Introduction to the Criminal Element of Environmental Law · responsible for a failure to take action, or taking improper action. 5. EXAMPLE: Bob works as a "pumper" for Acme oil

WASHBURN UNIVERSITYSCHOOL OF LAW

PRESENTS

ENVIRONMENTAL CRIME

EXPLORING TIlECRIMINAL ELEMENT OFENVIRONMENTAL LAW

November 18, 1994Washburn University School of Law

1700 SW College AveTopeka, Kansas 66621

INTRODUCTION TOTHE CRIMINAL ELEMENT

OF ENVIRONMENTAL LAW

by

David E. Pierce

Professor of LawWashburn university School of Law

Of Counselshughart Thomson , Kilroy

OUTLINE CONTENTS

Page

I. Environmental Protection Through Criminal Liability 1

A. The Basic Goal: compliance ........................ 1

B. Corporate vs. Individual Liability ••••••••••••••••• 2

C. The Criminal option •••••••••••••••••••••••••••••••• 4

D. statutory Overview of Selected FederalEnvironmental Crimes ••••••••••••••••••••••••••••••• 5

1. Migratory Bird Treaty Act ••••••••••••••••••••• 5

2. Refuse Act of 1899 •••••••••••••••••••••••••••• 6

3. Clean Water Act ••••••••••••••••••••••••••••••• 6

4. Clean Air Act ••••••••••••••••••••••••••••••••• 9

5. Resource Conservation and Recovery Act •••••••• 12

6. comprehensive Environmental Response,compensation and Liability Act •••••••••••••••• 13

@copyriqht 1994 by David B. PierceAll Rights Reserved

-i-

Page7. Emergency Planninq and community

Riqht-To-Know Act ••••••••••••••••••••••••••••• 16

8. Toxic Substances Control Act •••••••••••••••••• 16

9. Federal Insecticide, Funqicide, andRodenticide Act ••••••••••••••••••••••••••••••• 16

E. Kansas statutes •••••••••••••••••••••••••••••••••••• 17

II. Responsible Corporate Officer Doctrine •••••••••••••••••• 18

A. "status" Liability ................................. 18

B. Legislative Intent to Impose Liability ••••••••••••• 22

-ii-

INTRODUCTION TOTHE CRIMINAL ELEMENT

OF ENVIRONMENTAL LAW

by

David E. Pierce

Professor of LawWashburn University School of Law

Of CounselShughart Thomson & Kilroy

I. ENVIRONMENTAL PROTECTION THROUGH CRIMINAL LIABILITY

A. The Basic Goal: Compliance

1. The necessary laws to protect the environmentcurrently exist.

2 . Environmental goals will be achieved not through newlaws but through enforcement of existing laws.

3. Since 1980 the trend has been to utilize "liabilityforcing" techniques to achieve compliance by makingit economically-devastating not to anticipate andavoid or mitigate environmental problems. Seegenerally David E. Pierce, The Emerging Role of"Liability-Forcing" in Environmental Protection, 30Washburn L. J. 381 (1990).

4. Since the mid-1980s Congress has required thedisclosure of information concerning the use of, andpotential pUblic exposure to, toxic substances.~ Emergency Planning and Community Right-To-KnowAct of 1986, 42 U.S.C.A. 55 11001 to 11050 (West1994 Pamphlet). A collateral goal of suchlegislation is to elicit the assistance of potentialtort liability and general pUblic concern toencourage persons to voluntarily reduce their useor manufacture of toxic substances.

5. Criminal liability is viewed by many as the mosteffective tool for redirecting corporate priorities

Pierce Page 1

to ensure environmental concerns receive theattention they require.

6. By imposing individual responsibility for corporatenon-compliance, the parties who act on behalf of thecorporate entity will have the incentive to ensureenvironmental laws are complied with and thatenvironmental problems are addressed in a timely andforthright manner.

a. The motivation is not so much organizationalas it is personal--the selfish desire to avoidpersonal criminal liability.

b. This selfish desire to protect one's ownliberty and personal financial positionconverts every employee and company managerinto a motivated environmental protectionist;at least in theory.

B. Corporate vs. Individual Liability

1. n[A] corporate agent, through whose act, default,or omission the corporation committed a crime, washimself guilty individually of that crime." Unitedstates v. Park, 421 U.S. 658, 670 (1975).

a. It is not necessary to find the corporationguilty of a crime in order to find thecorporation's agent or employee guilty of thecriminal act. United states v. Dotterweich,320 U.S. 277, 279 (1943).

b. However, the corporate entity can also be heldcriminally liable for the actions of its agentsor employees. If a stockholder, officer,director, or employee is the actor that commitsthe crime, and they are pursuing corporatebusiness at the time of their act, thecorporation, and the person(s) through whichit acts, are all liable for the crime. 1 w.Fletcher, cyclopedia of the Law of Privatecorporations S 34, at 572 (rev. perm. ed.1990).

2 . The environmental statutes are worded so that aclass of individuals, in addition to the corporateentity, can be held criminally responsible for anact or failure to act.

Pierce Page 2

3 . The"Any person" approach.

a. Clean Water Act: "Any person" who violates theAct can be held criminally responsible.

b. Clean Air Act: "Any person" who violates theAct can be held criminally responsible.

c. RCRA: "Any person" who transports, treats,stores, or disposes of hazardous wasteimproperly.

d. Under the "any person" approach you can haveseveral persons criminally responsible for afailure to take action, or taking improperaction.

