Civil and Criminal Enforcement of Environmental Laws Thirteenth

Civil and Criminal Enforcement of Environmental Laws Thirteenth

Civil and Criminal Enforcement of Environmental Laws Thirteenth Annual ELI Boot Camp Course on Environmental Law November 12, 2004 Barry M. Hartman, Esq. Kirkpatrick & Lockhart LLP [email protected] www.kl.com 2004 Kirkpatrick & Lockhart LLP Why Worry About Criminal Environmental Enforcement?

Profits Publicity Prison/Penalties 2 2004 Kirkpatrick & Lockhart LLP Profits 3 2004 Kirkpatrick & Lockhart LLP Profits

4 2004 Kirkpatrick & Lockhart LLP Publicity 5 2004 Kirkpatrick & Lockhart LLP Publicity 12/27/02 Oil Company Sentenced for 1997 Explosion; Final Restitution Totals More Than $9 Million 12/27/02 Shipping Companies, Chief Engineer Face Fines Stemming from Washington Oil Spill 01/15/03

Norwegian Shipping Line to Pay $500,000 Over 1999 Oil Spill Off South Carolina Coast 01/21/03 Asbestos Contractor Must Be Resentenced; 65 Months Insufficient, Appeals Court Rules 6 2004 Kirkpatrick & Lockhart LLP Publicity 01/21/03 Coke Producer to Pay $2.9 Million Fine to Settle Allege Violations at 24 Plants 01/27/03

Appeals Court Orders Re-Evaluation of Sentence in Asbestos-Removal Case 01/30/03 Former Rocketdyne Manager Gets Probation, Fine for Violations Linked to Fatal Explosion 7 2004 Kirkpatrick & Lockhart LLP Publicity 01/30/03 South Carolina Coating Firm, Executive Plead Guilty to Clean Water Act Violations

02/06/03 Summary of EPA Enforcement Statistics for Fiscal Year 2002 02/28/03 Waste Disposal Firm, Employees Charged in Alleged Mishandling of Illegal Chemicals 03/12/03 Ashcroft Says Justice Will Focus on Laws to Protect Environment, Nations Security 8 2004 Kirkpatrick & Lockhart LLP Publicity

04/02/03 Federal Jury in California Convicts Owner of Plating Shop for Illegal Waste Dumping 04/02/03 Senator Suggests Using Money from Fines for Trust Fund to Protect Water Supply 04/02/03 Justice Department Seeks New Funding for Focus on Hazardous Materials Cases 04/15/03 Petroleum Tester Guilty of Falsifying

Reports to EPA on Oxygen in Reformulated Gasoline 9 2004 Kirkpatrick & Lockhart LLP Publicity 04/18/03 House Approves Bill to Strengthen Enforcement of Environmental Statutes 04/23/03 Taiwanese Shipping Company, Engineer Plead Guilty in Oily Waste Dumping Case 04/25/03

Chicago Man Pleads Guilty to Charges of Falsifying Test Results for Air Technicians 04/28/03 White House Announcements 10 2004 Kirkpatrick & Lockhart LLP Publicity 04/30/03 Businessman from Saipan Pleads Guilty to Tampering With Drinking Water Samples 05/01/03 Pennsylvania Landlord Pleads Guilty to

Forging Signatures on Lead Paint Forms 05/28/03 Governor Signs Bills to Increase Penalties for Water Violations, Armed Brownfields Law 11 2004 Kirkpatrick & Lockhart LLP Publicity 06/20/03 Pipeline Employees Sentenced to Prison for Role in 1999 Explosion That Killed Three 06/25/03 Ships Engineer Gets Time Served in

Dumping Case 06/27/03 Tyson Foods to Pay $7.5 Million in Fines for Water Act Violations at Poultry Plant 07/10/03 Motiva to Pay $296,000, Pleads No Contest to Charges Stemming From Tank Explosion 12 2004 Kirkpatrick & Lockhart LLP Publicity 07/18/03 Governor Signs Legislation Strengthening

Controls, Penalties for Industrial Polluters 07/22/03 Olympic Asks Court to Block Seattle from Requiring Tests on Pipeline Segment 07/29/03 Wastewater Plant Operator Found Guilty of Negligence, Lying About Maintenance 08/07/03 Higher Criminal Fines Urged in Britain Because Large Polluters Failing to Learn 13 2004 Kirkpatrick & Lockhart LLP

Publicity 08/08/03 Alabama Gasoline Refiner Sentenced, Fined 08/08/03 Saipan Island Man Sentenced in Drinking Water Case 09/05/03 Houston Businessman Sentenced to Prison, Fined $20,000 for Illegal Asbestos Removal 09/09/03

Sarbanes-Oxley Act Forces Corporations to Focus on Environmental Disclosure Rules 14 2004 Kirkpatrick & Lockhart LLP Publicity 09/15/03 Landlord Sentenced in Lead Paint Disclosure Case 09/17/03 Used Oil Refiner Fined $1.1 Million for Waste Discharge, Storage Violations 09/19/03

