Civil and Criminal
Environmental Enforcement
Fifteenth Annual ELI Boot Camp Course on
Environmental Law
October 9-11, 2006
Barry M. Hartman, Esq.
Kirkpatrick & Lockhart Nicholson Graham LLP
bhartman@klng.com
www.klng.com
© 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
www.klng.com
Why Worry About Criminal
Environmental Enforcement?
¡
Profits
¡
Publicity
¡
Prison/Penalties
2 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Profits
3 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Profits
4 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Publicity
5 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Publicity
12/27/02
Oil Company Sentenced for 1997 Explosion;
Final Restitution Totals More Than $9 Million
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 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Publicity
01/30/03
South Carolina Coating Firm, Executive
Plead Guilty to Clean Water Act Violations
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, Nation’s Security
7 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Publicity
04/02/03
Federal Jury in California Convicts Owner
of Plating Shop for Illegal Waste Dumping
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
8 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Publicity
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
05/01/03
Pennsylvania Landlord Pleads Guilty to
Forging Signatures on Lead Paint Forms
9 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Publicity
06/20/03
Pipeline Employees Sentenced to Prison for
Role in 1999 Explosion That Killed Three
06/27/03
Tyson Foods to Pay $7.5 Million in Fines for
Water Act Violations at Poultry Plant
07/29/03
Wastewater Plant Operator Found Guilty of
Negligence, Lying About Maintenance
10 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Publicity
08/08/03
Alabama Gasoline Refiner Sentenced, Fined
09/05/03
Houston Businessman Sentenced to Prison,
Fined $20,000 for Illegal Asbestos Removal
09/17/03
Used Oil Refiner Fined $1.1 Million for
Waste Discharge, Storage Violations
11 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Publicity
09/19/03
Printing Company Officer Pleads Guilty to
Falsifying Application for Title V Permit
02/25/04
California Woman Gets 15 Months in Prison
For Falsifying Numerous Environmental Tests
04/12/04
New Jersey Power Plant to Pay $1 Million To
Settle Hot Water Discharge Violation
12 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Publicity
03/01/05
Gulf Coast Developer, Others Found Guilty of
Water Act Violations in Wetlands Project
03/18/05
Motiva Pleads Guilty to Air, Water Violations
Stemming From Delaware Refinery Explosion
08/11/05
Court Says Party May Face Criminal Liability
For Aiding, Abetting Unpermitted Disposal
13 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Publicity
11/16/05
Former New York City Employee Sentenced
To Probation for Faking Water Program Data
11/16/05
EPA Criminal Investigations Fall in 2005;
Larger Companies Targeted, Report Says
11/17/05
N.C. Surveyor Pleads Guilty to Charges Of
Falsifying Wetlands Delineation Maps
14 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Publicity
12/07/05
Gulf Coast Developer, Others Sentenced To
Prison, Fined $5.3 Million in Wetlands Case
01/17/06
Grand Jury Indicts San Diego Energy Utility
For Improper Asbestos Removal From Pipes
03/08/06
Criminal Charges Filed Against Contractors
Over Monterey Courthouse Asbestos
Removal
15 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Publicity
04/07/06
California Charges Central Valley Firm,
Employees With Faking Air Quality Tests
05/08/06
Texas Gambling Ship Owner Fined $300,000
For Obstructing Pollution Investigation
07/27/06
Worker Endangerment Initiative Survives First
Test in Environmental Crimes Trial
16 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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 nation’s
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.”
17 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Prison
18 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Source: http://www.epa.gov/compliance/resources/reports/endofyear/eoy2003/fy2003enforcementandcomplianceendofyearcharts.pdf
19 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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
11
43
37 34
37
31 32
73
70 70
25 23
15
5
1983
5 2
5 3
1984
1985
8
1986
1987
1988
1989
1990
Prison Terms
* Prison terms for FY 96 and FY 97 have not been compiled.
20 © 2004 Kirkpatrick & Lockhart Nicholson Graham LLP
1991
1992
1993
Actual Confinement
1994
1995
*
*
1996
1997
Kinds of Criminal Offenses
‹
Misdemeanors < 1 yr
‹
Felonies > 1 yr
21 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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
22 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Knowing Violations
‹
What statute is being used?
‹
Is the charge a misdemeanor or
a felony?
‹
What specific standard is alleged
to be violated?
‹
What court are you in?
23 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Factors Influencing the
“knowledge” element
‹
Public Welfare Doctrine
‹
Responsible Corporate Officer
Doctrine
‹
“Knowing” vs “Willful”
‹
Due Process Concerns
24 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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
™
Misdemeanor
25 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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….”)
™ Misdemeanor
26 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
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.
27 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Public Welfare Doctrine
‹
Grenades
™ US v. Fred, 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.
™ Felony
28 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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.
29 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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 (asbestos handling).
Held: government need only prove defendant knew
substance involved was asbestos; need not know it was
‘friable’.
“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.
30 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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 1970’s
‹
Same as guns?
31 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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;
Does not require polluter to know existence of the permit but
only that he knowingly engaged in conduct that results in
permit violation.
No “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.”
32 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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 non regulation regardless of danger of
product/activity precludes inference of knowledge
short history of regulation regardless of danger of
product/activity allows inference of knowledge
public welfare legislation without more allows
inference of knowledge
33 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
The “knowledge” element and the
“Responsible Corporate Officer” Doctrine
‹
‹
Officers strictly and vicariously liable for
environmental violations caused by employee of
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)
Misdemeanor
34 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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
company hired to oversee
removal of asbestos
knowingly violated CAA when
he was:
(1) present at site on daily
basis; (2) performed
inspections of relevant areas;
(3) prepared/signed final
inspection reports certifying
abatement complete; and
(4) had power to stop the
contractor’s work for
improper performance.
35 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
‹
United States v Self, 2 F.3d
1071, 1088 (10th Cir. 1993)
™
conviction of president
sustained evidence
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 35, (1st Cir. 1991)
™
Defendant (president)
must have actual
knowledge of some
facts
™
No mandatory
presumption of
knowledge from
position
36 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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?
37 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Language of the Statute
Knowingly violated a provision
V.
Knowing engage in conduct in
violation of a provision
38 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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);
39 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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).
40 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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)
• In 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);
41 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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….
42 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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).
43 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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).”
44 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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.”
45 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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.
46 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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)”
47 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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.”
48 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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.
49 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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”
50 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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
51 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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” (mistake of fact)
52 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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).
53 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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.
54 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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 vs. guns: What about
“public welfare” exception?
55 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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 defense if the
defendant has something he mistakenly believed
to be a permit to make the discharges for which
he is being prosecuted.”
56 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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.
57 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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.
58 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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 might be harmful
‹
Mistake of fact defense
59 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Summary of “knowledge” element
¡
Audits may be fair game for
prosecutors;
¡
“Independent counsel” investigations by
spurred by potential liabilities
generally are not;
60 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
The Double Standard for Criminal
Liability Under the Clean Air Act
Senior Management
Liable for
Knowing Violations
61 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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.
62 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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”
63 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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”
64 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Due Process and “Knowledge”
‹ U.S.
™
v. Balint, 258 U.S. 250 (1922)
Achieving social betterment
rather than punishing ‘mala in
se’ conduct allows elimination
of common law ‘knowledge’
element without offending
due process
65 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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 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.
66 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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."
67 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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.
68 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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
69 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
FACT A
EMPLOYEE
EMPLOYEE
70 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Title 18 Offenses
‹
False Statements
‹
Obstruction of Justice
‹
Conspiracy
‹
Conspiracy to Defraud an
Agency of the United States
‹
Aiding and abetting
‹
Accessory after the fact
71 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Conspiracy
‹
Existence of agreement to achieve
unlawful objective
‹
Knowing and voluntary
participation
‹
Overt act in furtherance
72 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Conspiracy (cont.)