4. The "Any person in charge" approach.

a. Clean Water Act (§ 311): "Any person incharge" of a vessel or facility must report aspill of oil or a hazardous substance.

b. CERCLA (S 103): "Any person in charge" of avessel or facility must report a release of ahazardous substance.

c. Under the "any person in charge" approach youcan also have several persons criminallyresponsible for a failure to take action, ortaking improper action.

5. EXAMPLE: Bob works as a "pumper" for Acme oilCompany. While transferring oil from a storage tankto a tank truck, a barrel of oil was spilled in aditch which emptied into a creek. Bob noticed asheen on the water in the ditch. Later that day Bobtold his supervisor, Lisa, that he had spilled abarrel of oil at the Jackson Lease. Lisa calledand reported the spill to Mary who is theenvironmental coordinator for Acme. Mary decidednot to report the incident because only a barrel hadbeen involved and the creek did not connect directlywith any major river or other water body.

a.

b.

Under the Clean Water Act "any person incharge" of a facility must report a spill ofoil into the waters of the United states.

Bob arguably was "in charge" of the facilityat the time the spill occurred; Lisa and Mary

Pierce Page 3

may also be "in charge" since they possess theauthority to respond to the situation.

c. The Criminal option

1. Smoke Ordinance of 1273 under King Edward I: Madeburning of coal in the city of London a crime-punishable by death.

2. The government need not pursue civil remedies beforeemploying criminal remedies.

3. united States v. Frezzo Bros., Inc., 602 F.2d 1123(3rd Cir. 1979).

a. Frezzo Brothers, Inc. and its officers, GuidoFrezzo and James Frezzo, operated a mushroomgrowing business. Manure contaminated waterwas permitted to flow out of the growing boxesinto a storm water run-off system that emptiedinto an unnamed tributary of the East Branchof the White Clay Creek.

b. The Frezzo group was convicted of six countsof willfully and negligently dischargingpollutants into a navigable water of the unitedStates without a permit.

(1) The corporate defendant was fined $50, 000.

(2) The individual defendants were fined atotal of $50,000 and sentenced to 30 daysin jail.

c. Basic Defense: The Environmental ProtectionAgency (EPA) must either give the defendantsprior notice of the alleged violations, orinstitute a civil action, before pursuingcriminal remedies under the Act.

(1) Defendants assert that only in this mannercan the requisite scienter be establishedto support a criminal prosecution.

(2) Court rejects this argument noting: theelements of the crime can be establishedby the circumstances surrounding thedischarges.

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d. Court states:

"[I]n view of the broad responsibilitiesimposed upon the Administrator of the EPA, heshould be entitled to exercise his sounddiscretion as to whether the facts of aparticular case warrant civil or crimi~al

sanctions."

Frezzo, 602 F.2d at 1127.

e. Court holds:

"[T]he Administrator of the EPA is not requiredto pursue administrative or civil remedies, orgive notice, before invoking criminal sanctionsunder the Act."

Frezzo, 602 F.2d at 1127.

D. statutory Overview of Selected Federal EnvironmentalCrimes

1. Migratory Bird Treat Act (MBTA), 16 U.S.C.A. §§ 701to 711 (West 1985 & Supp. 1994):

"[I]t shall be unlawful at any time, by any meansor in any manner, to pursue, hunt, take, capture,kill, any migratory bird •••• "

16 U.S.C.A. S 703 (West Supp. 1994).

a. "Migratory bird" is defined by the u.s. Fishand Wildlife Service as including any birdspecie listed at 50 C.F.R. § 10.13 (1993).

b. Violation of the Act is a misdemeanor whichcarries up to a $500 fine and six monthsimprisonment. 16 U.S.C.A. § 707(a) (West1988).

c. However, under 18 U.S.C.A. S 3559(a) (7) (WestSUpp. 1994) such a violation is classified asa Class B misdemeanor to which the AlternativeFines Act would apply.

d. Under the Alternative Fines Act an "individual"violating the MBTA could be fined up to $5,000and an "organization" up to $10, 000. 18U.S.C.A. S 3571(b) (6) (West Supp. 1994)

Pierce Page 5

(individual) and S 3571(c) (6) (West Supp. 1994)(organization).

2. Refuse Act of 1899, 33 U.S.C.A. S 407 (West 1986):

"It shall not be lawful to throw, discharge, ordeposit • • • any refuse matter of any kind ordescription whatever other than that flowing fromstreets and sewers • • • into any navigable waterof the united states, or into any tributary of anynavigable water from which the same shall float orbe washed into such navigable water •••• "

a. Penalty provision found at 33 U.S.C. S 411which provides:

"Every person and every corporation thatshall violate, or that shall knowingly aid,abet, authorize, or instigate a violation [of§ 407] • • • shall be guilty of a misdemeanor

"b. Imposes strict liability on anyone who

"violates" § 407 by discharging refuse intowaters of the united states.

3. Clean Water Act (CWA), 33 U.S.C.A. §§ 1251 to 1387(West 1986 & Supp. 1994).

a. Offers the EPA a menu of civil and criminalremedies it can use to respond to violations.

b. CWA S 309, 33 U. S. C.A. S 1319 (West 1986 &Supp. 1994):

(1) Injunctive relief. S 309(b).

(2) Administrative Penalties. § 309(g).

(a) Class I: $10,000 per violation withcap of $25,000.

$10,000 per day for eachviolation with cap of

(b) Class II:day of$125,000.

(3) civil Penalties. S 309(d).

