United States v. Johnson & Towers, Inc.

Crim. No. 83-83 (D.N.J. September 6, 1983)

The court dismisses criminal charges under § 3008(d)(2) of the Resource Conservation and Recovery Act (RCRA) against two employees who allegedly dumped waste illegally because they were neither owners nor operators of the facility and therefore not subject to sanctions. Defendants Angel and Hopkins, service manager and shop foreman respectively, allegedly directed the illegal dumping of hazardous waste. RCRA § 3008(d)(2) provides criminal sanctions for persons who knowingly dispose of hazardous wastes but do not have a permit. The court holds that RCRA's apparently broad definition of "person" in § 1004(15) is qualified by implication in § 3008 to mean persons responsible for obtaining a RCRA permit. The court holds that Congress intended to direct criminal sanctions narrowly at those effectively able to ensure compliance. Further, fairness argues against exposing employees to criminal sanctions when they are unable as a practical matter to determine whether their actions violate the complex law.The court holds that only owners and operators, the persons required to file for permits, are subject to sanctions under § 3008(d)(2). The RCRA regulations define operator as the person responsible for overall operation of a facility. The court holds that although the plant's general manager may be an operator, the service manager and foreman are not. The defendants may be liable under 18 U.S.C. § 2, however, for aiding and abetting their employer's criminal RCRA violation.

Counsel for Plaintiff
Michael V. Gilbarti, Samuel P. Moulthrop, Ass't U.S. Attorneys
970 Broad St., Rm. 502, Newark NJ 07102
(201) 645-1255

Counsel for Defendants
Jeffrey A. Libert
Falciani & Fletcher
P.O. Box 379, Woodbury NJ 08096
(609) 845-8333

Joseph A. Carmen
43 Kings Highway W., Haddonfield NJ 08033
(609) 429-0201

[13 ELR 20883]

Brotman, J.:

This is a criminal prosecution brought by the United States against defendants Jack Hopkins and Peter Angel.¹ On March 29, 1983, a federal grand jury returned a five count indictment charging defendants with a conspiracy to dispose of hazardous waste unlawfully, 18 U.S.C. § 371; three substantive counts of unlawful dumping under the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 6928(d)(2)(A); and one court of unlawfully discharging pollutants in violation of the criminal provisions of the Clean Water Act, 33 U.S.C. § 1319(c). The indictment also alleges that the defendants aided and abetted the company in its acts of unlawful dumping. 18 U.S.C. § 2. Defendants, in this motion, seek to have the court dismiss the indictment.

A brief factual history is necessary. Johnson & Towers, Inc., the company that employs both Hopkins and Angel, is in the business of repairing and overhauling large motor vehicles. It operates a plant in Mount Laurel, New Jersey. Defendant Angel is the service manager in the trucking department and defendant Hopkins is the shop foreman. Both men have been employed by Johnson & Towers since at least 1976.

During its business operations, Johnson & Towers allegedly used substantial quantities of caustic and chemical degreasers to clean automotive components. The degreasers contain chemicals such as methylene chloride and trichloroethylene which are classified as "hazardous wastes" under RCRA and "pollutants" under the Clean Water Act. After using the degreasers, the employees of the company would drain the vats and collect them in a tank. When the tank was full the waste would be pumped into a trench in the back of Johnson & Towers' plant. On occasion, the chemicals would flow into a nearby creek which, in turn, flows into the Delaware River. Both Angel and Hopkins allegedly directed such activity on three separate occasions; June 8, 1981; June 9, 1981; June 10, 1981.

The above activity was carried out despite the fact that defendants did not possess the necessary permit to do so lawfully.As a result Johnson & Towers, Inc., Peter Angel and Jack Hopkins were indicted.

Legal Discussion

This is a case of first impression. The substantive counts of the indictment were instituted pursuant to 42 U.S.C. § 6928(d)(2) of RCRA and 33 U.S.C. § 1319(c)(1) of the Clean Water Act ("CWA"). Section 6928(d)(2) reads, in pertinent part, as follows:

Any person who —

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

(A) without having obtained a permit under section 6925 of this title . . .

