ENVIRONMENTAL CRIMES MONTHLY BULLETIN June 2006

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ENVIRONMENTAL CRIMES MONTHLY BULLETIN June 2006 ENVIRONMENTAL CRIMES MONTHLY BULLETIN June 2006 EDITORS’ NOTE: Please continue to submit information on relevant case developments in federal prosecutions for inclusion in the Bulletin. If you have a significant photograph from the case, you may email this, along with your submission, to Elizabeth Janes at Material may be faxed to Elizabeth at If you have information to submit on state-level cases, please send this to the Regional Environmental Enforcement Associations’ website at http://www.regionalassociations.org. You may quickly navigate through this document using electronic links for the Significant Opinions, Active Cases, and Quick Links. PHOTOS FROM ENVIRONMENTAL CRIMES COURSE MAY 2006 COLUMBIA, SOUTH CAROLINA: Martha Grekos Herb Johnson AT A GLANCE SIGNIFICANT OPINIONS S.D. Warren Co. v. Maine Board of Environmental Protection, ___ S. Ct. ___, 2006 WL 1310684 (May 15, 2006) (No. 04-1527). Clean Water Act, Discharge of a Pollutant, Release from Hydropower Dams. United States v. Thorn, 317 F.3d 107 (2d Cir. 2003), on remand, ___ F.3d ___, 2006 WL 1130902 (2d Cir. Apr. 27, 2006). Clean Air Act, Sentencing, Injury and Abuse of Trust Enhancements. United States v. Wabash Valley Service Co., 62 Env’t Rep. Cas. (BNA) 1050 (S.D. Ill. Mar. 16, 2006). FIFRA, Void for Vagueness Doctrine. United States v. Singleton, ___ F. Supp. 2d ___, 2006 WL 539554 (E.D. Mich. Mar. 6, 2005). RCRA, Sentencing, Continuing Release Enhancement. Districts Active Cases Case Type / Statutes C.D. Calif. US v. Ahmet Artuner Ship Scuttling/ CWA, False Statements N. D. Calif. US v. Sierra Meat Company Exotic Meat Sales/ Lacey Act S. D. Calif. US v. Victor’s Premier Plating, Inc. Electroplater/CWA Pretreatment N.D. Fla. US v. Panhandle Trading Inc. Seafood Importers Mislabeled Catfish/Lacey Act S.D. Fla. US v. Parkland Town Center, LLC. Hotel Renovation/ CAA NESHAP US v. Winn-Dixie Stores, Inc. Supermarket Chain Undersized Lobsters/Lacey Act US v. Alberto Roman Commercial Fisherman Illegal Import/ Lacey Act D. Minn. US v. Ted Gibbons Electroplater/ CWA Pretreatment, Tampering US v. Prime Plating, Inc. Metal Plater/ CWA, Conspiracy D. N. J. US v. Ashok Kumar Vessel/ Conspiracy, False Statement, Obstruction D. Nev. US v. Greg Street Plating, Inc. Electroplater/ CWA E.D. Tex. US v. Kun Yun Jho Vessel/ Conspiracy, False Statement, APPS S. D. Tex. US v. Corpus Christi Day Cruise, Vessel/ False Statement, Obstruction Ltd. Quick Links Significant Opinions pp. 4 - 8 Trials pp. 9 - 10 Indictments pp. 10 – 11 Pleas/Sentencings pp. 12 – 16 Training p. 18 Significant Opinions U.S. Supreme Court S.D. Warren Co. v. Maine Board of Environmental Protection, ___ S. Ct. ___, 2006 WL 1310684 (May 15, 2006) (No. 04-1527). Plaintiff company operated five hydropower dams on a river that produced electricity for its paper mill. Each dam created a pond from which water was funneled into a “power canal,” through turbines, and back to the riverbed downstream from the dam. A license to operate the dams was required from the Federal Energy Regulatory Commission (“FERC”). Under section 401 of the Clean Water Act, if such activities could cause a discharge into navigable waters, a FERC license must be conditioned upon a certification from the state in which the discharge may originate that it will not violate water quality standards (including those set under state law). The certification may set forth effluent limitations and other requirements assuring compliance with the Clean Water Act and applicable state law. Seeking to renew its federal licenses in 1999, plaintiff, under protest, applied for certification from the Maine Department of Environmental Protection (“MDEP”), claiming that its dams did not result in a “discharge into” the river. The MDEP issued certifications containing environmental conditions, and FERC subsequently licensed the dams subject to the state conditions. Continuing to claim that it did not need state certification, the plaintiff appealed to the Maine Board of Environmental Protection (“BEP”), which denied its appeal. It then filed suit in County Superior Court, which affirmed the decision of the BEP. Defendant, in turn, appealed to the Maine Supreme Judicial Court (its highest court), which affirmed the judgment of the Superior Court. The U.S. Supreme Court subsequently granted certiorari. Held: The Court affirmed the decision of the Maine Supreme Judicial Court. It first noted that the term “discharge” (unlike the narrower “discharge of a pollutant”) is not defined in the CWA and thus should be construed according to its “ordinary meaning,” that is a “flowing out.” It then found, under prior precedent, that releases from hydropower dams are “discharges” of water. The Court rejected plaintiff’s argument that the term “discharge” necessarily implied the addition of something foreign into the water, distinguishing Miccosukee Tribe as interpreting the narrower term “discharge of a pollutant” under