the investigative priorities of the three agencies are essentially the same. They are articulated in EPA's 1994 guidance memorandum on the exercise of investigative decision, the Coast Guard's 1997 Commandant's Instruction, and the stated guidance of the FBI's program managers.43 All begin with the premise that violations causing "significant environmental harm" (EPA and Coast Guard) or which place individuals in danger of death or serious bodily injury (FBI) should be given priority. Both EPA and the Coast Guard go on to state that this initial factor of "harm" must be coupled with "culpable conduct," meaning strong evidence of criminal intent including a history of repeat violations, deliberate behavior, efforts to conceal, tampering with monitoring devices, and other illegal activity such as fraud, obstruction, and the like. Obviously the FBI, lacking the regulatory enforcement authority of either EPA or the Coast Guard, only considers cases appropriate for investigation where there are clear indicia of criminal intent. Thus, these three agencies have instructed their agents to focus their energy and resources on what are arguably the most egregious cases of environmental harm and culpable conduct. Given such an approach, it would be inconsistent for these agencies to focus on negligence cases in the first instance. The only exception would be those cases involving extraordinary environmental harm or injury and death as a result of an environmental violation. Thus, explicit agency guidance and limited agency resources are likely to limit negligence cases to a small fraction of total environment crimes cases. Norms Underlying the Traditional Exercise of Prosecutorial Discretion The consistency in historic charging patterns would appear to reflect the views and values of federal prosecutors making charging decisions in the environmental area. In part, prosecutorial discretion, like investigative discretion, reflects the need to husband limited government resources and focus them on the most egregious crimes, which by definition are felonies rather than misdemeanors.44 The extremely limited use of the CWA's negligence provisions by federal prosecutors also reflects the deep-seated norm in Anglo-American jurisprudence that criminal penalties should generally be limited to injuries caused by intentional misconduct rather than by accidents. As the U.S. Supreme Court has stated: "The contention that an injury can amount to a crime only when inflicted by intention . . . is as universal and persistent in mature systems of law as belief in freedom of the human will and a consequent ability and duty of the normal individual to choose between good and evil."45 While legislatures have carved out exceptions to this principle, usually in the area of public health and welfare [32 ELR 11161] statutes,46 the severity of criminal process and penalties, and the views and values noted above, can be expected to lead prosecutors to continue to use the CWA's negligence provisions sparingly, notwithstanding Hanousek and Hong. Our empirical analysis shows that the government has brought negligence-based CWA prosecutions only in rare and clearly definable circumstances. While Hanousek and Hong raise the specter of a more aggressive approach, we would temper concerns about expansion of the use of negligence charges with four considerations: (1) the facts of Hanousek and Hong make their selection for criminal prosecution unremarkable; (2) federal prosecutors have long considered the simple negligence standard to be the appropriate legal standard for CWA negligent violations, meaning that Hanousek does not signal an expansion of liability from the prosecutors' point of view; (3) as matters of policy and practice, federal law enforcement agencies have made it their explicit policy to focus limited resources on cases presenting the most egregious behavior and culpable conduct, a trend that is unlikely to change in light of recent events; and (4) the norms underlying the exercise of prosecutorial discretion that have led to the restrained use of negligent charges have not changed. At the same time, by setting precedents for negligent supervision prosecutions, Hanousek and Hong may spawn more of the same, and that would be a significant change. All of the factors that have informed prosecutorial decisionmaking in the past should serve as guides for future prosecutions, but they are, of course, only guides. Given the relatively small body of federal environmental criminal prosecutions, it may take only a single case that appears to inappropriately exploit the discretion implicit in Hanousek and Hong to result in a very different calculus as to the future use of criminal negligence liability under the CWA. 1. Federal Insecticide, Fungicide, and Rodenticide Act (FIFRA), 7 U.S.C. § 136l(b), ELR STAT. FIFRA § 14(b); Toxic Substances Control Act (TSCA), 15 U.S.C. § 2615(b), ELR