Opinion

United States v. Bp Products North America Inc.

610 F. Supp. 2d 655
2009 U.S. Dist. LEXIS 19472
2009 WL 677653

Court: District Court, S.D. Texas
Filed: Mar 12, 2009
Status: Published
Author: Rosenthal
On the bench: Lee H. Rosenthal
Cited by: 4 cases
Authority: More cited than 49.3%

construing “derived from” language in § 3571(d) “as imposing a proximate causation requirement”

How later courts described this case

construing “derived from” language in § 3571(d) “as imposing a proximate causation requirement”
“This court disagrees that applying Fountain results in a categorical bar to basing restitution or a fine on future losses resulting from an offense.”

Written by the judges who cited it.

The opinion

MEMORANDUM AND ORDER

LEE H. ROSENTHAL, District Judge.

I. Introduction.............................................................660

II. Background..............................................................662

A. The Clean Air Act....................................................662

B. The Explosion at the Texas City Refinery...............................664

C. The Regulatory and Internal Investigations..............................666

1. The CSB Report and the Baker Report..............................666

2. The OSHA Settlement Agreement..................................667

3. The TCEQ Agreed Order..........................................668

D. The Criminal Investigation and Plea Agreement..........................668

III. The Legal Standard for Accepting or Rejecting a Rule 11(c)(1)(C) Plea..........674

IV. The Objections to the Proposed Plea........................................678

A. Objections that the Victims No Longer Assert or Press...................678

B. The Present Objections...............................................680

V. The Fine................................................................681

A. The Applicable Statutory Provisions....................................681

B. Disputed Issues Relating to § 3571(d) ..................................682

1. The Loss or Gain To Be Measured..................................682

2. The

Apprendi

Issue...............................................684

3. Causation........................................................687

4. Whether Calculating Gain or Loss Under § 3571(d) Would “Unduly Complicate or Prolong the Sentencing Process”.....................690

a. Multiple Victims..............................................691

b. Disputed Causation and Other Issues ...........................692

c. Future Losses................................................694

C. Analysis of the Victims’ Objections to the $50 Million Fine.................695

1. Calculation Based on Gain.........................................695

a. The Information and Charged Offense...........................696

i. The Scope of the Information..............................696

ii. The Charged Offense and Other Offense Conduct.............697

b. The Victims’ Proposed Bases for Determining Gain...............699

i. Fine Based on Profits.....................................699

ii. Fine Based on Cost Savings ...............................700

iii. Fine Based on the Cost-Saving Estimate that Forms the Basis for the Proposed Plea..............................701

*660

2. Calculation Based on Loss.........................................702

a. The Victims’ Submissions......................................703

b. Worker’s Compensation Records ...............................707

D. Conclusion as to the Victims’ Objections to the Fine ......................707

VI. The Victims’ Objections to the Terms of Probation............................707

A. The OSHA Settlement Agreement and the Sawyer Report.................709

1. Whether BP Products Improperly Controlled the Audit................711

2. Whether the Audit’s Sampling Practices Were Improper...............712

3. Whether the Time Frame Is Acceptable.............................716

4. Whether BP Products’s Remediation Response Has Been Adequate.....718

5. Whether BP Products’s Provision of Data for Follow-Up Reports Is Proper......................................................719

B. The TCEQ Agreed Order.............................................720

C. Whether an Independent Monitor Is Necessary..........................720

D. Conclusion as to the Objections to the Proposed Probation Terms ..........722

VII. Whether This Court Should Order a Presentence Investigation and Report.....723

VIII. Whether the CVRA Violation Provides a Basis for Rejecting the Plea............725

IX. Whether To Accept or Reject the Proposed Plea..............................727

X. Conclusion...............................................................730

I. Introduction

BP Products North America, Inc. entered a plea of guilty to an information charging a felony violation of the federal Clean Air Act. The charge arises from the March 23, 2005 explosion at the Texas City, Texas plant that killed 15 and injured scores. The plea agreement stipulates the sentence: a $50 million fine and three years of probation with the conditions that BP Products comply with a Settlement Agreement reached with the Occupational Safety and Health Administration (“OSHA”) and an Agreed Order imposed by the Texas Commission on Environmental Quality (“TCEQ”).

The United States asks this court to accept BP Products’s guilty plea under Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure. Under Rule 11(c)(1)(C), if this court accepts the plea, it must impose the stipulated sentence. This court has the responsibility of deciding whether to accept or reject the proposed plea.

Victims of the explosion have objected. The victims have been given the opportunity to participate in court hearings. The victims and their lawyers have spoken at these hearings and many victims have submitted written impact statements. Through their lawyers, the victims have also filed numerous briefs and voluminous information, including a report on environmental and safety compliance prepared for the civil cases filed after the explosion. The victims have been heard and their views fully considered.

The victims’ arguments include that the fine is too low and the probation conditions are too lenient. The government responds that it aggressively prosecuted BP Products. When BP Products signed the plea agreement, it would have been the first company criminally convicted of knowing violations of the Risk Management Plan regulations of the Clean Air Act.

The $50

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million fíne will be the largest criminal fine imposed against a single corporation under the Clean Air Act and the largest criminal fíne imposed for a fatal industrial accident. The proposed probation conditions include compliance with requirements imposed after the explosion for extensive process safety and environmental improvements at the Texas City refinery. The government states that it required BP Products to plead to the highest offense that could have been charged based on the evidence, despite the fact that lesser charges were available. (Docket Entry No. 18 at 4, 10-11). The victims are not asking this court to reject the plea because of the offenses charged. (Docket Entry No. 66 at 100-01).

BP Products points out, and the victims have not disputed, that the fine is not the only financial consequence that BP Products will bear as a result of the explosion. In addition to paying over $1.6 billion to the victims to settle approximately 4,000 civil cases, BP Products has also paid almost $21.7 million in fines to OSHA and to the TCEQ and will pay over $265 million to do the work required under the OSHA Settlement Agreement and the TCEQ Agreed Order. (Docket Entry No. 8 at 10-11).

A fíne is just that. It is not intended to be compensation to the victims or payment for safety improvements. The victims have not objected to the proposed plea on the basis that restitution is not part of the stipulated sentence.

In deciding whether to accept or reject the proposed plea, this court’s task is to make an individualized assessment of the stipulated sentence based on the facts and circumstances specific to this case. A court may not reject a plea proposed under Rule 11(c)(1)(C) based on broad policy grounds or on a categorical basis. A court’s discretion to reject a plea is also limited by the constraints of the judicial, as opposed to the prosecutorial, role. A court may not reject a proposed plea because it believes that additional crimes or additional defendants should have been charged; such decisions are up to the prosecutor. Nor may a court insert itself into the plea-bargaining process by modifying or rewriting the proposed plea and sentence. A court may only evaluate the plea that the parties have proposed, not a hypothetical plea that the court might prefer but the parties have not presented. A court must accept or reject the proposed plea and explain why, but may not modify or change its terms. A disciplined and careful analysis of the facts and circumstances, under

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the applicable law and statutes, is required.

Based on the pleadings, the briefs, the statements, the submissions, the arguments, and the applicable law, this court finds that the proposed plea satisfies the purposes that the law recognizes as controlling. The victims’ arguments that the plea agreement is too lenient fail to recognize the statutory constraints that apply and the risks to the government if the plea were rejected. The court must take into account “the exigencies of plea bargaining from the government’s point of view,” including “limited resources and uncertainty of result.”

United States v. Bundy,

359 F.Supp.2d 535, 538 (W.D.Va.2005). The issues in this case, one of the few in which the government has successfully applied a felony criminal statute to an industrial accident, present significant risks that absent the plea, the government would not be able to prevail or would only obtain a $500,000 fine. These risks have been considered in weighing the adequacy and reasonableness of the proposed plea terms.

Considering the specific facts and circumstances presented in this voluminous record, including the victims’ objections, this court finds that the proposed plea is a reasonable disposition given the available alternatives, the risks they present, and the limits inherent in the statutes that the government can use to obtain a felony conviction to punish conduct leading to an industrial accident. Accordingly, this court accepts the proposed plea.

The reasons are stated in detail below.

II. Background

A. The Clean Air Act

BP Products pleaded guilty to a criminal information charging it with a felony violation of the Clean Air Act, 42 U.S.C. § 7413 (e)(1), which imposes criminal penalties for knowing violations of certain provisions of the Clean Air Act,

including viola

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tions of regulations enacted under 42 U.S.C. § 7412 (r)(7). Section 7412(r)(7) was enacted in 1990, in the wake of the disaster at the Union Carbide plant in Bhopal, India, to “prevent accidental releases of regulated substances.” 42 U.S.C. § 7412 (r)(7). The Environmental Protection Agency acted under § 7412(r)(7) to promulgate the Risk Management Plan (RMP) regulations set forth in 40 C.F.R. § 68.1

et seq.

The RMP regulations codify requirements for Process Safety Information systems, which companies are required to implement to prevent chemical and petrochemical plant releases. Substantially similar regulations known as Process Safety Management (PSM) regulations are promulgated and enforced by OSHA.

See

29 C.F.R. § 1910.119 .

The government decided to prosecute BP Products under the RMP regulations because the PSM regulations do not allow a felony penalty and contain a lower default maximum fine. (Docket Entry No. 96 at 4 n. 7).

BP Products pleaded guilty to violating two of the regulations promulgated under § 7412(r)(7): 40 C.F.R. § 68.73 (b), which requires the owner or operator of a plant such as the Texas City refinery to establish and implement written procedures to maintain the ongoing integrity of process equipment; and 40 C.F.R. § 68.87 (b) (2), which requires the owner or operator of such a plant to warn contractors working on or adjacent to a “covered process” of the known potential fire, explosion, or toxic-release hazards related to the contractor’s work and the process.

BP Products and the government jointly moved the court to waive the presentence investiga

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tion and accept the proposed plea. (Docket Entry No. 8).

B. The Explosion at the Texas City Refinery

The facts set out in this section include those that BP Products admitted in the Statement of Facts that accompanied the joint motion for waiver of the presentence report.

(Id.,

Ex. A; Docket Entry No. 96, Ex. 6). Other sources of information about the explosion include a report by the United States Chemical Safety and Hazard Investigation Board (“CSB”)

after an extensive two-year investigation,

see

U.S. Chem. Safety & Hazard Investigation Bd., BP Texas City: Final Investigation Report (Mar. 20, 2007) (Docket Entry No. 8 at 3, Ex. 2), and a report published after an internal investigation led by former Secretary of State James Baker,

see

James A. Baker

et al.,

Report of the BP U.S. Refineries Independent Safety Review Panel (January 2007) (the “Baker Report”).

The Texas City refinery is the largest BP Products refinery in the United States. When BP Products acquired the refinery in 1999, it was an aging facility. Parts of the process unit involved in the March 2005 explosion were nearly fifty years old. The refinery covers more than 1,200 acres and in March 2005 employed approximately 1,800 permanent staff and 2,000 contract workers. The plant included twenty-nine different refining units and four chemical units and had the capacity to process approximately 460,000 barrels of crude oil a day. (Docket Entry No. 8, Ex. A at 3; Ex. 2 at 194, 218-19; Docket Entry No. 96, Ex. 6 at 3).

The explosion occurred in the plant’s isomerization unit (“ISOM unit”). The ISOM unit’s main function was to increase the octane in a chemical component of gasoline. The ISOM unit had several process components, including a pressure vessel known as a “raffinate splitter.” The raffinate splitter was a 164-foot tall tower that could hold approximately 3,700 barrels. The explosion occurred as the raffinate splitter was restarted following a shutdown for maintenance and repairs.

“Raffinate” describes gasoline components that are being or have been refined. The raffinate splitter separated the components into “heavy” and “light” raffinate. Heavy raffinate emerged from the splitter as a hydrocarbon liquid that could be blended into jet fuel or unleaded gasoline. Light raffinate

emerged

as hydrocarbon vapor. The process involved high pressures and temperatures. The resulting vapor was highly volatile and could easily ignite. (Docket Entry No. 8, Ex. A at 4; Docket Entry No. 96, Ex. 6 at 4).

The raffinate splitter had a set of pressure-relief valves and headers intended to prevent excess pressure build-up from hydrocarbon vapors. There were different options in the ISOM unit for using the relief valves to direct the release of the hydrocarbon vapors. Written procedures required that during a normal startup of the raffinate splitter, a flare system was to be used to burn off the hydrocarbon vapors before they were released into the

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open air. Although no written procedures authorized the practice, another option was to direct the hydrocarbons to a “blowdown stack.” The blowdown stack used water to cool some of the hydrocarbon vapors into liquid and released the remaining vapors through the stack into the open air. Under its written procedures, BP Products was permitted to release hydrocarbons from the blowdown stack to the open air in the case of an emergency or process upset, after providing advance notice to the TCEQ. (Docket Entry No. 8, Ex. A at 2-5; Docket Entry No. 96, Ex. 6 at 2-5). BP Products had not performed a study since at least 1999 to determine whether the blowdown stack had the capacity to release hydrocarbons safely. The blowdown stack in the ISOM unit had been in poor operating condition since at least April 2003. (Docket Entry No. 8, Ex. A at 8, 10-11; Docket Entry No. 96, Ex. 6 at 8, ,10 — 11).

During the month before the explosion, the ISOM unit was shut down for maintenance and repairs. Around March 21, 2005, BP Products maintenance personnel informed ISOM unit personnel that critical alarms for that unit had not been properly inspected. Nevertheless, on March 23, the raffinate splitter was restarted. (Docket Entry No. 8, Ex. A at 11-12; Docket Entry No. 96, Ex. 6 at 11-12). Restarting the splitter was the most dangerous phase of operating the ISOM unit because of the reintroduction of hydrocarbons in the presence of elevated temperatures and pressure. Although federal regulations required BP Products to establish and implement specific written instructions for operators and supervisors and to ensure that alarm systems and process safety components in the ISOM unit were operating correctly,

see

40 C.F.R. §§ 68.69 (a), 68.73(b), on the morning of March 23, 2005, safeguards important to the safe startup of the raffinate splitter either had not been established through written procedures or the written procedures that did exist were not being followed.

The acts that BP Products has admitted as knowing violations of the RMP regulations include the following:

• BP Products failed to notify nonessential employees and nonessential contractors located in temporary office trailers close to the raffinate splitter that the startup was going to occur.

• The bottom of the raffinate splitter was filled above the level permitted under the written procedures for start-ups. This had become a common practice for raffinate splitter startups.

• The ISOM unit’s control board operator had filled the tower with raffinate feed but heavy and light raffinate were not being emptied. A control instrument showed that the level of feed in the tower was decreasing when in fact it was increasing, and the operator did not see the increase. The required instrument checks were not performed before the startup, despite knowledge that there was a question about whether the sight glass on the tower used for visually checking the product level in the tower was functioning properly.

• Alarms failed to function or were ignored. BP Products knew that the alarms had not been inspected but allowed the startup to proceed.