a different section of the CWA (section 402). The Court also disagreed that the removal of the term “thermal discharge”, during the enactment of the Water Pollution Control Act Amendments of 1972, from the descriptive scope of the term “discharge” in Section 502(16) of the CWA, was intended to narrow the reach of the statute. [NOTE: Justice Scalia declined to join in this portion of the Court’s opinion.] Finally, the Court rejected plaintiff’s argument that the inclusion of the term “discharge of a pollutant” in section 511(c)(2) of the CWA (barring review by agencies such as FERC of effluent limitations and other requirements or conditions contained in section 401 certifications) meant that discharges that add no pollutant were not covered under section 401. The CWA protects the integrity of the nation’s waters broadly, including “pollution” resulting from man-made alterations such as changes in movement, flow and circulation due to the presence of dams, and section 401 certifications are essential to preserve the authority of states to address such concerns. [NOTE: The Maine Supreme Court had held that plaintiff’s dams, in removing substances from a navigable water body and then redepositing them into that same body of water, had “added” to the river, finding that “[a]n ‘addition’ is the fundamental characteristic of any discharge.” S.D. Warren Co. v. State Board of Environmental Protection, 868 A.2d 210 (Me. 2005). In a footnote, the U.S. Supreme Court pointed out that, although it was affirming the judgment of the Maine Supreme Court, it was doing so upon different grounds, since it disagreed that an addition was fundamental to any discharge.] Back to Top 2nd Circuit United States v. Thorn, 317 F.3d 107 (2d Cir. 2003), after remand, ___ F.3d ___, 2006 WL 1130902 (2d Cir. Apr. 27, 2006). Defendant owner of an asbestos abatement company employed a total of approximately 700 persons on abatement projects at more than one thousand buildings over several years. Although he assured customers that all abatement jobs would be completed in compliance with the law, defendant (with the assistance of independent laboratories and air monitoring companies) actually engaged in an extensive scheme to defraud customers and to violate a number of applicable regulations through “rip and run” procedures without proper containment, causing significant quantities of asbestos fibers to be released into the air within each of the buildings. His workers (many of whom did not wear respirators) were extensively exposed to the fibers, and defendant falsified medical reports regarding their exposure. Thorn was convicted by a jury on nine Clean Air Act violations with respect to the removal of asbestos at twenty-two specific projects over a five-year period and of one count of conspiracy to promote money laundering. He was sentenced to serve 65 months’ incarceration, forfeit almost $1 million in value of twenty-two abatement contracts, and pay approximately $300,000 in restitution. No fine was imposed because the district court found the defendant was unable to pay. The government appealed the sentence, arguing inter alia that the district court had erred (1) in finding that the CAA violations had not resulted in a substantial likelihood of death or serious bodily injury and (2) in refusing to impose an enhancement for abuse of a position of trust. The defendant cross- appealed his money laundering conviction. Held: The Second Circuit affirmed the defendant’s conviction on the money laundering charge. It vacated his sentencing on a number of grounds, including both of the CAA issues appealed by the government, and it remanded for resentencing. The court first found that “substantial likelihood” in section 2Q1.2(b)(2) of the Sentencing Guidelines means “considerably more likely [than not],” and the application of that enhancement does not require that the offense actually cause serious bodily injury or death. Also, this guideline does not restrict the class of individuals put at risk, so it is not limited to situations in which the offense created a risk to persons other than participants in the offense. It then found that the district court clearly had erred in finding that the evidence had been too uncertain to support application of this enhancement. The fact that asbestos abatement inherently imposes risks on workers and that workers knowingly participated in the conduct that endangered them did not preclude a finding that the defendant’s illegal behavior resulted in a “substantial likelihood” of death or serious bodily injury to those workers, and undisputed medical evidence established that likelihood. Thus, the district court should have imposed a nine-level increase in offense level as provided under section 2Q1.2(b)(2). The court also found that, due to the nature of his work and despite the substantial regulation of his industry, the defendant enjoyed broad discretion that enabled him to perform illegal abatements and to conceal and carry out his scheme undetected for ten years.
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