STAT. TSCA § 16(b); Surface Mining Control and Reclamation Act (SMCRA), 30 U.S.C. § 1268(e), (g), ELR STAT. SMCRA § 518(e), (g); Rivers and Harbors Act of 1899 (Refuse Act), 33 U.S.C. § 411; Clean Water Act (CWA), 33 U.S.C. § 1319(c), ELR STAT. FWPCA § 309(c); Ocean Dumping Act, 33 U.S.C. § 1415(b); Act to Prevent Pollution From Ships (APPS), 33 U.S.C. § 1908(a); Safe Drinking Water Act (SDWA), 42 U.S.C. §§ 300h-2(b), 300h-3(c), 300i-1, ELR STAT. SDWA §§ 1423(b), 1423(c), 1432; Noise Control Act (NCA), 42 U.S.C. §§ 4910(a)(1), 4912(c); Resource Conservation and Recovery Act (RCRA), 42 U.S.C. § 6928(d), (e), (f), ELR STAT. RCRA § 3008(d), (e), (f); Clean Air Act (CAA), 42 U.S.C. § 7413(c), ELR STAT. CAA § 113(c); Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), 42 U.S.C. § 9603(b), ELR STAT. CERCLA § 103(b); Emergency Planning and Community Right-To-Know Act (EPCRA), 42 U.S.C. § 11045(b)(4), ELR STAT. EPCRA § 325(b)(4); Hazardous Materials Transportation Statute (HMTS), 49 U.S.C. § 5124. 2. See, e.g., United States v. Weitzenhoff, 35 F.3d 1275, 24 ELR 21504 (9th Cir. 1994) (CWA felony), cert. denied, 513 U.S. 1128 (1995); United States v. Laughlin, 10 F.3d 961, 24 ELR 20221 (2d Cir. 1993) (CERCLA, RCRA), cert. denied, 114 S. Ct. 1649 (1994); United States v. Buckley, 934 F.2d 84, 21 ELR 21113 (6th Cir. 1991) (CERCLA); United States v. Reilly, 827 F. Supp. 1076, 24 ELR 20097 (D. Del. 1993) (Ocean Dumping Act); United States v. Corbin Farm Servs., 444 F. Supp. 510, (E.D. Cal.) (FIFRA), aff'd, 578 F.2d 259 (9th Cir. 1978). The precise meaning of the knowledge requirement in the different environmental statutes is the subject of much litigation. See, e.g., United States v. Tomlinson, No. 99-30020, 1999 WL 511496 (9th Cir. July 16, 1999) (unpublished opinion) (CAA); United States v. Ahmad, 101 F.3d 386, 27 ELR 20557 (5th Cir. 1996) (CWA). 3. 33 U.S.C. § 1319(c)(1), ELR STAT. FWPCA § 309(c)(1). The only other environmental statute that contains a criminal negligence provision is the negligent endangerment provision of the CAA. 42 U.S.C. § 7413(c)(4), ELR STAT. CAA § 113(c)(4). The authors are aware of only one case charging this CAA provision, and the provision is not discussed in this Article. 4. The first paragraph of the CWA's criminal negligence provisions makes it a crime to negligently violate certain specified sections of the CWA, any national pollutant discharge elimination system (NPDES) permit condition or limitation, any requirement of approved pretreatment programs, or any requirements in wetland permits for dredged or fill material. 33 U.S.C. § 1319(c)(1)(A), ELR STAT. FWPCA § 309(c)(1)(A). Thus, for example, it is a crime to negligently discharge a pollutant from a point source into waters of the United States without a permit or in violation of an NPDES permit limit. The second paragraph of the criminal negligence provisions makes it a crime to negligently introduce a pollutant or hazardous substance into a sewer system or publicly owned treatment works that causes the treatment works to violate its discharge permit. Id. § 1319(c)(1)(B), ELR STAT. FWPCA § 309(c)(1)(B). 5. Mandatory sentencing ranges for federal crimes, including the CWA misdemeanors, are determined under the U.S. Sentencing Guidelines. The calculations of the mandatory sentencing range for crimes under the CWA use exactly the same formulas whether the crimes are felonies committed knowingly or misdemeanors committed negligently. See U.S. SENTENCING GUIDELINES MANUAL §§ 2Q1.2, 2Q1.3. The only difference is that the sentencing judge may, but is not required to, depart downward from the mandatory range for negligent conduct. Id. § 2Q1.2, app. 4; § 2Q1.3, app. 3. 6. 176 F.3d 1116, 29 ELR 21049 (9th Cir. 1999), cert. denied, 528 U.S. 1102 (2000). 7. Specifically, the court upheld the district court's instruction to the jury that the government "was required to prove only that [the defendant] acted negligently, which the District Court defined as 'the failure to use reasonable care.'" Id. at 1120, 29 ELR at 21050. 8. Id. 9. Id. at 1119, 29 ELR at 21050. 10. 242 F.3d 528, 31 ELR 20509 (4th Cir. 2001), cert. denied, 122 S. Ct. 60 (2001). 11. Id. at 530, 31 ELR at 20509. 12. Id. at 531-32, 31 ELR at 20510. 13. Id. at 531, 31 ELR at 20510. 14. A "status offense," also known as a "status crime," is a crime which does not consist of a proscribed act or failure to act, but in the accused's having a "certain personal condition or being a person of a specified character." Thus, in place of the usual example of a status crime, "vagrancy," one would substitute "supervisor of an employee who has violated the law." See BLACK'S LAW DICTIONARY 1264 (5th ed. 1979). 15. 162 F.3d 1015, 29 ELR 20367 (9th Cir. 1998). 16. Id. at 1025, 29 ELR at 20371. 17. Id. 18. E.g., N. Cartusciello, Developments in Environmental Criminal Law in 1999 (presented at American Bar Association, 14th Annual National Institute on White Collar Crime 2000, Mar. 2-3, 2000), conference materials at N-3. 