Printing Company Officer Pleads Guilty to Falsifying Application for Title V Permit 15 2004 Kirkpatrick & Lockhart LLP Publicity 10/03/03 Convicted Treatment Plant Superintendent Must Be Resentenced, Appeals Court Rules 10/20/03 Colorado Court Imposes $850,000 Fine on Chemical Firm, Cuts Officers Sentence 16 2004 Kirkpatrick & Lockhart LLP

Publicity 01/09/04 South Florida Water Management District v. Miccosukee Tribe of Indians: Supreme Court Considers Extending Clean Water Act Regulation 02/12/04 Citgo Agrees to Pay $1.74 Million Fine To Resolve Air, Water, Waste Violations 02/25/04 California Woman Gets 15 Months in Prison For Falsifying Numerous Environmental Tests

17 2004 Kirkpatrick & Lockhart LLP Publicity 03/15/04 Massachusetts Transit Authority to Spend $1.4 Million to Settle Air, Water Allegations 04/12/04 New Jersey Power Plant to Pay $1 Million To Settle Hot Water Discharge Violation 11/08/04 ARCO Agrees to Pay EPA $50 Million Toward Clark Fork Basin Cleanup Costs

18 2004 Kirkpatrick & Lockhart LLP Prison 19 2004 Kirkpatrick & Lockhart LLP Homeland Security 20 2004 Kirkpatrick & Lockhart LLP EMERY WORLDWIDE AIRLINES PLEADS GUILTY TO CRIMINAL HAZARDOUS MATERIALS TRANSPORTATION VIOLATIONS WASHINGTON, D.C. - The Department of Justice and The Department of Transportation today announced that Emery Worldwide Airlines, Inc. has pled guilty to twelve (12) felony counts for violating the Hazardous Material Transportation Act and agreed to pay a criminal penalty of $6 million and develop a compliance program to detect and deter future violations. Emery, a wholly owned subsidiary of CNF, Inc., provides air and land transportation

services for business to business shippers of heavyweight cargo. Its major operation hub is near the Dayton International Airport in Vandalia, Ohio. With the sheer amount of hazardous materials being shipped on our nations transportation infrastructure, we must track down and bring to justice those who violate our transportation laws, said Attorney General John Ashcroft. This will significantly reduce the potentially severe consequences of a hazardous materials incident, whether by air, sea, road or rail. 21 2004 Kirkpatrick & Lockhart LLP Source: http://www.epa.gov/compliance/resources/reports/endofyear/eoy2003/fy2003enforcementandcomplianceendofyearcharts.pdf 22 2004 Kirkpatrick & Lockhart LLP Profile of Positions Held by Individuals Indicted for Environmental Crimes 70 60 50

40 30 20 10 0 1986 Officers 23 2004 Kirkpatrick & Lockhart LLP 1987 1988 1989 Management Employees 1990

1991 1992 Other Employees Kirkpatrick & Lockhart LLP Prison Terms Imposed/Served For Environmental Crimes 180 170 160 150 140 130 120

110 100 90 80 70 60 50 40 30 20 10 0 155 111 72

64 63 59 55 48 39 31 32 11 1983 5 2

5 3 1984 1985 1986 37 1987 8 1988 1989

Prison Terms * Prison terms for FY 96 and FY 97 have not been compiled. 24 2001 Kirkpatrick & Lockhart LLP 43 37 34 25 23 15 5 73 70 70 1990

1991 1992 1993 Actual Confinement 1994 1995 * * 1996

1997 Kinds of Criminal Offenses Misdemeanors < 1 yr Felonies > 1 yr 25 2004 Kirkpatrick & Lockhart LLP Kinds of Criminal Offenses 1984 RCRA felonies 1986 CERCLA felonies 1987 Clean Water Act misdemeanors and

felonies 1990 Clean Air Act felonies 19?? TSCA felonies 19?? OSHA felonies 26 2004 Kirkpatrick & Lockhart LLP Knowing Violations (Issues) What court are you in? What statute is being used?

What specific standard is being alleged to be violated? Is the charge a misdemeanor or a felony? 27 2004 Kirkpatrick & Lockhart LLP Evolution of the knowledge element Public Welfare Doctrine Responsible

Corporate Officer Doctrine Knowing Due vs Willful Process Concerns 28 2004 Kirkpatrick & Lockhart LLP Public Welfare Doctrine U.S. v. Balint, 258 U.S. 250 (1922)

Narcotics Act contained no knowledge element Achieving social betterment rather than punishing mala in se conduct allows elimination of common law knowledge element without offending due process 29 2004 Kirkpatrick & Lockhart LLP Public Welfare Doctrine U.S. v. International Minerals and Chemicals Corp., 402 U.S. 558 (1971)

