Petition for Writ of Certiorari — Louisville Edible Oil Products, Inc. v. United States

91°76 4. | Bupreme cout, U.S,

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+, JUL 12 199%

No. |

—————-“( “oes THE CLERK

In THE :

Supreme Court of the United States

OCTOBER TERM, 1991

LOUISVILLE EDIBLE O1L Propucts, INC., et al.,

Petitioners,

V.

UNITED STATES OF AMERICA,

Respondent.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Sixth Circuit

PETITION FOR A WRIT OF CERTIORARI

FRANK E. HADDAD, JR. CARTER G. PHILLIPS *

Kentucky Home Life Building MARK D. Hopson

Louisville, Kentucky 40202 SIDLEY & AUSTIN

(502) 583-4881 1722 Eye Street, N.W.

Washington, D.C. 20006

(202) 736-8000

Counsel for Petitioners

July 12, 1991 * Counsel of Record

WILSON . EPES PRINTING Co., INC. - 789-0096 - WASHINGTON, D.C. 20001

ils

QUESTION PRESENTED

Whether imposition of a significant penalty by a local

government entity, acting pursuant to delegated federa)

authority and pursuant to federal standards, bars a sub-

sequent federal prosecution for the same conduct under

the Double Jeopardy Clause of the Fifth Amendment.

(i)

ii

LIST OF PARTIES

In addition to the petitioner listed in the caption, the

following are additional] petitioners:

Presidential, Inc.

A. Dean Huff

Raymond Car! Marrillia

STATEMENT PURSUANT TO RULE 29.1

Pursuant to Rule 29.1 of the Rules of this Court, the

following list identifies all of petitioners’ affiliated com-

panies and subsidiaries:

1. Louisville Vegetable Oil Supply Co., Inc.

2. Golden Foods/Golden Brands, Inc.

TABLE OF CONTENTS

Page

QUESTION PRESENTED... j

ee ee ii

STATEMENT PURSUANT TO RULE 29.1... ‘ii

TABLE OF AUTHORITIES... iv

RI ae ahs 1

ESE RIE ah nec ee ea 2

CONSTITUTIONAL PROVISIONS INVOLVED ..... 2

DEERE ee 2

REASONS FOR GRANTING THE PETITION ......... 9

I a A 18

(iii)

iv

TABLE OF AUTHORITIES

CASES Page

Abbate v. United States, 359 U.S. 187 (1959)........ 11

Bartkus Vv. Illinois, 359 U.S. 121 (1959) _........8, 11, 12, 13

Benton v. Maryland, 395 U.S. 784 (1969) ............... 10

Breed v. Jones, 421 U.S. 519 (1975)........................ 10

Grafton v. United States, 206 U.S. 333 (1907) ...... 15

Heath v. Alabama, 474 U.S. 82 (1985) -................. 11

Jeffers v. United States, 482 U.S. 187 (1977) ........ 10

Marek v. Chesny, 473 U.S. 1 (1985) ........................ 14

Moore V. Illinois, 14 How. 18 (1852) -........................ 11

Price v. Georgia, 398 U.S. 323 (1970) .................... 10

Puerto Rico v. Shell Oil Co., 302 U.S. 253 (1937) .. 16

Serfass v. United States, 420 U.S. 377 (1975)........ 10

United States vy. Aboumoussallem, 726 F.2d 906

CN Be I crenrtsctaiidinntetdiiioatntiiimetnbetanioneees 13

United States v. Aleman, 609 F.2d 298 (7th Cir.

1979), cert. denied, 445 U.S. 946 (1980) ........... 13

United States v. Halper, 490 U.S. 435 (1989)........ x

United States v. Jordan, 870 F.2d 1310 (7th Cir.),

cert. denied, 110 S. Ct. 101 (1989) .........000000....... 13

United States v. Lanza, 260 U.S. 377 (1922) ........... 11

United States vy. Louisville Edible Oil Prods., Inc.,

926 F.2d 584 (6th Cir. 1991) ...................0.........-.. 1

United States v. Martin Linen Supply Co., 430 U.S.

