Environmental crimes.

• Author: Blabolil, Sandee
• Position: Twelfth Survey of White Collar Crime

1. INTRODUCTION II. COMMON ISSUES

   1. Liability

      1. Corporate

      2. Responsible Corporate Officer Doctrine

   2. Common Defenses

      1. Constitutional Defenses

      2. Other Defenses

   3. Sentencing Issues

      1. Voluntary Compliance III. RESOURCE CONSERVATION AND RECOVERY ACT

   1. Purpose

   2. Scope

   3. Elements of the Offense

      1. Knowledge Requirement Under the RCRA

      2. Knowing Endangerment

   4. Defenses

   5. Penalties

   6. Enforcement IV. TOXIC SUBSTANCES CONTROL ACT

   1. Purpose

   2. Scope

      1. Section 3: Testing Requirements

      2. Section 4: Notice of New Substances or Uses

      3. Section 5: Restrictions on Manufacture, Processing,

         Distribution, Use, and Disposal

      4. Section 14: Commercial Use

   3. Elements of the Offense

   4. Penalties V. THE FEDERAL INSECTICIDE, FUNGICIDE AND RODENTICIDE ACT

   1. Elements of the Offense

   2. Penalties VI. COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSATION AND LIABILITY ACT

   1. Scope

   2. Elements of the Offense

   3. Penalties VII. CLEAN AIR ACT

   1. Programs Under the Clean Air Act

      1. National Ambient Air Quality Standards

      2. National Uniform Emission Standards for Hazardous Air

         Pollutants

      3. New Source Performance Standards

      4. Acid Deposition Regulation

      5. Stratospheric Ozone Protection

   2. Elements of a Clean Air Act Offense

      1. Violation

      2. Knowledge

   3. Defenses

   4. Penalties VIII. SAFE DRINKING WATER ACT

   1. Purpose

   2. Legislative Developments Programs

      1. Underground Injection of Contaminants

         1. Elements of the Offense

         2. Penalties

      2. Regulation of Drinking Water Coolers

         1. Elements of the Offense

         2. Penalties

      3. Enforcement of Ban on Tampering

         1. Elements of the Offense

         2. Penalties IX. CLEAN WATER ACT

   1. Purpose

   2. Programs

      1. Effluent Limitations and Water Quality Standards;

         National Pollutant Discharge Elimination System

         ("NPDES") Permit Program

      2. Monitoring, Reporting and Regulatory Searches

      3. Discharge of Oil and Hazardous Substances

      4. Prohibition on Dredge and Fill Activities

         Elements of the Offense

   4. Defenses

   5. Penalties X. THE RIVERS AND HARBORS ACT OF 1899

   1. Purpose

   2. Elements of the Offense.

   3. Defenses

   4. Penalties XI. RECENT DEVELOPMENTS

   1. Enforcement

   2. Legislative Developments

   3. Proposed Sentencing Guidelines

   4. Judicial Developments

1. INTRODUCTION

   The enforcement of federal environmental regulations through criminal prosecution occurs under eight principal statutes. Under the Resource Conservation and Recovery Act ("RCRA"),(1) a set of amendments giving teeth to the Federal Solid Waste Disposal Act ("SWDA"), criminal penalties are imposed on persons who improperly transport, store, or treat hazardous wastes. The Toxic Substances Control Act ("TSCA")(2) addresses the manufacture, processing and distribution or disposal of chemicals that pose an unreasonable risk of injury to the public or environment. The Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA") regulates the manufacture, registration, transportation, sale and use of toxic pesticides.(3) The Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA")(4) mandates the cleanup of hazardous. substances at contaminated sites and imposes criminal penalties on those who violate its provision. The Clean Air Act ("CAA")(5) imposes penalties on those who knowingly violate federal or state regulations designed to achieve ambient air quality standards established by the United States Environmental Protection Agency ("EPA"). The Federal Water Pollution Control Act ("Clean Water Act" or "CWA"),(6) the Rivers and Harbors Act of 1899 ("Refuse Act"),(7) and the Safe Drinking Water Act ("SDWA"),(8) together restore and protect the quality of the nation's surface and groundwater.