Transporting hazardous chemicals without classifying on shipping papers Statute contained knowledge element (knowingly violates regulations.) Punishment 30 2004 Kirkpatrick & Lockhart LLP was misdemeanor Public Welfare Doctrine

U.S. v. International Minerals and Chemicals Corp., 402 U.S. 558 (1971) But, here, where dangerous or deleterious devices or products or obnoxious waste materials are involved, the probability of regulation is so great that anyone who is aware that he is in possession of them or dealing with them must be presumed to be aware of the regulation. 402 U.S. 558,at 565. 31 2004 Kirkpatrick & Lockhart LLP Public Welfare Doctrine Grenades

US v. Freed, 401 U.S. 601 (1971) "one would hardly be surprised to learn that possession of hand grenades is not an innocent act." 401 U.S. at 609 Knowledge may be inferred from character of substance. 32 2004 Kirkpatrick & Lockhart LLP Public Welfare Doctrine Guns

United States v. Staples, 511 U.S. 600 (1994) guns in general are not "deleterious devices or products or obnoxious waste materials that put their owners on notice that they stand in responsible relation to a public danger In contrast to the selling of dangerous drugs or the possession of hand grenades considered, private ownership of guns in this country has enjoyed a long tradition of being entirely lawful conduct. defendant had to know that it was an automatic gun before being subject to possibly 10 years in prison.

33 2004 Kirkpatrick & Lockhart LLP Public Welfare Doctrine Asbestos (United States v. Weintraub, 273 F.3d 139 (2nd Cir. 2001) Real estate developer convicted of knowingly violating the CAA requirement governing removing and disposing of asbestos. Held: government need only prove that the defendant knew that the substance involved was asbestos; need not show it was friable.

As a general matter, asbestos is strictly regulated and no reasonable person...could be unaware that asbestos in almost all of its applications is closely regulated. the use and handling of asbestos isregulated at the municipal level In sum, no reasonable person at this late date could claim to be unaware that asbestos is severely regulated and its handling is fraught with legal risk. Id. at 151. 34 2004 Kirkpatrick & Lockhart LLP Public Welfare Doctrine Asbestos was first used legally for its fire retardant properties for over a century and when used properly is no danger at all

It was first regulated due to dangers of removal in the late 1970s Can the same thing be said of guns? 35 2004 Kirkpatrick & Lockhart LLP Public Welfare Doctrine Sewage Water

U.S. Weitzenhoff, 35 F.3d 1275 (9th Cir. 1993); Wastewater plant discharged 6% more wastewater than what permit permitted; Knowing violation of permit condition does not require the polluter to know of the existence of the permit but only that the polluter knowingly engaged in conduct that results in a permit violation. Court did not apply inherently dangerous substance rationale or long history of regulation rationale. The criminal provisions of the CWA are clearly designed to protect the public at large from the potentially direct consequences of water pollution, and as such fall within category of public welfare legislation. 36 2004 Kirkpatrick & Lockhart LLP

Public Welfare Doctrine Evolution of relaxation of Knowledge element inherently dangerous product/activity regardless of regulatory history allows inference of knowledge long history of nonregulation regardless of danger of product/activity allows inference of knowledge short history of regulation regardless of character of product/activity allows inference of knowledge public welfare legislation without more allows inference of knowledge 37 2004 Kirkpatrick & Lockhart LLP The knowledge element and the Responsible Corporate Officer Doctrine

Officers strictly and vicariously liable for any environmental violations caused by an employee of the corporation. United States v. Dotterweich, 320 U.S. 1977(1943) person who was otherwise innocent, but who stood in responsible relation to the public danger is responsible Premised on public welfare character of legislation No knowledge requirement in statute (FFDCA)

38 2004 Kirkpatrick & Lockhart LLP The knowledge element and the Responsible Corporate Officer Doctrine United States v Dipentino, 242 F.3d 1090 (9th Cir. 2001 on-site representative of a company hired to oversee removal of asbestos knowingly violated CAA when he was: (1) present at the site on a daily basis; (2) performed inspections of areas that the asbestosremoval contractor had allegedly

abated; (3) prepared and signed final inspection reports certifying that the site was clear of asbestos-containing material; and (4) had the power to stop the asbestos-removal contractors work for improper performance. 39 2004 Kirkpatrick & Lockhart LLP United States v Self, 2 F.3d 1071, 1088 (10th Cir. 1993) conviction of corporate president sustained based

on evidence that was sufficient to allow jury to infer that defendant knew of illegal storage of hazardous waste. The knowledge element and the Responsible Corporate Officer Doctrine McDonald & Watson, 933 F.2d 277 (1st Cir. 1993) [RCRA Defendant (president)

must have actual knowledge of some facts No mandatory presumption of knowledge from position 40 2004 Kirkpatrick & Lockhart LLP United States v. Hansen, 262 F.3d 1217 (11th Cir. 2001) Defendant has responsible