‹
Agreement to operate a plant
‹
Knowledge that there are
environmental issues at the plant
United States v. Hansen (11th Cir).
73 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Federal Sentencing Guidelines
74 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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);
75 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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
76 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Base Level Offenses Factors
‹
Base Level for an Environmental
Violation: 8
‹
Possession of 250 grams of
marijuana: 8
‹
Murder: 43
‹
Robbery: 20
77 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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)
78 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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)
79 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Enhancements to Base Level
‹
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)
80 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
(cont.)
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);
81 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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)
82 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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 was
personally in charge of five or more participants.
83 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Enhancements to Base Level
(cont.)
‹
Vulnerable victim enhancements
USSG §3A1.1(b);
‹
United States v. Bragg, 207 F.3d 394
(7th Cir. 2000)
84 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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)
85 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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).
86 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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
87 © 2006 Kirkpatrick & Lockhart Nicholson Graham 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)
88 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Other factors
‹
Standing in community not normally
relevant.
‹
Committing crime to avoid a greater
harm not normally relevant
89 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
90 © 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
91 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Increase/Decrease
Offense Level
8
+4
+4
-2
14
92 © 2002 Kirkpatrick & Lockhart LLP
Applying the Guidelines
(cont.)
Cooperate by pleading guilty -2
93 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Applying the Guidelines (cont.)
Downward Adjustment: -2
Criminal History 1
94 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
95 © 2006 Kirkpatrick & Lockhart LLP
96 © 2006 Kirkpatrick & Lockhart LLP
Constitutionality of Guidelines
Blakely/Booker/Funfan
97 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Source: http://www.epa.gov/compliance/resources/reports/endofyear/eoy2003/fy2003enforcementandcomplianceendofyearcharts.pdf
98 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Why Worry About Civil
Environmental Enforcement?
Profits: Economic Benefit of
Noncompliance
Publicity
99 © 2006 Kirkpatrick & Lockhart Nicholson Graham LLP
Source: http://www.epa.gov/compliance/resources/reports/endofyear/eoy2003/fy2003enforcementandcomplianceendofyearcharts.pdf
100 © 2006 Kirkpatrick & Lockhart Nicholson Graham
LLP
Source: http://www.epa.gov/compliance/resources/reports/endofyear/eoy2003/fy2003enforcementandcomplianceendofyearcharts.pdf
101 © 2006 Kirkpatrick & Lockhart Nicholson Graham
LLP
Source: http://www.epa.gov/compliance/resources/reports/endofyear/eoy2003/fy2003enforcementandcomplianceendofyearcharts.pdf
102 © 2006 Kirkpatrick & Lockhart Nicholson Graham
LLP
Source: http://www.epa.gov/compliance/resources/reports/endofyear/eoy2003/fy2003enforcementandcomplianceendofyearcharts.pdf
103 © 2006 Kirkpatrick & Lockhart Nicholson Graham
LLP
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 Department’s 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 Attorney’s Offices resulted in more than $203 million in penalties for civil violations of
the nation’s 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
104 © 2006 Kirkpatrick & Lockhart Nicholson Graham
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
Department’s Environment and Natural Resources Division, announced today that Fiscal Year
2004 was a record breaking year in the Division’s efforts to secure commitments by polluters to
take action to remedy their violations of the nation’s 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 nation’s 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
105 © 2006 Kirkpatrick & Lockhart Nicholson Graham
LLP
Strict Liability
¡
Responsibility vs status
¡
Vicarious liability
¡
Joint and Several Liability
106 © 2006 Kirkpatrick & Lockhart Nicholson Graham
LLP
Civil Penalty Factors
¡
History of violations
¡
Ability to stay in business
¡
Economic benefit
¡
Gravity
¡
Good faith efforts to comply
107 © 2006 Kirkpatrick & Lockhart Nicholson Graham
LLP
Allegheny Ludlum v. United States
No. 02-4346 (3rd Cir. 2003)
¡
$12 million dollar civil
penalty vacated
108 © 2006 Kirkpatrick & Lockhart Nicholson Graham
LLP
Allegheny Ludlum v. United States
No. 02-4346 (3rd Cir. 2003)
¡
Interest rate
¡
“Invalid test” defense
¡
30 day violation presumption
109 © 2006 Kirkpatrick & Lockhart Nicholson Graham
LLP
Numquam debes
purgamentum dare rustico
cui nomen Bubbarum et qui
carrum utilem invehit.
110 © 2006 Kirkpatrick & Lockhart Nicholson Graham
LLP
Never give your waste to a man
named Bubba driving a pick-up truck.
111 © 2006 Kirkpatrick & Lockhart Nicholson Graham
LLP
Sentencing Hearing
Tue., 315-2005
speak in your own behalf.
Is there anything you want to
say?
THE DEFENDANT: Your Honor, I don't believe
there were any wetlands on that property back then or even
today. And in the courtroom today is Mr. Russ Harding who
is the DEQ Director for the State of Michigan for over
eight years and I wish you would hear from him, your
Honor.
COURT:
Mr. Wilhelm, what is that a11
about?
'MR. W I ~ L M : Well, Mr. Harding has done a
study, another study of the wetlands or purported wetlands
on Mr. Rapanos's property and he hs concluded based upon
his expertise that there were no wetlands on that
property.
THE COURT:
We are not going to retry the
facts.
MR. WILHEfiM:
That's what 1: thought.
I
understand that, your Honor.
THE COURT:
Let me just make a statement and
tell you where the Court is coming from in this case and I
22
will give both parties an opportunity to again address the
23
Court.
24
25
This is the oldest case in my chambers. It's the
most voluminous, and we are anxious to close this case
United States o f America v. John Rapanos
S e n t e n c i n g Hearing
Tue., 315-2005
1
2
out.
This case is referred to within my chambers by
everybody as the "Sand Man Case". Everybody that talks
about the sand man knows that we are talking about
Mr. Rapanos because what he did was to move sand from one
end of his property to the other end of his property.
This all occurred on property he owned. Nothing was
brought in to fill this land except sand that was already
on that land.
Counsel for the government has pointed out in both
her memo and just now in court that this Court has been
reversed twice on this sentence, and that is true. And it
seems to imply that I am a very light or lenient person in
sentencing in criminal matters.
Well, rumor has it when I first got on this bench
after the first two years that I held the record for high
sentences in the Eastern District of Michigan, and that
was probably tzue. And last week I just refused to accept
a Plea Bargain Agreement entered into between the
government and a defendant because, in my opinion, the
sentence was too lenient. So I'm not sure the US
Attorney's Office can make that case.
In this case, I granted a motion f o r a new trial.
1 have been a Judge for 27 years.
And I granted a motion
for a new trial approximately five times. And I can't
United S t a t e s o f America v. John Rapanos
Sentencing Hearing
T u e . , 315-2005
remember ever granting one in a criminal case.
So this
case was very, very rare to me,
Based on the totality of all of the circumstances
I did not believe that a fair trial was had in this case.
I could have granted a mistrial several tines during the
case but I was loathe to do that as any trial Judge is
because of all of the money and the preparation that goes
into something like this, you want to wait and see how the
case turns out and if it turns out that this was harmless
error then there is no need to retry the case.
In this case, out of one out of five or maybe even
less, I did believe that a mistrial and a new trial should
be granted in this case. And, of course, that went up to
the Court of Appeals and I was reversed again.
So you have to ask the question, what is going on
in this case? Why is the government insisting that this
particular defendant go to prison?
I'm not really sure
but I will give you my opinion on it.
First of all, my relationship with the US
Attorney's Office in the Eastern District of Michigan has
been excellent. You could consider me to be a cheerleader
for the US Attorney's Office in the Eastern District of
Michigan.