• The blowdown stack rather than a flare was being used to release excess hydrocarbon vapors, an unauthorized but common practice. There was no emergency that required sending the hydrocarbons to the blowdown stack rather than the flare. The TCEQ had not been notified in advance.

• BP Products had not treated the overfill of the raffinate splitter as a credible threat and had chosen not to perform a “what-if” scenario to study

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what would occur if the splitter overfilled.

• BP Products had failed since 1999 to perform a relief-valve study on the ISOM unit blowdown stack to determine whether it had adequate capacity to release excess hydrocarbons safely.

• An April 2003 inspection showed deficiencies in the blowdown drum and stack, including that the quench system did not operate and baffles used to reduce the amount of released vapors were corroded and did not operate as designed. BP Products nonetheless continued to use the blowdown drum and stack.

(Docket Entry No 8, Ex. A at 8-12; Docket Entry No. 96, Ex. 6 at 8-12).

At 1:15 p.m., on March 23, 2005, excess liquid pressure and temperature had been building up inside the raffinate splitter for several hours. Hydrocarbon vapors and liquids were released from the raffinate splitter into the blowdown stack. The volume of the hydrocarbon liquid exceeded the blowdown stack’s capacity. Hydrocarbon liquid was released out of the top of the stack and flowed down, reaching the ground. A vapor cloud formed and migrated away from the blowdown stack. An ignition source, believed to be the running engine of a truck parked nearby, caused the hydrocarbon vapor cloud to explode. Fifteen people working in two temporary trailers approximately 150 feet away from the stack died. At least 170 other workers in the plant were injured. (Docket Entry No. 8, Ex. A at 7-8; Docket Entry No. 96, Ex. 6 at 7-8).

BP Products has admitted that it knowingly violated the RMP regulation requiring it to “establish and implement written procedures to maintain the on-going integrity of process equipment.” 40 C.F.R. § 68.73 (b). BP Products has also admitted that it knowingly violated the RMP regulation requiring it to inform contractors in the vicinity of the raffinate splitter of the risks posed by the restart. 40 C.F.R. § 68.87 (b)(2).

C. The Regulatory and Internal Investigations

After the explosion, investigations were conducted by federal agencies, including the CSB, OSHA, and the Department of Justice; by Texas agencies, including the TCEQ; and internally by BP Products through the Baker panel.

1. The CSB Report and the Baker Report

The CSB Report on the explosion issued on March 20, 2007. The Baker Report issued in January 2007. The CSB Report examined “immediate causes,” “possible root causes,” “cultural issues,” and “corrective actions.” The Baker Report focused on the role of BP Products’s corporate hierarchy and culture, studying “the effectiveness of BP’s corporate oversight of safety management systems at its five U.S. refineries and its corporate safety culture.” (Baker Report at ix). Both reports emphasized that BP Products’s parent company, headquartered in London, had implemented budget cuts that adversely affected the Texas City refinery, including its process safety management systems. (Docket Entry No. 8, Ex. 2 at 157-59; Baker Report at 59). The plant was aging when BP Products acquired it in 1999, with equipment and infrastructure in decline. But rather than committing resources to repair equipment and address safety problems that had been identified in audits and investigations — problems that included a lack of proper process safety management — BP Products’s parent company implemented budget cuts. The CSB concluded that a “lack of investment compromised safety” and that budget cuts by BP Products’s parent company “did not consider the specific maintenance needs of

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the Texas City refinery.” (Docket Entry No. 8, Ex. 2 at 157-58). The Baker Report concluded that “BP has not always ensured that it identified and provided the resources required for strong process safety performance at its U.S. refineries.” (Baker Report at xii).

The CSB Report summarized by stating that “[c]ost-cutting, failure to invest and production pressures from BP Group executive managers impaired process safety performance at Texas City.” (Docket Entry No. 8, Ex. 2 at 25). The CSB Report identified various decisions affected by budget cuts and pressures: reduction in maintenance spending for a decade; “impaired training, operations staffing levels, and mechanical integrity”; and the decision on several occasions “not to replace the ISOM blowdown system” with a flare system.

(Id.,

Ex. 2 at 188). The reports acknowledged that although BP Products had focused on “personal safety,” it had not focused on “process safety.”

(Id.,

Ex. 2 at 210; Baker Report at x). The victims argue that the “root causes” of the explosion were the parent company’s budget cuts and refusal to provide the resources necessary to achieve process safety compliance at the Texas City refinery. (Docket Entry No. 16 at 7-10; Docket Entry No. 28 at 5).

2. The OSHA Settlement Agreement

On September 22, 2005, BP Products and OSHA signed a Settlement Agreement under which BP Products paid a $21,361,500 penalty and “agreed to perform extensive upgrades and improvements to equipment and process safety management (‘PSM’) systems at the Refinery.” (Docket Entry No. 94 at 3; Docket Entry No. 96, Ex. 2). BP Products was required to retain an external expert, subject to OSHA’s approval, “to conduct a comprehensive audit and analysis of the PSM systems at BP Products’ Refinery and assess the robustness of the PSM systems.” (Docket Entry No. 96, Ex. 2 at 2). The audit, which was to be “conducted in accordance with best practices in the industry,” was to include, but was not to be limited to, the following:

(1) the safe location of personnel in relation to hazardous processes; (2) the safe movement of vehicles into process areas; (3) the construction of fired and unfired pressure vessels, particularly the relief of overpressures to a safe location, in accordance with 29 C.F.R.1910.106(i)(3) and the referenced ASME codes; (4) the classification of hazardous locations as defined in 29 C.F.R.1910.399; (5) the notification of contractors and employees regarding potential hazards; (6) the inspection and maintenance of alarms providing personnel with notification of hazardous conditions that may be developing; (7) the standard operating procedures (particularly start-up and emergency shutdown procedures); (8) the adequacy of pressure relief for individual pieces of equipment; (9) the adequacy of safety instrumented systems; (10) human factor analysis; and (11) lock ouV tag out programs, procedures, and applications.

(Id.,

Ex. 2 ¶ l(b)(l)-(ll)). The auditor was to complete, and BP Products was to forward to OSHA for review, an initial report, two biannual progress reports, and one final report detailing deficiencies found and recommendations for correction.

(Id.,

Ex. 2 at 3-4). BP Products was required to implement “all feasible recommendations” in these reports. Within thirty days of each audit report, BP Products was required to file a statement of action, informing OSHA which recommendations it would implement and the steps taken toward implementation. If BP Products chose not to implement certain recommendations, it was required to provide detailed reasons for that decision.

(Id.,

Ex. 2 at 4).

Other requirements of the OSHA Settlement Agreement included that BP

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Products would: retain an organizational expert, subject to OSHA’s approval, to conduct an organizational systems audit,

(id:,

Ex.

at 5-7); conduct safety and health training to ensure that all employees and contractors understood the hazards to which they might be exposed, and how to prevent harm from those hazards,

(id.,

Ex. 2 at 7-8); submit logs of occupational injuries and illnesses to OSHA every six months for three years,

(id.,

Ex. 2 at 8-9); abate the specific conditions identified during OSHA’s investigation,

(id.,

Ex. 2 at 9-13); and permit OSHA to verify and monitor the abatement,

(id.,

Ex. 2 at 13-14). In addition to the $21.3 million fine that it has already paid, BP Products estimates that compliance with the OSHA Settlement Agreement will cost $15 million. (Docket Entry No. 8 at 10-11).

The Settlement Agreement explicitly gives “OSHA (including its experts) access to the Texas City Refinery to determine progress and compliance with this Agreement.” (Docket Entry No. 96, Ex. 2 at 14). It also permits OSHA, through an enforcement order entered by the Fifth Circuit under 29 U.S.C. § 660 (b), to pursue civil contempt remedies against BP Products.

(Id.,

Ex. 4).

3. The TCEQ Agreed Order

BP Products was already under investigation by the TCEQ before the March 23, 2005 explosion for exceeding emissions limits in several of its Texas City facility process units. On May 31, 2006, BP Products and the TCEQ signed an Agreed Order that assessed a penalty of $336,556 and “requirefd] BP Products to undertake a substantial program of improvements to control and reduce emissions from its flares.” (Docket Entry No. 94 at 18; Docket Entry No. 96, Ex. 3). A number of the compliance items in the Agreed Order are not scheduled for completion until 2011. (Docket Entry No. 96, Ex. 3-A § 7). BP Products states that compliance with this Order will cost $250 million. (Docket Entry No. 8 at 10-11).

D. The Criminal Investigation and Plea Agreement

The DOJ also investigated the explosion at the Texas City refinery. As part of its investigation, the government communicated with many affected by the explosion, including those pursuing civil litigation against BP Products. (Docket Entry No. 26 at 31-32; Docket Entry No. 63 at 5). Lawyers representing many of the victims in civil cases “worked very close[ly] with the Department of Justice to try to get them the information that [they] were deriving from the civil litigation.” (Docket Entry No. 120 at 149-150). One of the lawyers representing the victims in this case was also liaison counsel for the plaintiffs’ steering committee in the victims’ state-court civil litigation. At a hearing before this court, that lawyer explained the nature and extent of his work with the DOJ before the plea was negotiated:

On a regular basis, [DOJ] attorneys would come in, first from Houston, later from Washington. We were closer to the documents that were being produced in the [civil] discovery.... [A]s we evolved more into the litigation, we understood better the regulatory compliance issues ... and the emissions problems they were having there.... [W]e shared that information [with the DOJ],

(Id.

at 150). At another hearing in this court, another lawyer who represented

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both plaintiffs in civil cases against BP Products and victims in this criminal case confirmed that he had been subpoenaed by the DOJ before the plea agreement was executed and that he “provided very important documents to them.” (Docket Entry No. 26 at 31). Before the proposed plea was announced, counsel for some of the victims had also shared with the government the opinions of Michael Sawyer, a regulatory expert who worked on behalf of the civil plaintiffs, about BP Products’s regulatory compliance issues. (Docket Entry No. 120 at 150-51). The government “remained in contact with counsel for the victims through the investigation [and] benefitted from their cooperation with the investigation.” (Docket Entry No. 63 at 5). Not all victims had this degree of contact or communication with the government before the plea agreement was executed. (Docket Entry No. 117 at 2 n. 1).

On October 18, 2007, before any charging instrument was filed, the government filed a sealed

ex parte

motion seeking “an order outlining the procedures to be followed under the Crime Victims’ Rights Act.”

(Docket Entry No. 54, Ex. 1 at 3). In that motion, the government stated that it was engaged in plea negotiations with BP Products; a plea agreement was anticipated to be signed by October 25, 2007; and the plea was expected to be entered in late November 2007.

(Id.,

Ex. 1 at 2). The motion stated that due to the large number of victims in the case, “consulting the victims prior to reaching a plea agreement would not be practicable.”

(Id.).

The government recognized in the motion that the Crime Victims’ Rights Act (CVRA) provides victims a “reasonable right to confer with the attorney for the Government in the case.” The government invoked the CVRA section stating that “in a case where the court finds that the number of crime victims makes it impracticable to accord all of the crime victims the rights described in subsection (a), the court shall fashion a reasonable procedure to give effect to this chapter that does not unduly complicate or prolong the proceedings.” 18 U.S.C. § 3771 (d)(2). The government asserted that “a reasonable procedure to give effect to the Crime Victims’ Rights Act” was to provide prompt notice to victims and their families of their rights under the CVRA after the plea agreement was signed and to have an extended period before entry of the plea. During that period, the government would send victims notice of their CVRA rights, including information on any hearings; a contact telephone number with updates on the case status; points of contact at the U.S. Attorney’s Office and/or the Department of Justice; and “updates and case information” on a website and/or the Victim Notification System. (Docket Entry No. 54, Ex. 1 at 3). The plea hearing would be delayed to ensure that victims could receive notice and fully exercise their rights to attend and be heard. On the same day the

ex parte

motion was filed on the miscellaneous docket, October 18, 2007, a district court judge issued a sealed order approving this arrangement.

(Id.,

Ex. 2 at 1).

On October 22, 2007, the government filed the criminal information, under seal. The information charged a single count: the knowing violation, under 42 U.S.C. § 7413 (c)(1), of two regulations under 42 U.S.C. § 7412 (r)(7). The information stated:

Knowing Violations of Risk Management Practices

20. Between in or about January 1999 and on or about March 23, 2005, in

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Texas City, Texas, within the Southern District of Texas, the defendant, BP PRODUCTS NORTH AMERICA INC., did knowingly violate a requirement promulgated pursuant to the Clean Air Act, Title 42, United States Code, Section 7412 (r)(7); specifically, defendant BP PRODUCTS NORTH AMERICA INC. knowingly failed to do the following:

a. Establish and implement written procedures to maintain the ongoing mechanical integrity of process equipment, in violation of Title 40, Code of Federal Regulations, Section 68.73(b).

b. Inform contract owners and operators of the known potential fire, explosion, or toxic release hazards related to the contractors!!] occupation of temporary trailers in the vicinity of the ISOM Unit, in violation of Title 40, Code of Federal Regulations, Section 68.87(b)(2).

(Docket Entry No. 1 at 7-8).

Two days later, on October 24, 2007, the government and BP Products signed a plea agreement under which BP Products agreed to plead guilty to the information. As part of the plea agreement, BP Products conceded that it knowingly failed to establish and implement written procedures to maintain the ongoing integrity of the raffinate splitter in the ISOM unit and related process equipment, in violation of 40 C.F.R. § 68.73 (b), and that it failed to inform its contractors of the risks associated with the restart of the raffinate splitter and the risks of siting contractor trailers in the near vicinity of the ISOM unit blow-down stacks, in violation of 40 C.F.R. § 68.87 (b)(2). (Docket Entry No. 8 at 6-7). Under the proposed plea, BP Products agreed to pay a $50 million fine within three days of sentencing and a $400 special assessment immediately upon sentencing, and to serve a three-year probation term. During probation, BP Products would be required to comply fully with the OSHA Settlement Agreement and the TCEQ Agreed Order. The plea agreement provided that if BP Products is unable to comply with its obligations under the TCEQ Agreed Order within the three-year probation term, the probation term will be extended to the statutory maximum of five years, with “compliance with and completion of the TCEQ order as the only term[s] of the extended probation period.” (Docket Entry No. 96, Ex. 1 at 2). The plea agreement required BP Products to cooperate with the government in its ongoing investigation of other possible criminal violations related to the explosion, including making its employees available to participate in judicial proceedings; making documents, records, and other technical information relating to the explosion available to the government; and providing the government access to the Texas City refinery.

(Id.,

Ex. 1 at 2-3).

On October 25, 2007, the day after the United States and BP Products signed the plea agreement, a magistrate judge signed an order unsealing the criminal information. The proposed plea was announced at a press conference that received extensive coverage. But the

ex parte

order was not unsealed at that time.