relationship to violationunder his authority Power or capacity to prevent violation Acted knowingly in failing to prevent, detect or correct violation What must you know to knowingly violate the law? Must you know what your permit

requires? Must you know what the law is? Must you know the acts that constitute the violation of law? 41 2004 Kirkpatrick & Lockhart LLP Language of the Statute Clean Air Act (42 U.S.C. 7413(c): (i) Any person who knowingly violates a requirement

of 42 U.S.C. 7413(c)(1); (ii) Any person who knowingly makes a false material statement, 42 U.S.C. 7413(c)(2)(A); (iii) Any person who knowingly alters record ..., 42 U.S.C. 7413(c)(2)(A); (iv) Any person who knowingly fails to notify or report as required , 42 U.S.C. 7413(c)(2)(B); (v) Any person who knowingly falsifies, tampers with a device, 42 U.S.C. 7413(c)(2)(C); 42 2004 Kirkpatrick & Lockhart LLP Language of the Statute Clean Water Act, 33 U.S.C. 1319(c): (i) Any person who knowingly violates sections ,

33 U.S.C. 1319(c)(2)(A); (ii) Any person who knowingly introduces any pollutant into a sewer system , 33 U.S.C. 1319(c) (2)(B); (iii) Any person who knowingly makes false material statements , 33 U.S.C. 1319(c)(4); (iv) Any person who knowingly falsifies or tampers with any device, 33 U.S.C. 1319(c)(4). 43 2004 Kirkpatrick & Lockhart LLP Language of the Statute Resource Conservation & Recovery Act, 42 U.S.C. 6928(d) (i) Any person who knowingly transports hazardous waste, listed under this subchapter to a facility which does not have a

permit , 42 U.S.C. 6928(d)(1); (ii) Any person who knowingly treats, stores, or disposes of any hazardous waste identified or listed , 42 U.S.C. 6928(c)(2) Without a permit In knowing violation of material condition. (iii) Any person who knowingly omits material information, 42 U.S.C. 6928(c)(3); (iv) Any person who knowingly generates, stores any hazardous waste not listed and knowingly destroys records required to be kept, 42 U.S.C. 6928; (v) Any person who knowingly exports , 42 U.S.C. 6928(c); 44 2004 Kirkpatrick & Lockhart LLP Language of the Statute

Comprehensive Environmental Response Compensation & Liability Act, 42 U.S.C. 9603(b) (i) Any person who fails to notify immediately the appropriate agency. (ii) Any person who submits information which he knows to be false or misleading. 45 2004 Kirkpatrick & Lockhart LLP Language of the Statute

Knowingly violated a provision V. Knowing engage in conduct in violation of a provision 46 2004 Kirkpatrick & Lockhart LLP RCRA: How far does Knowing travel? Any person who ---(2) knowingly treats, stores, or disposes of any hazardous waste identified or listed under this subchapter ---(a) without a permit under this subchapter..(b) in knowing violation of any material condition or requirement of such permit; or (c) in knowing violation of any material condition or requirement of any applicable interim

status regulations or standards. 42 U.S.C. 6928(d)(2)(a) & (b). 47 2004 Kirkpatrick & Lockhart LLP RCRA: How far does Knowing travel? United States v. Johnson & Towers, Inc., 741 F.2d 662 (3d Cir.1984). it is unlikely that Congress could have intended to subject to criminal prosecution those persons who acted when no permit had been obtained irrespective of their knowledge under subsection (A), but not those persons who acted in violation of the terms of a permit unless that action was

knowing (subsection (B)). Thus, we are led to conclude that the omission of the word knowing in (A) was inadvertent or that knowingly which introduces subsection (2) applies to subsection (A). 48 2004 Kirkpatrick & Lockhart LLP RCRA: How far does Knowing travel? United States v. Hoflin, 880 F.2d 1033 (9th Cir. 1989) Had Congress intended knowledge of the lack of a permit under subsection (A) it could have easily said so. It specifically inserted a knowledge

element in subsection (b) and did so notwithstanding the knowingly modifier which introduces subsection (2) In the face of such obvious Congressional action we will not write something into the statute that Congress so plainly left out. 49 2004 Kirkpatrick & Lockhart LLP RCRA:Knowledge jury instruction (U.S. v. Hoflin):

That Defendant knowingly disposed of or commanded and caused others to dispose of chemical wastes on or about August 1, 1983; That Defendant knew that the chemical wastes had the potential to be harmful to others or to the environment, or in other words, it was not an innocuous substance like water; The wastes were listed or identified by the United States Environmental Protection Agency ("EPA") as a hazardous waste pursuant to RCRA; The defendant had not obtained a permit from either EPA or the State authorizing the disposal under RCRA. 50 2004 Kirkpatrick & Lockhart LLP RCRA: Knowledge