I was the Chief Judge for five and a half years
and I was the contact point between the US Attorney's
Office and this bench.
And I've also enjoyed a very good
U n i t e d S t a t e s of America v. John Rapanos
Sentencing Hearing
Tue., 315-2005
relationship.
Being a member of the Judicial Conference of the
United States and attending Chief Judges meetings around
the United States I always spoken very highly of the US
Attorney's Office in the Eastern District of Michigan.
As a matter of fact, as the Chief Judge, I
instituted a program of publicly swearing in new assistant
United States Attorneys so as to make that experience a
big deal for them and their families which I believe it
is. And I am hoping that the new Chief Judge will
continue to do that.
As a general rule I found this Office to be
reasonable, responsible, open and cooperative. There are
exceptions to every rule and I am finding that this case
is an exception.
So, what is going on in this case? And this is
just my opinion.
I'm asking myself and people are asking
me, why is the government so determined to send this
defendant to prison for moving his sand?
Number one -- I think it's a two-prong thing
--
number one, this defendant is a very disagreeable person.
He is rude. He is arrogant. He is obscene on occasion.
He wants everything his way.
He has been successful in
his life and he wants everybody to know it.
So he is a
man who is easy to dislike.
U n i t e d S t a t e s of America v. John Rapanos
Sentencing Hearing
T u e . , 315-2005
Number two, this person who is easy to dislike had
1
2
the audacity and the temerity to insist upon his
3
constitutional rights. This all started for this
4
individual, this legal business all started on or about
5
August 30th, 1989, when the defendant insisted upon a
6
search warrant before he would let anybody on his
7
property.
8
the DNR on several occasions and they were trying to work
9
out an inspection of the property, My understanding is on
Prior to that date, he had been meeting with
10
that date, on August 30th, there was a meeting at his
11
property and he had his attorney present, And there was a
12
confrontation between he and the DNR people.
13
people had one view of what they wanted to do.
14
another view of what he wanted to do.
15
lawyer and asked whether or not he had to permit the DNR
16
to go on his property. And the lawyer said you don't have
17
to permit them unless they have a search warrant and then
18
he said, I'm not going to permit you unless you have a
19
search warrant. That's when all of this started.
20
it over to the federal government, the state government.
The DNR
He had
He turned to his
Turned
Incidentally, the state government had prior
21
22
trespasses on the defendant's property once and at least
23
twice.
24
25
So here we have, and this is my view of what is
going on, we have a very disagreeable person who insists
United S t a t e s of America v. John Rapanos
Sentencing Hearing
Tue. , 3-15-2005
on his constitutional rights. And this is the kind of
person that the Constitution was passed to protect.
He is
exactly the person who should be protected by the
Constitution.
People ask, well, what did this person dump to
pollute the waters of the United States? Did he dump oil,
radioactive substances, sewage, garbage, herbicides,
pesticides, insecticides, fungicides, fertilizer,
detergent, lead, iron, copper, mercury, benzene, dioxin,
PCB1s, PCP1s, bacteria, DDT, chlordane, nitrates or
cyanide? No.
He didn't dump that.
He polluteed the
waters of the United States by moving sand from one area
of his property to the other.
So then they ask, well, did he dump it into the
Great Lakes? No.
Did he dump it into any lake? No.
he dump it into a river? No.
Did
Did he dump it into a
stream? No. Did he dump it into a pond? No.
Did he dump
it into waters adjacent to any of the inhabitable waters
of the United States? And the answer to that is, no.
I am finding that the average US citizen is
incredulous that it can be a crirne for which the
government demands prison for a person to move dirt or
sand from one end of their property to the other end of
their property and not impact the public in any way
whatsoever.
U n i t e d S t a t e s of America v. John Rapanos
Sentencing Hearing
Tue.,
315-2005
I read the government's recent Memo under date of
3-11-05. The memo, when it states that the elements of
the enhancement were proved beyond a reasonable doubt to
the jury or were admitted by the defendant, I do not find
to be true.
I don't find that to be credible.
I know we
have a difference of opinion on that.
I don't have the
benefit of the record in front of me.
I might be wrong,
but I don't think I am,
The memo speaks to increased uniformity. I agree
with that.
It talks about unwarranted disparities. And I
agree with that.
It talks about the seriousness of the
offense and just punishment for that offense.
The government does not talk about the substance
that was dumped, that is, sand versus toxic waste, doesn't
talk about harm to the public, doesn't talk about
disruption of public utilities, doesn't talk about
evacuation a community, or doesn't talk about public money
for clean up.
And, in my opinion, the government has failed to
address similar conduct in sentencing consequences.
We have done some research about what happens to
people who are accused and convicted of environmental
crimes.
In Michigan, environmental defendants have rarely
been sentenced to prison for their environmental crimes.
U n i t e d S t a t e s of America v. John Rapanos
Sentencing Hearing
Tue., 3 15-2005
14
1
Aldo Quadrini and Gaspere Vitale were sentenced to one
2
year probation and ordered to pay $5,000 in fines and to
3
fully restore wetlands.
4
were prosecuted by the Michigan Department of
5
Environmental Quality after they clear-cut, plowed and
6
destroyed eight acres of forested wetlands in New
7
Baltimore, Michigan.
8
and 1999. And despite repeated warnings the defendants
9
continued cutting and chipping trees, removing stumps and
10
bulldozing the site. So they received one year probation
11
and a $5,000 fine.
12
The two Macomb County developers
The violations occurred between 1995
In another interesting case involving corporate
environmental pollution, the Department of Justice
prosecuted BP Oil Company for discharging pollutants into
the Delaware River in violation of the Clean Water Act.
Over a six year period, BP discharged a variety of
pollutants, including oil and grease. These pollutants
depleted the oxygen supply in the water, making it
impossible for fish to survive and reproduce. In
addition, hydrocarbons present in the pollution have the
potential to become concentrated in the fish. BP's
violations represented a major contribution to the
pollution of the river.
In addition, they were committed
knowingly over a period of years.
Nonetheless, the
Department of Justice only prosecuted BP Oil civilly.
United States o f America v. John Rapanos
Sentencing Hearing
Tue., 3-15-2005
There were no criminal charges brought against them at
all.
Ultimately, BP Oil was fined and merely told to
clean up their facility.
Perhaps the most notorious American environmental
disaster of 20th Century was the Exxon Valdez oil spill of
1989 which is the same year that the defendant moved his
sand. When the Exxon Valdez struck Bligh Reef in Alaska's
Prince William Sound, it dumped 10.8 million gallons of
crude oil in the water and created a huge oil slick
killing tens of thousand of animals.
That oil slick
reached 1,300 miles of coastland and killed approximately
I
250,OO birds, 2,800 sea otters, 300 seals, and 250 bald
eagles, In addition, the disaster crippled the local
fishing industry.
Joseph Hazelwood was the captain of the Exxon
Valdez. It was later determined that Captain Hazelwood was
drunk on the night of the spill and that his negligence
caused the accident. Captain Hazelwood was prosecuted and
convicted of negligence in this matter.
He was sentenced
to serve 1,000 hours of commity service over five years
with no prison time or no fine.
So, do either counsel
--
in addition to that, I
have prepared a written Opinion that covers much of what I
have stated. But I will give an opportunity at this time
for either counsel to address the Court if they wish.
United S t a t e s of America v . John Rapanos
Sentencing Hearing
T u e . , 315-2005
MS. PEREGORD: Just very briefly, your Honor.
It is the government's position that the likeability or
lack thereof of the defendant had absolutely nothing to do
with this prosecution. Moreover, sand is more toxic and
destructive to wetlands than any of the substances the
Court mentioned.
THE COURT:
Even the 10.8 million gallons of
crude oil dumped in the waters oEE Alaska?