The government maintains that it need only prove three elements in order to establish a prima facie case under § 6928(d)(2); those elements being i.) that the defendant was a "person" as defined in 42 U.S.C. § 6703(15); ii.) that he knowingly treated, stored or disposed of hazardous waste; and iii.) that he did not have a permit.

The defendants disagree with the government's simplistic reading of the statute. They contend that they were never required to obtain a permit and therefore should not be held criminally liable for acting without a permit. Moreover, defendants contend that, in view of both the language and the purpose of the statute, they do not fall within the intended scope of the law and schould not be prosecuted thereto.

When construing a statute impsing criminal sanctions, itis important to give the alleged wrongdoer the benefit of any doubt as to the intended reach of that statute.Perrin v. United States, 100 S. Ct. 311 (1979); Donnelley v. United States, 276 U.S. 505, 512 (1927). Therefore, courts have traditionally interpreted such laws in a narrow fashion. Busic v. United States, 100 S. Ct. 1747 (1979). The instant case presents no exception to these general rules of statutory construction. The language and scope of the relevant sections of RCRA are ambiguous. Furthermore, there is a dearth of accompanying legislative history, thereby depriving the court of much Congressional guidance as to the intended breadth of the law. As a result it is necessary for this court to analyze the relevant statutory language, policies and legislative comments before deciding whether Congress intended to include these defendants under the scope of RCRA's criminal provisions.

a.) Statutory language

It is well-established that when interpreting a statute the court must first turn to the relevant language. Touche Ross v. Redington, 442 U.S. 560, 568 (1979); 79 AM. JUR. 2d § 22 at 281; 71 A.L.R.2d 715. The government focuses on a broad reading of the definition of the term "persons." The statutory definition reads as follows:

Persons — . . . an individual, trust, firm, joint stock company, corporation (including a government corporation), partnership, association, state muncipality, commission, political subdivision of a State, or any interstate body.

42 U.S.C. § 6903(15). Since defendants are individuals, they are thereby "persons" who disposed of hazardous waste (allegedly with knowledge) and did so without a permit. Therefore, according to the government they both fall within the confines of the statute. This analysis is far too simplistic and literal and it fails to take into account the statutory scheme and the unique working of the criminal provision itself.

When analyzing the language of a statute it is proper to look to sources from which the law was derived. United States v. Katz, 271 U.S. 354 (1926). RCRA is just one statute, among many, in the environmental regulatory scheme. See United States v. Price, 523 F. Supp. 1055, 1070 [11 ELR 21047] (D.N.J. 1981); Note, Liability for Generators of Hazardous Waste: the Failure of Existing Enforcement Mechanisms, 69 GEO. L.J. 1047, 1051 (1981). Other statutes also provide criminal sanctions for certain violations, including 33 U.S.C. § 1319 of the Clean Water Act, [13 ELR 20884] which coincidentally forms the grounds for Count 5 of the indictment in the instant case, and 42 U.S.C. § 7412(c) of the Clean Air Act. Both § 1319(c)(1) and § 7412(c) also use the term "person" when describing those with potential criminal liability. The statutory definition of "person" is almost identical to that which is used in RCRA. Compare 33 U.S.C. § 1362(5) with 42 U.S.C. § 6903(15). (The term person is defined in both the Clean Water Act and Clean Air Act as "an individual, corporation, partnershop, association, State, municipality, commission, or political subdivision of a State, or any interstate body.") There is qualifying language in both § 1319(c)(3) and § 7412(c)(3), however, which states the following proposition:

For the purposes of this subsection, the "person" shall mean, in addition to the definition contained in section 1362(5) of this title, any responsible corporate officer.

(Section 7412(c)(3) uses substantially the same language).

