Environmental crimes.

• Author: Lachenmayr, Andrea
• Position: Thirteenth Survey of White Collar Crime

1. INTRODUCTION

   Nine principle statutes govern the enforcement of federal environmental regulations through criminal prosecution. After a brief discussion in Section II of issues common to most of these statutes, including theories of liability, defenses, and sentencing issues, this article addresses each of these statutes.

   First, Section III discusses the Resource Conservation and Recovery Act ("RCRA"),(1) a set of amendments reinforcing the Federal Solid Waste Disposal Act (SWDA"), which imposes criminal penalties on persons who improperly transport, store, or treat hazardous wastes. Section IV considers the Toxic Substances Control Act ("TSCA"),(2) which concerns the manufacture, processing and distribution or disposal of chemicals that pose an unreasonable risk of injury to the public or environment. Section V discusses the Federal Insecticide, Fungicide, and Rodenticide Act ("FIFRA")(3), which regulates the manufacture, registration, transportation, sale and use of toxic pesticides. Section VI returns to hazardous wastes, considering the Comprehensive Environmental Response, Compensation and Liability Act ("CERCLA"),(4) which mandates the cleanup of hazardous substances at contaminated sites and imposes criminal penalties on those who violate its provisions. Section VII covers air pollution, discussing the Clean Air Act ("CAN"),(5) which 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"). Sections VIII, IX, and X address water pollution, respectively discussing the Federal Water Pollution Control Act ("Clean Water Act" or "CWA"),(6) the Rivers and Harbors Act of 1899 ("RHA"),(7) and the Safe Drinking Water Act ("SDWA").(8) which together restore and protect the quality of the nation's surface and groundwaters. Crimes against wildlife are considered in Section XI, which analyzes the Endangered Species Act (ESA).(9) Finally, Section XII analyzes some recent developments in environmental criminal law, including enforcement trends, legislative developments, sentencing proposals, and important judicial developments.

   Most of these statutes, described more specifically below, contain overlapping civil, criminal, and administrative penalty provisions.(10) Over time, Congress has elevated violations from misdemeanors to felonies and has increased potential jail sentences and fines for those convicted.(11)

   The EPA enforces the criminal provisions of these statutes in conjunction with the Department of Justice (DOJ). In 1997, the EPA referred 278 criminal cases to the DOJ and assessed $169.3 million in criminal fines, while also assessing $95.1 million in civil penalties for 426 civil cases.(12) Criminal prosecutions have increased markedly in recent years.(13) According to EPA policy, the pursuit of criminal sanctions(14) stems primarily from the existence of significant environmental harm and culpable conduct.(15) EPA enforcement policy also emphasizes cross-media environmental problems,(16) the possibility of cooperation from other administrative agencies,(17) and "comprehensive settlements which combine appropriate penalties, injunctive relief, and other innovative features (e.g., corporate or facility-wide self-auditing, pollution prevention, ecosystem restoration)."(18)

   The DOJ also uses a flexible approach to enforcement, considering several factors in deciding whether to pursue criminal prosecution for a violation of a federal environmental statute." Besides the specific criminal act, the DOJ may consider: (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.(20) The goal of the DOJ's policy and this discretion is "to encourage self-auditing, self-policing, and voluntary disclosure of environmental violations."(21)

2. COMMON ISSUES

   This section addresses two issues that are common to all of the statutes discussed in this article. Part A considers theories of liability under which corporations and individual officers or employees of corporations can be held criminally liable under the statutes. Part B first discusses some constitutional and other defenses which are commonly (often unsuccessfully) asserted by those charged under the statutes. Part B also considers the impact of voluntary compliance programs on sentencing of those convicted under these statutes.

   1. Liability

      1. Corporate

         Corporations are included in the legal definition of "persons."(22) Corporate liability for environmental crimes, or any crime, is "based on the imputation of agents' [or employees'] conduct to a corporation, usually through the application of the doctrine of respondeat superior.(23) Corporations may also incur liability for the conduct of their subsidiaries(24) or predecessors(25) through separate doctrines.

         It has been argued that criminal prosecution of corporations engaging in environmental crimes is an important tool for the enforcement of environmental laws because (1) the harms posed by environmental crimes may be as significant as those posed by traditional crimes, (2) the corporate environmental criminal may be just as morally culpable as traditional criminals, and (3) without criminal sanctions, corporate environmental criminals may view environmental sanctions as "a mere cost of doing business which they may ultimately pass on to their customers."(26) However, like individuals, corporations "can suffer from the stigma of a conviction and there may also be collateral consequences that flow from a conviction."(27)

         When imposing criminal sanctions on a corporation, courts focus on the extent of the corporation's control over the acts or omissions constituting an alleged violation.(28) Generally, if an individual employee's guilt can be established, prosecutors can establish the criminal liability of the employer/corporation by showing that the individual was acting within the scope of his or her job for corporate benefit.(29) However, it has been suggested that prosecutors should not pursue criminal sanctions against a corporation in every instance that an employee or agent commits an environmental crime.(30)

         In addition to incurring liability for the acts of employees acting within the scope of their employment(31) for the corporation's benefit,(32) corporations may incur liability under certain statutes for directly or indirectly supervising illegal dumping conducted by high level employees.(33) Other statutes impose liability on corporations or corporate officials as "operators" if the corporation could have prevented the violation with reasonable measures.(34)

         Corporations can also incur liability for predecessors' acts under the "substantial continuity" test.(35) 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.(36)

         In some jurisdictions, corporations may be liable for violations of subsidiaries if the parent has the authority to control, and exercises actual or substantial authority, directly or indirectly.(37) Other jurisdictions have imposed liability only when there is sufficient evidence to pierce the corporate veil of the parent corporation.(38)

      2. Responsible Corporate Officer Doctrine

         Most criminal sanctions under the environmental statutes apply to any "person"(39) who violates a regulation.(40) According to the "responsible corporate officer doctrine,"(41) individual liability is generally imposed upon those with the responsibility or authority to prevent or correct the violation(42) rather than those who actually commit the contaminating act.(43)

         Whether actual knowledge is a prerequisite for imposing liability on a corporate officer is not well settled. Several circuits have held that actual knowledge is necessary to incur liability,(44) while others have held that corporate officers and shareholders are liable only if they participated in the liability creating conduct.(45) 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.(46) Some courts have allowed juries to infer knowledge and/or control of environmental officers based on circumstantial evidence,(47) although they may not "find guilt solely on the basis of [the defendant's] position in the corporation."(48)

         In recent years, the EPA and the DOJ have increasingly targeted individual corporate officers, as well as 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.(49) These cases most frequently arise where violations are deliberate and premeditated.(50)

   2. Common Defenses

      1. Constitutional Defenses

         Constitutional defenses to environmental statutes have met with limited success in the courts.(51) Some generally successful defenses have included challenges under the dormant Commerce Clause by landfill operators being prosecuted under state law;(52) the Due Process Clause against retroactive application of certain statutes;(53) and sovereign immunity by federal facilities.(54) Constitutional defenses which have generally failed include claims that the National Environmental Policy Act(55) (NEPA) results in an improper delegation of powers to state and executive authorities,(56) environmental statutes violate due process rights on vagueness grounds,(57) and that federal statutes exceed federal authority under the Commerce Clause.(58) Fourth Amendment claims challenging environmental inspections have also achieved...