Any person who ---(2) knowingly treats, stores, or disposes of any hazardous waste identified or listed under this subchapter ---(a) without a permit under this subchapter..(b) in knowing violation of any material condition or requirement of such permit; 51 2004 Kirkpatrick & Lockhart LLP RCRA: Knowledge Hoflin followed: United States v. Baytank, Inc., 934 F.2d 599

(5th Cir. 1991) United States v. Kelley Technical Coatings, 157 F.3d 432 (6th Cir. 1998) United States v. Kelley, 167 F.3d 1176 (7th Cir. 1999) United States v. Goldsmith , 978 F.2d 643 (11th Cir. 1992) 52 2004 Kirkpatrick & Lockhart LLP

RCRA: Knowledge United States v. Dean, 969 F.2d 187 (6th Cir. 1992) [RCRA] Knowledge of permit requirement not element of RCRA offense Defendant said that he had read the RCRA waste code but thought it was a bunch of bullshit. 53 2004 Kirkpatrick & Lockhart LLP

RCRA: Knowledge United States v. Dee, 912 F.2d 741 (4th Cir. 1990) [RCRA] We agree with the defendants that the knowledge element does extend to knowledge of the general hazardous character of the wastes. But government does not have to show that Defendants knew the chemicals were characterized as hazardous under the law You need only to find that the defendant knew (1) the waste had potential to be harmful to the

environment (2) the defendant knew the waste was not an innocuous substance. Id. at 1181. 54 2004 Kirkpatrick & Lockhart LLP RCRA: Knowledge United States v. Hayes International Corp. 786 F.2d 1499 (11th Cir. 1986) Neither lack of knowledge that waste was hazardous nor ignorance of permit requirements is valid defense under RCRA. it is completely fair and reasonable to

charge those who chose to operate in such areas with knowledge of the regulatory provisions 55 2004 Kirkpatrick & Lockhart LLP RCRA: Knowledge United States v. Self, 2 F.3d 1071 (10th Cir. 1993) Know that the material is hazardous Know that could be harmful to persons

56 2004 Kirkpatrick & Lockhart LLP RCRA: Knowledge United States v. Elias, 1999 U.S. Dist. LEXIS 21372 (D. Idaho) Government did not have to show that defendant knew he was breaking law, that his waste was defined as hazardous under RCRA, or that he needed permit to store and dispose of his waste).

If defendant thought the substance disposed of was benign, he did not knowingly dispose of a hazardous substance 57 2004 Kirkpatrick & Lockhart LLP Clean Water Act Knowledge Clean Water Act, 33 U.S.C. 1319(c): (i) Any person who knowingly violates sections , 33 U.S.C. 1319(c)(2)(A); (ii) Any person who knowingly introduces any pollutant into a sewer system , 33 U.S.C. 1319(c)(2)(B); (iii) Any person who knowingly makes false material statements , 33 U.S.C. 1319(c)(4); (iv) Any person who knowingly falsifies or tampers

with any device, 33 U.S.C. 1319(c)(4). 58 2004 Kirkpatrick & Lockhart LLP Clean Water Act Knowledge United States v. Hopkins, 53 F.3d 533 (2nd Cir. 1995) Congress intended to punish the defendant who knowingly commits a proscribed act, "even if the defendant was not aware of the proscription." The court also considered International Minerals as well as other public welfare offense cases.

The government was only required to prove that the defendant knew the nature of his acts and performed them intentionally; not that he knew his acts violated the statute or permit. 59 2004 Kirkpatrick & Lockhart LLP Clean Water Act Knowledge United States v. Ahmad,101 F.3d 386 (5th Cir. 1996) Government has to prove that the defendant knew he was discharging gasoline.

gasoline is no more potentially harmful or dangerous than machine guns, and therefore violations of the CWA do not fall within the public welfare offense exception. 60 2004 Kirkpatrick & Lockhart LLP Clean Water Act Knowledge United States v. Wilson,133 F.3d 251 (4th Cir. 1997)

Government has to prove that the defendant knew he did not have a permit. This last requirement does not require the government to show that the defendant knew that permits were available or required. Rather, it, like the other requirements, preserves the availability of a mistake of fact offense if the defendant has something he mistakenly believed to be a permit to make the discharges for which he is being prosecuted. 61 2004 Kirkpatrick & Lockhart LLP Clean Water Act Knowledge United States v. Sinskey, 119 F. 3d 712, 714

(8th Cir. 1997) The defendant asserted that he did not know that his discharge of waste exceeded the permit (rather than mistakenly believing that the amount of discharge was within permit limits). Held that a permit is another layer of regulation in the nature of a law. Mistake relating to permit is a mistake of law no defense 62 2004 Kirkpatrick & Lockhart LLP Clean Water Act Knowledge United States v. Weitzenhoff, 35 F.3d 1275 (9th Cir.1993)