Although Congress appears to define "person" in a broad manner, an obvious inconguity is created by virtue of the additional language in subsection (c)(3). If "person" is interpreted in the same fashion advocated by the government in the instant case, the language specifying "a responsible corporate officer" would be superfluous. See, e.g., Lawson v. Sucannee S.S. Co., 336 U.S. 198, 201 (1949) ("Statutory definitions control the meaning of statutory words, of course, in the usual case. But this is an unusual case. If we read the definition into § 8(f)(1) in a mechanical fashion, we create obvious incongruities in the language . . ."). The environmental statutes raise unusual issues. They are primarily regulatory statutes complete with appropriate civil sanctions. The criminal sanctions were added because Congress felt that certain violations were more serious and therefore required more severe penalties. H.R. REP. NO. 1491, supra at 31, reprinted in U.S. CODE CONG. & AD. NEWS at 31. The definition of the term "person," however, is applicable to the entire statute. Because of the qualifying language inserted in the criminal provisions we conclude that Congress intended to limit the definition of "person" as it is used in those subsections.

Applying the same rationale to RCRA, we find that Congress also used language which appears to limit the scope of § 6928(d)(2)(A). Instead of stating that those persons who acted without a permit may be liable, § 6928(d)(2) specifically refers to those "persons" who acted "without having obtained a permit under section 6925." 42 U.S.C. § 6928(d)(2).² The Congressional choice of words in this instance is extremely important. By referring to those persons who could have obtained a permit, but failed to do so, Congress appears to be focusing on the parties who are responsible for registering with the EPA under § 6925 of RCRA. (This emphasis is similar to that put on "responsible corporate officers" in the analogous section of the Clean Water Act.) The statute does not, however, purport to hold liable all those persons who work for a company that may be operating without the requisite permit.

We turn also, for guidance, to the companion criminal provisions articulated in § 6928(d). For example, subsection (d)(2)(B) also provides criminal sanctions for those "persons who knowingly . . . dispose of hazardous waste . . . in knowing violation of any material condition or requirement of such permit;" 42 U.S.C. § 6928(d)(2)(B). Congress intentionally used the term "knowing" twice with respect to that subsection, thereby ensuring that the alleged perpetrator was protected to the extent that the government would have to prove beyond a reasonable doubt that he knew of the disposal of hazardous waste and also that he knew such disposal was violating the terms of the permit.

The language of subsection (d)(2)(A), however, is far more open-ended. It does not put a burden on the government to prove that all alleged wrongdoers knew they were acting without a permit or in violation of the law. Instead, the subsection was drafted in an effort to impose strict standards on those required, by statute, to obtain permits because Congress believed that those persons should be solely responsible to account for potential harmful activity. Severe penalties were necessary to act as a deterrent to persons who failed to register with EPA. H.R. REP. NO. 1491, 94th Cong., 2d Sess. at 31, reprinted in 1976 U.S. CODE CONG. & AD. NEWS 6238, 6269. However, while subsection (d)(2)(A) does not require the government to prove knowledge of action without a permit, it does limit those individuals who can be prosecuted for such violations. Congress did not seek to hold criminally liable any employee involved in any manner in the disposal of hazardous waste, regardless of whether that employee was aware of the company's failure to obtain a permit. But see 21 U.S.C. § 301 et seq.; United States v. Park, 421 U.S. 658 (1975); United States v. Dotterweich, 320 U.S. 277 (1943).³ If the government's literal interpretation of the subsection is adopted, it would extend the reach of the statute far beyond Congress' original intent.

b.) Congressional purpose

After interpreting the language used in a statute the court must also take into account the general purpose of the law itself; Helvering v. Stuart, 317 U.S. 154 (1942) and the objective of the provision at issue. United States v. Seeger, 380 U.S. 163 (1965). The general purpose behind RCRA is to provide "a multifaceted approach towards solving the problems associated with the 3-4 billion tons of discarded materials generated each year and the problems resulting from the anticipated 8% annual increase in the volume of such waste." H.R. REP. NO. 1491, supra at 2, reprinted in 1976 U.S. CODE CONG. & AD. NEWS at 6239.

