CHAPTER 6 CRIMINAL LAW AND PRACTICAL CORPORATE STRATEGIES

• Jurisdiction: United States

Corporate Environmental Management II
(Feb 1994)
CHAPTER 6
CRIMINAL LAW AND PRACTICAL CORPORATE STRATEGIES
Ronald J. Sandberg
Cooper Industries
Houston, Texas

Introduction

This paper will address ways in which a company can be managed to minimize criminal environmental exposure. The types of potential criminal liability will be covered, as well as the increasing enforcement of environmental criminal laws. The advantages and problems of environmental audits will be examined. The U.S. Department of Justice (DOJ) factors for decisions regarding criminal prosecution, and the guidelines recently proposed to the U.S. Sentencing Commission will also be reviewed.¹

It is generally recognized that the environmental regulations are so voluminous and complex that no company² can be in 100 percent compliance 100 percent of the time. Moreover, in many situations it is very difficult to define a clear line between civil non-compliance and a criminal violation. "Currently there is no theoretical distinction between environmental violations that are civil or administrative and those that are criminal, because the laws do not contain a standard of intent that requires some element of willful violation. The question of which cases to pursue criminally thus is left to the discretion of the individual prosecutor or criminal investigator." Starr, Block, and Cooney, "Prosecuting Pollution", Legal Times (May 31, 1993). (Messrs. Starr and Block were the first two chiefs of the Environmental Crimes Section of the DOJ's Environment and Natural Resources Division. The authors are now in private practice.) Not only is the element of willful violation fading from environmental criminal law, in some cases the mere proof of negligence is asserted as the standard for "criminal" conduct. Some of the criminal provisions explicitly include negligent conduct as criminal behavior. For example, the Clean Water Act and Federal Water Pollution Control Act criminalize negligent conduct in violation of specified sections of the Act. 33 U.S.C. § 1319(c)(1); and the Clean Air

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Act criminalizes the negligent release of a listed hazardous air pollutant to the ambient air which negligently places another person in imminent danger of death or serious bodily injury. 42 U.S.C. § 7413(c)(4).

Furthermore, the consequences of conviction for environmental crimes are extremely serious. The criminal sanctions for a "knowing" violation of a statute or regulation include significant potential fines and jail terms. For example, Resource Conversation and Recovery Act (RCRA) criminal violations can be punished with up to $50,000 per day in fines, and up to five years in jail for an individual. 42 U.S.C. § 6928(d). Criminal sanctions for "knowing" imminent endangerment to human life or serious bodily injury can include the following sanctions for an individual: penalties of up to $250,000, up to fifteen years in jail, or both. For the company, penalties for criminal imminent endangerment violations can include fines of up to $1 million. Id., at § 6928(e); Clean Water Act, 33 U.S.C. 1319(c)(3).³

The public policy issues about the criminalization of environmental law are beyond the scope of this paper. The fact remains, however, that there is a danger for any company that an over zealous prosecutor will attempt to bring a criminal law enforcement action based on facts which in the past would have been considered an issue of civil environmental law noncompliance. Therefore, companies must be realistic about the risks of criminal enforcement of environmental laws, and take preventive measures to ensure compliance and avoid criminal (as well as civil) noncompliance.

Those preventive measures should, at a minimum, include: (1) a corporate environmental policy endorsed by the senior executives and properly implemented throughout the company; (2) a corporate consciousness about the importance of compliance, among all employees throughout the various levels of the organization; (3) adequate human and other resources to successfully implement the compliance program; and (4) an environmental audit program to assure the company that compliance is being achieved. A subsequent section of this paper will examine the views of the U.S. Environmental Protection Agency (EPA), DOJ and the U.S. Sentencing Commission's Advisory Working Group about the elements of a compliance program.

Targets of Prosecution and the Element of Knowledge.

Knowledge

The traditional burden placed on governments in criminal prosecutions requires proof of criminal intent (conscious wrongdoing) or specific intent to commit a crime. Smith v. California, 361 U.S. 147 (1959). Since environmental statutes are considered "public welfare" laws, however, courts often require

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only a general intent to commit a particular act, rather than a knowing violation of a statutory prohibition. This concept has been explained as follows:

The prosecution to which [the defendant] was subjected is based on a now familiar type of legislation whereby penalties serve as effective means of regulation. Such legislation dispenses with the conventional requirement for criminal conduct — awareness of some wrongdoing. In the interest of the larger good, it puts the burden of acting at hazard upon a person otherwise innocent but standing in responsible relation to a public danger.

United States v. Dotterweich, 320 U.S. 277, 280 (1943).

Although most criminal provisions in environmental laws contain a requirement that the violator act "knowingly," the Dotterweich case and its progeny establish that the prosecution's burden might be satisfied without direct evidence that the defendant knew he was violating the law. In some cases the element of knowledge can be established through the duty placed on an individual by public welfare laws. See United States v. Park, 421 U.S. 658 (1975). Ignorance of or misunderstanding the regulations may not be a defense. Courts have held that since environmental regulations concern an area with great ramifications for the public health and safety, it is reasonable to charge those who choose to operate in such areas with knowledge of the regulatory provisions. United States v. Hayes International Corp., 786 F.2D 1499 (11th Cir. 1986). Similarly, a company or individual might be charged with the obligation of knowing the regulatory status and competence of contractors, haulers, recyclers, disposers, etc. For example, in Hayes, the defendant was held to have knowingly violated a regulation because he had failed to determine the permit status of a disposal facility. Id., at 1504.

Knowledge can also be established through evidence of "willful blindness." This concept is explained as follows:

The element of knowledge may be satisfied by inferences from proof that a defendant deliberately closed his eyes to what would otherwise have been obvious to him. A finding beyond reasonable doubt of a conscious purpose to avoid entanglement would permit an inference of knowledge. Stated another way, a...