After the criminal information was unsealed and the plea agreement filed and announced, the government mailed written notices to victims in compliance with § 3771(a) of the CVRA.

The notices ad

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vised the victims of the proposed plea and the plea agreement, the dates and times of court proceedings, and that the victims had a right to attend and be heard at those proceedings.

On the day the plea agreement was announced, the government set up a telephone number and website that provided current information about the criminal case, established a procedure for submitting victim-impact statements, and made the victim-witness coordinator for the U.S. Attorney’s Office for the Southern District of Texas available to answer victims’ questions. These notices by the government were reinforced by extensive media coverage and by the fact that most of the victims had counsel representing them in civil lawsuits.

On November 16, 2007, BP Products and the United States jointly moved under Rule 32(c)(1)(A)(ii) of the Federal Rules of Criminal Procedure for a waiver of the presentence investigation and report and acceptance of the plea agreement. (Docket Entry No. 8). On November 20, 2007, a week before a hearing set for November 27, 2007, twelve victims — Alisa Dean, Ralph Dean, Tracy Donaie, Tyrone Smith, Ronald Duhan, Mary Ann Duhan, Michael Jordan, Sandra Thomas, Kelly Porter, Calvin Thomas, Henry Rivera, and Maria Rivera — moved through counsel for leave to appear and be heard under the CVRA and asked the court to reject the proposed plea agreement or at least defer decision and require a presentence investigation. (Docket Entry No. 9). Nine other victims — Kenneth Grant, George Hardin, Lee Dusek, Jason Wimberly, Liberato Solis, Jorge Patino, Rodolfo Mendoza, Luis Villa

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zana, and Jerett Pahkala — filed a similar motion through counsel on November 23, 2007. (Docket Entry No. 14). On November 27, 2007, the case was reassigned to this court.

At a status conference held on November 28, 2007, lawyers for numerous victims appeared and urged that they and their clients be heard in opposition to the proposed plea agreement. This court granted the requests. The victims submitted extensive information supporting their opposition to the proposed plea agreement. At the hearing, liaison counsel for the plaintiffs’ steering committee in the state-court civil litigation also agreed to communicate with the other plaintiffs’ counsel to be sure that the plaintiffs in those cases were informed of their rights under the CVRA, including the right to attend hearings and to be heard on the proposed plea and sentence. (Docket Entry No. 26 at 44). The government worked with counsel handling the many civil cases relating to the explosion to ensure that the victims received notice of their CVRA rights.

At a February 4, 2008 hearing, BP Products entered its guilty plea under Rule 11(c)(1)(C). Lawyers for the victims filed motions and extensive briefs with supporting materials in opposition to the proposed plea. One hundred and thirty-four individuals filed victim-impact statements. At the hearing, the court allowed all those present who wanted to speak to do so. Ten individuals spoke in open court.

The lawyers representing the victims presented arguments on their request that this court reject the proposed plea.

One of the asserted grounds for rejecting the plea was the government’s failure to respond to two letters — one sent on December 21, 2007 and one sent on January 11, 2008 — asking for an explanation of how the $50 million fine was calculated. The day after the victims filed a motion asserting that the government had violated the victims’ “reasonable right to confer” by failing to respond to the letters, the government moved to unseal the October 2007

ex parte

motion and order. On February 5, 2008, the victims moved to reject the proposed plea on the ground that the October 18, 2007

ex parte

motion and order granting it, as well as the government’s failure to answer the two letters later sent by one of the lawyers representing the victims, violated the victims’ “reasonable right to confer” with the prosecutors and to be treated with fairness. On February 21, 2008, this court issued an opinion holding that these asserted CVRA violations were not in themselves a basis for rejecting the proposed plea. (Docket Entry No. 72). The victims petitioned the Fifth Circuit for a writ of mandamus. On May 7, 2008, the Fifth Circuit denied the petition.

The Fifth Circuit held that the

ex parte

procedure had violated the CVRA, concluding that because “there were fewer than two hundred victims ... it [wa]s not reasonable to say that notification itself’ would have been too difficult or that the government could not confer “in some rea

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sonable way with the victims before ultimately exercising its broad discretion” to execute a plea. (Docket Entry No. 79 at 6-7). The court concluded that:

[t]he Act gives the right to confer. The number of victims here did not render notice to, or conferring with, the victims to be impracticable, so the victims should have been notified of the ongoing plea discussions and should have been allowed to communicate meaningfully with the government, personally or through counsel, before a deal was struck.

(Id.

at 7).

But the Fifth Circuit agreed with this court that the alleged CVRA violations were not grounds for the relief sought. Observing that 134 victims had filed impact statements, and that ten had spoken in open court at the February 4, 2008 hearing, the court concluded that the victims had been “allowed substantial and meaningful participation.”

(Id.).

The Fifth Circuit concluded that “the better course” was to “deny relief, confident that the district court will take heed that the victims have not been accorded their full rights under the CVRA and will carefully consider their objections and briefs” “in deciding whether the plea agreement should be accepted.”

(Id.

at 8).

After the Fifth Circuit’s opinion, the victims — most through counsel — and the parties appeared at a July 16, 2008 hearing before this court. At the hearing, this court invited the victims to submit additional briefing and exhibits on the adequacy of the proposed fine and of the proposed terms of probation. The court specifically invited the victims to submit information about their losses and, over the parties’ objections, allowed the victims to provide their expert’s report on BP Products’s compliance with the OSHA Settlement Agreement. (Docket Entry No. 84 at 9, 43^14). The parties were given the opportunity to respond. The victims and the parties appeared at another hearing before this court on October 7, 2008, to present argument on the victims’ submissions and the parties’ responses. (Docket Entry No. 120).

Four fatalities associated with the Texas City refinery have occurred since the March 2005 explosion. Three of these deaths — all to employees of contractors— were unrelated to the type of conduct that led up to the March 2005 explosion. BP Products apparently has not been implicated in these deaths. The fourth death, of BP Products employee William J. Gracia, occurred when a 500-pound lid blew off of a water-filtration unit with defective bolts in the plant’s Ultracracker unit during startup on January 14, 2008. BP Products entered a settlement with OSHA, agreeing to correct six regulatory violations and to pay a $28,000 fine. (Docket Entry No. 110, Ex. 1; Docket Entry No. 111). A member of Gracia’s family spoke in court to object to the proposed plea in this case. (Docket Entry No. 66 at 50-54).

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III. The Legal Standard for Accepting or Rejecting a Rule 11(c)(1)(C) Plea

Federal Rule of Criminal Procedure 11(c)(1)(C) states that the government may enter into a plea agreement in which it “agree[s] that a specific sentence or sentencing range is the appropriate disposition of the case, or that a particular provision of the Sentencing Guidelines, or policy statement, or sentencing factor does or does not apply.” Such an agreement under Rule 11(c)(1) (C) “binds the court once the court accepts the plea agreement.” Fed. R.Crim. P. 11(c)(1)(C);

see also

1A Charles A. Wright & Andrew D. Leipold, Federal Practice and Procedure—Criminal § 180 (4th ed. 2008) (“Once a court accepts a Type C agreement, it may not unilaterally modify the agreement and impose either a higher or lower sentence than the one negotiated by the parties.”). A court may not condition acceptance of a Rule 11(c)(1)(C) plea on the modification of its terms.

See Smith,

417 F.3d at 488 (“A district court is absolutely prohibited from participating in plea negotiations.”);

Crowell,

60 F.3d at 203 (“When a court goes beyond providing reasons for rejecting the agreement presented and comments on the hypothetical agreements it would or would not accept, it crosses over the line established by Rule 11 and becomes involved in the negotiations.”);

United States v. Miles,

10 F.3d 1135, 1140 (5th Cir.1993) (“Rule 11 requires that a district court explore a plea agreement once disclosed in open court; however, it does not license discussion of a hypothetical agreement that it may prefer.”).

A court generally does not have the discretion to accept a Rule 11(c)(1)(C) plea agreement that provides for a sentence above a statutory maximum or below a statutory minimum.

See United States v. Cieslowski,

410 F.3d 353, 363 (7th Cir. 2005),

cert. denied,

546 U.S. 1097 , 126 S.Ct. 1021 , 163 L.Ed.2d 866 (2006) (holding that the sentence imposed under a Rule 11(c)(1)(C) plea agreement “must comply with the maximum (and minimum, if there is one) provided by the statute of conviction”);

see also

Fed. R.Crim. P. 11(f) (“The admissibility or inadmissibility of a plea, a plea discussion, and any related statement is governed by Federal Rule of Evidence 410.”). “Rule 410 excludes any evidence of a withdrawn plea of guilty; it does not distinguish between direct and circumstantial evidence. Hence, any evidence that would permit the jury to infer that the defendant had once pleaded guilty would be within the scope of the rule.” 23 Charles A. Wright & Kenneth W. Graham, Jr., Federal Practice & Procedure § 5343 (1980).

IV. The Objections to the Proposed Plea

The victims have submitted extensive filings, posing numerous — and evolving— objections to the proposed plea agreement. Each objection is examined and analyzed under the applicable legal standard.

A. Objections that the Victims No Longer Assert or Press

In initial briefs objecting to the proposed plea, the victims raised several arguments that they have since abandoned or no longer press. These arguments show the evolving nature of the objections the victims have raised.

The victims initially urged this court to reject the proposed plea because only BP Products, and not the parent company, BP p.l.c. (referred to as “BP Global”), was criminally charged. The victims later withdrew this objection, recognizing that it had no support in the law:

The Victims realize that the prosecutor has the exclusive discretion to select whom to charge. We concede that failure or refusal to charge the party which supervised, controlled, and directed the crime, however lenient or unwise, is within the prosecutor’s prerogative. We do not, because we cannot, ask the Court to reject the Plea Agreement for failing to charge BP Global.

(Docket Entry No. 28 at 21-22;

see also

Docket Entry No. 66 at 88-89 (affirming that the victims are not asking for rejection of the plea because the parent company and affiliates were not charged)).

The victims are not asking this court to reject

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the proposed plea because a higher or more severe criminal offense could have been charged.

(Id.

at 100-01).

The victims initially urged this court to reject the proposed plea because it improperly “immunized” BP Global and its subsidiaries from prosecution for future misconduct. This argument lacks a basis in the facts and the law. The plea agreement immunizes BP Products and its affiliates, including its parent, BP Global, from federal prosecution for any additional offenses “known to the Government at the time of this [plea] Agreement that are based upon evidence in the Government’s possession at this time and that

arose out of the conduct giving rise to the criminal investigation of the March 28, 2005 explosion.”

(Docket Entry No. 96, Ex. 1 at 4) (emphasis added). BP Products and the government have both clarified that this language does not prevent the prosecution of individuals for their role in the March 23, 2005 explosion. Nor does the language prevent the prosecution of BP Products, its parent, or its affiliates for their role in the explosion based on evidence that was not in the government’s possession in October 2007. Nor does the language immunize any individual, BP Products, its parent, or its affiliates, from criminal liability for any offenses occurring after the March 23, 2005 explosion, even if those offenses stemmed from the same problems that caused the March 23, 2005 explosion. The government explained that the clause at issue is a standard clause and is never used to immunize postoffense conduct.

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(Docket Entry No. 66 at 90-91). Counsel for BP Products explained in open court that “BP Products does not take the position and will not take the position that this agreement gives immunity for any conduct after the March 23, 2005 explosion.”

(Id.

at 91-92). The victims are no longer urging this objection as a basis for rejecting the plea.

(Id.

at 93).

The victims also initially argued that the proposed plea should be rejected, or at least a presentence investigation performed, because the government and BP Products had underreported the prior criminal history of BP Products and its parent and affiliates worldwide. The victims argued that the “total record” for BP Products, BP Global, and its affiliates “reveals at least nine cases of fines for safety violations, five of which involve death or injury, and at least 14 cases of environmental crimes and five cases of fraud crimes.” (Docket Entry No. 28 at 10-13). The victims later acknowledged that the criminal history disclosure was “not [their] main source of concern.” (Docket Entry No. 66 at 93-94).

B. The Present Objections

The victims continue to object to the fine, the probation terms, the absence of a presentence report, and the violation of the right to confer with the prosecution before the plea agreement was executed. The victims dispute virtually every aspect of how the fine should be calculated, including whether nonpecuniary losses and gains may be considered; what causation standard applies; and whether the fine calculation is so complex and burdensome that the statutory default maximum of $500,000 would apply if the plea were rejected.

The victims have specifically briefed the pecuniary and causation issues, (Docket Entry No. 69), and BP Products and the government have responded, (Docket Entry Nos. 74, 75). To obtain information about the nature and extent of the victims’ losses and to test the difficulty of making those determinations, this court asked the victims to submit loss information for between thirty to fifty victims, including all those who died in the explosion. (Docket Entry No. 84 at 43-44). The victims filed briefs and numerous exhibits on the alleged losses, (Docket Entry No. 101), and BP Products and the government have responded, (Docket Entry Nos. 104, 107).

The victims also object to the proposed probation terms. The victims do not appear to argue that requiring compliance with the OSHA Settlement Agreement or

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the TCEQ Agreed Order is inappropriate. Rather, the victims’ primary argument is that BP Products is not complying with the OSHA Settlement Agreement, making the proposed plea inadequate because it does not also require a court-appointed monitor to serve as an additional check. The victims have submitted the report of Michael Sawyer, who served as an expert witness for many of the plaintiffs in the civil litigation. The victims provided this report to the government before it executed the plea agreement. (Docket Entry No. 89; Docket Entry No. 120 at 150-51). BP Products and the government have replied to the victims’ briefs, attaching voluminous exhibits, including submissions from OSHA and the TCEQ. (Docket Entry Nos. 94, 96). BP Products and the government argue that the evidence shows that BP Products has in fact complied with the regulatory requirements imposed after the explosion and that the terms of probation are adequate and effective.

The victims also continue to argue that this court should deny the motion for waiver of the presentence investigation and report. (Docket Entry No. 117). BP Products and the government responded. (Docket Entry Nos. 118, 119). These arguments and response raise the issue whether the information that the parties and the victims have provided gives this court a sufficient basis to determine whether to accept the proposed plea.

Finally, the victims assert that the CVRA violation that the Fifth Circuit found is in itself a basis to reject the proposed plea. (Docket Entry No. 117 at 1-5). BP Products and the government have responded. (Docket Entry Nos. 118, 119).

Each of these issues is examined in depth.

V. The Fine

A. The Applicable Statutory Provisions

The Sentencing Guidelines provisions on fines for organizational defendants do not apply to environmental offenses. U.S.S.G. § 8C2.1. Instead, under U.S.S.G. § 8C2.10, a court is to “determine an appropriate fine by applying the provisions of 18 U.S.C. §§ 3553 and 3572.” Section 3553 sets forth the factors a court is to consider in determining a sentence.

Section 3572 sets forth the factors a court is to consider in setting a fine.