Net A aaiaailinereens 10

United States v. Patterson, 809 F.2d 244 (5th Cir.

ae ceaicincenieee 12

United States v. Russotti, 717 F.2d 27 (2d Cir.

1983), cert. denied, 465 U.S. 1022 (1984) .......... 13

United States v. Wheeler, 4835 U.S. 313 (1978)... 15, 16,

17, 18

United States v. Wilson, 420 U.S. 332 (1975) _...... 10

Waller v. Florida, 397 U.S. 387 (1970) -................. 16

STATUTES AND REGULATIONS

sl seemieenionrreems 2

Clean Air Act, ch. 360, 69 Stat. 322 (1955) (codi-

fied as amended at 42 U.S.C. §§ 7401-7642) ........ passim

Vv

TABLE OF AUTHORITIES—Continued

Page

te Taal et CE el is if ele lea Re aE IT 2

REIN SRR eee le ONE Arc reene sR 4

ED ee Re ae eS RENE AI 3

SRE niet tyne 3

a ea 17

eo a ee 4,17

~7412(d) (2)... OUT U ie Ears IR ESRC Me endo ESI RTS 4

5 il A AD aa ch BAO est ST 7

se TEETER A eT R CLIT S PaO ae Piel Cee 3

eA SES pa CRA AE I icabaniaaaiaaia 3

TTT Ae TELA RD Re EEO 3

Et TRIS ES eo Le ee eo fe 4,12,17

| TER teen RD en eee! ae 3

TIE SA De SI SEEN Alot A DR 15

a 8 0 ak eee 3

REINER ee eR Oe ae 3

Clean Air Act Amendments of 1990, Pub. L. No.

101-549, § 711(b), 104 Stat. 2684... 2

40 C.F.R. §§ 61.140-.156 (1990)... 38, 5,17

40 C.F.R. §§ 61.145-.147, 61.152 (1990) 7,8

42 Fed. Reg. 64,735 (1977) 00 passim

LEGISLATIVE MATERIALS

H.R. Rep. No. 728, 90th Cong., Ist Sess., reprinted

in 1967 U.S. Code Cong. & Admin. News 1938... 4

H.R. Rep. No. 1146, 91st Cong., 2d Sess., reprinted

in 1970 U.S. Code Cong. & Admin. News 5356... 4, 15

S. Rep. No. 228, 101st Cong., 2d Sess., reprinted

in 1990 U.S. Code Cong. & Admin. News 3385... 4

OTHER AUTHORITIES

D. Selmi & K. Manaster, State Environmental Law

GUN cctessiniectdntsiniintonsttnipedandscnc ae eet ee 3,14

IN THE

Supreme Court of the United States

OCTOBER TERM, 1991

No.

LOUISVILLE EDIBLE OIL PRopucts, INC., et al.,

Petitioners,

V.

UNITED STATES OF sewer >

espondent.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Sixth Circuit

PETITION FOR A WRIT OF CERTIORARI

Louisville Edible Oil Products, Inc., Presidential, Inc.,

A. Dean Huff, and Raymond Carl Marrillia, Jr., (“peti-

tioners’”’) hereby petition for a writ of certiorari to review

the judgment of the United States Court of Appeals for

the Sixth Circuit in this case.

OPINIONS BELOW

The opinion of the court of appeals (App., infra, 1a-9a)

is reported at 926 F.2d 584 (6th Cir. 1991). The district

court’s memorandum opinion and order, denying peti-

tioners’ motion to dismiss the indictment, (App., infra,

10a-20a) is not reported.

2

JURISDICTION

The opinion of the court of appeals was entered on_

March 1, 1991. Rehearing was denied on April 15, 1991.

App., infra, 21a. The jurisdiction cf this Court is in-

voked under 28 U.S.C. § 1254(1).

CONSTITUTIONAL PROVISIONS INVOLVED

The Fifth Amendment to the United States Constitu-

tion provides, in pertinent part:

No person shall. . . be subject for the same offence te

be twice put in jeopardy of life or limb... .

U.S. Const. amend. V.