(a) $25,000 per day for each violation.

(b) No cap.

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(4) citizen suits. § 505.

(a) Order compliance.

(b) civil penalties.

(5) Criminal Penalties. § 309(c).

c. CWA criminal violations:

(1) "Negligent violations" of the CWA. 1

Penalizes any person who "negligentlyviolates" the Act.

(a) Not less than $2,500 nor more than$25,000 per day of violation.

(b) Imprisonment for up to 1 year; orboth.

(c) Subsequent violations after firstconviction:

i) Up to $50,000 per day ofviolation.

ii) Imprisonment for up to 2 years.

(2) "Knowing violations" of the CWA.Penalizes any person who "knowinglyviolates" the Act.

(a) Not less than $5,000 nor more than$50,000 per day of violation.

(b) Imprisonment for up to 3 years; orboth.

lIncludes violation of CWA permit and other requirements.Also includes negligently introducing a pollutant into a publiclyowned treatment works (POTW):

"[W]hich such person knew or reasonably should have knowncould cause personal injury or property damage or, otherthan in compliance with all applicable Federal, state,or local requirements or permits, which causes suchtreatment works to violate any effluent limitation orcondition •••• "

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CWA.plus

(3)




"Knowing endangerment" under theRequires a "knowing violation"knowledge:

"[A]t that time that he thereby placesanother person in imminent danger of deathor serious bodily injury •••• "

(a) Fine of not more than $250,000.


(c) organization can be fined up to$1,000,000.

(d) Subsequent violations after firstconviction:

i) Fine of not more than $500,000.


iii) Organization can be fined up to$2,000,000.

(4) False statements under the CWA:

"Any person who knowingly makes anyfalse material statement, representation,or certification in any application,record, report, plan, or other documentfiled or required to be maintained . • .or who knowingly falsifies, tampers with,or renders inaccurate any monitoringdevice or method required to be maintainedunder this chapter •••• "



Pierce Page 8




(5) "For the purpose of this [criminalpenalties] subsection, the term 'person'means, in addition to the definitioncontained in section 1362(5) of thistitIe, any responsible corporate officer. "

( 6 ) CWA 5 311 (b) (5), 33 U. S •C. A. 5 1321 (b) (5)(West Supp. 1994), requires:

"Any person in charge of a vessel orof an onshore facility or an offshorefacility shall, as soon as he hasknowledge of a discharge or oil or ahazardous substance from such vessel orfacility [into or upon the navigablewaters of the United States] . • .immediately notify the appropriate agencyof the unites States Government of suchdischarge."

(a) Failure to give immediatenotification is a crime.

i) Fines in accordance with Title18.

ii) Imprisonment for not more than5 years; or both.

(b) Statute provides: "Notificationreceived pursuant to this paragraphshall not be used against any suchnatural person in any criminal case,except a prosecution for perjury orfor giving a false statement ...

4. Clean Air Act (CAA) , 42 U.S.C.A. 55 7401 to 7671q(West Supp. 1994).

a.

b.

civil jUdicial and administrative remediesavailable under CAA S 113(b) and (d).

criminal remedies available under CAA 5 113 (c) ,

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42 U.S.C.A. §7413(c) (West Supp. 1994).

(1) "Any person who knowingly violates" theoperative terms of the Act, a stateimplementation plan, or an EPA order underthe Act, or fails to pay any fee owedunder the Act, is sUbject to the followingpenalties:

(a) Fines in accordance with Title 18.

(b) Imprisonment for not more than 5years; or both.

(c) Subsequent violations after firstconviction: double the fine andpunishment.

(2) "Any person who knowingly--

(a) "Makes any false material statement"in reporting to the EPA.

(b) Fails to notify or report as requiredunder the Act.

(c) Tampers with any monitoring device.

i) Fines in accordance with Title18.

ii) Imprisonment for not more than2 years; or both.

iii) Subsequent violations afterfirst conviction: double thefine and punishment.

(3 ) "Any person who knowingly fails to pay anyfee owed the United States" under certainsubchapters.


(b) Imprisonment for not more than 1year; or both.


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(4) "Any person who negligently releases intothe ambient aid any hazardous airpollutant ••• or any extremely hazardoussubstance and who at the timenegligently places another person inimminent danger of death or serious bodilyinjury •• "


(b) Imprisonment for not more than 1year; or both.


(d) statutory defense: when the releaseis authorized by a CAA emissionsstandard or permit issued under theCAA.

(5) "Any person who knowingly releases intothe ambient air any hazardous airpollutant • . . or any extremely hazardoussubstance • . • and who knows at the timethat he thereby places another person inimminent danger of death or serious bodilyinjury •• "


(b) Imprisonment for not more than 15years; or both.

(c) organization can be fined up to$1,000,000 for each violation.

(d) SUbsequent violations after firstconviction: double the fine andpunishment.