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No fine, even if the parties agree, can exceed the statutory maximum. Under 18 U.S.C. § 3571 (c), an organizational defendant that has been found guilty of a criminal offense for which no fine amount is specified by separate statute may be sentenced to a maximum statutory fine of not more than $500,000. Under the Alternative Fines Act, 18 U.S.C. § 3571 (d), however, a higher fine may result. Section 3571(d) states:

If any person derives pecuniary gain from the offense, or if the offense results in pecuniary loss to a person other than the defendant, the defendant may not be fined more than the greater of twice the gross gain or twice the gross loss, unless imposition of a fine under this subsection would unduly complicate or prolong the sentencing process.

Under § 3571, $500,000 is the statutory maximum fine against an organization that has been found guilty of a felony, but an alternative statutory fine applies if the defendant has derived pecuniary gain from the offense or the offense has resulted in pecuniary loss to a person other than the defendant. That alternative fíne can be no more than the greater of twice the gross gain or twice the gross loss. Under § 3571(d), if imposing the alternative maximum fine would “unduly complicate or prolong the sentencing process,” the $500,000 maximum applies.

B. Disputed Issues Relating to § 3571(d)

The victims and parties disagree about how § 3571(d), which is rarely discussed in the case law, should be interpreted and applied. These disputes bear on whether the $50 million fine is adequate and just.

1. The Loss or Gain To Be Measured

The victims assert that under § 3571(d), the fine must be based on the greater of twice the gross loss or gain, including all nonpecuniary losses such as pain and suffering, emotional distress, and loss of consortium. The parties vigorously dispute this interpretation. Instead, the parties argue that the statutory and Guidelines language and the case law make clear that the court is limited to considering gross

pecuniary

losses or gains under § 3571(d).

The victims assert that the use of the terms “pecuniary gain” and “pecuniary loss” in the first part of § 3571(d) and “gross gain” and “gross loss” in the second part indicates that Congress intended non-pecuniary as well as pecuniary gains and losses to be included in the fine calculation. The victims argue that § 3571(d) has two parts. The first is a “trigger mechanism,” which invokes the Alternative Fines Act only if pecuniary gain or loss is present (“[I]f any person derives pecuniary gain from the offense, or if the offense results in pecuniary loss to a person other than the defendant .... ”). The second is a “penalty calculator,” which allows all forms of gain or loss to be considered in calculating the fine (“[T]he defendant may not be fined more than the greater of twice the gross gain or twice the gross loss .... ”). (Docket Entry No. 69 at 1-3). The victims cite no authority to support this interpretation. The case law, the language of § 3571(d), and the related Guidelines pro

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visions are all to the contrary, supporting the conclusion that the “gross loss” and “gross gain” referred to are the gross

pecuniary

loss and gain identified in the statute.

The decisions addressing § 3571(d) have stated that calculations of loss or gain are to be based on pecuniary loss or gain amounts.

See, e.g., United States v. Chusid,

372 F.3d 113, 117 (2d Cir.2004) (“Section 3571 provides for a fine which is ... twice the resulting gross pecuniary gain to the defendant or loss to the defendant’s victims.”);

United States v. W. Coast Aluminum Heat Treating Co.,

265 F.3d 986, 994 (9th Cir.2001) (upholding loss calculation based on pecuniary loss);

United States v. Pippin,

903 F.2d 1478, 1483 (11th Cir.1990) (“This fine cannot exceed ... twice the gross pecuniary gain from the offense, or twice the gross pecuniary loss to the victim.”).

This reading is faithful to the language of the statute. Section 3571(d) applies only “if any person derives

pecuniary

gain from the offense, or if the offense results in

pecuniary

loss to a person other than the defendant.” 18 U.S.C. § 3571 (d) (emphasis added). In such cases, the fine is to be “no more than the greater of twice the gross gain or twice the gross loss.” As a matter of grammar and logic, the words “the gross gain” and “the gross loss” in the second part of the sentence could only refer to the pecuniary gain derived from the offense or the pecuniary loss resulting from the offense identified in the first part of the sentence. “Gross” pecuniary gain or loss simply means that the court is not to reduce the amounts to a net sum, by deducting such items as costs.

The victims’ approach makes the “pecuniary gain” derived from the offense or “pecuniary loss” resulting from the offense in the first part of the sentence mean something different or refer to something different than the “gross gain” and “gross loss” in the second part of the sentence. This reading ignores the words of the statute. This reading would lead not only to considering nonpecuniary losses or gains but also to considering

any

losses or gains, even if they are not derived or resulting from the offense.

Section 3571(d) is clear that the losses or gains must be those derived or resulting from the offense.

The Sentencing Guidelines also support interpreting § 3571(d) as including only pecuniary losses resulting and gains derived from the offense. The Guidelines consistently define “actual loss” as the “reasonably foreseeable pecuniary harm that resulted from the offense.” U.S.S.G. § 2B1.1, cmt. n. 3(A)(i). Similarly, “pecuniary harm” is defined as “harm that is monetary or that otherwise is measurable in money ... not including] emotional distress, harm to reputation, or other non-economic harm.”

Id.,

cmt. n. 3(A) (iii). The Guidelines explain that they derive the terms “pecuniary gain” and “pecuniary loss” from § 3571(d). U.S.S.G. § 8A1.2 cmt. n. 3(h), (i). The Guidelines explain that the “pecuniary gain” derived by the organization from the offense or the “pecu

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niary loss” resulting from the offense should be used to determine the base fine. U.S.S.G. § 8C2.4 emt. n. 1. The cases recognize that “[l]oss in the Sentencing Guidelines generally refers to pecuniary loss,” and that the Guidelines definition of “loss” was derived from § 3571(d).

United States v. Painter,

375 F.3d 336, 339 (5th Cir.2004) (internal quotations omitted) (citing U.S.S.G. § 5E1.2 cmt. n. 2).

The legislative history of the predecessor statute to § 3571(d), 18 U.S.C. § 3623 (c)(1) (repealed Nov. 1, 1987), also supports limiting the loss or gain to pecuniary loss or gain.

“Section 3623(c) authorizes a judge to impose a fine of up to twice the

pecuniary

gain derived by the defendant from the offense or twice the

pecuniary

loss inflicted upon any victim of the offense.” H.R.Rep. No. 98-906, at 17 (1984),

reprinted in

1984 U.S.C.C.A.N. 5433, 5449 (emphasis added). The same House Report also states that § 3623(c)(1) was modeled on § 6.03(5) of the Model Penal Code, which permits courts to impose a fine “not exceeding ... any higher amount equal to double the

pecuniary

gain derived from the offense by the offender.” Model Penal Code § 6.03(5) (emphasis added).

The weight of authority strongly supports limiting the fine calculation and the review of the reasonableness of the fine under § 3571(d) to pecuniary losses or gains. That precludes including such non-pecuniary factors as pain and suffering, mental anguish, or loss of consortium in examining the gross losses resulting from the offense and the gross gains BP Products derived from the offense.

2. The

Apprendi

Issue

BP Products and the government dispute whether under

Apprendi v. New Jersey,

530 U.S. 466 , 120 S.Ct. 2348 , 147 L.Ed.2d 435 (2000), absent a plea, the government would have to prove the amount of gain or loss caused by the offense, to a jury, beyond a reasonable doubt, to obtain a fine above $500,000 under § 3571(d). Under the Supreme Court’s decision in

Apprendi ,

“[ojther than the fact of a prior conviction, any fact that increases the penalty for a crime beyond the prescribed statutory maximum must be submitted to a jury, and proved beyond a reasonable doubt.” 530 U.S. at 490 , 120 S.Ct. 2348 . “[T]he ‘statutory maximum’ for

Apprendi

purposes is the maximum sentence a judge may impose

solely on the basis of the facts reflected in the jury verdict or admitted by the defendant.” Blakely v. Washington,

542 U.S. 296, 303 , 124 S.Ct. 2531 , 159 L.Ed.2d 403 (2004) (emphasis in original). A sentence below the statutory maximum may be set by the court under a preponderance of the evidence standard. BP Products argues that § 3571(c) sets a $500,000 maximum fine per felony count against a defendant organization, and that were the case to go to trial, the United States would have to prove the gain or loss to support a higher fine to the jury beyond a reasonable doubt. In support of its argument that any fine above $500,000 under § 3571(d) must be proved beyond a reasonable doubt, BP Products cites

United States v. LaGrou Distribution Systems, Inc.,

466 F.3d 585, 594 (7th Cir.2006), in which the Seventh Circuit vacated a $1 million fine imposed on the defendant organization for one felony count because

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gains or losses beyond what the court characterized as “the default statutory maximum [of] $500,000” had not been established by a “jury finding beyond a reasonable doubt.”

Id.

Instead, the district court computed the fine amount “using a preponderance of the evidence standard.”

Id.

LaGrou

does not make clear whether the district court determined that the $1 million fine was twice the maximum amount of either loss or gain under § 3571(d) or whether the court simply assessed what it believed to be the appropriate fine.

Id. LaGrou

appears to be the only case to have examined whether

Apprendi

applies to determining the amount of a fine under § 3571(d).

Although the court in

LaGrou

applied

Apprendi

to fíne determinations, it concluded that

Apprendi

did not apply to restitution: “[T]his court has consistently held that restitution is a civil penalty, not criminal, and therefore the Sixth Amendment and

Booker

do not apply.” 466 F.3d at 593 .

Other courts have similarly held that

Apprendi

does not apply to restitution determinations in criminal cases.

See United States v. Danford,

435 F.3d 682, 689 (7th Cir.2006) (“[Restitution ‘is not a criminal punishment but a civil remedy administered for convenience by courts that have entered criminal convictions.’ Restitution is determined by the judge using the lower preponderance of the evidence standard.”) (quoting

United States v. George,

403 F.3d 470, 473 (7th Cir.2005));

United States v. Ziskind,

471 F.3d 266, 269 (1st Cir.2006),

cert. denied,

549 U.S. 1316 , 127 S.Ct. 1902 , 167 L.Ed.2d 384 (2007);

United States v. May,

413 F.3d 841, 849 (8th Cir.2005) (concluding that

Apprendi

does not apply because “restitution does not have a ‘statutory maximum’ ”),

cert. denied,

546 U.S. 1024 , 126 S.Ct. 672 , 163 L.Ed.2d 541 (2005). Courts have also held that

Apprendi

does not apply to forfeiture orders.

See United States v. Swanson,

483 F.3d 509, 516 (7th Cir.2007),

cert. denied,

— U.S. —, 128 S.Ct. 455 , 169 L.Ed.2d 318 (2007) (“[T]he Sixth Amendment and

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Booker

do not apply to forfeiture orders because there is no statutorily prescribed maximum amount of forfeiture.”);

United States v. Huber,

462 F.3d 945 , 949 (8th Cir.2006) (“Criminal forfeiture is an indeterminate sentencing scheme and accordingly, Huber was not entitled to a reasonable doubt forfeiture instruction under the

Apprendi

line of reasoning.”);

United States v. Alamoudi,

452 F.3d 310, 315 (4th Cir.2006) (“We note that in holding that the. Sixth Amendment right recognized in

Booker

does not apply to forfeiture orders, we join every circuit to consider the issue.”) (citing cases from the Second, Third, Sixth, Seventh and Eighth Circuits);

United States v. Gasanova,

332 F.3d 297, 300-01 (5th Cir.2003),

cert. denied,

540 U.S. 1011 , 124 S.Ct. 550 , 157 L.Ed.2d 422 (2003) (“[S]tatutorily-prescribed forfeiture is warranted upon a showing of a preponderance of the evidence.”).

If the conditions for applying § 3571(d) are met — pecuniary gain is derived from the offense or pecuniary loss resulted from the offense — the “statutory maximum” is the greater of twice that gross gain or gross loss and a fíne within that limit arguably is not subject to

Apprendi .

This is consistent with the rationale some circuit courts have used in explaining why

Apprendi

does not apply to determining restitution or forfeiture amounts. As the Third Circuit explained in

United States v. Leahy,

438 F.3d 328, 337-38 (3d Cir.2006),

cert. denied,

549 U.S. 1071 , 127 S.Ct. 659 , 660, 661, 166 L.Ed.2d 547 (2006):

Under the defendants’ view, the conviction itself yields a restitution amount of zero dollars, and the factual finding of the amount of loss therefore increases the sentence beyond the maximum sum authorized by the facts, in violation of

Booker.

On the contrary, we see the conviction as authorizing restitution of a specific sum, namely the “full amount of each victim’s loss”; when the court determines the amount of loss, it is merely giving shape to the restitution penalty born out of the conviction.

Id.

(quoting 18 U.S.C. § 3664 (f)(1)(A));

see also United States v. Marlatt,

24 F.3d 1005, 1007 (7th Cir.1994) (noting “the difference between ‘but-for’ causation and the causation — for which the presence of but-for causation is ordinarily a necessary condition but rarely a sufficient one — that imposes legal liability”).

The

Spinney

court also pointed out that proximate causation in a criminal case presents a higher threshold for proof than proximate causation in a civil tort case. “We reject the government’s argument that the Restatement of Torts provides a useful guideline for resolving the proximate cause issue in this case. Proximate cause analysis in crimes differs from tort analysis of causation.” 795 F.2d at 1416 n. 2.

Construing § 3571(d) as imposing a proximate causation requirement is also consistent with the Supreme Court’s decision in

Hughey v. United States,

495 U.S. 411 , 110 S.Ct. 1979 , 109 L.Ed.2d 408 (1990), in which the Court concluded that a defendant could be ordered to pay restitution only for damages caused by the “offense of conviction,” to the exclusion of other “losses stemming from all conduct attributable to the defendant, including conduct unrelated to the offense of conviction.”

Id.

at 418 , 110 S.Ct. 1979 .

BP Products and the government argue that if a proximate causation standard applies under § 3571(d), absent the plea, the government would have a difficult time at trial establishing the necessary causal links among BP Products’s charged criminal conduct, liability for the explosion, and the victims’ losses or BP Products’s gain.

BP Products points out that the CSB identified numerous causes of the explosion for

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which BP Products has not been charged, including many actions and omissions that are not criminal. These actions and omissions include miscommunications among operations personnel, employees’ failures to follow written start-up procedures that were in place, inadequate training, ineffective supervision, insufficient staff, and excessive overtime for workers. (Docket Entry No. 107 at 9-13). BP Products and the government argue that these uncharged and noncriminal acts would greatly complicate and could defeat the government’s ability to prove not only that the charged offense proximately caused the explosion, but also the amount of the pecuniary losses or pecuniary gains proximately caused by the offense.

The government recognizes that if it had to try this case, showing the necessary causal link between the specific Clean Air Act violations charged and the explosion at the ISOM unit would require “methodically and carefully structure[d]” and highly technical proof. (Docket Entry No. 75 at 5). The government concedes a significant risk that were the case to go to trial, the court would not adopt “the victims’ expansive reading of’ § 3571(d) and the government would be unable to draw a connection sufficient to satisfy the statute’s causation requirement as to liability or as to the losses or gains to be used in determining the fine.