That is because sand totally
MS. PEREWRD:
destroys wetlands, and once wetlands are destroyed their
ability to filter pollutants from reaching the water and
their ability to prevent and control flooding is totally
obliterated. Mr. Rapanos -THE COURT:
So let me just ask you this
question.
MS. PEREGORD:
THE COURT:
Sure.
Where are my notes?
Would it be
better for him to have filled these lands with copper or
lead or mercury or benzine?
MS. PEREGORD:
Frankly, if the wetlands had
been in existence they would have had a pretty high
ability, especially at the rate of approximately 60 acres
that he had on his property, to filter such toxic
substances from ever reaching the water, The lack of the
wetlands totally prevents such a thing.
United S t a t e s o f America v. John Rapanos
S e n t e n c i n g Hearing
Tue., 315-2005
THE COUEtT:
I appreciate your comments.
Go
ahead.
MS. PEREWFE):
Thank you. Mr. Rapanos was
prosecuted because he refused repeatedly to apply for a
That is all he was asked t o do.
permit.
He was told by
employees from the MDNR that it was likely that he could
still build the commercial shopping project that he
intended to build if he would submit a permit and work
around some likely fairly minor restrictions with regard
to driveways and access to the property and where the
commercial structure was located.
He initially agreed t o apply for a permit and then
after his consultant came back with a figure of 50 to
60 acres, he threatened to ruin and otherwise destroy his
consultant if he did not get rid of every one of his
records showing he had done work on the Salzburg Road
property.
Mr. Rapanos lied to the EPA in writing when he
said that no agency had ever found that there were
wetlands on that property when he well knew that at that
point the DNR had been out there, they had executed the
search warrant, they had found a minimum of 29 acres and
they had continued to attempt to get his compliance with
ceasing to fill the wetlands and simply applying for a
permit.
United S t a t e s of America v. John Rapanos
S e n t e n c i n g Hearing
315-2005
Tue.,
He was prosecuted because he refused to obey the
law, your Honor.
Plain and simple.
THE COURT:
Thank you.
Does the defense wish to place
anything on the record?
Your Honor, I will be very
MR. WILHEW:
brief.
The Court is aware at the initial sentencing in
1998, the Court sentenced Mr. Rapanos to a three year
period of probation, fined him $185,000 and required that
he do 200 hours of community service work.
Mr. Rapanos successfully completed his
probationary sentence, and completed his
--
paid his fine
and did his community service work a number of years ago.
That all became resolved.
We would ask the Court to take in the factors the
Court can consider now. We ask the Court to sentence him
to time served. And I think that would be a just:
resolution of this matter, your Honor.
THE COURT:
Okay. As I indicated earlier, we
have prepared a written Opinion.
I have not signed it yet
because I wanted to hear what counsel had to say. There
may be a few minor adjustments.
I anticipate that we will
have that written Opinion and Order within a half hour or
SO.
But the sentence of this Court is going
that
the defendant be placed on probation for a period of three
United S t a t e s of America v . John Rapanos
Sentencing Hearing
Tue., 315-2005
years.
He is to perform 200 hours of community service, a
fine of $185,000, special assessment of $100, all of which
I understand has been satisfied.
As far as I am
concerned, this case i s closed.
If counsel wish to wait around for the Opinion, as
I indicated, it will be ready probably in thirty minutes.
Is there anything further either counsel wish to
place on the record in this matter?
MS. PEREGORD:
MR. WIlZlEIM:
!l'HE
COURT:
No, your Honor.
No, your Honor.
Thank you.
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United S t a t e s of America v. John Rapanos
C E R T I F I C A T I O N
I , Lawrence R. Przybysz, o f f i c i a l court r e p o r t e r
f o r the United S t a t e s D i s t r i c t Court, Eastern D i s t r i c t of
Michigan, Southern Division, appointed pursuant t o t h e
provisions of T i t l e 28, United S t a t e s Code, Section 753,
do hereby c e r t i f y t h a t the foregoing i s a c o r r e c t
t r a n s c r i p t of t h e proceedings i n t h e above-entitled cause
on t h e date hereinbefore s e t f o r t h .
I do f u r t h e r c e r t i f y t h a t the foregoing
t r a n s c r i p t has been prepared by me o r under my d i r e c t i o n .
11
3-/ f - a . i
12
Lawfence R. Przybysz ,
13 O f f i c i a l Court R e p o r k r
u
Date
U n i t e d S t a t e s of America v , John Rapanus
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA
MIAMI DIVISIO N
UNITED STATES OF AMERICA
CASE NO . 05-80097-C R
MIAMI, FLORIDA
AUGUST 24, 2005
3 O'CLOCK, P .M .
Vs .
MARK SCHWARTZ ,
Defendant .
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TRANSCRIPT OF CHANGE OF PLEA HEARING
BEFORE THE HONORABLE DONALD MIDDLEBROOKS ,
UNITED STATES DISTRICT JUDG E
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APPEARANCES :
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FOR THE GOVERNMENT :
JOSE BONAU, ESQ .
Assistant U .S . Attorney
Miami, Florid a
FOR THE DEFENDANT :
MICHAEL SALNICK, ESQ .
Attorney-At-Law
West Palm Beach, Florida
REPORTED BY :
ROGER WATFORD, RMR-CR R
Federal Official Court Reporter
West Palm Beach, Florida 33401
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THE COURT : This is the case of the United States
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versus Mark Schwartz, Case Number 05-80097 . Could we have
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appearances .
MR . BONAU : Jose Bonau, Your Honor, Assistant United
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States Attorney, for the United States .
MR . SALNICK : Michael Salnick, from West Palm Beach,
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on behalf of Mark Schwartz, along with Mr . Flynn Bertisch from
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my office .
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THE COURT : And this is set for change of plea?
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MR . BONAU : Yes, Your Honor .
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THE COURT : I have reviewed the plea agreement . And I
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noted it's specific in its recommendations . Are you going to
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want a presentence investigation report or how do you want to
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handle sentencing ?
MR . BONAU : Your Honor, yes, we would request a
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presentence investigation report .
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THE COURT : Okay . Are we ready then to begin?
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MR . SALNICK : Yes, Your Honor .
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THE COURT : And there has been an arraignment and
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waiver of indictment, correct ?
MR . BONAU : Yes, Your Honor . It was signed in ope n
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court .
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THE COURT : Okay .
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THE CLERK : Mr . Schwartz, raise your right hand
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please . Do you swear or affirm that the testimony you will
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give in the matter before the Court will be the truth, the
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whole truth, and nothing but the truth, so help you God?
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THE DEFENDANT : Yes .
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THE CLERK : Please state your full name for th e
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record .
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THE DEFENDANT : Mark B . Schwartz .
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THE COURT : Good afternoon, Mr . Schwartz .
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THE DEFENDANT : Good afternoon, sir .
THE COURT : Mr . Schwartz, you are now under oath . If
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you answer falsely to any of my questions your answer could
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later be used against you in another prosecution for perjury or
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for making a false statement . Do you understand that ?
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THE DEFENDANT : Yes, sir .
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THE COURT : Why don't you pull the mike over that way
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so you -- you will probably need it more than Mr . Salnick . I
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am going to ask you several questions .
The purpose of the questions is to make sure you've
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carefully considered your decision to plead guilty in this
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case, determine that you are competent, to make the decision,
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that you are aware of your rights, and that there's a reason
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for you to plead guilty, that you did what the government says
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you did .
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If you don't understand any of my questions tell me .
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you may do that .
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Do you understand ?
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THE DEFENDANT : Yes, sir .
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THE COURT : How far did you go in school ?
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THE DEFENDANT : I have three years of college .
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THE COURT : Have you ever been treated for any menta l
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illness?
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THE DEFENDANT : No, sir .
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THE COURT : Have you been treated for addiction to
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narcotics or alcohol ?