(e) statutory defense: when the releaseis authorized by a CAA emissionsstandard or permit issued under theCAA.

c. "For the purpose of this [criminal penalties]sUbsection, the term 'person' includes, inaddition to the entities referred to in section7602(e) of this title, any responsible

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corporate officer."

d. However, S 113(h) provides that when the crimeat issue is a S 113(c) (4) "negligent" release:

"[T]he term 'a person' shall not include anemployee who is carrying out his normalactivities and who is not a part of seniormanagement personnel or a corporate officer.Except in the case of knowing and willfulviolations ••• the term 'a person' shall notinclude any employee who is carrying out hisnormal activities and who is acting underorders from the employer."

e. CAA § 113 (f), 42 U.S.C.A. § 7413 (f) (West Supp.1994) creates a bounty system:

"The Administrator may pay an award, notto exceed $10,000, to any person who furnishesinformation or services which lead to acriminal conviction or a jUdicial oradministrative civil penalty for any violationof this subchapter •••• "

5. Resource Conservation and Recovery Act (RCRA) , 42U.S.C.A. §§ 6901 to 6992k (West 1983 & SUpp. 1994).

a. civil jUdicial and administrative remediesavailable under RCRA S 3008(a) and (g).

b. Criminal remedies available under RCRA § 3008(d) •

(1) The following can give rise to criminalliability for any person who "knowingly":

(a) Transports hazardous waste to afacility which does not have apermit.

(b) Treats, stores, or disposes ofhazardous waste:

i) without a permit.

ii) In knowing violation of apermit.

(c) Omits information or makes falsestatements in any document employed

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6.

under the Act.

(d) Generates, stores, treats,transports, disposes of, exports, orotherwise handles hazardous waste orused oil and who "knowingly destroys,alters, conceals, or fails to file"any document required by the Act oran authorized state program.

(e) Transports without a manifest ahazardous waste or used oil.

(f) Exports a hazardous waste withoutcomplying with the Act.

(2) Any of these knowing violations is sUbj ectto the following penalties:

(a) Fine of not more than $50, 000 per dayof violation.

(b) Imprisonment for up to 2 years (5years for items S.b. (1) (a) and (b» ior both.


(3) "Any person who knowingly transports,treats, stores, disposes of, or exportsany hazardous waste • • • or used oil •• • [as noted in item 5.b.(1) above] whoknows at that time that he thereby placesanother person in imminent danger of deathor serious bodily injury, shall, uponconviction ••• :"



(c) Organization can be fined up to$1,000,000.

comprehensive Environmental Response, compensationand Liability Act (CERCLA), 42 U.S.C.A. §§ 9601 to9675 (West 1983 & Supp. 1994).

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a. CERCLA S 103 (a), 42 U.S.C.A. S 9603 (a) (West1983), provides:

"Any person in charge of a vessel or anoffshore or onshore facility shall, as soon ashe has knowledge of a release (other than afederally permitted release) of a hazardoussubstance from such vessel or facility inquantities equal to or greater than thosedetermined pursuant to section 9602 of thistitle, immediately notify the National ResponseCenter ••• of such release."

b. Failure to report is a crime:

..Any person-- who fails to notifyimmediately • • • as soon as he has knowledgeof such release or who submits in such anotification any information which he knows tobe false or misleading shall [suffer thefollowing penalties] •• "

(1) Fines in accordance with Title 18.

(2) Imprisonment for not more than 3 years(not more than 5 years for a second orsubsequent offense); or both. CERCLAS 103(b).

(3) "Notification received pursuant to thissubsection or information obtained by theexploitation of such notification shallnot be used against any such person in anycriminal case, except a prosecution forperjury or for giving a false statement ...CERCLA S 103(b).

c. CERCLA S 103 (c) imposes an additional reportingobligation designed to identify existinghazardous waste sites:

"[A]ny person who owns or operates, or who atthe time of disposal owned or operated, or whoaccepted hazardous substances for transport andselected, a facility at which hazardoussubstances • • • are, or have been stored,treated, or disposed of shall, unless suchfacility has a permit issued • • • [underRCRA.l, notify the [EPA] ••• of the existence

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of such facility •••• ,,2

(1) "Any person who knowingly fails to notifythe Administrator of the existence of suchfacility"


(b) Imprisonment for up to 1 year; orboth.

(c) Lose limitation on liability and anydefenses you may have under CERCLAS 107.

(2) "Notification received pursuant to thissubsection or information obtained by theexploitation of such notification shallnot be used against any such person in anycriminal case [probably under S 103(a) orRCRA], except a prosecution for perjuryor for giving a false statement."

d. Recordkeeping obligations: CERCLA § 103(d).

(1) 50-year recordkeeping obligation.

(2) Crime to "knowingly destroy, mutilate,erase, dispose of, conceal, or otherwiserender unavailable or unreadable orfalsify any records" which identify the"location, title, or condition of afacility" or the "identity,characteristics, quantity, origin, orcondition of any hazardoussubstances contained or deposited in afacility."


(b) Imprisonment for not more than 3years (5 years for a second orsubsequent conviction); or both.

2The statute requires that these matters be reported beforeJune 8, 1981.

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7. Emergency Planning and community Right-To-Know Act(EPCRA), 42 U.S.C.A. §§ 11001 to 11050 (WestPamphlet 1994).

a . EPCRA § 325 (b) (4), 42 U•S•C• § 11045 (b) (4)(West Pamphlet 1994), provides:

"Any person who knowingly and willfullyfails to provide notice in accordance withsection 11004 [emergency notification] • • •shall, upon conviction, be fined not more than$25,000 or imprisoned not more than two years,or both (or in the case of a second orsubsequent conviction, shall be fined not morethan $50,000 or imprisoned for not more thanfive years, or both)."

b . EPCRA § 325 (d) (2), 42 U•S•C• § 11045 (d) (2)(West Pamphlet 1994), provides:

"Any person who knowingly and willfullydivulges or discloses any information entitledto protection under section 11042 • • • [tradesecrets] shall, upon conviction, be SUbject toa fine of not more than $20,000 or toimprisonment not to exceed one year, or both."