(Id.

at 4).

There are two aspects to the causation issues raised by the briefing. Both bear on the litigation risks that must be analyzed in assessing the proposed plea. The first is the causal relationship between the charged offense and liability for the explosion. The government notes that before it executed the plea agreement, there was no admission from BP Products that its criminal conduct resulted in the explosion. The victims respond that since then, a BP Products business unit leader admitted at a state civil trial that BP Products’s criminal conduct caused the explosion:

MR. CANNON: See, what I’m trying to make sure is that the lawyers don’t come back later and say, well, that was just a violation of the Clean Air Act. It doesn’t have anything to do with this accident. You’re testifying under oath and assuring this jury and this judge that BP is guilty of a felony that caused this accident and these injuries?

MR. CASEY: Yes.

(Docket Entry No. 69, Ex. 2 at 137-38). The victims argue that because of this statement, the “litigation risk on the causation issue is, exactly, zero.”

(Id.

at 8). Although the unit leader’s statement es

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tablishes but-for cause, it is unclear that it establishes proximate cause. This is clarified by other portions of his testimony:

MR. CANNON: [D]o you admit that your company committed a crime that caused this explosion, a criminal act?

MR. CASEY: I admit and I, on behalf of the company, have signed that agreement that we are taking responsibility for those facts on the violation of the Clean Air Act.

(Id.,

Ex.

at 137).

The second aspect to the causation issue is the relationship between BP Products’s offense and the elements of the fine under § § 3571(c) and (d). In assessing the adequacy and reasonableness of the proposed fine, this court need not determine with precision what amount of pecuniary loss resulted from, or what amount of pecuniary gain was derived from, the offense conduct under a proximate-cause standard. This court must consider whether $25 million is a reasonable estimate of those losses or gains. As part of that analysis, this court must also consider whether, absent the plea, the difficulties in proving the pecuniary losses or gains proximately caused by the offense would trigger the complexity provision of § 3571(d) and limit the government to the default $500,000 fine amount.

4. Whether Calculating Gain or Loss Under § 3571(d) Would “Unduly Complicate or Prolong the Sentencing Process”

A court need not — and should not — calculate a fine under § 3571(d) if calculating the gain or loss “would unduly complicate or prolong the sentencing process.” 18 U.S.C. § 3571 (d). If a court concludes that the calculation is unduly complicated, then the statutory maximum fine for an organization is $500,000 per felony count under § 3571(c). BP Products and the government strenuously argue that were this case to go to trial, the court would conclude that calculating the pecuniary gain derived from the offense or pecuniary loss resulting from the offense would unduly complicate and prolong the sentencing process. The result would be a $500,000 fine.

The victims have not directly addressed the argument that calculating the fine based on gain derived from or loss resulting from the offense would be unduly complicated and time-consuming. Instead, the victims argue that it is enough to show that calculating even a portion of the total gain or loss results in a figure far above $25 million. (Docket Entry No. 69 at 1). BP Products and the government counter that calculating even a portion of the gain or loss would be unduly complicated and would prolong sentencing beyond what the statute contemplates or permits.

Few authorities shed light on how complicated or prolonged a fine determination must be to trigger the complexity provision of § 3571(d). The legislative history of 18 U.S.C. § 3623 (c), the predecessor statute to § 3571(d), includes a House Report that explains that the complexity provision “does not require that a fine be determined on the basis of the defendant’s gain or the victim’s loss in every case”:

[F]or example, if determining the amount of the defendant’s gain were to require a protracted hearing that would last longer than the trial, the judge could decline to base the fine on the defendant’s gain. The court’s determination as to whether imposing a fine based on defendant’s gain or victim’s loss is discretionary, and the committee is confident that federal judges will not abuse this discretion.

H.R.Rep. No. 98-906, at 17 (1984),

reprinted in

1984 U.S.C.C.A.N. 5433, 5450.

Similar statutory sections provide useful guidance. The Victim and Witness Protec

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tion Act (“VWPA”), 18 U.S.C. § 3663 (a)(1)(B) (ii), provides that “[t]o the extent that the court determines that the complication and prolongation of the sentencing process resulting from the fashioning of an order of restitution under this section outweighs the need to provide restitution to any victims, the court may decline to make such an order.” This provision was added to “prevent sentencing hearings from becoming prolonged and complicated trials on the question of damages owed the victim.” S.Rep. No. 97-532, at 31 (1982),

reprinted in

1982 U.S.C.C.A.N. 2515, 2537. The Mandatory Victims’ Restitution Act (MVRA), 18 U.S.C. § 3663A(c)(3)(B), provides that the restitution requirement “shall not apply [in cases involving offenses against property or offenses violating the Controlled Substances Act, including offenses committed by fraud or deceit] if the court finds, from the facts on the record, that determining complex issues of fact related to the cause or the amount of the victim’s losses would complicate or prolong the sentencing process to a degree that the need to provide restitution to any victim is outweighed by the burden on the sentencing process.” This provision was added to “guarantee[ ] that the sentencing phase[s] of criminal trials do not become fora for the determination of facts and issues better suited to civil proceedings”:

all cases,

it is the committee’s intent that highly complex issues related to the cause or amount of a victim’s loss not be resolved under the provisions of mandatory restitution. The committee believes that losses in which the amount of the victim’s losses are speculative, or in which the victim’s loss is not clearly causally linked to the offense, should not be subject to mandatory restitution.

S.Rep. No. 104-179, at 19 (1996),

reprinted in

1996 U.S.C.C.A.N. 924, 931-32 (emphasis added).

The cases decided under § 3571(d) as well as under §§ 3663(a)(1) (B)(ii) and 3663A(c)(3)(B) show that courts are most likely to conclude that determining the amount of a fine or restitution would unduly complicate or prolong the sentencing proceeding when there are: multiple victims; the causation issues are disputed; or disputed future losses are involved. In the present case, all three factors are present.

a. Multiple Victims

In a case decided under the MVRA,

In re W.R. Huff Asset Mgt. Co., LLC,

409 F.3d 555 , 563 (2d Cir.2005), the Second Circuit approved a settlement creating a $715 million fund to be divided among thousands of victims. The court acknowledged that the fund did not provide full restitution to all victims. The court approved the settlement because if the case had been tried, there was a strong likelihood that the complexity exception to the MVRA would apply and the victims would receive no restitution. The court emphasized the large number of victims and the presence of disputed issues, including causation:

The district court determined that the victims in this case were numerous and that the complexity of resolving a multitude of factual and causal issues would extend the sentencing process inordinately. As a basic predicate to this complexity, it is undisputed that there are potentially tens of thousands of victims of the [defendants’] crimes. Second, the amount of losses of those victims has not been established, and doing so would indisputably take a great deal of time.

Id.

The court concluded that “[c]learly[] this case fits within the dual exceptions contained in the MVRA, and the district court did not abuse its discretion by deciding to accept the provisions of the Settle

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ment Agreement as reasonable substitute restitution

.Id.

at 563-64.

In another MVRA case,

United States v. Reifler,

446 F.3d at 113-139 , the Second Circuit stated that the complexity exception might apply in a securities fraud action involving millions of shares and an unspecified number of shareholders. In that case, determining the restitution amount would require analyzing which shares were purchased in reliance on the defendants’ alleged fraudulent statements and determining whether these shares were later sold, and, if so, at what price. The district court had failed to conduct this analysis before ordering the defendants to pay over $8.6 million in restitution. The appellate court vacated the sentence and remanded, stating that the district court might appropriately invoke the complexity exception to the MVRA.

Id.

at 139 .

b. Disputed Causation and Other Issues

The Supreme Court has held in the restitution context that a defendant may only be ordered to pay restitution for damages caused by the “offense of conviction,” to the exclusion of other “losses stemming from all conduct attributable to the defendant, including conduct unrelated to the offense of conviction.”

Hughey v. United States,

495 U.S. at 418 , 110 S.Ct. 1979 . Courts are more likely to apply the complexity exception if the amount of gain or loss caused by the defendant’s offense conduct is difficult to separate from gain or loss attributable to other factors. In

United States v. Kones,

77 F.3d 66, 69 (3d Cir.1996), the Third Circuit explained that the complexity exception in the VWPA was designed to avoid “bring[ing] fault and causation issues before the sentencing court that cannot be resolved with the information otherwise generated in the course of the criminal proceedings on the indictment.” The court explained:

Nothing in the legislative history evidences an expectation that a sentencing judge would adjudicate, in the course of the court’s sentencing proceeding, all civil claims against a criminal defendant arising from conduct related to the offense. Rather, it was expected that entitlement to restitution could be readily determined by the sentencing judge based upon the evidence he had heard during the trial of the criminal case or

learned in the course of determining whether to accept a plea and what an appropriate sentence would be.

Id.

(emphasis added). The court affirmed the district court’s refusal to award restitution to a patient of the defendant doctor. The patient had become addicted to pain killers that the defendant illegally prescribed. The defendant was convicted of mail fraud based on his submission of fraudulent insurance claims, some related to the patient. The court concluded that although the patient’s addiction may have arisen from drugs provided “in furtherance of’ the defendant’s mail fraud scheme, establishing a restitution amount based on the contribution to the patient’s addiction would require prolonged and complicated proceedings to resolve the disputed issues.

Id.

at 71 .

United States v. Reifler,

446 F.3d at 135 , the Second Circuit vacated over $8.6 million in restitution that two of the defendants were ordered to pay to victims of their securities fraud. The district court had ordered restitution based on the total diminution in value for all shares after the fraud was revealed. The Second Circuit reversed and remanded. The court noted that many of the shareholders were the defendants and their coconspirators and concluded that the restitution amount could not include those shareholders’ losses. As to the losses of the nondefendant shareholders, there were “difficult questions as to both the causation requirement

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and the requirements for determining the timing and the amounts of losses caused.”

Id.

at 135 . The court noted that many of the nondefendant shareholders would not be entitled to recover under § 10(b) and Rule 10b-5 because they could not show that they made their purchases in reliance on a fraudulent misrepresentation by the defendants or because they did not sell after the fraud was revealed.

Id.

at 136. The court remanded to the district court for resentencing and suggested — but did not mandate — that the district court invoke the complexity exception and decline to award restitution:

Congress plainly intended that sentencing courts not become embroiled in intricate issues of proof, as it provided that the MVRA is to be inapplicable if the court finds that the determination of complex factual issues related to the cause or amount of the victims’ losses would unduly burden the sentencing process. This provision reflects Congress’s intention that the process of determining an appropriate order of restitution be streamlined ... and be made quickly.

Id.

at 136, 139 (internal citations and quotations omitted).

United States v. Gibson,

409 F.3d 325, 342 (6th Cir.2005), the Sixth Circuit upheld the district court’s invocation of the complexity exception under § 3571(d). The defendant corporation was convicted of conspiracy, making false statements to and concealing material facts from a federal agency, and violating the Mine Safety and Health Act. The government pxxrsued a sentence under § 3571(d) based on the defendants’ pecuniary gain derived from the offense. The district court acknowledged that the corporation “probably realized some gain,” but refused to hear evidence the government sought to present on the pecuniary gain issue.

Id.

The court concluded that “there’s no defensible methodology to use in calculating the gain with any reasonable certainty.”

Id.

The district judge added: “I might be here for a long time and still have lots of questions about the amount, and I’d be[] engaging in speculation and guesswork, ... and certainly I think it’s going to complicate matters, and it’s going to prolong this sentencing.”

Id.

The Sixth Circuit concluded that the district court did not err in invoking the complexity provision of § 3571(d).

Similarly, in

United States v. Schwartz,

No. 3:06-cr-2, 2006 WL 1662899 , at *1 (D.Conn. May 25, 2006), the defendant, a tax accountant, pleaded guilty to two counts of making false statements to the IRS in his own federal income tax returns and in income tax returns he prepared on behalf of the CEO of his company. The CEO and the CEO’s wife sought restitution, arguing that the defendant’s actions had cost them between $2.1 million and $5.4 million in tax penalties.

Id.

The court concluded that the complexity exception to the restitution statutes applied because “a determination of fault, causation, and amount of restitution in this case would clearly overwhelm an otherwise straightforward sentencing proceeding.”

Id.

at *5 . The court described the complexities in calculating the loss amount to determine restitution:

[T]he court would be required to resolve many issues outside of the Information and Stipulated Offense Conduct, including ... whether the IRS penalties and interest claimed by the [putative victims] were proximately caused by defendant’s misrepresentations to the IRS or whether there were other intervening factors, and the amount of restitution — which is demonstrably complex, as the [victims] themselves have claimed different amounts in their various letters, and uncertain, because the [victims] are currently protesting various penalties. Assessment of IRS policy would have to be made to determine the likely outcome

*694

had defendant not made the misrepresentations for which he was convicted, and defendant would likely have to obtain his own forensic accountant to examine the claimed amount of losses flowing directly from these lies, as opposed to the other alleged fraudulent conduct.

Id.

at *6 . The court noted that determining restitution would be complicated because the amount of the victims’ loss was “intertwined with the losses caused by defendant’s allegedly fraudulent and other wrongful conduct” that were not part of the criminal charge but had been the subject of prolonged civil litigation.

Id.

United States v. Foote,

No. 00-cr-20091, 2003 WL 22466158 , at *7 (D.Kan. July 31, 2003), the defendant was convicted of conspiracy to traffic in counterfeit goods. The defendant argued, and the court agreed, that restitution under § 3663 based on loss would be inappropriate, in part because the causation issues would unduly complicate the sentencing. There was no reliable way to quantify the pecuniary losses to the victims — which included purchasers, manufacturers, and retailers— resulting from the sales of the counterfeit goods, and the “government ha[d] not proposed any reliable estimate of victim losses.”

Id.

The court concluded, however, that a fine under § 3571(d) based on the gross gain realized by the defendant from sales of the infringing products was calculable and appropriate. The court based the fine upon the defendant’s revenues from the sale of the infringing merchandise.

Id.

c. Future Losses

BP Products argues that future losses should never be compensable under § 3571(d). The parties and victims agree that no case has addressed the issue in the context of § 3571(d). BP Products cites the Seventh Circuit’s opinion in

United States v. Fountain,

768 F.2d 790, 802 (7th Cir.1985),

cert. denied,

475 U.S. 1124 , 106 S.Ct. 1647 , 90 L.Ed.2d 191 (1986), in which the court held that in calculating restitution under the statutory predecessor to § 3663, “a calculation of lost future earnings unduly complicates the sentencing process and hence is not authorized by [§ 3663] — unless, to repeat a vital qualification, the amount is uncontested, so that no calculation is required.”

Id.

The court concluded that “projecting lost future earnings has no place in criminal sentencing if the amount or present value of those earnings is in dispute.”

Id.

BP Products argues that the logic underlying the court’s determination that calculating future losses unduly complicates a restitution order is equally applicable to fine calculations under § 3571(d). (Docket Entry No. 107 at 4-7).