19. For a variety of reasons, no change in the U.S. Department of Justice's (DOJ's) policy in this regard is likely. Notably, following the recent disclosures concerning Arthur Andersen, Enron, and Worldcom, President George W. Bush stated that corporate executives will be held personally accountable for corporate law violations. "Our Justice Department will hold people accountable," President Bush stated in a speech calling on corporations to be honest and law-abiding. Bush Issues Call for Honesty in Corporate America, N.Y. TIMES, June 29, 2002, available at www.nytimes.com/2002/06/29/business/29SPEE.html (emphasis added). 20. This study is not the place to address this critical premise regarding the effects of both individual and corporate criminal liability on corporate compliance. As Prof. William Laufer noted before the U.S. Sentencing Commission Symposium on Corporate Crime in September 1995, this is an issue that needs greater research to obtain "objective measures of compliance effectiveness." See Proceedings of the Second Symposium on Crime and Punishment in the United States, Corporate Crime in America, Strengthening the "Good Citizen" Corporation, U.S. Sentencing Commission, Sept. 1995, at 137. There have been some efforts at empirical work. See, e.g., Jennifer Arlen & Reinier Kraakman, Controlling Corporate Misconduct: An Analysis of Corporate Liability Regimes, 72 N.Y.U. L. REV. 687 (1997); Mark Cohen, Theories of Punishment and Empirical Trends in Corporate Criminal Sanctions, 17 MANAGERIAL & DECISION ECON. 309 (1996). Many others have approached the issue as a matter of doctrine. See, e.g., V.S. Khanna, Corporate Criminal Liability: What Purpose Does It Serve?, 109 HARV. L. REV. 1477 (1996). Given the importance of the issues of corporate and individual criminal liability in the context of regulatory violations, the limited resources committed to empirical work in this area is regrettable. 21. U.S. DOJ, FEDERAL PROSECUTION OF CORPORATIONS (1999). 22. Compare Richard Lazarus, Meeting the Demands of Integration in the Evolution of Environmental Law: Reforming Environmental Criminal Law, 83 GEO. L.J. 2407 (1995), with Kathleen Brickey, The Rhetoric of Environmental Crime, Culpability, Discretion, and Structural Reform, 84 IOWA L. REV. 115 (1998). 23. The statistics contained in this Article are based on public case information obtained by the authors. One difficulty in obtaining accurate case counts is that environmental criminal cases are prosecuted by both the DOJ's Environmental Crimes Section and the 93 U.S. Attorneys' offices of the United States and its territories. Some cases are prosecuted by the Environmental Crimes Section alone, some in combination with a U.S. Attorney's office, and some by an individual U.S. Attorney's office alone. Despite this fact, the DOJ lacks a uniform single reporting system for all environmental crimes cases. We believe our compilation is based on the most accurate case counts available. Where we have had questions about the charges or dispositions of individual cases, we have sought to resolve them by direct communication with the prosecutors who handled the cases. We believe that these statistics accurately represent the universe of environmental criminal cases, and include substantially all such cases. 24. Of the total number of federal environmental crimes prosecutions roughly one-half include water pollution charges. Thus, negligence-based CWA cases are also a very small percentage of all cases involving water pollution. This Article considers only federal environmental crimes for violations of pollution statutes. Wildlife, fisheries, and archeological resource prosecutions are not considered. 25. The investigative and prosecutorial resources required to handle an environmental criminal "case" can vary widely. A case involving a major corporation with complex factual and legal issues can occupy several years of effort, while a more routine "rip and run" asbestos case may be resolved within a matter of months. We believe these variations probably have been the largest factor influencing the number of cases prosecuted annually over the past 10 or 12 years. 26. Notably, given that these numbers result in a standard deviation of 4.25 (roughly one-half of the mean of 8.21) there is no statistical significance to the year-to-year variations. 27. For example, according to the U.S. Environmental Protection Agency (EPA), in fiscal year (FY) 1998 73% of its cases included charges against individuals. 28. For example, the percentage of federal fraud cases resolved by pleas was over 95% in FY 2000. See the Federal Justice Statistics Resource Center website, at http:www.fjsrc.urban.org (last visited June 15, 2002). 29. Exxon Shipping plead guilty to a negligent CWA charge, and to both the Migratory Bird Treaty Act (MBTA), 16 U.S.C. § 707(a), and Refuse Act, 33 U.S.C. § 411, charges. Exxon Corporation plead only to a single MBTA charge. 