8. Toxic Substances Control Act (TSCA), 15 U.S.C.A. §§2601 to 2692 (West 1991 & Supp. 1994). TSCA § 16(b), 15 U.S.C.A. § 2615(b) (West Supp. 1994),provides:

"Any person who knowingly or willfully violatesany provision of [TSCA] shall, in addition to or inlieu of any civil penalty • • • be subject,' uponconviction, to a fine of not more than $25,000 foreach day of violation, or to imprisonment for notmore than one year, or both."

9. Federal Insecticide, Fungicide, and Rodenticide Act(FIFRA), 7 U.S.C.A. §§ 136 to 136y (West 1980 &Supp. 1994).

a. FIFRA § 14(b) (1), 7 U.S.C.A. S 136l(b) (1) (WestSupp. 1994) provides:

" (A) Any registrant, applicant for aregistration, or producer who knowinglyviolates any provision of this subchapter shallbe fined not more than $50,000 or imprisoned

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for not more than 1 year, or both.

"(B) Any commercial applicator of arestricted use pesticide, or any other personnot described in subparagraph (A) whodistributes or sells pesticides or devices, whoknowingly violates any provision of thissUbchapter shall be fined not more than $25,000or imprisoned for not more than 1 year, orboth."

b. FIFRA S 14(b) (2), 7 U.S.C.A. S 1361(b) (2) (West1980) provides:

"Any private applicator whoknowingly violates any provision of thissubchapter shall be quilty of a misdemeanor andshall on conviction be fined not more than$1,000, or imprisoned for not more than 30days, or both."

c. FIFRA S 14(b) (4), 7 U.S.C.A. S 1361(b) (4) (West1980) provides:

"When construing and enforcing theprov1s10ns of this subchapter, the act,omission, or failure of any Officer, agent, orother person acting for or employed by anyperson shall in every case be also deemed tobe the act, omission, or failure of such personas well as that of the person employed."

E. Kansas statutes

1. Kan. stat. Ann. S 65-159 (1992). Failure to abatea nuisance "found on any private property or uponany watercourse," in response to an order from theKansas Department of Health & Environment (KDHE),is a criminal offense punishable by a fine of notless than $10 nor more than $100 for each day thenuisance continues.

2. Kan. stat. Ann. S 65-169 (1992). Failure to complywith KDHE water pollution requirements is amisdemeanor punishable by a fine of not less than$25 nor more than $100 for each day of the offense.

3. Kan. stat. Ann. S 65-3441(a) (Supp. 1993). Listsa number of acts associated with the handling anddisposal of hazardous wa'ste which can give rise to

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criminal penalties.

a. NOTE: Although many of the acts parallel theRCRA provisions, many of the Kansas provisionsdo not have a "knowingly" requirement.

(1) For example, it is a crime to "store,collect, treat or dispose of hazardouswaste contrary to the rules andregulations, standards or orders of thesecretary [of the KDHE]." S 65-3441(a)(4) •

(2) The RCRA counterpart requires that suchactivity be done "knowingly."

b. The "knowingly" issue becomes relevant whenconsidering the penalty:

(1) If the action is not done know!ngly thecrime is a class A misdemeanor.

(2) If the action is done knowingly the crimeis a class C felony.

(3) Improper transportation and disposal ofa hazardous waste is a class E felony("knowingly" is not part of the statute).See Kan. stat. Ann. S 65-3441(a) (11) and(b) (1985).

II. RESPONSIBLE CORPORATE OFFICER DOCTRINE

A. "status" Liability

1. united states v. Dotterweich, 320 U.S. 277 (1943).

a . Federal Food, Drug, and· Cosmetic Act prohibited"the introduction into interstatecommerce of any • • • drug. • that isadulterated or misbranded." "Any person"violating the statute was "guilty of amisdemeanor."

(1) Charges against Buffalo Pharmacal Company,

3subject to a few exceptions noted in the statute.

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Inc. and Dotterweich, its president andgeneral manager.

(2) Jury convicted Dotterweich for shippingmisbranded drugs and an adulterated drug.

(3) Dissent notes:

"There is no evidence in this case of anypersonal guilt on the part of • • •[Dotterweich]. There is no proof or claimthat he ever knew of the introduction intocommerce of the adulterated drugs inquestion, much less that he activelyparticipated in their introduction. Guiltis imputed to • • • [Dotterweich] solelyon the basis of his authority andresponsibility as presiden't and generalmanager of the corporation." Dotterweich,320 U.S. at 285-286.

b. Congress may "dispense with the conventionalrequirement for criminal conduct--awareness ofsome wrongdoing. In the interest of the largergood it puts the burden of acting at hazardupon a person otherwise innocent bu't s'tandingin responsible rela'tion to a public danger."Dotterweich, 320 U.S. at 281.

c. "Congress has preferred to place it upon thosewho have at least the opportunity of informingthemselves of the existence of conditionsimposed for the protection of consumers beforesharing in illicit commerce, rather than tothrow the hazard on the innocent public who arewholly helpless." Dotterweich, 320 U.S. at285.

2. United States v. Park, 421 U.S. 658 (1975).

a. President of Acme Markets, Inc., John R. Park,convicted because there were rodent droppingsat two of the company's warehouses where foodwas stored.

(1) Food chain with 36,000 employees, 874retail outlets, 12 general warehouses, andfour special warehouses.