STATEMENT

1. The Clean Air Act: The Clean Air Act (the “Act’”)

is a complex interweaving of over ten different pieces of

federal legislation, enacted between 1955 and 1990, re-

flecting the legislative trial and error of efforts to regu-

late and control air pollution. The Act as it exists today

mandates federal leadership, but envisions significant

local participation in connection with enforcement of air

pollution regulations. See 42 U.S.C. § 7401 (1988).’

One of the primary purposes of the Act is to establish

standards for air quality. To accomplish this goal the

Act sets up primary and secondary national Ambient

Air Quality Standards (“AAQS”). 42 U.S.C. § 7409.

These standards generally are to be achieved in accord-

ance with State Implementation Plans (“SIPs”) consist-

ent with the federal ambient standards. /d. § 7410. The

SIPs also provide for the regulation of areas unable to

attain AAQS and are designed to prevent the signifi-

1The Clean Air Amendments of 1990, codified as amended at 42

_ULS.C. §§ 7401-7671q. (Supp. 1991) and effective only as of Novem-

ber 15, 1990, do not apply to the charges involved in this appeal.

See The Clean Air Act Amendments of 1990, Pub. L. No. 101-549,

§ 711(b), 104 Stat. 2684.

_—

eee —_=

3

cant deterioration of areas already in compliance with

the federal standards. Jd. §§ 7470-79, 7501-08.

In addition to these general requirements, the Act estab-

lishes National Emission Standards for Hazardous Air

Pollutants (“NESHAP”). These standards mandate

limits on the emission of certain defined substances. 42

U.S.C. § 7412. Other substances, for which it is not

feasible to prescribe safe emission standards, are governed

by regulations establishing the equipment, operations, and

work practices to be used in dealing with those substances.

Id. § 7412(e)(1). For example, asbestos, a natural

mineral fiber once widely used in commercial insulation,

has been classified as a hazardous air pollutant by the

Environmental Protection Agency (“EPA’’), and work

practice regulations have been enacted to control the man-

ner in which asbestos is removed from buildings during

modification or demolition. 40 C.F.R. §§ 61.140-.156

(1990).

Enforcement of the various requirements in the Act is

accomplished by “an active and complex partnership be-

tween the federal government and the states.” D. Selmi &

K. Manaster, State Environmental Law § 6.02, at 6-4

(1990). The EPA is authorized to file notices of viola-

tions of state plans and to issue compliance orders. 42

U.S.C. § 7413(a). The EPA also is authorized to com-

mence civil actions against those who fail to respond to

compliance orders or who otherwise violate emission

standards. Jd. § 7413(b). In addition, the Act provides

for criminal actions to be brought against a person who

knowingly violates emission standards. Jd. § 7413(c).

Moreover, the EPA can assess “noncompliance penalties’

which require persons in violation of the Act to forfeit

any economic benefit they have enjoyed by reason of their

noncompliance. Jd. § 7420.

In general, the Act delegates to the individual states

the immediate responsibility for maintaining air quality

4

standards within their borders. In order to participate

in the enforcement of the Act, however, a state must

submit a proposed State Implementation Plan to the EPA

explaining how it will meet the Ambient Air Quality

Standards. If the state plan receives the EPA’s ap-

proval, the state is authorized to enforce directly the

federal air quality standards. 42 U.S.C. § 7410({a) (1).

State law that sets emission standards at levels less strin-

gent than federal standards is preempted. 42 U.S.C.

§ 7416; H.R. Rep. No. 728, 90th Cong., 1st Sess. 1, re-

printed in 1967 U.S. Code Cong. & Admin. News 1938,

1939.

With respect to hazardous air pollutants, the states

also must develop procedures for implementing the fed-

eral hazardous air pollutant standards and submit them

to the EPA for approval. If the EPA determines that

the state procedures are adequate, the Administrator of

the EPA will “delegate to such State any authority he has

under this chapter to implement and enforce such stand-

ards.” 42 U.S.C. § 7412(d) (1).