In order to further the aforementioned Congressional policy, criminal sanctions must be directed towards those individuals or corporations which are able to take effective action and thereby ensure compliance with the law. Only those persons who are considered "owners and operators" of a facility need actually apply for an EPA permit. 42 U.S.C. § 6925(a).⁴ Unless the defendants in the instant action are so classified (see discussion, infra), they are not in a position to obtain permission to dispose of hazardous waste in a legal manner. Therefore, holding them criminally liable for acting without a permit will not further the Congressional purpose of encouraging registration. Nor will such a result serve as an effective deterrent in future cases because those faced with criminal prosecutions are not ones who can do anything material to rectify the problem. Instead, as in this instance, the corporate officers who bear responsibility for obtaining the permit, and who can change corporate policy in the future, are not threatened with any personal exposure.

The Congressional policy of deterrence directed towards those whose actions can have a substantial effect on the illegal disposal of hazardous waste is further evidenced by the other criminal provisions of § 6928(d). For example, § 6928(d)(1) provides criminal sanctions for "any person who — knowingly transports any hazardous waste identified or listed under this subchapter or to a facility which does not have a permit under section 6925 . . . ." 42 U.S.C. § 6928(d)(1). The language of subsection (d)(1) is obviously broader than that of subsection (d)(2)(A). The reason can probably be explained as follows: in the former situation a low-level employee such as a truck driver, is required by law to first check and see if the facility to which he is delivering the waste has a permit allowing it to dump such waste. If not, the transporter is obligated to take the waste elsewhere. The policy reasons behind this wide-ranging provision are obvious — Congress considered the person transporting the waste to be in the best position to ensure that it was disposed of in a legitimate fashion. The transporter [13 ELR 20885] usually has enough flexibility to leave if he determines that the facility is operating unlawfully. (This can easily be accomplished by just asking the appropriate person to produce the necessary permit.)

On the other side of the coin, however, are the defendants in the instant action. These employees generally have no choice — they are not in a position to ask for a permit themselves (and due to the nature of their work may not even be aware of such a requirement) and they did not possess enough authority within the company to force Johnson & Towers into compliance. Thus, it is clear that the broad-based language used in § 6928(d)(1)(B) furthers the Congressional policy inherent in the statute, yet the same reasoning applied to subsection (d)(2)(A) would not serve the same purposes.

c.) Fairness and equitable considerations

As discussed earlier in this opinion, Congress had some definite goals in mind when it enacted penal provisions within the RCRA statutory scheme. It was also aware, however, of the potentially harsh consequences that might result from criminal sanctions. Therefore, the House Report specifically notes that "the use of criminal penalties are sufficiently narrow in that they only apply to . . . the actual disposal of hazardous wastes without a permit . . . ." H.R. REP. NO. 1491, supra at 31, reprinted in U.S. CODE CONG. & AD. NEWS at 6269. Concededly, the narrow application of the statute to which this report speaks is the fact that the criminal provisions only reach those "more serious offenses" under RCRA. The comment does, however, give this court the indication that Congress was quite selective when allocating potential criminal responsibility and as such, intended to impose such liability only in those instances where it would clearly further the statutory purposes. The instant case does not provide that type of situation.

The fact that Congress did not intend to impose criminal liability on just any person disposing of waste without a permit, is further evidenced by the complex and technical registration requirements imposed upon companies and individuals forced to register with EPA. 40 C.F.R. 122.1 et seq., 123.1 et seq., 264.1 et seq., 265.1 et seq., 267.1 et seq.; see also EPA form 8700-12 (Instructions for Filing Notification of Hazardous Waste Activity). Not only are the legal requirements difficult to understand, but the scientific aspects of the law are also beyond the comprehension of most laymen. See Moulthrop, Criminal Liability Under Federal Environmental Statutes, 104 NEW JERSEY LAWYER 36, 38 (August, 1983). Even the initial step of determining whether or not registration is necessary becomes a job best left to scientists or engineers. See, e.g., 40 C.F.R. Part 261 (identification of hazardous wastes regulated by the EPA). Obviously the defendants in the instant action are not qualified to identify or analyze the waste they were handling and thereby bring it to the attention of EPA themselves. Nor are they in a position to hire an expert to perform that job. Instead, the corporation and those in a decision-making capacity are best suited to perform those chores. This is why Congress required only "owners and operators" to file for permits and consequently, why Congress could not have intended to hold a mere employee criminally liable for disposing of hazardous wastes without possessing a permit.