(2) President relied upon subordinates to

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remedy any sanitation problems at itswarehouses.

b. Court notes the basic premise of Dotterweich:

" [To provide] sanctions which reach out andtouch the individuals who execute the corporatemission--and this is by no means necessarilyconfined to a single corporate agent oremployee--the Act imposes not only a positiveduty to seek out and remedy violations whenthey occur but also, and primarily, a duty toimplement measures that will insure thatviolations will not occur." Park, 421 U.S. at672.

( 1) "The duty imposed by congre:ss onresponsible corporate agents 1S, weemphasize, one that requires the higheststandard of foresight and vigilance

"

(2) Court notes a possible defense:

"[B]ut the Act, in its criminal aspect,does not require that which is obj ectivelyimpossible. II If you can demonstrate thatthe corporate agent was "powerless" toprevent or correct the violation, it canbe raised as a defense. Park, 421 U.S.at 673.

(3) This may also provide a defense when thecorporate agent has, in effect, doneeverything right by taking all the properprecautions, but nevertheless, a violationoccurs • Although the employee causing theviolation to occur and the corporateentity may be criminally liable, thecorporate agent may be able to demonstratethey have indeed been"responsible" anddone everything in their power to ensurea violation would not occur.

c. Court notes that under this statute:

"[T]he Government establishes a prima faciecase when it introduces evidence sufficient towarrant a finding by the trier of the factsthat the defendant had, by reason of his

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position in the corporation, responsibility andauthority either to prevent in the firstinstance, or promptly to correct, the violationcomplained of, and that he failed to do so."Park, 421 U.S. at 673-74.

d. Defense raised by Park:

"[H]e had employed a system in which he reliedupon his subordinates • • •• [H]e had foundthese subordinates to be 'dependable' and had'great confidence' in them."

(1) Government's reply: Park had been sentnotices from regulatory agency thatindicated his system was not working.

(2) He failed to take action to remedy theweaknesses in the system. "At some pointin time, Mr. Park has to be heldresponsible for the fact that his systemisn't working •••• " Park, 421 U.S. at675, n.16.

e. Dissent notes:

(1) Responsible corporate agent can be heldcriminally liable for their negligent actsbut not merely because of their status inthe corporate hierarchy.

(2) "[T]he prosecution must at least show thatby reason of an individual's corporateposition and responsibilities, he had aduty to use care to maintain the physicalintegrity of the corporation's foodproducts."

(a) "A jury may then draw the inferencethat when the food is found to be insuch condition as to violate thestatute's prohibitions, thatcondition was 'caused' by a breachof the standard of care imposed uponthe responsible official. This is'the language of negligence, and Iagree with it." Park, 421 U.S. at678-679.

(b) Dissent did not feel that the trialcourt's jury instructions required

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a finding of negligent corporatemanagement.

B. Legislative Intent to Impose Liability

1. The main focus of the dissenting justices inDotterweich concerned:

"[I]n the absence of clear statutory authorizationit is inconsistent with established canons ofcriminal law to rest liability on an act in whichthe accused did not participate and of which he hadno personal knowledge." Dotterweich, 320 U.S. at286.

2 • Dotterweich and Park dealt with statutes whichimposed strict liability on those who violated theAct. They also imposed misdemeanor penalties.

3. Many of the environmental statutes require"knowledge" or a "knowing" or "willful" act.

4. state v. Kailua Auto Wreckers. Inc., 615 P.2d 730(Hawaii 1980).

a. Statute: "[N]o person shall ignite, cause tobe ignited, permit to be ignited or maintainany open fire."

b. Kailua Auto Wre-ckers, Inc. was run by Roy Weberwho was vice-president, general manager,secretarY,and a director of the corporation.

(1) Helen Weber was the president, treasurer,and a director of the corporation.

(2) Roy ran the business i Helen took noactive part in the business--she ran anoccasional errand and occasionallyattended a director's meeting.

c.' Kailua, Roy, and Helen were each convicted of17 counts of maintaining an open fire. Roywould set the interiors of cars on fire to burnoff the plastic, etc. before salvaging themetal.

d. Court' notes the statute in this case imposes"strict liability upon persons and institutionswho engage in unlawful open burning."

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(1) The open burning infraction is onlypunishable by fine.

(2) Court holds, as to Helen:

"[T]he regulation's purpose ofsafeguarding the public from the hazardsof air pollution similarly warrants theimposi tion of a high standard of care uponofficers of a corporation to insurecorporate compliance wi th the law.Therefore • • • we hold ~ha~ highcorpora~e officers who possess managerialauthori'ty bear a personal responsibili'ty'to 'the public 'to exercise reasonable care'to discover any viola'tion of 'the openburning regula'tion, 'to remedy any suchviola'tion of which 'the officer knows orshould have known, and ~o preven't Iu'tureviola'tions." Kailua, 615 P.2d at 739.

(3) However, the court notes this is anegligence standard.

Ca) "[W]e find Mrs. Weber, as presidentand treasurer of KAW, negligent infailing to exercise reasonable careto discover, remedy and preventcorporate violations of the openburning prohibition." Kailua, 615P.2d at 740.

(b) "Given the constant and egregiousnature of KAW's violations, theslightest effort by Mrs. Weber tocarry out her duties as president andto become generally informed aboutthe corporation's affairs would havemade her aware of the corporation'sillegal activity." Kailua, 615 P.2dat 740.

(4) Court notes possible defenses:

(a) Only applies to violations that theresponsible corporate officer "couldhave remedied or prevented in theexercise of reasonable care."