Notwithstanding this delegation of authority, the Act

reserves to the federal government the authority to en-

force emission standards directly, even when a state plan

is in place. Jd. § 7412(d) (2). Congress concluded that

the reservation of such concurrent jurisdiction to enforce

pollutant standards was necessary in the event states with

delegated authority failed to enforce them. H.R. Rep.

No. 1146, 91st Cong., 2d Sess. 24, reprinted in 1070 U.S.

Code Cong. & Admin. News 5356, 5380. Thus, “[u]nder

current law, the formal State role” with respect to haz-

ardous air pollutants “is limited to the enforcement of

the handful of emission standards which the Agency has

promulgated for hazardous air pollutants.” S. Rep. No.

228, 101st Cong., 2d Sess. 192, reprinted in 1990 U.S.

Code Cong. & Admin. News 3385, 3577.

5

2. Proceedings by the Jefferson County Air Pollution

Control District: Consistent with the scheme established

under the Act, the Commonwealth of Kentucky submitted

procedures for implementing and enforcing the federal

standards for hazardous air pollutants to the EPA. The

EPA, in turn, approved Kentucky’s request for “the dele-

gation of Federal authority” for enforcement of these

standards after determining that the procedures adopted

by Kentucky were adequate. Delegation Notice, 42 Fed.

Reg. 64,735 (1977). As part of this delegation of federal

law, Kentucky then adopted the national asbestos regula-

tions, 40 C.F.R. 61, Subpart M, in their entirety. 401

K.A.R. 57:011 § 2, C.A. App. 204.?

The state government, acting through the Kentucky

Natural Resources and Environmental Protection Cabinet,

has executed a Memorandum of Agreement with the Air

Pollution Control District of Jefferson County Board (the

“Board”) for the regional enforcement of the federal

standards. See Memorandum of Agreement.’ The Board,

in turn, adopted Air Pollution Control Regulation

(“A.P.C.”) 5.04, which also adopts verbatim the language

of the federal asbestos standard, 40 C.F.R. 61, Subpart M.

Thus, while the asbestos regulations enforced by the Board

and the EPA differ in title, the content of the Board reg-

ulations constitute a reenactment of the federal regula-

tions governing asbestos emissions.

The penalties at issue in this case derive from the

alleged conduct of petitioners from 1986 to 1988, when

petitioners were in the process of relocating their fa-

cilities from South Shelby Street to 7th Street in Louis-

ville, which is located in Jefferson County, Kentucky.

Petitioner Louisville Edible Oil Products is a Kentucky

corporation in the business of producing edible oils such

2 All materials that were submitted in a joint appendix to the

United States Court of Appeals for the Sixth Circuit are cited

herein as “C.A. App.”

%The Agreement is reproduced in Appendix B of the Brief for

the United States for the court of appeals.

6

as salad oil. Presidential, Inc., is an Indiana corpora-

tion affilicted with Louisville Edible operating as its con-

struction and demolition contractor. A. Dean Huff is the

Director and President of Presidential and a Special

Products Manager of Louisville Edible. Raymond Carl

Marrillia, Jr. is a Director and the Secretary-Treasurer

of Presidential and the Vice President of Facilities Man-

agement of Louisville Edible.

Both buildings involved in the case were old and con-

tained equipment insulated with asbestos which was

transferred between the buildings over the course of

several years. In their conduct of the relocation, peti-

tioners contracted with various certified asbestos abaters

in an attempt to ensure the safe removal of those ma-

terials. Nevertheless, petitioners were cited by the Board

as responsible for violations of the Board’s asbestos

regulations.

The Board cited petitioners in October 1986 for pur-

ported asbestos violations involving two insulated tanks

found in the rear of the 7th Street property. As a result

of this notice of violation, petitioners subsequently paid

the Board a fine of $25,000 and entered into an Agreed

Order of Satisfaction acknowledging that at that time

they were in compliance with the asbestos regulations.

C.A. App. 138. In April 1988, petitioners again were

cited by the Board for asbestos-related violations. Those

violations resulted in the payment of a fine of $24,000.

The Order specifically stated that petitioners did not

admit to any violations of the regulations nor was the

agreement to be construed as an admission of guilt.