   Most of these statutes contain overlapping civil, criminal, and administrative penalty provisions.(9) Over time, Congress has intensified the criminal penalty provisions of some environmental statutes by elevating violations from misdemeanors to felonies and increasing the maximum levels of incarceration and monetary fines for convicted offenders.(10)

   The EPA, in conjunction with the Department of Justice (DOJ), is in charge of enforcing the provisions of these statutes. According to EPA policy, the pursuit of criminal sanctions(11) stems primarily from the existence of significant environmental harm and culpable conduct.(12) More specifically, "[c]riminal enforcement is necessary . . . in cases involving knowing and intentional conduct, repeated violations, concealment or falsification of noncompliance, or a cavalier attitude that results in egregious harm or the potential for harm."(13) Other emphases of EPA enforcement policy are cross-media environmental problems,(14) the possibility of cooperation from other administrative agencies,(15) and environmental audits and pollution prevention plan requirements as part of settlement agreements.(16)

   The DOJ considers a number of factors in deciding whether to pursue criminal prosecution for a violation of a federal environmental statute,(17) primarily taking into account the specific actions undertaken by the alleged violator.(18) Actions which the DOJ considers include: (1) voluntary disclosure; (2) the degree and timeliness of cooperation; (3) preventive measures and compliance programs; (4) pervasive non-compliance; (5) disciplinary systems to punish employees who violate compliance policies; and (6) subsequent compliance efforts.(19) The goal of the DOJ's policy is "to encourage self-auditing, self-policing, and voluntary disclosure of environmental violations."(20)

2. COMMON ISSUES

   This section addresses two issues that are common to all of the statutes discussed in this article. First, the degree to which corporations and individual officers in corporations can be held liable under the statutes is discussed. Second, it examines the various defenses which are available for all of the statutes discussed in this article, as well as the impact of voluntary compliance programs on sentencing for convictions under these statutes.

   1. Liability

      1. Corporate

         Corporations are included in the legal definition of "persons."(21) When imposing criminal sanctions on a corporation, courts focus on the extent of the corporation's control over the alleged violation(22) or the extent to which corporate policy knowingly diverges from environmental requirements.(23)

         As in other criminal contexts, corporations can be held liable for the acts of their employees/agents, predecessors, or subsidiaries. Liability for the acts of employees may arise where the employee: (1) is acting within the scope of his employment(24) and (2) for the corporation's benefit.(25) Several environmental statutes specifically hold corporations liable if they directly or indirectly supervise illegal dumping conducted by employees.(26) Other statutes impose liability on corporations or corporate officials as "operators" if the corporation could have prevented the violation with reasonable measures.(27) Even if no single employee possesses the requisite knowledge necessary for criminal prosecution, some jurisdictions impute the collective knowledge of a corporation's employees to find corporate liability.(28)

         In addition, corporations can be held liable for predecessors under the "substantial continuity" test.(29) However, according to the "mere continuation" exception, liability is imposed only when, after transfer of assets, one corporation remains, and there is an identity of stock, stockholders, and directors between the two corporations.(30)

         Similarly, the Eighth Circuit has held that corporations may be found liable for subsidiaries if the parent has the authority to control and exercises actual or substantial authority, directly or indirectly.(31) Other circuits have imposed liability only when there is sufficient evidence to pierce the corporate veil of the parent corporation.(32)

      2. Responsible Corporate Officer Doctrine

         Most criminal sanctions under the environmental statutes apply to any "person"(33) who violates a regulation.(34) According to the "responsible corporate officer doctrine,"(35) individual liability is generally imposed upon those with the responsibility or authority to prevent or correct the violation(36) rather than those who actually commit the contaminating act.(37)

         The circuit courts are split on whether actual knowledge is a prerequisite for imposing liability on a corporate officer. Several circuits have held that actual knowledge is necessary to incur liability,(38) while others have held that corporate officers and shareholders are liable only if they participated in the liability creating conduct.(39) The "authority to control" test, one means of determining liability, does not require actual knowledge, but instead actual participation in or exercise of control over causally connected activities.(40) Some courts have allowed juries to infer knowledge and/or control of environmental crimes by corporate officers based on circumstantial evidence,(41) although they may not "find guilt solely on the basis of [the defendant's] position in the corporation."(42)

         In recent years, the EPA and the DOJ have targeted individual corporate officers, instead of corporations, for criminal enforcement actions. Targeting individuals has a stronger deterrent effect since individuals, unlike corporations, cannot treat criminal fines as a cost of doing business.(43) These cases most frequently arise where violations are deliberate and pre-meditated.(44)

   2. Common Defenses

      1. Constitutional Defenses

         Constitutional defenses to environmental statutes have met with limited success in the courts.(45) Some defenses have been accepted, such as: challenges under the dormant commerce clause by landfill operators being prosecuted under state law;(46) the due process clause against retroactive application of certain statutes;(47) and sovereign immunity by federal facilities.(48) However, constitutional defenses that have failed include claims that the National Environmental Policy Act(49) (NEPA) results in an improper delegation of powers to state and executive authorities,(50)...