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THE DEFENDANT : No, sir .
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THE COURT : Are you currently under the influence of
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any drug or alcohol ?
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THE DEFENDANT : No, sir .
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THE COURT : Are you taking any type of medication?
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THE DEFENDANT : I take prescription medication .
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THE COURT : And what types are those ?
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THE DEFENDANT : I take cholesterol medicine and I take
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high blood pressure medicine and most recently I take a very
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mild tranquilizer as a result of this issue .
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THE COURT : Okay . The cholesterol and high blood
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pressure medicine I presume wouldn't have any impact on your
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ability to concentrate or make decisions about your case . What
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about the tranquilizer, have you had any problems with talking
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to your lawyer, making decisions?
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THE DEFENDANT : No, sir . It's a very mild form .
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THE COURT : Okay . Have you reviewed the information,
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the charges filed against you in this case, and have you
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discussed the charges with your lawyer ?
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THE DEFENDANT : Yes, I have discussed them .
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THE COURT : Are you satisfied with the representation
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Mr . Salnick has provided to you ?
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THE DEFENDANT : Yes, I am .
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THE COURT : I have been given a plea agreement between
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yourself and the government . Do you have a copy there ?
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THE DEFENDANT : Yes .
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THE COURT : Let me first ask you to turn to the last
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page, page 8 . Is that your signature on the agreement ?
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THE DEFENDANT : Yes, it is .
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THE COURT : And before signing it did you review it
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and discuss it with your lawyer ?
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THE DEFENDANT : Yes, I did .
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THE COURT : Do you believe you understand it?
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THE DEFENDANT : Yes, sir .
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THE COURT : I am going to review aspects of it with
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you . If you have any question about any part of it, please
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tell me .
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In paragraph 1 you are agreeing to plead guilty to the
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one count criminal information which charges that you, being an
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owner and operator of a proposed demolition and renovation
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activity, that is an individual who operated, controlled and
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supervised a demolition and renovation operation, did knowingly
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fail to file and cause the failure to file of a notice required
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by the Clean Air Act containing advanced written notification
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of your intent to engage in demolition, renovation and other
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activities that would involve stripping and removing regulated
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asbestos containing material and involved the breaking up,
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dislodging and similarly disturbing regulated asbestos
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containing material from a workplace consisting of a facility
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located at 401 to 405 Northwood Road in the City of West Palm
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Beach Florida, in violation of federal law .
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Do you understand you are agreeing to plead guilty to
that charge ?
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MR . SALNICK : Judge, could I just have one second?
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THE COURT : Yes .
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(Pause .)
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THE DEFENDANT : Yes, sir, I understand this .
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THE COURT : All right .
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Then you understand that's what you are agreeing to
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plead guilty to ?
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THE DEFENDANT : Yes, sir .
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THE COURT : The sentence in this case will be imposed
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after consideration of the federal sentencing guidelines . Have
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you discussed the guidelines and how they might apply in your
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case with your lawyer?
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THE DEFENDANT : Yes, sir, I have .
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THE COURT : I am obliged to consider the guidelines in
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sentencing defendants . In most cases a sentence falls within
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the guideline range .
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The Supreme Court has recently ruled that the
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guidelines are advisory and the Court has some discretion to go
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above or below the guidelines, but the guidelines have to be
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considered, along with other laws passed by Congress related to
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sentencing .
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The Court has legal authority to sentence you up to
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the maximum authorized by law for the offense to which you are
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pleading guilty and you won't be able to withdraw your plea as
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a result of the sentence imposed .
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Do you understand ?
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THE DEFENDANT : Yes, sir .
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THE COURT : Under this new sentencing procedure I am
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required to determine whether a sentence is reasonable, and in
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your plea agreement you are expressly agreeing that the
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recommended sentence that is contained within this plea
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agreement, which apparently you and your lawyer and the
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government have agreed to, that that sentence is reasonable .
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Do you understand that ?
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THE DEFENDANT : Yes, sir, I do .
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THE COURT : Okay, the possible penalties are set forth
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in paragraph 3, which indicates that the Court could impose a
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maximum term of imprisonment of up to two years, followed by a
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term of supervised release of up to one year .
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In addition to imprisonment and supervised release, a
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fine of up to $250,000 could be ordered, as well as
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restitution . There's also a one hundred dollar special
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assessment that is payable at sentencing .
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Do you understand these are the possible penalties for
this crime ?
THE DEFENDANT : Yes, sir .
THE COURT : In paragraph 5 you have agreed with the
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government to jointly recommend that the sentence in this case
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be imposed within the sentencing guideline range and to
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recommend the Court neither go up or down from the sentencing
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guidelines .
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Further, in paragraph 6 the government has agreed to
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recommend that your guideline level be reduced by two levels
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for acceptance of responsibility and also they have agreed to
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recommend the low end of the guideline range .
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And finally, in paragraph 7 there's pretty specific
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recommendations as to what the sentence in this case should be .
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Both sides have agreed that the base offense level would be 8,
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that you would increase the base offense level by four levels
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because the offense involved the discharge, release and
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omission of asbestos, so that would take you to 12, and then
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subtracting the two for acceptance, the adjusted offense level
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would be 10, with a criminal history category of 1, the
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guideline range would be six to twelve months .
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And then you've agreed with the government that there
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should be no additional adjustments and then have agreed to
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recommend a five year term of probation which would include six
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months of home detention .
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We have covered a lot of ground there, but do you
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understand the impact of those joint recommendations on
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sentencing in this case ?
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THE DEFENDANT : Yes, I do, sir .
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THE COURT : All right .
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In paragraph 8 you have expressed a willingness to
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cooperate with the government by providing truthful information
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if they call upon you to do that and by assisting them in the
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investigation of unlawful conduct .
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The government will evaluate any assistance you might
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provide them and they may file a motion under the guidelines or
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Rule 35 of the Rules of Criminal Procedure asking the Court to
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depart downward from what would otherwise be your sentence by
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reason of your cooperation .
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There are two things the make sure you understand
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about that . First, it's up to the government whether to file
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the motion . If they don't file it, I don't have any authority
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to act on that basis . Second, even if they do file it, I am
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not obligated to grant the motion .
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Do you understand ?
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THE DEFENDANT : Yes, I understand .
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THE COURT : Paragraph 12 is a very important part of
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your plea agreement because under federal law you have a right
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to appeal the sentence imposed in this case ; however, as part
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of your plea agreement you are giving up your right to appeal
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the sentence, including the restitution order, or to appeal the
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manner in which sentence is imposed, unless it exceeds the
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maximum permitted by statute or is a result of an upward
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departure from the guideline range established at sentencing .
Do you understand you are giving up your rights to
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appeal the sentence in this case ?
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THE DEFENDANT : Yes, sir .
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THE COURT : And you have discussed that with you r
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lawyer?
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THE DEFENDANT : Yes, I have, sir .
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THE COURT : Okay . We have reviewed this written plea
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agreement . Beyond this agreement has the government made any
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promises to you in connection with your case ?
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THE DEFENDANT : No, they haven't made any promises .
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THE COURT : Has anyone attempted to force you to plea d
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guilty?
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THE DEFENDANT : No, sir .
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THE COURT : Are you pleading guilty of your own free
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will because you are guilty?
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THE DEFENDANT : Yes, sir .
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THE COURT : Do you understand you have a right to
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plead not guilty, if you plead not guilty you have a right to a
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trial by jury, the government would have to prove your guilt
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beyond a reasonable doubt, you would have the right to the
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assistance of counsel, your lawyer could cross examine the
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witnesses called by the government, present witnesses on your
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behalf, you could either testify or choose not to testify, and
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if you decided not to testify that fact couldn't be used
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against you in the trial, do you understand you have those
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rights?
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THE DEFENDANT : Yes, I understand .