C.A. App. 146.

In August 1988, the Board issued a notice of violation

against petitioners for the allegedly improper handling of

pipes insulated with asbestos. In the course of negotiat-

ing an appropriate penalty for this third violation, the

Board consulted several times with the EPA’s Region IV

office, which recommended assessing a large fine in order

to deter recidivism, and with an Assistant United States

7

Attorney representing the EPA’s Office of Criminal] In-

vestigations, which at the time was contemplating bring-

ing a criminal action against petitioners. After “[c]on-

sidering all factors involved,” the Board agreed to assess

a penalty of $125,000. Offutt Memo, C.A. App. 124, 126.

The EPA, which was informed of the extent of the penalty,

did not exercise its own authority revoke Kentucky’s

delegation and pursue its own civil or criminal action

against petitioners, which it could have done if it had

concluded that federal action was necessary to protect

fully the Clean Air Act interests implicated by the Board’s

enforcement action. Delegation Notice, 42 Fed. Reg.

64,736 B(10) (1977). Indeed, in its final order the Board

acknowledged that the EPA had indicated that “this

agreement [would] be an acceptable settlement for the

alleged violations.” Board Order #6-89, C.A. App. 156.

3. Proceedings Below: Despite the payment of fines

totaling $174,000 as a penalty for their violations of the

asbestos regulations, petitioners were indicted by a fed-

eral grand jury in Louisville, Kentucky, on April 19,

1990. Count One of the superseding indictment (dated

May 7, 1990) charged that in September and October of

1986, petitioners knowingly had violated asbestos work

practices and knowingly emitted asbestos into the air

from their 7th Street facility in violation of the Clean Air

Act, 42 U.S.C. §§$ 7412-13, and the federal asbestos stand-

ards, 40 C.F.R. §§ 61.145-.147, 61.152 (1990). Petition-

ers already had been fined $25,000 by the Board for

the same asbestos violations at the 7th Street property.

Agreed Order of Satisfaction, C.A. App. 188. Count 5

charged that petitioners, in April 1988, violated the Clean

Air Act and asbestos emission standards at their Shelby

Street facility. Again, the Board already had fined peti-

tioners $24,000 for those alleged asbestos violations.

Board Order #007-88, C.A. App. 145.

Count 3 of the federal indictment charged that peti-

tioners, in August 1988, had violated the asbestos regula-

tions at the 7th Street site. Count 6 charged that peti-

tioners, in September 1988, violated the asbestos regula-

8

tions at the Shelby Street site. Petitioners had been fined

$125,000 by the Board for the same conduct charged in

Counts 3 and 6. Board Order 6-89, C.A. App. 156. The

specific asbestos provisions that the federal indictment

alleges were violated are identical to the Board regula-

tions, which provided the basis for the fines paid by peti-

tioners pursuant to the Board’s delegated federal author-

ity. Compare 40 C.F.R. §§ 61.145-.147, 61.152 with A.P.C.

Regulation 5.04 §§ 6-8, 13.

_ In the United States District Court for the Western

District of Kentucky, petitioners filed a motion to dismiss

Counts 1, 3, 5 and 6 as barred by the Double Jeopardy

Clause of the Fifth Amendment. Petitioners argued that

they already had paid fines to the Board for the same

regulations as charged in the indictment. Moreover, pe-

titioners asserted that the fines constituted “punishment”

for purposes of the Double Jeopardy Clause. See United

States v. Halper, 490 U.S. 435 (1989). Thus, petitioners

argued that the federal criminal charges constituted suc-

cessive prosecutions for the same acts in violation of the

Double Jeopardy Clause. Jd. The district court denied

the motion to dismiss on the ground that the Board and

the EPA were separate “sovereigns” and therefore could

impose multiple penalties for the same conduct. App.,

infra, 16a.*

The court of appeals affirmed. App., infra, 9a. Even

assuming that the fines were punitive, the court of ap-

peals agreed with the district court’s conclusion that the

Board and the United States were “dual sovereigns” and

thus entitled separately to pursue the imposition of penal-

ties against petitioners. App., infra, 7a. The court re-

jected petitioners’ argument that this case fell within the

“Bartkus exception” to the “dual sovereignty” doctrine.