Provision of the CWA making it a felony to knowingly violate any permit condition does not require the polluter to know of the existence of the permit but only that the polluter knowingly engage in conduct that results in a permit violation. 63 2004 Kirkpatrick & Lockhart LLP Summary of knowledge element Aware of facts/conduct that are the basis for the violation (The storage, discharge or emission)

Knowledge that the material is a pollutant/waste Knowledge that the material might be harmful 64 2004 Kirkpatrick & Lockhart LLP Summary of knowledge element Audits may be fair game for prosecutors;

Independent counsel investigations by spurred by potential liabilities generally are not; 65 2004 Kirkpatrick & Lockhart LLP The Double Standard for Criminal Liability Under the Clean Air Act Senior Management Liable for Knowing Violations 66 2004 Kirkpatrick & Lockhart LLP Rank and File Employees

Liable for Knowing and Willful Violations The Double Standard for Criminal Liability Under the Clean Air Act (cont.) United States v. Metalite, 51 ERC 1950 (D. Ind. 2000) The generally accepted understanding of "willful" versus "knowing" in the criminal law context is that "willfulness" requires an act in conscious disregard of a known duty, whereas "knowingly" designates a lack of mistake or accident and an awareness of

actions that make up a violation of the law, without knowing that one's acts were prohibited by law. 67 2004 Kirkpatrick & Lockhart LLP Conscious Disregard (Jury Instruction) deliberately closed his eyes to what would otherwise have been obvious to him failing to investigate if he is in possession of facts which cry out for investigation 68 2004 Kirkpatrick & Lockhart LLP Conscious Disregard

(Jury Instruction) (cont.) circumstantial evidence may be used, including evidence that the defendant took affirmative steps to shield himself from relevant information 69 2004 Kirkpatrick & Lockhart LLP Due Process and Knowledge U.S. v. Balint, 258 U.S. 250 (1922) Narcotics Act contained no knowledge element

Achieving social betterment rather than punishing mala in se conduct allows elimination of common law knowledge element without offending due process 70 2004 Kirkpatrick & Lockhart LLP Due Process and Knowledge United States v. Engler, 806 F.2d 425 (3rd Cir. 1986) Felony statute is not necessarily rendered unconstitutional because it lacks a knowledge element.

the Supreme Court has indicated that the due process clause may set some limits on the imposition of strict criminal liability, but it has not set forth definite guidelines as to what those limits might be. 71 2004 Kirkpatrick & Lockhart LLP Due Process and Knowledge Lambert v. California, 355 U.S. 225, 228, (1957) "We

do not go with Blackstone in saying that a 'vicious will' is necessary to constitute a crime . . . for conduct alone without regard to the intent of the doer is often sufficient. There is wide latitude in the lawmakers to declare an offense and to exclude elements of knowledge and diligence from its definition." 72 2004 Kirkpatrick & Lockhart LLP Due Process and Knowledge United States v. Wulff, 758 F.2d 1121 (6th Cir. 1985)

Applying the Migratory Bird Treaty Act without a scienter requirement would be unconstitutional, because the crime is not one known to the common law, and because the felony penalty provision is severe and would result in irreparable damage to one's reputation. 73 2004 Kirkpatrick & Lockhart LLP 74 2004 Kirkpatrick & Lockhart LLP Corporate Knowledge CORPORATION FACT F FACT H

GENERAL COUNSEL FACT G VP OPERATIONS VP ENVIRONMENT FACT D FACT C REGIONAL MANAGER PLANT MANAGER FACT B FACT A

EMPLOYEE 75 2004 Kirkpatrick & Lockhart LLP EMPLOYEE Title 18 Offenses False Statements Obstruction of Justice Conspiracy

Conspiracy to Defraud an Agency of the United States 76 2004 Kirkpatrick & Lockhart LLP Conspiracy Existence of agreement to achieve unlawful objective Knowing and voluntary participation

Over act in furtherance 77 2004 Kirkpatrick & Lockhart LLP Conspiracy (cont.) Agreement to operate a plant Knowledge that there are environmental issues at the plant United States v. Hansen (11th Cir).

78 2004 Kirkpatrick & Lockhart LLP Federal Sentencing Guidelines 79 2004 Kirkpatrick & Lockhart LLP Base Level Offenses Factors Offenses involving knowing endangerment of others; Offenses involving mishandling of hazardous or toxic substances or pesticides (including related recordkeeping offenses);

Offenses involving mishandling of other (nontoxic) pollutants (including related recordkeeping offenses); 80 2004 Kirkpatrick & Lockhart LLP Base Level Offenses Factors (cont.) Offenses involving public water systems;

Offenses involving hazardous or injurious devices on federal lands; and Offenses involving specially protected fish, wildlife, and plants 81 2004 Kirkpatrick & Lockhart LLP Base Level Offenses Factors Base Level for an Environmental Violation: 8

Possession of 250 grams of marijuana: 8 Murder: 43 Robbery: 20 82 2004 Kirkpatrick & Lockhart LLP (cont.) Enhancements to Base Level