Owners and Operators

The next question we must address is whether these defendants can be considered an "operator or owner" of a "facility [used] for the treatment, storage, or disposal of hazardous waste." 42 U.S.C. § 6925(a). The government argues that both men have "managed, supervised, and directed a substantial portion of Johnson & Towers' operations at the Mount Laurel plant, including those related to . . . disposal of hazardous wastes and pollutants." See Government Indictment re: Peter Angel dated March 29, 1983, P8; Indictment re: John Hopkins, P7. Therefore, they are considered "operators" under the statute and were not only capable of filing, but were obligated by law to file for a permit prior to disposing of hazardous wastes. Defendants, on the other hand, maintain that they were merely mid-level employees, specifically a "mechanic" and "manager of a mechanic," and as such, they do not fit within the statutory definition of "owner or operator." See Letter Memorandum, Jack Hopkins, dated June 15, 1983, at pg. 2.

There is no dispute as to the fact that defendants are not owners of the company in question. The controversy arises with respect to the term "operator." The definition of "operator" is explained in the regulations as "the person responsible for the overall operation of a facility." (Emphasis added). 40 C.F.R. § 260.10 (1982). Although the definition itself is somewhat ambiguous, the implication is that an operator is someone with control over the entire company, such as the president or the plant manager. The use of the terminology "overall operation" is indicative of an attempt to focus on those individuals who exercise primary control even though they may not actually own the company. A narrow reading of the term "operator" is also reinforced in light of the use of the pronoun "the" when referring to those parties responsible for obtaining the permit. If the EPA had intended to include a large number of people as "operators" it would have used the more general terminology: "a" or "any" person responsible.

Even after viewing the facts in a manner most favorable to the government, it is difficult to see how these defendants can fairly be considered operators. Mr. Angel was the service manager and possibly in charge of one dapartment, but he was not responsible for the overall operation of the Mount Laurel facility. Mr. Hopkins was one step below him on the hierarchical ladder. Most of the information necessary for procurement of the permit, however, could only be provided by those with an intimate knowledge of the company. At least two men were in positions of greater authority than these defendants; Mr. Peter Johnson, the General Manager of the plant and Mr. Walter Johnson, Jr., the President and Chairman of the Board of Johnson & Towers. Not only were these men in positions of authority at the company, but they were also the ones listed on the form Johnson & Towers filled out notifying the EPA of hazardous waste activity at the Mount Laurel plant (See defense exhibit 1). Nowhere in those forms were the names of Peter Angel or John Hopkins and it is unclear as to whether these men were even notified of the hazardous waste problem at the plant. Therefore, they do not fall within the ambit of those persons obligated to obtain a permit for the disposal of hazardous waste.

The only persons who can be held criminally liable, without requiring proof that they knew the dumping was taking place without a permit are those considered "owners and operators" under the statute. Peter Angel and John Hopkins do not fit in that category. For the reasons discussed in this opinion, the individual defendants do not fall directly within the scope of 42 U.S.C. § 6928(d)(2)(A).