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THE COURT : By pleading guilty, you are giving up
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those rights and there will be no trial, do you understand
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that?
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THE DEFENDANT : Yes, sir .
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THE COURT : This crime is a felony . If your plea is
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accepted you will be adjudged guilty of a felony and may lose
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valuable civil rights, such as the right to vote, the right to
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hold office, the right to own a firearm, do you understand ?
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THE DEFENDANT : Yes, sir .
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THE COURT : I am going to ask the prosecutor to
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describe what he would have proven at trial had the case gone
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to trial . Please listen carefully . When he finishes I am
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going to ask you whether you did what the government says you
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did . Mr . Bonau .
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MR . BONAU : Thank you, Your Honor .
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Your Honor, had this case proceeded to trial the
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government would have proven beyond a reasonable doubt that
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beginning in or about the summer of 2000 defendant Mark
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Schwartz on behalf of his corporation, Mark Schwartz
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Construction Management, Inc, began negotiating with an
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individual named Neil Kozokoff, who was the owner and manager
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of a company named Parkland Corporation, LLC, which is a
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developer in Palm Beach County specializing in renovations and
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condominium conversions .
The negotiations were for the purpose of obtaining a
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contract for the renovation of the former Northwood Hotel,
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which is located at 401 through 405 Northwood Road in West Palm
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Beach, and which hereinafter I will refer to as the Northwood
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Building .
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In the course of the contract negotiations defendant
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Schwartz was informed by Kozokoff that the Northwood Building
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contained asbestos which was located on a boiler or a hot water
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storage tank located in a second floor outdoor room which was a
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utility room on certain piping running from the utility room or
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the hot water storage tank and on an outside wall and asbestos
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containing floor tile .
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Additionally, the defendant was provided a copy of an
asbestos abatement estimate provided by Best Tec Abatement, a
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licensed asbestos contractor, which basically stated Best Tec
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would remove and dispose of the asbestos containing floor the
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from the bathroom area and the asbestos containing pip e
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insulation and water storage tank insulation, per the survey by
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Circle Engineering, Inc, for the cost of $4,200 .
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The evidence would also have shown that in or about
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November 1st, 2000 Schwartz, on behalf of Mark Schwartz
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Construction Management, Inc . and Kozokoff on behalf of
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Parkland, signed a contract for Mark Schwartz Construction
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Management to serve as the construction manager for the
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demolition and renovation of the Northwood Hotel .
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The contract, which was in the amount of $913,392,
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provided a construction manager fee to Mark Schwartz
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Construction Management in the amount of $85,000 and
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specifically included a line item for the cost of asbesto s
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abatement in the amount of $4,200, which is the same amount as
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I referred to previously from the Best Tec abatement estimate .
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Additionally, the contract provided $4,200 in a
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schedule of values in the contract and another clause in the
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contract provided that Mark Schwartz Construction Management
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keep any savings pertaining to the cost of asbestos abatement
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below the $4,200 .
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Finally, defendant Schwartz had toured the building
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during the contract negotiation period and before the
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demolition and renovation activity began and he knew about the
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areas of the building where the asbestos had been identified .
In or about early November 2000 Terry Dykes, a
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demolition/renovation subcontractor contracted by Schwartz,
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began demolition and renovation activities in the Northwood
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Building . Dykes in turn hired two carpenters and day laborers
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from a local labor pool, Work Force, which demolished walls,
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floors and ceilings and windows in the first, second and third
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floors and also conducted some limited renovation activities .
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These activities commenced in November 2000 and
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continued through in or about March 6, 2001 when the project
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was shut down by the Palm Beach County Health Department and
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Building Inspectors because the asbestos in the building had
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been disturbed and subjected to illegal abatement during the
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course of the demolition and renovation activities which were
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taking place in the building .
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As the construction manager for the Northwood project,
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defendant Schwartz frequently visited the Northwood Building
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and followed the demolition and renovation activities which
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were taking place there . Further, he had several supervisors
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with the Northwood Building at various times, including Joel
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Silverstein and Vincent Imbriani, who reported to defendant
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Schwartz . And defendant Dykes was also in communication with
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defendant Schwartz and frequently discussed with Schwartz the
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progress of the demolition and renovation activities at the
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Northwood Building .
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As I stated in the information, and I don't want to
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read all of it, but I do want to paraphrase significant parts
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so the Court can follow this, under the Clean Air Act, o f
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course, asbestos is a regulated hazardous air pollutant and the
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EPA has promulgated work practice standards because there's
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really no safe level of emission of asbestos, so instead work
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practice standards have been promulgated for individuals that
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work with asbestos or have to deal with asbestos at work sites,
and those work practice standards in turn apply to all
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individuals who operate, control or supervise demolition or
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renovation operations concerning a facility such as the
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Northwood Building which contain threshold quantities of
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regulated asbestos containing material or individuals who own,
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lease, operate, control or supervise such a facility .
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That NESHAP work, what is called NESHAP work, National
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Emission Standards Or Hazardous Air Pollutants, also sets forth
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certain procedures to be followed to prevent the discharge of
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asbestos particles into the ambient air .
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Of particular importance in this case, the NESHAP
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standards require that owner or operator or individuals working
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with asbestos remove all regulated asbestos containing
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materials in accordance with other applicable NESHAP work
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practice standards before any activity begins that would break
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up, dislodge or disturb such material or preclude access to
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such material for subsequent removal .
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Additionally, the regulations require that before any
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activity begins that would, of course, disturb or dislodge any
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asbestos containing material that the owner or operators of the
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facilities that are being subjected to demolition or renovation
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activities involving the requisite amount of regulated asbestos
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containing material provide the EPA with written notification
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of their intention or his or her intention to demolish or
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renovate and that each owner or operator of a facility being
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demolished must provide the EPA with written notification of
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his or her intention to demolish even if the combined amount of
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regulated asbestos containing material is less than 260 linear
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feet on pipes, less than 160 square feet on other facility
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components and less than 35 cubic feet of facility components
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where the length or area could not be measured previously .
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In other words, if there's going to be demolition
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activity taking place, which means any activity that could
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affect any structural member of the building, including
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demolition of walls, weight bearing walls, floors, ceilings
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anything of that sort, then the notice is required to be filed
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regardless of the amount of the asbestos that is there as long
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as there's asbestos in the building, and otherwise if there's
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asbestos beyond those amounts that I just read then the notice
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has to be filed if there's renovation activity taking place and
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the notice has to notify the EPA and in this case the State of
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Florida Department of Environmental Protection or the Palm
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Beach County Health Department before commencing any renovation
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or demolition activities which would involve the stripping,
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removing or any other activity that would break up, dislodge or
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similarly disturb asbestos containing materials .
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They must notify who the facility owner is, who the
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operator is, as well as the asbestos removal contractor, and
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the type of operation and the location of the demolition or
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renovation activity, the approximate amount of asbestos to be
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removed, the procedures to be followed in detecting and
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removing the asbestos, the schedule's starting and completion
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dates and the name and location of the waste disposal site
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where the asbestos material will be disposed .
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In addition, the owner or operator must provide
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certification that at least one person trained in asbestos
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regulations will supervise the stripping and removal . And that
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is provided for in the Code of Federal Regulations at 40 CFR,
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Section 61 .145(a)(2) .
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Now, further, Your Honor, in the instant case the
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state of mind is a knowing state of mind . In other words,
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what's required to prove is that the individual committing th e
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offense or the proof that is required is proof of the knowledge
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of the underlying facts which constitute these offenses, in
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other words, proof of the facts and attendant circumstances
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that comprise a violation of the statute, not specific
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knowledge that one's conduct is illegal, in other words,
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knowledge that there's asbestos containing material in the
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building, notice that demolition and renovation activities have
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begun in the building and that the asbestos has not been abated
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and that notice has not been filed, that is the element of
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knowledge required, not specific knowledge that you have a
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requirement to file the notice or knowledge that, you know, you
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have to remove the asbestos beforehand .