30. The most recent notable indictment that involved extreme harm and criminal negligence charges was in No. CR01-338R (W.D. Wash.). The indictment grew out of a spill of gasoline from a ruptured pipeline on June 10, 1999, which released over one-quarter of a million gallons of gasoline into a creek that leads to the Puget Sound. As the gasoline flowed down the creek it was ignited, resulting in the death of two 10-year-old boys and a young man. The gasoline and the subsequent fire also caused environmental and property damage. The indictment alleges that the spill was the result of both negligent violations of the CWA, and knowing and willful violations of the Hazardous Liquid Pipeline Safety Act, 49 U.S.C. § 60123(a). 31. United States v. Guide Corp., No. IP-01-73-CR-01-DH) (S.D. Ind.). It should be noted that the corporation did not admit to all of these allegations, but only to a narrow set of facts sufficient to support its pleas. In the plea agreement the United States represented that it would have been able to prove these additional factual allegations at trial. 32. See United States v. McDonald & Watson Waste Oil Co., 933 F.2d 35 (1st Cir. 1991); United States v. Koppers, 652 F.2d 290, 297 (2d Cir.), cert. denied, 254 U.S. 1083 (1982). Corporate vicarious criminal liability will no doubt receive a new burst of attention following the jury instructions provided in the recent case leading to the conviction of the accounting firm Arthur Andersen on charges of obstruction of justice. See Tom Fowler, Andersen Guilty: Verdict Seen as Fatal Blow to Firm, HOUS. CHRON., June 19, 2002, at http://www.chron.com/cs/CDA/story.hts/special/andersen/1456537. 33. See supra tbl. 5, column entitled "Corporation/Misdemeanor/Individual/Felony." Conversely, there are other compromise cases in which the corporation has been convicted of a CWA felony based on an employee's conduct, but the employee has entered a plea agreement and pleaded to only the misdemeanor. These cases are included in Table 5, column entitled "Corporation/Felony/Individual/Misdemeanor." 34. While Hanousek was acquitted on a charge of conspiring to provide false information to the U.S. Coast Guard about the spill, his alleged co-conspirator, Paul Taylor, was convicted on two of five counts of making false statements to the Coast Guard. Taylor was acquitted on charges of failing to report a discharge, obstruction, and conspiracy. Taylor's conviction was reversed on appeal on issues unrelated to the negligence standard and after a a subsequent mistrial Taylor plead guilty to one count of negligent discharge of oil (33 U.S.C. § 1321(b)(3), ELR STAT. FWPCA § 311(b)(3)) and was sentenced to a fine and three years probation. 35. 242 F.3d at 532, 31 ELR at 20510. 36. 461 F. Supp. 266, 9 ELR 20139 (E.D. Pa. 1978), aff'd, 602 F.2d 1123, 9 ELR 20556 (3d Cir. 1979), cert. denied, 444 U.S. 1074 (1980). 37. Jury Instructions, on file with the authors. 38. 602 F.2d at 1129, 9 ELR at 20559. 39. Frezzo Bros. did so, but only in passing. See id. at 1130 n.11, 9 ELR at 20559 n.11. 40. 242 F.2d at 531, 31 ELR at 20510 (quoting United States v. Park, 421 U.S. 658 (1975)). 41. Id. at 532, 31 ELR at 20510. 42. It now appears that the FBI will continue to allocate agent time to environmental crime matters despite the reallocation of agent resources to national security/anti-terrorism activities. It is also notable that EPA recently authorized the Criminal Investigation Division to hire a substantial number of new agents. It is likely that in the near future the Agency will, for the first time, have some 220 agents nationwide. 43. U.S. EPA, GUIDANCE ON EPA'S EXERCISE OF INVESTIGATIVE DISCRETION FOR ENVIRONMENTAL CRIMES (1994) (available from the ELR Document Service, ELR No. AD-3418); U.S. COAST GUARD, COMMANDANT INSTRUCTION M16201.1 (1997). 44. This approach is consistent with theapproach that federal prosecutors take generally in exercising their discretion as described in the principles of Federal Prosecution contained in the U.S. Attorneys' Manual. These principles call for prosecutors to weigh various factors before going forward with a federal prosecution, including: federal law enforcement priorities, the nature and seriousness of the offense, the deterrent effect of the prosecution, individual culpability and criminal history, and the availability of admissible evidence sufficient to both obtain and sustain a conviction. See USAM, 9-27.220, 9-27.230, available at www.usdoj.gov/usao/eousa/foia_reading_room/usam/title9/download.htm. 45. Morrissette v. United States, 342 U.S. 246, 250 (1952). 46. Legislatures have enacted, and courts have upheld, numerous criminal statutes based on both negligence and strict liability. 32 ELR 11153 | Environmental Law Reporter | copyright © 2002 | All rights reserved |