Aiding and Abetting

The government maintains that even if these defendants cannot be held criminally liable directly under RCRA, they can still be held responsible as aiders and abettors pursuant to 18 U.S.C. § 2.⁵ In order to hold someone liable for aiding and abetting, the government must prove that the person associated himself with a criminal enterprise, that he desired to participate in it as something he wished to bring about, and that he sought by his actions to help it succeed. United States v. Barber, 429 F.2d 1394, 1397 (3rd Cir. 1970); United States v. Thomas, 676 F.2d 531 (11th Cir. 1982). Moreover, one may be incapable of committing a particular crime, yet still be held culpable as an aider and abettor. United States v. Kelley, 395 F.2d 727 (2nd Cir. 1968). As such, the government must establish that the defendants were aware of the illegal activity. In other words, Angel and Hopkins can only be found guilty if they knew that Johnson & Towers was disposing of hazardous waste without the necessary permit and they encouraged or parfticipated in such action. Hernandez v. United States, 300 F.2d 114 (9th Cir. 1962); White v. United States, 366 F.2d 474 (10th Cir. 1966).

[13 ELR 20886]

To the extent that the defendants can be found guilty of aiding and abetting pursuant to 18 U.S.C. § 2, the criminal activity to which Johnson & Towers has already pled guilty, counts two, three, and four of the indictment, must be kept intact. The language, however, in those counts, charging defendants Angel and Hopkins with violations of 42 U.S.C. § 6928(d)(2)(A), must be stricken from the indictment.⁶

Order

This matter having come before the court on the 27th day of July, 1983; and

The court having considered the briefs, exhibits and oral argument; and

For the reasons stated in the court's opinion filed this date,

It is on this 6th day of September, 1983, hereby ORDERED that the motion by defendants Peter Angel and Jack Hopkins for an order dismissing the indictment is GRANTED in part and DENIED in part in that:

a. the portion of the indictment charging defendants with violations of 42 U.S.C. § 6928(d)(2), including those charges in counts 2, 3 and 4, are dismissed from the said indictment.

b.the remainder of the indictment, including those charges relating to 18 U.S.C. § 2, also in counts 2, 3, 4 and 5, are still in full force and effect.

No costs.

1. The corporate entity, Johnson & Towers, Inc., was the third defendant in this action. Johnson & Towers has already pled guilty to three counts of the indictment.

2. Congress could have easily stated that any person knowingly disposing of hazardous waste "without a permit" may be held criminally liable. Such language would be less ambiguous.

3. The Supreme Court, in Dotterweich, held that Congress could impose criminal liability on corporate officials even if they were not aware of the wrong-doing. 320 U.S. at 281. That decision, however, was arrived at only after the Court considered the background and purposes behind the statute at issue in Dotterweich; the Food and Drugs Act of 1906, 52 Stat. 1040, codified at 21 U.S.C. §§ 301-392. Rather than stressing the limitations of that law, the House Committee referred to inadequacies in prior food and drug laws and emphasized the need to "increase substantially the criminal penalties . . . which manufacturers have regarded as substantially a license fee for the conduct of an illegitimate business." H.R. REP. NO. 2139, 75th Cong., 2d Sess. pt. 1 at 4. The Senate Committee also highlighted the need for more far-reaching provisions that would "strengthen and extend that law's protection of the consumer." S. REP. NO. 152, 75th Cong., 1st Sess. at 1. Congress, in explaining the need for criminal sanctions under RCRA, does not use such wide-ranging language and therefore the scope of § 6928(d)(2)(A) is far more limited.

4. Since § 6925 requires extensive information to be submitted along with the request for a permit, it is unlikely and in most instances nearly impossible, for anyone who lacks broad decision-making authority to apply for such a permit.

5. 18 U.S.C. § 2 reads as follows:

(a) Whoever commits an offense against the United States or aids, abets, counsels, commands, induces or procures its commission, is punishable as a principal.

(b) Whoever willfully causes an act to be done which if directly performed by him or another would be an offense against the United States, is punishable as a principal.

6. Defendants did not raise any arguments with respect to Counts one and five of the Indictment, therefore this court offers no opinion thereto. Of course, the conspiracy count (Count one) can still be valid even though defendants cannot be charged with the substantive offense. See Pereira v. United States, 347 U.S. 1, 11 (1954).