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THE COURT : Let me understand .
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You said you have to know that the notice hasn't bee n
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filed?
MR . BONAU : Right, you have to know that the notice
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itself has not been filed, but you don't have to have knowledge
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that you are required to file a notice . In other words, you
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don't have to have knowledge that there's a requirement to file
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the actual notice or you don't have to have any, you know, any
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bad faith or there's no -- in other words, it's not a specific
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intent crime, it's a general intent crime, it's a knowing
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violation, so you have to have knowledge of the attendant facts
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and circumstances, in other words, knowledge that there is
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asbestos on the work site .
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In this case, as I set forth, the defendant was
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provided with the contract negotiations and the Best Tec
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abatement estimate and touring the building and discussion wit h
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Mr . Kozokoff and then knowledge that demolition and renovation
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had begun in the building and that he had not abated the
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asbestos and had not, in other words, he had not filed th e
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notice .
THE COURT : There is a case that says that, that talks
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about what knowingly means in this context ?
MR . BONAU : Yes . There's a number of cases . And I
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can cite one for the Court .
THE COURT : Is that an issue in the case, whether or
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not he knew there was supposed to be a notice ?
MR . SALNICK : Judge, the reason he had a problem with
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the word "knowingly," which is why I stepped over to Mr . Bonau,
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is because obviously he knew that there was asbestos in the
12
building . What he didn't know was that he had to file the
13
notice . That is where he had the hang-up . And then I
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explained to him that if you are on notice of the asbestos, the
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question of whether or not you knew you had to file the
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document may be irrelevant .
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THE COURT : You agree that it is? I mean, if his
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contention is he didn't know you had to file a notice, that is
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an important issue in terms of whether the elements are met .
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MR . SALNICK : Could I have a moment with Mr . Schwartz
again? Because he has been asking me a couple of questions .
THE COURT : Okay .
(Pause .) <$$> .
MR . BONAU : Your Honor, I can give you the citation of
this case .
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THE COURT : All right .
2
MR . BONAU : One case, Your Honor, is United States
3
versus Ho, which is at 311 F .3d 589, Fifth Circuit, 2002 . It' s
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specifically asbestos case . Another one is, well, there's
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THE COURT : Is there an 11th Circuit case ?
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MR . BONAU : There's the seminal Supreme Court cases,
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Your Honor, Bryan versus U .S ., 524 U .S ., 184, defining
8
knowingly as merely requiring proof of knowledge of facts that
9
constitute the offense . And there's --
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THE COURT : That doesn't help much, does it? Facts
11
that constitute the offense, what does that mean? I mean a
12
fact would be not filing the notice .
13
MR . BONAU : Right . And, as I indicated, he knew he
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didn't . In other words, he did have knowledge that he didn't
15
file the notice .
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THE COURT : I guess it's the other side of the same
17
coin, if you knew you didn't file it, doesn't that imply you
18
knew you are supposed to ?
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MR . BONAU : Well, the case, Your Honor, that
20
specifically talks about knowledge of the, knowledge of the
21
notice filing requirement, is U .S . versus Weintraub, and that
22
is 273 F .3d, 139, a Second Circuit case from 2001 . The 11th
23
Circuit cases that I found, Your Honor, no specific cases
24
dealing with asbestos but a number of cases dealing with
25
defining what the word "knowingly" means, you know, when it's a
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knowing violation as compared to a willful specific inten t
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offense .
MR . SALNICK : Your Honor, Mr . Schwartz is,
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notwithstanding the efforts he has made in working with the
5
government for all these months, he's having some difficulty
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with this knowingly issue again now, and that is what's causing
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the delay here . I might need a few more minutes . I certainly
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didn't intend for this to happen but he's asking me some
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questions that as an officer of the court I don't want to make
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representations to you now that he is not having a
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misunderstanding of something . So I might need more than two
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or three minutes if that's okay .
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THE COURT : Okay .
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And I would like to at least read -- you thin k
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Weintraub or Ho is MR . BONAU : Weintraub probably has the best
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discussion .
THE COURT : Okay . Let me see if I can get it on thi s
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computer .
(Pause .)
MR . BONAU : Your Honor, in the Ho case I have a
specific citation .
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THE COURT : Could I see it ?
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MR . BONAU : It's 311 F .3d, at 605, citing the Supreme
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Court case, Bryan .
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THE COURT : I could see more easily not knowing the
1
2
standards, if you know there's asbestos and you remove it and
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dislodge it, if you are charged with that offense --
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MR . BONAU : Right .
5
THE COURT : -- I can see how knowledge of the notice
6
might not be required . But to say that you knowingly failed to
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file a notice, it's hard for me to see how that can be knowing
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if you didn't know there was a necessity for notice . What you
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read didn't make that clear to me . Maybe it is in the case .
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You don't have the case here ?
MR . BONAU : No, I don't have a copy of it here . I can
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get one .
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THE COURT : Yeah, we may need to .
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I'm not sure this computer has the Lexus signup
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information .
(Pause .) <$$> .
MR . BONAU : Your Honor, I just spoke to Mr . Salnick .
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Part of the reason we filed this specific charge is that we
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negotiated this charge because the charge, he could have been
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charged with the actual violation of the NESHAP work practice
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standards relating to the actual removal of the asbestos and,
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of course, on this charge for failure to file notice concerning
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the removal of the asbestos and, you know, that is why we
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agreed on this charge . But, you know, if necessary, I could
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just have -- I could run over to my office and grab a copy of
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1
the case or have somebody bring it over as soon as possible .
THE COURT : Well, I guess it depends on whether tha t
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is an issue . I can get Lexis in my office . I just don't have
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the, you know, the codes on this computer, and I don't remember
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the Lexis numbers, so I can go in my office and run copies of
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those two cases . Is that -- I mean what do y'all want to do ?
7
I could understand if he was charged with the abatement
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problems .
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MR . BONAU : Basically, this is more of a technica l
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violation . In other words, the failure to file a notice i s
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kind of like -
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MR . SALNICK : I don't think the government is saying
he engaged in any illegal abatement ; is that correct ?
MR . BONAU : Yes, not at all . In fact, that was the
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next thing I was going to say, that the government is not
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indicating that Mr . Schwartz had anything to do with the actual
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illegal abatement that took place there, it's just that his
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failure to abate the asbestos before the renovation began,
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before the demolition began, before anything began, that could
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have dislodged the asbestos, and because he was an owner/
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operator and was required to file the notice, basically it's
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one of these circumstances where, you know, you are required to
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know the law, ignorance of the law is no excuse, and that is
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seriously discussed,in those cases as well .
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THE COURT : Wouldn't that go more to -- I mean it
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would seem like that would make him, if he was in charge of
2
this renovation and they went ahead and abated without notice
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and he knew the asbestos was there and they took the steps to,
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whatever steps they took, it would seem like that might fall
5
within the act as opposed to this knowingly failing to file a
6
notice . I could see the former easier than the latter I guess
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is what I am saying .
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MR . SALNICK : Obviously, we got to the lesser charge
for reasons that, you know, we come appearing before the Court .
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We have other individuals who are charged in this case .
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Mr . Schwartz knew asbestos was the, he knew there was a line
12
item for a potential removal, he knew it had to be removed . He
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did not know when he had to remove it . He actually thought it
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could be removed after the project was done because he thought
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it was such a small amount .
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He didn't know that it had to be done before the
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project began and he didn't know he had to file the attendant
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notice . That is where the technicality comes in . And that's
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where he had the question . Because if I came to you at
20
sentencing and said, Judge, what he did is a technical
21
violation and he didn't know that he had to file it, I wouldn't
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want the Court to say, well, didn't he plead guilty to knowing
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that he knew he had to file ?