This court disagrees that applying

Fountain

results in a categorical bar to basing restitution or a fine on future losses resulting from an offense. Courts in this circuit have, without discussion, approved using future losses to determine restitution.

See United States v. Razo-Leora,

961 F.2d 1140, 1146 (5th Cir.1992) (affirming order that defendant pay $100,000 in lost future income as restitution to the victim’s widow);

United States v. Jackson,

978 F.2d 903, 915 (5th Cir.1992),

cert. denied,

508 U.S. 945 , 113 S.Ct. 2429 , 124 L.Ed.2d 649 (1993) (holding that the district court has the authority to award future lost income under the VWPA, but remanding for further factual findings on the victim’s losses).

Courts in other circuits have questioned or rejected a categorical approach, while recognizing that the difficulties in calculating future loss are likely to trigger the complexity exception. In

United States v. Oslund,

453 F.3d 1048, 1063 (8th Cir.2006), the Eighth Circuit concluded that the restitution statutes “do[] not prevent the district court from using its abundant

*695

discretion in crafting restitution orders to include the lost future income of a victim.” The court stated, however, that “a burdensome, complicated, or speculative calculation provides a good reason for the district court to decline to exercise its discretion in favor of including future lost income in a restitution order.”

Id.

The Eighth Circuit also agreed with the proposition in

Fountain

that the calculation of restitution based on future losses will in many cases be unduly complicated unless there is no dispute as to the amount.

Id.

United States v. Cienfuegos,

462 F.3d 1160 (9th Cir.2006), the Ninth Circuit concluded that interpreting § 3663A to bar restitution for lost future income “would conflict with Congress’s stated intent to force offenders to ‘pay full restitution to the identifiable victims of their crimes.’ ”

Id.

at 1165 (quoting S.Rep. No. 104-179, at 12 (1996),

reprinted in 1996

U.S.C.C.A.N. 924, 925). The court stressed, however, that proof of future losses “must not be predicated on speculation or conduct unrelated to the offense of conviction, as such an award would be inconsistent with congressional. intent.”

Id.

at 1168 (citing S.Rep. No. 104-179, at 19 (1996),

reprinted in

1996 U.S.C.C.A.N. 924, 932 (“The committee believes that losses in which the amount of the victim’s losses are speculative, or in which the victim’s loss is not clearly causally linked to the offense, should not be subject to mandatory restitution.”)). The court remanded for calculation of restitution to the estate of a manslaughter victim’s family consistent with its order.

Id.

at 1169.

United States v. Serawop,

505 F.3d 1112, 1123-25 (10th Cir.2007), the Tenth Circuit concluded that future losses may be included in a restitution order under § 3663A, citing

Cienfuegos .

The court noted, however, that the statute does not cover “incidental, consequential, or pain and suffering awards ... [or] speculative reimbursements.”

Id.

at 1124. The court upheld the award of lifetime future earnings to the estate of a three-month-old homicide victim but commented that “[t]he district court would also certainly have been on firm ground, noting the time and complexity of its subsequent proceedings, to have left such complex matters to a civil determination. Indeed, it might often be the case that complexity or delay caused by these determinations should be deferred to a civil forum.”

Id.

This court must consider the risk that absent the parties’ agreement as to the fine, the complexity provision of § 3571(d) would likely apply. The criteria the cases use for applying the provision are all met: there are multiple victims (in numbers that could range from 180 to 4,000); there are disputed issues as to causation; and many of the victims have claimed future losses in amounts that are vigorously disputed. These considerations impact the reasonableness of the fine amount in the proposed plea.

C. Analysis of the Victims’ Objections to the $50 Million Fine

1. Calculation Based on Gain

The government and BP Products have clarified that the $50 million fine represents a reasonable estimate of twice BP Products’s gross pecuniary gain derived from the Clean Air Act violations to which it pleaded guilty. The government arrived at the $50 million figure by calculating BP Products’s cost savings in not replacing the blowdown stack in the ISOM unit and in not using an off-site contractor facility. (Docket Entry No. 66 at 120-22). The government calculated the costs that BP Products incurred in replacing eleven other blowdown stacks at the Texas City refinery ($50 million). The government also calculated the costs that BP Products incurred in manufacturing an off-site con

*696

tractor facility after the explosion ($33 million). The government prorated both of these costs to determine the portion attributable to the ISOM unit. Using these figures, the government concluded that BP Products saved approximately $25 million from not implementing these improvements in the ISOM unit before the explosion, and that this was the gross pecuniary gain derived from the offense. The government doubled this figure under § 3571(d) to reach the $50 million fine agreed to in the proposed plea.

(Id.

at 121). The government and BP Products assert that this fine is based on a proper estimate of the cost savings derived from the offense, and that it is the “very highest end of the fine amount that [could be recovered] in this case.”

(Id.).

The victims contend that the $50 million fine is far too low a measure of gross gain. The victims correctly note that “[g]ain can result from either additional revenue or cost savings.” U.S.S.G. § 8A1.2 emt. n. 3(h). But the victims’ arguments for a higher gain amount are factually or legally deficient under § 3571(d). The bases the victims urge for determining a higher gain amount rely on an improper construction of the information and are too tenuously connected to the offense conduct.

a. The Information and Charged Offense

i. The Scope of the Information

The victims argue that the information charges a plant-wide offense, and that a fine based on gross gain derived from the offense should therefore be based on the profits from the entire Texas City refinery, not just the cost savings allocated to the ISOM unit. The victims point to the introduction section of the information, which states that “[w]ithin the BP Products Texas City refinery, there were 29 different refining units and four chemical units that had the capacity to process 460,-000 barrels of crude oil per day into components including gasoline, jet fuel, diesel fuel, and chemical feed stocks.” (Docket Entry No. 1 at 1). The victims also point to the fact that one of the two regulatory violations charged in the information — the failure to warn the contractors of the raffinate splitter startup, in violation of 40 C.F.R. § 68.87 (b)(2) — explicitly references the ISOM unit, while the other charged violation — failing to [establish and implement written procedures, in violation of 40 C.F.R. § 68.73 (b) — does not.

The information states:

Knowing Violations of Risk Management Practices

Between in or about January 1999 and on or about March 23, 2005, in Texas City, Texas, within the Southern District of Texas, the defendant, BP PRODUCTS NORTH AMERICA INC., did knowingly ... fail[ ] to do the following:

a. Establish and implement written procedures to maintain the ongoing mechanical integrity of process equipment, in violation of Title 40, Code of Federal Regulations, Section 68.73(b).

b. Inform contract owners and operators of the known potential fire, explosion, or toxic release hazards related to the contractors!’] occupation of temporary trailers in the vicinity of the ISOM Unit, in violation of Title 40, Code of Federal Regulations, Section 68.87(b)(2).

(Docket Entry No. 1 at 7-8). The victims argue that because the § 68.73(b) charge does not reference the ISOM unit, this charge applies to the entire Texas City refinery. (Docket Entry No. 51 at 22-24 & n. 9).

The information describes the entire plant only in an introductory section, under the subheading “BP Texas City Refin

*697

ery Operations.” (Docket Entry No. 1 at 1). There are subsequent, separate subheadings for “The Clean Air Act,” “BP Products Texas City Refinery Isomerization Unit, Blowdown Drum and Stack,” and “Explosion of March 23, 2005.”

(Id.

at 3-4). As the sequence of these subheadings makes apparent, the information begins with a general introduction and becomes progressively more specific in setting out the charge, which appears under the final subheading, “Knowing Violations of Risk Management Practices.”

(Id.

at 7). Two subsections — under subheadings reading “BP Products Texas City Refinery Isomerization Unit, Blowdown Drum and Stack,” and “Explosion of March 23, 2005” — state the specific conduct alleged as criminal conduct. The conduct alleged in these sections relates only to the ISOM unit.

(Id.

at 3-7). The structure of the information and the nature of the conduct that it alleges make clear that the violations charged occurred only in the ISOM unit. The victims’ argument that the information charges a plant-wide violation of § 68.73(b) because this part of the information does not specifically reference the ISOM unit is not persuasive.

“An indictment must be read in its entirety.”

United States v. Miranda,

494 F.2d 783, 785 (5th Cir.1974),

cert. denied,

419 U.S. 966 , 95 S.Ct. 228 , 42 L.Ed.2d 181 (1974) (citing

United States v. Wilshire Oil Co.,

427 F.2d 969 (10th Cir.1970)). “An indictment is reviewed entirely on a practical basis, rather than in a ‘hypertechnical manner.’ ”

United States v. Sandoval,

347 F.3d 627, 633 (7th Cir. 2003) (quoting

United States v. Craig Smith,

230 F.3d 300, 305 (7th Cir.2000)). “The indictment or information must be a plain, concise and definite written statement of the essential facts constituting the offense charged.” Fed. R.Crim. P. 7(c)(1). The information, viewed as a whole, describes and charges conduct in the ISOM unit that led up to the March 2005 explosion. The information does not allege criminal conduct outside the ISOM unit.

The government asserts that it only intended to charge a criminal violation of the Clean Air Act in the ISOM unit, where the explosion occurred. (Docket Entry No. 66 at 124-25). In the Statement of Facts, BP admits to criminal violations of the Clean Air Act only in the ISOM unit. (Docket Entry No. 8, Ex. A at 8-16; Docket Entry No. 96, Ex. 6 at 8-16). The information and Statement of Facts support the parties’ interpretation of the information as limiting the criminal conduct alleged to the ISOM unit.

ii. The Charged Offense and Other Offense Conduct

A fine under § 3571(d) may only be based on the conduct specifically charged in the information, not on other uncharged criminal activity or other wrongdoing. Under § 3571(d), the fine may be no more than the greater of the gross (pecuniary) gain derived from the “offense” or the gross (pecuniary) losses resulting from the “offense.” “Offense,” in Guidelines terms, means the offense of conviction and relevant conduct.

See

Section 8A1.2, application note 3(h) (the term “pecuniary gain” is derived from § 3571(d) and means additional before-tax profit— either additional revenues or costs savings — resulting from the offense of conviction and relevant conduct under § 1B1.3). “Relevant conduct” is “all acts and omissions ... that occurred during the commission of the offense of conviction, in preparation for that offense, or in the course of attempting to avoid detection or responsibility for that offense.” U.S.S.G. § lB1.3(a). Relevant conduct is limited to

criminal

conduct and cannot extend to acts or omissions that are not criminal, even if they are negligent or repugnant. “Relevant conduct includes

offenses

that

*698

are part of the same course of conduct or common scheme or plan as the offense of conviction.”

United States v. Mann,

493 F.3d 484, 497 (5th Cir.2007) (emphasis added) (internal quotations omitted) (quoting

United States v. Brummett,

355 F.3d 343, 344 (5th Cir.2003));

see also United States v. Peterson,

101 F.3d 375, 385 (5th Cir.1996) (“For conduct to be considered ‘relevant conduct’ for the purpose of establishing one’s offense level that conduct must be criminal.”).

As noted, few cases analyze the application of § 3571(d). One such case is instructive in defining the term “offense.” In

United States v. Aguilar,

928 F.2d 1137 , 1991 WL 40339 , at *1 (9th Cir. Mar.25, 1991) (unpublished), the defendant pleaded guilty to one count of possession with intent unlawfully to use or transfer five or more false United States immigration documents. The court imposed a $33,580 fine, the amount found at the defendant’s home, where agents also discovered 64 false immigration documents. The evidence received by the district court indicated that the defendant’s “normal” fee for the use of these documents was $500 per person, that she had been involved in this “business” since 1988, when she was arrested in possession of 284 false documents that she was then “renting” for between $45-$140, and- that the documents were returned to the defendant upon their users’ successful entrance to the United States, thereby becoming available for repeated use.

Id.

at *3 . The court approved the fine calculation, which was based on a conservative estimate that each document discovered in the defendant’s home was used just once, at the going rate of $500.

Id.

The defendant argued that the court had wrongly based the fine on the gains derived from her “illegal activity” — all 64 documents — -as opposed to the gains derived from the “offense of conviction.” The court found that the district court had properly calculated the fine even assuming that the “term pecuniary gain as used in § 3571(d) refers only to the gain from the ‘offense of conviction.’ ”

Id.

The -court emphasized that the indictment to which the defendant had pleaded guilty charged unlawful use of

“five or more’’

false immigration documents.

Id.

“Given the inevitable uncertainty involved in assessing how much money has been derived from particular criminal conduct, the district court’s determination that the ‘pecuniary gain’ to Aguilar from the ‘offense of conviction’ was $33,580.00 was not clearly erroneous.”

Id.

at *4.

The Seventh Circuit’s opinion in

United States v. Alldredge,

551 F.3d 645 (7th Cir.2008), is a recent effort to define the word “offense.” The defendant was convicted of distributing counterfeit currency. The defendant had received the currency as payment for checks that she forged and shipped for sale overseas. The district court had enhanced the defendant’s sentence on the basis that part of the offense had occurred outside the United States. The Seventh Circuit reversed, noting that the defendant had not been charged with forging checks or participating in international counterfeiting.

Id.

at 647 . Because the offense of conviction — distributing counterfeit currency — occurred exclusively in the United States, the related international aspects of the defendant’s transaction could not be used as a basis for an enhanced sentence. The court noted that the Guidelines, which in relevant part are derived from § 3571(d), “implement a charge-offense system rather than a real-offense system.”

Id.; see also United States v. Schaefer,

291 F.3d 932, 938 (7th Cir.2002) (rejecting a loss calculation derived from all receipts used in the defendant’s artwork business, despite agreeing with the government that the defendant’s business was “permeated with fraud,” because the government had not established by a preponderance of the evidence that

*699

the defendant’s entire business was tainted by unlawfulness).

The fíne levied against BP Products must be based on the offense of conviction and “relevant conduct.” Those are criminal acts and omissions in the ISOM unit.

b. The Victims ’ Proposed Bases for Determining Gain

i. Fine Based on Profits

The victims argue that the fine should be twice the Texas City plant’s profits for the six years before the explosion because the information charges a six-year period of noncompliance with Clean. Air Act, (Docket Entry No. 28 at 32; Docket Entry No. 51 at 21-24); or twice $1 billion, BP Products’s profits from the entire Texas City refinery in the fourteen months before the explosion; or twice $450 million, which the victims allege was BP Products’s cost savings from not bringing the entire Texas City plant into compliance with the Clean Air Act, (Docket Entry No. 66 at 103-05); or twice $725 million, which is the result of multiplying the $25 million gain from not updating the ISOM unit (the basis for the fine in the plea agreement) by the 29 refinery units at the Texas plant,

(id.

at 123).

Putting aside the issue of whether BP Products has pleaded guilty to plant-wide criminal conduct, the victims have not identified a factual or legal basis for finding that all of BP Products’s profits from the Texas City refinery for the fourteen months — or six years — preceding the accident were derived from the offense. The victims recognize, for example, that then-record oil prices were a major part of the refinery’s profits. The victims argue that BP Products “kept unsafe units in operation to reap the

windfall profits of increased gas prices.”