6 level enhancement of continuous and ongoing violation, USSG 2Q1.2(b)(1)(A); Lack of harm mitigates against finding that a violation is continuous. United States v. Van Loben Sels, 198 F.3d 1161 (9th Cir. 1999) Number of days a defendant violated the CWA could be a sentencing factor.United States v. Chemetco, Inc., 274 F.3d 1154 (7th Cir. 2001) 83 2004 Kirkpatrick & Lockhart LLP

Enhancements to Base Level (cont.) Proof of actual contamination IS required. United States v. Ferrin, 994 F.2d 658 (9th Cir. 1993) Harm can be presumed from continuous discharge. United States v. Hoffman, 2000 U.S. App. Lexis 5185 (4th Cir. 2000)

84 2004 Kirkpatrick & Lockhart LLP Enhancements to Base Level (cont.) Proof of Actual Contamination NOT required United States v. Cunningham, 194 F.3d 1186 (11th Cir. 1999) United States v. Liebman, 40 F.3d 544 (2d Cir. 1994)

United States v. Goldfaden, 959 F.2d 1324 (5th Cir. 1992) 85 2004 Kirkpatrick & Lockhart LLP Enhancements to Base Level Whether the person has committed prior crimes, USSG 4A1.1 (cont.)

A prior unrelated DUI charge outstanding when offense environmental offense is committed is a prior crime. United States v. Kyle, 2001 WL 1580232 (6th Cir. 2001) [unpublished] Whether the violation created the threat of death or bodily injury, USSG 2Q1.2(b)2); 86 2004 Kirkpatrick & Lockhart LLP Enhancements to Base Level (cont.) 4 level increase if the violation involved

permit requirements, USSG 2Q1.2(b)(4); Notice to State is not a permit requirement. United States v. Weintraub, 96 F.Supp.2d 135 (D.Conn 2000); United States v. Chau, 293 F.2d 96 (3rd Cir. 2002) 87 2004 Kirkpatrick & Lockhart LLP Enhancements to Base Level (cont.) Whether the defendant was the supervisor

4 levels if more than five person involved.USSG 3B1.1; 2 levels for 2 persons United States v. Okoli, 20 F.3d 615 (5th Cir. 1994) defendant must have been the organizer, leader, manager, or supervisor of one or more other participants. Need not demonstrate that the individual being indicted was personally in charge of five or more participants. 88 2004 Kirkpatrick & Lockhart LLP

Enhancements to Base Level (cont.) Vulnerable victim enhancements USSG 3A1.1(b); United States v. Bragg, 207 F.3d 394 (7th Cir. 2000) 89 2004 Kirkpatrick & Lockhart LLP Enhancements to Base Level

(cont.) 4 levels for substantial expenditures for clean up; USSG 2Q1.2(b)(3); $200,000 is substantial. United States v. Chau, 293 F.d 96 (3rd Cir. 2002) 90 2004 Kirkpatrick & Lockhart LLP Enhancements to Base Level

(cont.) Whether the violation created the threat of death or bodily injury, USSG 2Q1.2(b)2); Not appropriate unless conviction is for offense that causes the injury. United States v. Elias, 32 ELR 20,218, 260 F.3d 1003 (9th Cir. 2001) Special Skills contributed to violation United States v. Ellen, 961 F.2d 462 (4th Cir. 1992).

91 2004 Kirkpatrick & Lockhart LLP Reductions to Enhanced Level This base level can also be decreased based on a number of factors, such as, Whether the offense involved recordkeeping only, USSG 2Q1.2(b) (6); or Whether the defendant cooperated in the investigation, USSG 3E1.1 92 2004 Kirkpatrick & Lockhart LLP

Downward Departures Is the case outside the heartland of environmental cases. USSG 5K2.0. United States v. Elias, 32 ELR 20,218, 260 F.3d 1003 (9th Cir. 2001) 93 2004 Kirkpatrick & Lockhart LLP Other factors

Standing in community not normally relevant. Committing crime to avoid a greater harm not normally relevant 94 2004 Kirkpatrick & Lockhart LLP 95 2002 Kirkpatrick & Lockhart LLP Applying the Guidelines Nature of Offense Offense involving a toxic waste Increase based on noncontinuous violation

Increase based on permit violation Decrease because defendant pled guilty/cooperated Total value assigned to offense 96 2004 Kirkpatrick & Lockhart LLP Increase/Decrease Offense Level 8 +4 +4 -2 14 97 2002 Kirkpatrick & Lockhart LLP

Applying the Guidelines (cont.) Cooperate by pleading guilty -2 98 2004 Kirkpatrick & Lockhart LLP Applying the Guidelines (cont.) Downward Adjustment: -2 Criminal History 1 99 2004 Kirkpatrick & Lockhart LLP 100 2002 Kirkpatrick & Lockhart 101 2002 Kirkpatrick & Lockhart