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(b) Among the factors to' consider:

i) Degree of harm to the public.

ii) Egregiousness of the violations.

iii) supervisory authority andcontrol vested in the corporateposition.

iv) size of the corporation.Kailua, 615 P.2d at 740, n.16.

5. statutory responsible corporate officer liability:

a. Clean Water Act (CWA) S 309(c) (6), 33 U.S.C.A.§ 1319(c) (6) (W~st Supp. 1994) provides:

"For the purpose of this subsection [criminalpenalties], the term 'person' means, inaddition to its definition contained in section1362(5) of this title, any responsiblecorporate officer."

b. Clean Air Act (CAA) § 113 (c) (6), 42 U.S.C.A.§ 7413 (c) (6) (West. Supp. 1994) contains anidentical provision defining "person" toinclude "any responsible corporate officer."

c. Commenting on this language under the CleanWater Act, the court in u.s. v. Brittain, 931F.2d 1413 (10th Cir. 1991), states (dicta):

"We interpret the addition of ' responsiblecorporate officers' as an expansion ofliability under the Act • • • • Under thisinterpretation, a 'responsible corporate

.officer, , to be held criminally liable, wouldnot have to 'willfully or negligently' causea permit violation. Instead, the willfulnessor negligence of the actor would be imputed tohim [responsible corporate officer] by virtueof his posi'tioD of responsibility_"

(1) NOTE: this is dicta since the court notesthere was enough direct action by RaymondT. Brittain to sustain his personalliability.

(2) Brittain was convicted of 18 felony countsof falsely reporting a material fact to

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a government agency and two misdemeanorcounts of discharginq pollutants inviolation of the Clean Water Act.

(3) Brittain was the public utilities directorfor the City of Enid, Oklahoma. Heallegedly directed other employees tofalsify discharge monitoring reports andto divert sewage around the city'streatment plant.

d. Note also that under the CWA and the CAA eachmake it a crime to negligently violate theacts.

(1) This appears to be another route forbringing in "responsible corporateofficers."

(2) CWA S 309(c) (1) provides:

"Any person who ... negligently violates[designated sections of the CWA] • •shall be punished by a fine of not lessthan $2,500 nor more than $25,000 per dayof violation, or by imprisonment for notmore than 1 year, or both."

(3) CAA S 113(c) (4) is more limited than theCWA provision, and provides:

"Any person who ~egligently releases intothe ambient a1r any hazardous airpollutant • • • and who at the time placesanother person in imminent danger of deathor serious bodily injury shall, uponconviction, be punished by a fine underTitle 18, or by imprisonment for not morethan 1 year, or both."

6. Responsible corporate officer doctrine under RCRA.

a. u.s. v. White, 766 F. Supp. 873 (E.D. Wash.1991).

(1) Wash water in cleaning pesticidecontainers was collected, for five years,in a tank. The contents of the tank weretaken out and sprayed on a field.

(a) Indictment charges PureGro, Inc. and

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four individuals for illegal storage,transportation, and disposal ofhazardous wastes.

(b) Defendant steven Steed moved tostrike portions of the Bill ofParticulars which asserted Steed wasliable for RCRA violations as aresponsible corporate officer.

(c) court notes that under thegovernment's theory Steed would beliable "for all the acts of all otheremployees of PureGro in handlinghazardous wastes, even if he did notknow of those activities, so long ashe should have known of thoseactivities."

(2) The courtresponsiblenoting:

rejects the government'scorporate officer theory

(a) The statutes involved in Park andDotterweich require -no mental stateor action- but RCRA applies to anyonewho "knowingly" treats, stores, ordisposes of a hazardous waste.

(b) Concluding that the term knowingly"modifies hazardous waste, as wellas treats, stores, or disposes of,"the court holds:

"[T]he government must prove not onlyknowing treatment, storage ordisposal of hazardous waste but alsothat the defendant knew the waste washazardous." White, 766 F. Supp. at895.

(c) Applying the RCRA knowledgerequirement to Steed the court holds:

"The 'responsible corporateofficer' doctrine would allow aconviction without showing therequisite specific intent. None ofthe cases cited by the governmentsupports the theory that a convictionmay be had under a state of mind

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requirement other than that specifiedby Congress. In the instant case itis 'knowing, , not 'should have known'as the prosecution suggests. " White,766 F. Supp. at 895.

b. u.s. v. Dee, 912 F.2d 741 (4th Cir. 1990).

(1) Dee and Lentz were Gepp' s superiors; theyall worked as civilian employees for theu.s. Army, assigned to Chemical Researchat the Aberdeen Proving Ground.

(2) Each were charged with various violationsof RCRA for illegally storing, treating,and disposing of hazardous wastes.

(3) Court notes:

"[T]he government did not need to provedefendants knew violation of RCRA was acrime, nor that regulations existedlisting and identifying the chemicalwastes as RCRA hazardous wastes. However,we agree with defendants that theknowledge element of S 6928 (d) does extendto knowledge 0:[ the general hazardouscharacter 0:[ the wastes." Dee, 912 F.2dat 745.

(4) COMMENT: Although most commentators citeDee as being one of the "more stringentapplications" of the responsible corporateofficer doctrine, the facts in Dee reallydon't support such a conclusion.

(a) Although there is language concerningthe obligations of Dee and Lentz asthe heads of their departments, thefacts indicate that each had apersonal role in causing the improperdisposal to occur.

(b) The court in Dee simply didn't needto rely upon vicarious liability toconvict the supervisory personnel;there was adequate evidence tosupport their direct involvement andknowledge in the crimes.