(Docket Entry No. 28 at 32) (emphasis added). The premise of the victims’ argument is that the profits were made possible by keeping unsafe equipment and procedures in use. This argument is contradicted by the facts in the record. Those facts show that the ISOM unit was taken offline and kept offline after the explosion, and that the Texas City refinery experienced little change to its profits as a result. (Docket Entry No. 66 at 102). Those facts also show that after the explosion, there were many safety improvements made throughout the plant, during which the plant continued to operate and generate profits. These facts defeat the causal link the victims argue exists between deferring or avoiding safety steps needed to comply with the Clean Air Act and the ability of the plant to continue operating and to generate profit.

(Id.

at 108).

Basing the fine on the Texas City refinery’s entire profits would not satisfy the § 3571(d) requirement that the gross gain have been

derived from

the offense. Using gross profits from the entire Texas City plant as the starting point for the fíne — whether for fourteen months or six years — would require the court to determine what part of these profits were either costs saved or additional revenues generated by the failure to implement the process safety measures that are the basis of the offense. Making this determination — even estimating it — would require a lengthy and prolonged sentencing process to try to separate the costs avoided or additional revenues received from failing to establish or implement these safety measures from the total profits of all or part of the refinery. If, as BP Products urges,

Apprendi

applied, these problems would be compounded by the requirement of proof beyond a reasonable doubt. Attempting to use the total plant profits as the basis for the fine would “unduly complicate and prolong” the sentencing process and would result in the application of the complexity provision of § 3571(d), leaving a default fine of $500,000. The government states that it

*700

did not use the total profit derived from the ISOM unit as a basis for the fine because the ISOM unit “was one of the least profitable units out there” and the resulting fine would have been lower.

(Id.

at 120).

ii Fine Based on Cost Savings

The victims alternatively argue that the fine should be based on BP Products’s cost savings from a plant-wide failure to establish and implement written process safety procedures. In the present case, the voluminous record shows that BP Products did not adequately address process safety throughout the Texas City refinery. But that record does not provide a basis to establish or estimate the extent to which such conduct amounted to

criminal

acts and omissions throughout the refinery. Instead, the record shows that there were a number of problems throughout the plant, including failures to train employees adequately. The victims do not contend, and could not contend, that every deficiency identified in the Baker Report, the CSB Report, or other documents is criminal. And many of the deficiencies are not part of the offense of conviction — the violations of 40 C.F.R. § 68.73 (b) or § 68.87(b)(2) charged in the information — or offense conduct. Even putting aside that the information charges violations only in the ISOM unit, and putting aside BP Products’s

Apprendi

argument, to calculate the fine using gross cost savings (or additional revenues) derived from not establishing or implementing process safety steps throughout the plant would require extensive proceedings to identify what deficiencies were criminal and within the offense of conviction and relevant conduct, and the amount of the savings or additional revenues attributable to those deficiencies. Such proceedings would be unduly complicated and prolonged, triggering the complexity provision.

The court in

United States v. Gibson

reached a similar conclusion, refusing to base a fine on the defendant’s alleged pecuniary gains from violating the Mine Safety and Health Act and making false statements to a federal agency. 409 F.3d at 342 . Although the court conceded that the defendant corporation had “probably realized some gain,” the court declined to calculate the fine based on that gain because it could think of “no defensible methodology to use in calculating the gain with any reasonable certainty,” so any resulting fine would be premised on “speculation and guesswork.”

Id.

The court in

United States v. Schwartz

similarly declined to determine restitution based on the putative victims’ losses, noting that it would be virtually impossible to distinguish the portion of the victims’ losses attributable to the defendants’ charged tax fraud from other “intervening factors.” 2006 WL 1662899 , at *6. The court concluded that the connection between the “conduct of conviction — which was lying to the IRS,” not the victims, and the losses claimed, which included the penalties, interest, and attorneys’ fees incurred by the victims after their tax returns were prepared by the defendant, was too complex.

Id.

at *4 . The court noted that the victims alleged that the defendant had made other, uncharged misrepresentations, both criminal and noncriminal, that contributed to the losses.

Id.

The court’s conclusion was bolstered by the fact that the loss amounts attributable were disputed. A protracted battle of forensic experts would be necessary even to approximate the appropriate loss amount, and the process “would clearly overwhelm an otherwise straightforward sentencing proceeding.”

Id.

at *5 .

In the present case, making the determinations necessary to satisfy § 3571(d) could easily extend the sentencing phase longer than any trial and would require complex — and to some inevitable extent,

*701

speculative — calculation. Absent the plea, attempting to base the gross-gain fine on twice a plant-wide measure of costs saved or additional revenues obtained by avoiding or deferring process safety procedures would trigger the complexity provision of § 3571(d), resulting in a maximum fine of $500,000.

iii. Fine Based on the Cost-Saving Estimate that Forms the Basis for the Proposed Plea

The victims suggest in the alternative that a fine based on gross gain could easily be calculated by taking the $25 million cost savings from not replacing the blowdown stack in the ISOM unit and not moving the contractors’ facility in that unit offsite (the basis for the $50 million fine in the plea) and multiplying that figure by all 29 refining units at the Texas City refinery. But this seemingly simple approach could not be done absent stipulation. Even putting aside that BP Products pleaded guilty to criminal violations only in the ISOM unit, each of the refinery units had different equipment and processes and performed different tasks. There is no factual basis for assuming that each of the 29 units had the same type of safety deficiencies as the ISOM unit or that similar cost savings were derived in each unit.

BP Products takes the position that even the $25 million cost savings figure from the ISOM unit that forms the basis for the plea agreement could not be established absent stipulation. (Docket Entry No. 66 at 126-27). The government adds that the figures from which the $25 million was derived — -the cost of replacing the blowdown stack and of building an offsite facility for contractors — results from steps that were not legally required but were instead a “voluntary remedial measure” by BP Products.

(Id.

at 128). The parties assert that the basis used to compute the stipulated fine could not be used in litigation if the plea agreement were rejected.

The victims urge that this court

should not tolerate such Janus-faced arguments .... Either the fines provision applies or it does not.... If the Defendant wants to obtain the benefits of this Rule 11(c)(1)(C) plea, the Court, the public, and the Victims are entitled to have the Defendant state clearly that the Court possesses legal authority to impose the sentence the Plea calls for.

(Docket Entry No. 51 at 13-14). The victims’ argument raises two issues. First, may this court accept as part of the plea agreement a fine that was computed on a basis that the parties contend could not be used in litigation? And second, what is the legal effect of the parties’ agreement to such a fine if this court rejects the plea agreement and BP Products withdraws the plea?

On the first issue, the parties do not contend that there is

factual basis for a $50 million fine. Instead, they argue that proving gross pecuniary gain or loss at trial, using any of the various metrics the victims have proposed, would so unduly complicate a sentencing determination that the complexity provision of § 3571(d) would apply. The parties have proposed a basis for the stipulated fine that, although not based exclusively on the criminal conduct that is the offense of conviction, has a strong factual nexus to that criminal conduct and estimates the pecuniary gain derived from that conduct. At the February 4, 2008 hearing, the government explained that although the basis it chose in calculating the fine incorporates certain noncriminal elements, this was the best method it could determine for arriving at an appropriate fine: “[W]e have searched hard and long to try to find a felony resolution on this case and we have stretched the facts as far as we think we can stretch them to

*702

achieve the maximum fine in this case .... ” (Docket Entry No. 66 at 129). Because “[t]he quantum of evidence needed to supply a factual basis ... takes less evidence than would be needed to sustain a conviction at trial,” 1A Charles A. Wright

et al.,

Federal Practice and Procedure-Criminal § 179 (4th ed.2008), this court may find a sufficient factual basis for the $50 million fine without determining that a fine approaching that amount could feasibly be proven and calculated at trial under either a reasonable doubt or preponderance of the evidence standard.

On the second issue, if this court were to reject the plea agreement, the parties would return to their “pre-plea posture.”

Cervantes-Valencia,

322 F.3d at 1062 ; Fed.R.Evid. 410; Fed. R.Crim. P. 11(f). The parties’ agreement that the cost savings from not replacing the ISOM unit’s blowdown stack is an appropriate metric for calculating the fine could not be introduced in a subsequent proceeding.

The victims have vigorously criticized the proposed gross-gain basis for the fine as unreasonably low. But the alternatives the victims identify for calculating a higher fine based on gross gain are all problematic under § 3571(d). Each alternative would, at a minimum, unduly complicate and prolong the sentencing proceedings to such a degree that the default $500,000 maximum fine under § 3571(c) would apply-

2. Calculation Based on Loss

The victims argue that this court should reject the plea because the $50 million fine is far lower than could have been obtained using the gross losses resulting from the offense. The government contends that it did not use gross losses as the fine basis because the calculation would be unduly complex, prolonged, and highly speculative. The victims counter that gross losses would not be unduly complicated to calculate and would yield a fine amount significantly higher than the $50 million in the plea agreement.

The victims initially proposed several methods for the court to use in calculating the fine. Most of these methods have since been abandoned or revealed as flawed. The victims asserted that the $1.6 billion in civil settlements BP Products had paid up to that point would reasonably estimate the victims’ losses resulting from the offense. (Docket Entry No. 51 at 20). But the amount of civil settlements does not equate to gross loss in a criminal fine. Such settlements are just that — settle

*703

ments — and they include nonpecuniary damages such as pain and suffering, emotional distress, loss of consortium, and punitive damages.

In a later brief, the victims submitted an affidavit from one of their lawyers serving as liaison counsel in the civil cases. In the affidavit, the lawyer stated that he had “a good faith basis for believing that the victims of the explosion have suffered a total pecuniary loss in excess of $200 million.” The lawyer appears to have arrived at this figure by calculating a “mean average for pecuniary losses” for a subset of victims and multiplying that number by the “over 2,000 victims” that he alleges suffered personal injury in the explosion. (Docket Entry No. 69, Ex. 1 at 2-3). Although reasonable estimation is permitted, this affidavit is an inadequate basis for calculating the fine based on gross losses. There is no recognition of the differences among, or disputes over, the victims’ injuries, medical expenses, and lost wages, both past and future. The government argues that the affidavit would raise serious issues under

Daubert

and does not provide the level of proof required in a criminal proceeding. (Docket Entry No. 75 at 3 n. 4).

The victims argued that the lack of more precise loss information was one of the consequences of the government’s failure to confer with them before the plea. The victims also argued that a presentence investigation should be conducted to gather detailed loss information. To ensure that the victims had a full opportunity to provide the government and the court with detailed loss information and to provide information relevant to deciding whether a presentence investigation is necessary and whether losses resulting from the offense are a proper basis for calculating and evaluating the fine, this court issued an order at the hearing on July 16, 2008. That order set a deadline, agreed to by the victims’ counsel, to submit detailed information on gross pecuniary losses resulting from the offense. The order invited the victims to submit loss information for up to fifty victims. The victims were instructed to provide pecuniary loss information about all fifteen individuals killed in the explosion and to choose thirty-five more, thereby ensuring that the information would address the highest losses. Supporting documentation was to be included. (Docket Entry No. 84 at 21, 43^14). The purpose was not to arrive at a total loss number, but rather to assist this court in determining whether the pecuniary losses resulting from the offense could feasibly be determined under § 3571(d); whether they were so far in excess of $25 million as to make the $50 million stipulated fine unreasonable; whether a presentence investigation should be conducted; and whether, if the plea were rejected, the sentencing procedure required to arrive at a loss calculation would be unduly complicated and prolonged.

(Id.

at 31-32).

a. The Victims’Submissions

The victims submitted pecuniary loss information for twenty-eight victims, not fifty. The submission contained loss information for just four of the fifteen who died in the explosion. The loss information was divided into three categories: lost wages; past medical; and future medical. The victims asserted that the total pecuniary losses for this sample group were $102,122,228.88. (Docket Entry No. 101, Ex. 1).

The government and BP Products pointed out numerous flaws in the victims’ methodology and errors in the victims’ calculations. Some are described below.

• Victim l’s future lost earnings include future lost earnings for the victim’s spouse, who was not injured in the explosion. The victims later clarified

*704

that this figure was included because the spouse decided to stay home to care for the injured victim. (Docket Entry No. 120 at 128). But the victims did not deduct this figure from the $29 million life care plan offered as evidence of future losses. Victim l’s claimed past medical expenses of $1,256,405.87 are double the victim’s actual past medical expenses. Worker’s compensation records showed that these expenses were $635,644.82. BP Products asserts that Victims l’s life care plan was implemented at an amount far lower than $29 million, and that the victims have not submitted any information about the true cost of implementation.

• Victim 3 is projected to have future lost wages of $1,521,231.25. BP Products and the government dispute this figure and there is no information as to preinjury earnings.

• Victim 4 is projected to have future lost wages of $2,904,000.00. The victims premise this figure on an income of $88,000.00 per year. But Victim 4’s tax returns for 2004 disclose wages of only $44,000.00.

• Victim 7’s medical expenses are listed as $3,879,239 for one month of care after the explosion. Workers’ compensation records reveal that the cost of care was only $521,367.00. The victims claim $5 million in future medical expenses for Victim 7, based on a letter from Victim 7’s attorney. Victim 7’s future lost earnings include lost earnings for his spouse, who was not injured in the explosion.

• Victim 8 is projected to have future lost wages of $3,219,312.00. But the victims’ expert report (developed for the civil litigation) projected future lost wages of only $1,408,811.00. Even that figure was premised on an earning capacity of $75,000.00, which is higher than the salary documentation submitted by the victims. These documents showed Victim 8’s 2003 and 2004 income at $50,546.99 and $62,904.76, respectively.

• Victim 13 is projected to have future lost wages of $983,554.00. But the victims’ expert report puts this figure at $312,949.00.

• Victim 14 is projected to have future lost wages of $1,775,142.00. But the victims’ expert report puts this figure at $769,757.00. The expert’s future lost wages figure is based on the assumption that Victim 14 would not work again, but the victim in fact returned to work shortly after the accident. Victim 14 is listed as having only $9,071.81 in past medical expenses and no future medical expenses.

• Victim 15 is listed as having future lost wages of $3,444,908.00. But the victims’ expert report puts this figure at $1,324,376.00.

• Victim 16 is listed as having future lost wages of $4,621,003.00. But the victims’ expert report puts this figure at $1,788,891.00. The expert’s figure is based on an earning capacity of $110,000.00 per year. Victim 16 earned $37,791.23 in 2003 and $44,735.96 in 2004. The expert’s future lost wages figure is based on the assumption that Victim 16 would not work again, but the victim in fact returned to work one month after the accident at a higher salary.

• Victim 20 is projected to have future lost wages of $1,087,737.00, based on the assumption that Victim 20 will never work again. But Victim 20 returned to work immediately after the explosion, earning more in 2006 ($57,-524) than in 2005 ($44,569).