Constitutionality of Guidelines Blakely v. Washington, 124 S.Ct. 2531 (2004) -enhancements beyond statutory maximum -fact finding beyond reasonable doubt Two cases in the Supreme Court United States v. Booker, Docket 04-104 United States v. Fanfan, Docket 04-105 102 2004 Kirkpatrick & Lockhart LLP Source: http://www.epa.gov/compliance/resources/reports/endofyear/eoy2003/fy2003enforcementandcomplianceendofyearcharts.pdf 103 2004 Kirkpatrick & Lockhart LLP Why Worry About Civil Environmental Enforcement? Profits: Economic Benefit of

Noncompliance Publicity 104 2004 Kirkpatrick & Lockhart LLP Source: http://www.epa.gov/compliance/resources/reports/endofyear/eoy2003/fy2003enforcementandcomplianceendofyearcharts.pdf 105 2004 Kirkpatrick & Lockhart LLP Source: http://www.epa.gov/compliance/resources/reports/endofyear/eoy2003/fy2003enforcementandcomplianceendofyearcharts.pdf 106 2004 Kirkpatrick & Lockhart LLP Source: http://www.epa.gov/compliance/resources/reports/endofyear/eoy2003/fy2003enforcementandcomplianceendofyearcharts.pdf 107 2004 Kirkpatrick & Lockhart LLP Source: http://www.epa.gov/compliance/resources/reports/endofyear/eoy2003/fy2003enforcementandcomplianceendofyearcharts.pdf 108 2004 Kirkpatrick & Lockhart LLP Why Worry About Civil Environmental

Enforcement? Profits- economic benefit of noncompliance 109 2004 Kirkpatrick & Lockhart LLP Publicity FOR IMMEDIATE RELEASE TUESDAY, DECEMBER 16, 2003 WWW.USDOJ.GOV ENRD (202) 514-2007

TDD (202) 514-1888 JUSTICE DEPARTMENT ANNOUNCES FY2003 RECORD YEAR FOR RECOVERY OF CIVIL PENALTIES IN ENVIRONMENTAL CASES Ashcroft, Sansonetti Hail Recovery Of More Than $203 Million From Violators WASHINGTON, D.C. - Attorney General John Ashcroft and Assistant Attorney General Tom Sansonetti of the Justice Departments Environment and Natural Resources Division, reported today that Fiscal Year 2003 was a record breaking year for the recovery of civil penalties in environmental cases. Court awards and consent decrees achieved by the Department and United States Attorneys Offices resulted in more than $203 million in penalties for civil violations of the nations environmental laws. In contrast during the three previous years, awards averaged approximately $75 million. Source: http://www.usdoj.gov/opa/pr/2003/December/03_enrd_694.htm 110 2004 Kirkpatrick & Lockhart LLP FOR IMMEDIATE RELEASE ENRD

WEDNESDAY, OCTOBER 6, 2004 (202) 514-2008 WWW.USDOJ.GOV TDD (202) 514-1888 JUSTICE DEPARTMENT ANNOUNCES FY 2004 RECORD YEAR IN OBTAINING OVER $4 BILLION FOR ENVIRONMENTAL IMPROVEMENT WASHINGTON, D.C. - Thomas L. Sansonetti, Assistant Attorney General of the Justice Departments Environment and Natural Resources Division, announced today that Fiscal Year 2004 was a record breaking year in the Divisions efforts to secure commitments by polluters to take action to remedy their violations of the nations environmental laws. Polluters across the nation agreed to spend in excess of $4 billion-topping the previous record of just more than $3 billion in FY 2002-to take corrective measures to protect the nations health, welfare and environment. Additionally, courts imposed more than $181 million in civil penalties for violations in environmental cases, second only to fiscal year 2003's record-setting recovery of $203 million. Source: http://www.usdoj.gov/opa/pr/2004/October/04_enrd_686.htm

111 2004 Kirkpatrick & Lockhart LLP Strict Liability Responsibility vs status Vicarious liability Joint and Several Liability 112 2004 Kirkpatrick & Lockhart LLP

Civil Penalty Factors History of violations Ability to stay in business Economic benefit Gravity

Good faith efforts to comply 113 2004 Kirkpatrick & Lockhart LLP Allegheny Ludlum v. United States No. 02-4346 (3rd Cir. 2003) $12 million dollar civil penalty vacated economic benefit 114 2004 Kirkpatrick & Lockhart LLP Allegheny Ludlum v. United States No. 02-4346 (3rd Cir. 2003)

Interest rate Invalid test defense 30 day violation presumption 115 2004 Kirkpatrick & Lockhart LLP Numquam debes purgamentum dare rustico cui nomen Bubbarum et qui

carrum utilem invehit. 116 2004 Kirkpatrick & Lockhart LLP Never give your waste to a man named Bubba driving a pick-up truck. 117 2004 Kirkpatrick & Lockhart LLP

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