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c. u.s. v. MacDonald & Watson Waste oil Co., 933F.2d 35 (1st Cir. 1991).

(1) Waste oil Co. and three of its employees,Slade, Ritarossi, and D'Allesandro, wereconvicted of knowingly transportinghazardous waste to a facility which lackeda permit for the waste, violating RCRA.

(a) Waste oil Co. and NarragansettImprovement Co. (NIC) were convictedof knowingly treating, storing, anddisposing of a hazardous waste inviolation of RCRA.

(b) Waste oil Co. and NIC were convictedof failing to report a release of ahazardous substance under CERCLA.

(c) Waste oil Co. was convicted of makingfalse statements and mail fraud.

(2) Master Chemical discovered it had aleaking toluene tank. They hired Wasteoil Co. to remediate the site and takecontaminated soil to a disposal siteleased from NIC, which held a RCRA permitto dispose of certain wastes at the site.

(a) Master Chemical representativesnegotiated with Slade, an employeeof Waste oil Co., concerning theremoval of toluene contaminated soil.

(b) Ritarossi, an employee of Waste oilCo., supervised the excavation of thecontaminated soil and itstransportation for disposal at theNIC site.

(d) D'Allesandro was the manager andprincipal of waste oil Co.

(d) The wastes were hazardous wastes thatcould not be legally disposed of atthe NIC site.

(3) The convictions of Slade and Ritarossiwere affirmed.

(4) Conviction of D'Allesandro is vacated.

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(a) Basis for D'Allesandro's convictionwas based upon his position aspresident and owner of Waste oil Co.

(b) Court notes:

"The government argued thatD'Allesandro was guilty of violating§ 3008(d) (1) because, as theresponsible corporate officer, he wasin a position to ensure compliancewith RCRA and had failed to do soeven after being warned by aconsultant on two earlier occasionsthat other shipments of toluenecontaminated soil had been receivedfrom other customers, and that suchmaterial violated NIC's permit."Waste oil Co., 933 F.2d at 50.

(c) Court holdsinstructions:

that the jury

"[I]mproperly allowed the jury tofind him guilty without finding hehad actual knowledge of the allegedtransportation of hazardous waste onJuly 30 and 31, 1986, from MasterChemical Company, Boston,Massachusetts, to NIC's site,knowledge being an element thestatute requires." Waste oil Co.,933 F.2d at 51.

(d) Distinguishing Park and Dotterweichthe court states:

It [W] e know of no precedent [withregard to the responsible corporateofficer doctrine] for failing to giveeffect to a knowledge r·equirementthat Congress has expressly includedin a criminal statute. • • •Especially is that so where, as here,the crime is a felony • •• " Wasteoil Co., 933 F. 2d at 52.

(5) However, the court notes that here therequisite knowledge can be demonstratedthrough circumstantial evidence.

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(a) The court notes that the jury wasproperly instructed with regard tocircumstantial evidence of knowledgeand "willful blindness."

(b) The jury was instructed as follows:

i) "Whether a Defendant actedknowingly or with knowledge ofa particular fact may beinferred from that Defendant'sconduct, from that Defendant'sfamiliarity with the subjectmatter in question or from allof the other facts andcircumstances connected with thecase."

ii) "In determining whether aDefendant acted knowingly, youalso may consider whether theDefendant deliberately closedhis eyes to what otherwise wouldhave been obvious. If so, theelement of knowledge may besatisfied because a Defendantcannot avoid responsibility bypurposefully avoiding learningthe truth. However, merenegligence or mistake in notlearning the facts is notsufficient to satisfy theelement of knowledge." Wasteoil Co., 933 F.2d at 52.

(c) The court notes: "the court could,had it wished, have elaborated on theextent to which D' Allesandro 's .responsibilities and duties mightlead to a reasonable inference thathe knew of the Master Chemicaltransaction." Waste oil Co., 933F.2d at 52.

(6) Where the trial court committed reversibleerror was when it instructed the jury"that proof that D'Allesandro was aresponsible corporate officer wouldconclusively prove the element of hisknOWledge of the Master Chemical

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shipments." Waste oil Co., 933 F.2d at52.

(7) Court concludes:

.. Simply because a responsible corporateofficer believed that on a prior occasionillegal transportation occurred, he didnot necessarily possess knowledge of theviolation charged. In a crime havingknowledge as an express elemen't, a mereshowing o:f o:fficial responsibili'ty underDotterweich and Park is no't an adequatesubs'ti'tu'te :for direc't or circums'tan'tialproo:f o:f knowledge." Waste oil Co., 933F.2d at 55.

(8) The evidence indicated that D'Allesandroparticipated actively in the firm's dayto-day management, and that he had beenwarned on other occasions that his companyhad illegally disposed of toluenecontaminated soil. Waste oil Co., 933F.2d at 42.

(a) However, there was no direct evidencethat he knew of the shipments givingrise to this prosecution.

(b) In closing, the court suggests:

i) .. [K]nowledge may be inferredfrom circumstantial evidence,inclUding position andresponsibility of defendantssuch as corporate officers, aswell as information provided tothose defendants on prioroccasions."

ii) "[W]illful blindness to thefacts constituting the offensemay be sufficient to establishknowledge." Waste oil Co., 933F.2d at 55.

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Documents

Introduction to the Criminal Element of Environmental Law · responsible for a failure to take action, or taking improper action. 5. EXAMPLE: Bob works as a "pumper" for Acme oil