• Victim 25 is projected to have future lost wages of $777,665.00. The vie

*705

tims’ expert report estimates the future lost wages to be $267,921.00. But Victim 25 went back to work shortly after the accident at a higher salary. Victim 25 sustained $2,634.00 in past medical expenses and is not projected to have any future medical expenses.

• Victims 22-24 and 26-28 are projected to have future lost wages varying from $735,485.00 to $1,654,656.00. All of these individuals have returned to work at higher salaries than before the explosion.

(Docket Entry No. 104; Docket Entry No. 107 at 16-25 & App’x; Docket Entry No. 120 at 88-99).

The government and BP Products also point out general problems with the information submitted. The losses are based on projections or estimates provided by victims’ counsel or by experts retained in the civil cases, primarily for the purpose of settling those cases. In most cases, the victims did not submit documentation such as tax returns or hospital or medical bills to support the projections or assertions. Many of the victims’ lost future earnings were calculated without reference to their ages at the time of the explosion, so future lost wages for individuals at or near retirement age were calculated as if these individuals would miss decades of future work. For some of the victims, the loss estimates assume an inability to return to work, despite the fact that those victims went back to work immediately, some at higher wages. For other victims, the future medical expenses are based on life-care plans prepared for civil litigation that, according to information BP Products submitted, overstate the victims’ actual expenses under those plans.

The government and BP Products argue that the errors and uncertainties in the victims’ submissions demonstrate that the pecuniary loss estimates that the victims provided are unreliable and cannot not be used to determine a fine. The government argues that this court’s difficulty in obtaining reliable information from victims represented by counsel about their pecuniary losses demonstrates the practical difficulties that the parties, probation officers, and the court would face in a sentencing proceeding trying to calculate a fíne based on twice the gross losses resulting from the offense.

The government argues that these practical issues would trigger the complexity exception under § 3571(d) and result in a $500,000 fine.

*706

BP Products adds to these arguments the legal and factual difficulties in untangling the causal relationship between all the losses that the victims identify and the offense. “In order to establish the causal nexus under Counsel’s proposed loss theory, the government would also have to prove that the explosion itself was proximately caused by BP Products’s violation of [§§ 68.73(b), 68.87(b)(2) ], not by something else.” (Docket Entry No. 107 at 9). BP Products also argues that under

Apprendi ,

any amount of pecuniary loss above the $500,000 limit set by § 3571(c) would require proof beyond a reasonable doubt. BP Products and the government argue that were this standard to apply at trial, calculating pecuniary loss would require having a jury determine, beyond a reasonable doubt, the pecuniary losses of each individual victim. (Docket Entry No. 120 at 86).

BP Products’s causation arguments focus on the liability link between the offense and the explosion. It is not necessary to resolve that argument. Nor is it necessary to decide that

Apprendi

applies, as BP Products asserts. The problems with the information the victims submitted lead to the conclusion that relying on gross losses resulting from the offense to set the fine absent the plea would trigger the complexity exception to § 3571(d) at the sentencing phase.

The cases show that if there are multiple victims present, the causation issues are disputed, and the losses include significant amounts of disputed future losses, the complexity exception to calculating losses in setting a fine (or restitution) is likely to apply.

See Huff,

409 F.3d at 563-64 (multiple victims);

Reifler,

446 F.3d at 113-139 (multiple victims and disputed causation);

Foote,

2003 WL 22466158 , at *7 (multiple victims and disputed causation);

Kones,

77 F.3d at 69 (disputed causation);

Gibson,

409 F.3d at 342 (disputed causation);

Schwartz,

2006 WL 1662899 , at *5 (disputed causation);

Oslund,

453 F.3d at 1062-63 (disputed future losses);

Cienfuegos,

462 F.3d at 1167-68 (disputed future losses). This case has all of those features. This court tested the extent to which those features would complicate determining the fine amount based on losses by inviting the victims to submit the type of information that they would ask the court to use to determine the criminal fine. The victims’ own submissions showed that there is no practical or legal way to arrive at a fíne using the loss prong of § 3571(d) without triggering the complexity provision.

The victims’ information was unreliable, incomplete, and contradicted by documents and other data. Much of the information was vigorously disputed. Many of those disputes centered around projected future losses. Resolving those disputes and ensuring that the loss information was sufficiently reliable for use — under even a preponderance of the evidence standard — for hundreds or thousands of victims, is beyond the capability of an already burdened probation office; a presentence investigation is not the solution to this problem. Determining the pecuniary losses in this case would require a sentencing court to “become embroiled in intricate issues of proof.”

Reifler,

446 F.3d at 136 . This would be inconsistent with the legislative intent that courts should avoid “protracted hearing[s] that would last longer than the trial” in determining fines. H.R.Rep. No. 98-906, at 17 (1984),

reprinted in

1984 U.S.C.C.A.N. 5433, 5450. Faced with cases presenting less complicated sentencing information, appellate courts have indi

*707

cated that district courts should not to attempt to set restitution or fines based on losses resulting from the offense.

See Huff,

409 F.3d at 563-64 ;

Reifler,

446 F.3d at 113-139 ;

Kones,

77 F.3d at 69-70 ;

Gibson,

409 F.3d at 342 . The same result appears likely here.

b. Worker’s Compensation Records

The victims propose using the worker’s compensation payments BP Products made to determine the past pecuniary losses resulting from the offense. The government required BP Products to submit worker’s compensation records as part of the DOJ investigation. Those records show that BP Products paid $21 million to 463 workers injured in the explosion. (Docket Entry No. 104 at 5 n. 3; Docket Entry No. 120 at 120). The parties and the victims dispute that $21 million reliably describes past pecuniary loss.

The government and BP Products argue that the figure inflates the amount of pecuniary loss because the Texas Worker’s Compensation statute is “liberally construe[d] ... in favor of the injured worker,” Ca

stellow v. Swiftex Mfg. Corp.,

33 S.W.3d 890, 896 (Tex.App.-Austin 2000),

abrogated on other grounds, Lawrence v. CDB Sens., Inc.,

44 S.W.3d 544 (Tex.2001), and is “akin to strict liability,” (Docket Entry No. 120 at 120). The victims argue that the $21 million figure underrepresents the amount of past pecuniary loss, because BP Products made an agreement with medical providers that allowed it to pay about fifty cents on the dollar for most claims.

(Id.

at 135).

Even if the worker’s compensation records could be used to estimate past pecuniary losses, that would not take into account, or provide a way to address, future pecuniary losses. If those future losses are excluded and the worker’s compensation payments are the only basis for past pecuniary losses, the losses resulting from the offense are lower than the $25 million the government and BP have agreed to as the base fine. If the disputed future losses are included, if the worker’s compensation figures are disputed, and if additional past pecuniary losses have to be determined, the difficulties in determining the fine remain.

See Kones,

77 F.3d at 69 (the complexity provision in VWPA should apply when there are “fault and causation issues before the sentencing court that cannot be resolved with the information otherwise generated in the course of the criminal proceedings on the indictment”);

Reifler,

446 F.3d at 136 (the complexity provision in MVRA should apply to avoid “becoming] embroiled in intricate issues of proof’ involving “the determination of complex factual issues”);

Gibson,

409 F.3d at 342 (complexity provision in § 3571(d) should apply when there is “no defensible methodology to use in calculating the gain with any reasonable certainty”).

D. Conclusion as to the Victims’ Objections to the Pine

The victims’ objections to the fine because it is based on too low a gain amount, and is not based on the victims’ losses, are not a basis for finding the proposed plea unacceptable. The methods and measurements the victims propose are either unsupported by the law and facts or would raise such difficult issues as to likely trigger the complexity provision of § 3571(d).

VI. The Victims’ Objections to the Terms of Probation

Under the proposed plea agreement, BP Products will serve a three-year term of probation. Title 18 U.S.C. § 3563 sets out mandatory conditions for a probation term. A sentencing court must require as part of any term of probation that the defendant not commit another crime during the probation term and that the defendant pay

*708

any fine or restitution imposed. § 3563(a)(1), (2).

BP Products will also be required to comply fully with the Settlement Agreement executed by BP Products and OSHA on September 22, 2005 and the Agreed Order executed by BP Products and the TCEQ on May 31, 2006. The government explained that based on the overlap of the PSM regulations and the Clean Air Act RMP regulations, for purposes of the criminal resolution of this case, compliance with the OSHA Settlement Agreement as a condition of probation was appropriate. (Docket Entry No. 96 at 4). BP Products and the government have represented to this court that these requirements are rigorous steps to address and remedy the underlying causes of the explosion, beyond the causes that BP Products admitted in the plea to the criminal information and in the Statement of Facts.

The victims’ primary objection to the proposed probation conditions is that BP Products is not in compliance with the OSHA Settlement Agreement. The victims have not challenged BP Products’s compliance with the TCEQ Agreed Order. (Docket Entry No. 120 at 59). The victims argue that appointment of an independent monitor is necessary to ensure that BP Products fulfills its obligations under the OSHA Settlement Agreement. The victims ask that this court appoint a monitor with “no fiduciary or administrative loyalties to BP” to oversee BP Products’s compliance with the regulatory settlements. (Docket Entry No. 28 at 39). The victims also ask this court to reject the plea because the probation terms do not include certain other terms, such as requiring the parent company, BP Global, to provide BP Products with sufficient money to “make this plant safe,” including compliance with “all applicable laws and regulations,” and implementation of an “effective Ethics and Compliance Program.” (Docket Entry No. 120 at 71-72,135).

The OSHA Settlement Agreement required BP Products to retain an independent PSM expert to conduct a “comprehensive audit and analysis of the PSM Systems at BP Products’ Refinery and assess the robustness of the PSM systems,” and supply OSHA with statements of action addressing the expert’s findings. (Docket Entry No. 96, Ex. 2). BP Products also agreed to conduct an additional pressure relief-valve audit in satisfaction of this Agreement.

(Id.,

Ex. 12). The results of that audit were due to OSHA by December 31, 2008.

BP Products argues that appointing an independent monitor would amount to “duplicative oversight,” because OSHA’s “comprehensive access to [BP Products’s] facilities, records, and personnel” will provide adequate oversight throughout BP Products’s term of probation. (Docket Entry No. 32 at 31).

*709

The government has emphasized that BP Products’s completion of its obligations under the OSHA Settlement Agreement is a condition of probation. At the October 7, 2008 hearing, the government explained to this court that a three-year term of probation, as opposed to the possible five-year term available by statute, 18 U.S.C. § 3561 (c)(1), was selected because the aim of the plea agreement was to bring BP Products into compliance with its regulatory obligations on an “accelerated schedule.” (Docket Entry No. 120 at 13). At the February 4, 2008 hearing, the government explained that “there’s a deadline for this.... [I]f the plea is accepted today, then everything [under the OSHA Agreement] has to be done by February 4, 2011.” (Docket Entry No. 66 at 172). The government states that if OSHA determines that BP Products is out of compliance with the Settlement Agreement during the term of probation, it will “come into the court and seek a revocation of probation or extension of probation.” (Docket Entry No. 120 at 15). OSHA has certified that BP Products is currently in compliance with the Settlement Agreement. (Docket Entry No. 96, Ex. 4) (“OSHA is monitoring BP’s activities and based upon the information known to OSHA at this time, it has not found any evidence that BP is currently violating the Settlement Agreement.”).

At the October 7, 2008 hearing before this court, counsel for the victims asserted that OSHA is wrong in its conclusion that BP Products is in compliance with the Settlement Agreement: “I think the facts absolutely demonstrate an inadequacy [in compliance with the agreement]. I don’t want to characterize OSHA in any pejorative way. I know that government agencies are oftentimes understaffed and underbudgeted and stretched.” (Docket Entry No. 120 at 38). The victims assert that the probation terms are inadequate because OSHA is an inadequate monitor. The victims ask this court to reject the plea because OSHA’s conclusion that BP Products is in compliance with its Settlement Agreement is wrong.

The victims do not address whether and to what extent OSHA is entitled to deference in its enforcement of the Settlement Agreement. An agency’s interpretation of, or finding of facts under, a regulation it is charged with enforcing is entitled to deference because “[a]dministrative agencies are simply better suited than courts to engage in such a process.”

Ford Motor Credit Co. v. Milhollin,

444 U.S. 555, 569 , 100 S.Ct. 790 , 63 L.Ed.2d 22 (1980);

see also

3 Charles H. Koch, Jr., Administrative Law and Practice § 12.24[3] (2d ed. 1997) (“It is readily recognized that many conclusions reached by the agency are the result of a technical competence that even the most arrogant nonexpert could not hope to replicate.”). The Supreme Court has “recognized on several occasions over many years that an agency’s decision not to prosecute or enforce, whether through civil or criminal process, is a decision generally committed to an agency’s absolute discretion.”

Heckler v. Chaney,

470 U.S. 821, 831 , 105 S.Ct. 1649 , 84 L.Ed.2d 714 (1985). Although this court is not directly reviewing OSHA’s findings, it must determine whether the record supports the victims’ allegation that OSHA is wrong in finding that BP Products is in compliance with the Settlement Agreement.

A. The OSHA Settlement Agreement and the Sawyer Report

At the July 18, 2008 hearing, this court invited submissions from the parties and victims on BP Products’s compliance with the OSHA Settlement Agreement and with the PSM regulations the Agreement is intended to enforce. The victims submitted an expert report by Michael E. Sawyer, an industry safety consultant who was re

*710

tained by the plaintiffs in many of the civil cases related to the explosion.

The Sawyer report raises the following arguments about BP Products’s compliance with the OSHA Settlement Agreement and the PSM regulations it is intended to enforce:

• BP Products did not retain a PSM expert to “conduct” an audit of its PSM systems as the OSHA Settlement Agreement requires, but instead only allowed the PSM expert, AeuTech, to “assist” BP Products in conducting the audit. (Docket Entry No. 89, Ex. 1 at 13-14).

• The audit of the PSM systems was not “comprehensive,” but merely a “spot check” of certain systems and inadequate.

(Id.,

Ex. 1 at 14-16).

• BP Products has identified certain remediation items as “closed” despite the fact that it has not yet remedied those items, but simply put in place a schedule for remediation in the future. BP Products is acting too slowly on future remediation.

(Id.,

Ex. 1 at 16-17).

• BP Products has faded to provide sufficient plans for remediating important items.

(Id.,

Ex. 1 at 17).

• AcuTech conducted first-hand inspections of the Texas City refinery only for the initial report. AcuTech’s follow-up progress reports were based exclusively on data submitted by BP Products.

(Id.,

Ex. 1 at 16).

These criticisms must be considered in light of OSHA’s Compliance Guidelines and Recommendations for Process Safety Management, 29 C.F.R. § 1910.119 App’x C, which include guidelines for compliance audits. Under 29 C.F.R. § 1910.119 (o), such audits

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