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That's where we have the hang-up . I am willing to
stipulate to the facts in light of the plea agreement if the
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1
Court is okay with that .
THE COURT : Well, I think I am . Let me step out and
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try to pull this case up real quick and look at it . And if
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y'all are satisfied with what you are -- if you want more time,
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go ahead and take it while I do that .
MR . SALNICK : Thank you, Your Honor .
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(Recess taken .) <$$> .
7
THE COURT : Okay, Mr . Salnick, did you get a chance to
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talk with your client ?
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MR . SALNICK : Yes, I did, Judge .
11
And to the extent that it satisfies the Court,
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Mr . Schwartz would like to proceed .
THE COURT : Okay, I have read Ho and Weintraub and
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have copies if either of y'all want to review them again . At
15
least Ho seems to say what the government says it says and the
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issue seems to have been fairly squarely presented in tha t
17
case .
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The other one, Weintraub, isn't as helpful because it
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was a plain error case and the question whether the issue was
20
preserved is there, but at least the 5th Circuit seems to say
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that you can be convicted of not, of failing to file thi s
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notice, if you have knowledge of the underlying facts about the
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asbestos and the presence of the asbestos and if you know you
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didn't file it .
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MR . BONAU : Yes .
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THE COURT : And it doesn't seem to require that you
2
knew you had to file it . And that seems -- so I think where I
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am in this is, based on Ho and the 5th Circuit, I am likely to
4
find the element is met .
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I will say to you, Mr . Schwartz, you know, there may
6
be an issue here that you could pursue . I don't know that the
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11th Circuit has dealt with this issue and if you wanted to go
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forward you could perhaps -- I don't know that this case, that
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this issue is definitively decided, I think there's a -- the
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Court of Appeals for the 5th Circuit, which is our predecessor
11
Circuit which is entitled to some respect by the 11th Circuit
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still, is not, still not this Court of Appeals, so they
13
conceivably could come to a different conclusion on that point
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and the question whether you actually had to know the law
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requires you to file the notice . To knowingly not file a
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notice perhaps could still be argued .
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MR . BONAU : Your Honor, the only thing I might point
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out to the Court is that the discussion in Ho is in general
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about describing what knowing, what the knowing element is, as
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compared to a willful or specific intent state of mind, and
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there are a number, which I am not prepared to cite them for
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the Court now, but there are a number of cases in the 11th
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Circuit, for instance, dealing with firearms violations where
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individuals don't know that they are required to file a notice
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with the National Firearms Registration Service, or whatever,
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or similarly, you know, they describe what the knowing state o f
2
mind is .
3
In other words, you may not know that you can't
4
possess an automatic weapon unless you register it with the
5
National Firearms Registration Service, but if you possess it
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and you didn't do it, you are still held to knowingly possess
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it and the fact that you didn't know that you had to file still
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doesn't --
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THE COURT : Yes . And I accept that . But that seems
10
clear to me that where the, what is proscribed is the, I guess
11
the act, the illegal act, you may not have to know it's illegal
12
but if you do the act and you do it intentionally, and then you
13
can, ignorance of the law is not an excuse, it just seems
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slightly different to me when the crime charged is failure to
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file the notice .
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MR . BONAU : Yes, sir .
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THE COURT : Because it would seem to fail to file
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something would almost seem to suggest you ought to know you
19
had to file it . But that is not the way He came out . And Ho
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dealt with this failure to file the notice, so it seems pretty
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close to the facts of this case, at least sufficient I think
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for me, if you decide to go forward, for me to accept the plea
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in terms of the elements .
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But again, particularly in a case where you are
pleading guilty and waiving any rights to appeal, the issue
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1
will be decided, you won't have a chance to review it . I am
2
going to follow the recommended sentence and, you know, you
3
know what you are facing, but I just want to make sure that you
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get a full chance to talk to your lawyer about it and make the
5
decision you are going to make .
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MR . SALNICK : Judge, he's prepared to go forward . If
7
you do have an extra copy of Ho, I might want to supplement
8
that in my file .
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THE COURT : Well, I can get another one from Lexis . I
will give you both of these .
MR . SALNICK : Thank you . Judge, we are prepared to go
forward with the plea .
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THE COURT : Okay . And had you finished your --
14
MR . BONAU : I think I had just -
15
THE COURT : Go ahead and finish it .
16
MR . BONAU : I just wanted to indicate that the
17
government is not saying in this case that Mr . Schwartz himself
18
was involved in any illegal abatement of the asbestos and that
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these events, of course, all transpired in the Souther n
20
District of Florida in West Palm Beach .
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THE COURT : All right, thank you .
22
Mr . Schwartz, you heard the prosecutor describe what
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he would prove at trial .
24
Did you do that ?
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THE DEFENDANT : Yes, I understood him, yes, sir .
29
THE COURT : Okay . And you did fail to file th e
1
2
notice?
3
THE DEFENDANT : Yes .
4
THE COURT : And you knew there was asbestos there?
5
THE DEFENDANT : Yes, sir .
6
THE COURT : All right . How do you plead to the
7
charge, guilty or not guilty ?
8
THE DEFENDANT : Guilty .
9
THE COURT : Mr . Bonau, is there anything else you
10
think I should cover ?
MR . BONAU : I can't think of anything else, You r
11
12
Honor .
13
THE COURT : Anything further?
14
MR . SALNICK : No, Your Honor .
15
THE COURT : It is then the finding of the Court in the
16
case of the United States versus Mark Schwartz that the
17
defendant is fully competent and capable of entering an
18
informed plea, that he is aware of the nature of the charge s
19
and the consequences of the plea, and that the plea of guilty
20
is a knowing and voluntary plea, supported by an independent
21
basis in fact, containing each of the essential elements of the
22
offense . The plea is, therefore, accepted and the defendant is
23
adjudged guilty of this offense .
24
25
I also find, with respect to the appellate waiver,
that that is knowingly made and that the defendant is aware of
30
1
his rights in that regard and has chosen to knowingly and
2
voluntarily waive his appellate rights .
Y'all want a PSI, as I understand it, despite the
3
4
pretty clear recommendations, is that right, both sides want
5
that?
6
MR . SALNICK : Yes, sir .
7
MR . BONAU : Yes, sir .
8
THE COURT : Okay . Mr . Schwartz, the probation office
9
will do an investigation . They will ask to speak to you . You
10
have a right to have your lawyer present when you talk to them .
11
They will prepare a written report which will describe thi s
12
crime and they will recommend how the advisory sentencing
13
guidelines ought to be applied .
14
If there's anything in the report that you believe is
15
incorrect, you and your lawyer can file written objections . If
16
those aren't worked out with the government, I will decide
17
those at the sentencing hearing . And you will have a right to
18
address the Court with respect to sentence .
19
Do you understand ?
20
THE DEFENDANT : Yes, I do .
21
THE COURT : Okay, when can we have sentencing?
22
THE CLERK : November 9th at 2 :30 in Miami .
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THE COURT : Is that date acceptable to the parties?
24
MR . SALNICK : That seems to be fine, Your Honor .
25
MR . BONAU : Fine, Your Honor .
31
1
THE COURT : Okay . Anything else today?
2
MR . SALNICK : No, sir .
3
MR . BONAU : No, Your Honor .
4
THE COURT : Okay, thank you all .
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(Hearing concluded . )
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C E R T I F I C A T E
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I, Roger Watford, Official Court Reporter, do hereby
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certify that the foregoing transcript is a true and accurate
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transcription of the proceedings in the above-entitled matter .
Dated this ~
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day o f
2005 .
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RogefWhitford,
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RP R
Official United Sties Court Reporter
Federal Courthous e
701 Clematis Stree t
West Palm Beach, Florida 3340 1