See Bartkus v. Illinois, 359 U.S. 121, 123-24 (1959) (dual

* Because it resolved the double jeopardy claim by reference to the

“dual sovereignty” doctrine, the district court did not resolve the

issue whether the fines assessed by the Board were “punitive” for

purposes of the Double Jeopardy Clause. App., infra, 15a.

9

sovereignty doctrine inapplicable where one sovereign is

acting on behalf of another). The court held that the

Board was not acting on behalf of the EPA, but rather in

“inter-sovereign” cooperation with it. App., infra, 8a.

Accordingly, the court of appeals concluded that the fed-

eral government could bring its own criminal prosecu-

tion against petitioners based on a violation of the same

law and in connection with the same conduct that formed

the basis of the fines paid to the Board.

REASONS FOR GRANTING THE PETITION

The Sixth Circuit has decided an issue of substan-

tial importance to federal enforcement of the Clean Air

Act in a way that is inconsistent with this Court’s prior

decisions and with basic principles underlying the Double

Jeopardy Clause. Moreover, the question presented has

important ramifications for Congress’s delegation of fed-

eral law enforcement authority to the states and for the

ability of states and regulated industries to settle en-

vironmental disputes without litigation. The decision of

the court below is manifestly unfair to criminal defend-

ants who will be twice punished for the same acts pur-

suant to the federal enforcement provisions of the Clean

Air Act and therefore requires review now.

The decision of the court of appeals focused solely on

the identity of the sovereigns enforcing the Clean Air

Act (i.e., state and federal entities) without considering

that federal law provided the sole source of authority for

both penalty proceedings. Because the “state” penalty

was imposed under the specific federal authority dele-

gated pursuant to an Act of Congress and not pursuant

to any inherent source of state power, there is no basis

for allowing petitioners to be subjected to multiple prose-

eutions and potentially multiple punishments. This dele-

gation of enforcement authority—which is inherent in

the structure of the Clean Air Act—presents a serious

and fundamental issue under the Double Jeopardy Clause

that warrants review by this Court.

10

1. The Double Jeopardy Clause represents a ‘‘funda-

mental ideal in our constitutional heritage.” Benton v.

Maryland, 395 U.S. 784, 794 (1969). The principle that

a person should not be placed in jeopardy more than once

for the same offense has it roots in ancient Greek and

Roman law, and the passage of the Fifth Amendment se-

cured that principle a place in our system of constitutional

governance. See generally United States v. Wilson, 420

U.S. 332, 339-40 (1975). The Double Jeopardy Clause curbs

the formidable weapon for oppression that would exist

if a government had the power to threaten to add te the

punishment already given to a defendant for a single vio-

lation of law. See United States v. Martin Linen Supply

Co., 480 U.S. 564, 569 (1977). Thus, the Double Jeop-

ardy Clause prohibits not only the imposition of a second

punishment but the risk of receiving multiple punish-

ments. See Price v. Georgia, 398 U.S. 3238, 326 (1970).

Because the Double Jeopardy Clause serves such a cen-

tral role in the protection of individuals from the poten-

tially oppressive power of government, this Court has re-

fused to construe the Double Jeopardy Clause narrowly

or to enforce it by means of rigid, mechanical rules. See

Serfass v. United States, 420 U.S. 377, 390 (1975).

Thus, while the language of the Amendment refers only

to “life or limb,” the Clause long has been understood

to prohibit a broader range of dual punishments. See

Breed v. Jones, 421 U.S. 519, 528 (1975). For purposes

of the Double Jeopardy Clause, punitive fines are treated

in the same way as capital punishment or sentences of

imprisonment. See Jeffers v. United States, 4382 U.S. 137,

155 (1977).

Under the dual sovereignty doctrine, however, the

Double Jeopardy Clause does not generally apply to mul-

tiple prosecutions by separate sovereign governments on

the theory that a single act can be viewed as a trans-

gression against the authority of more than one sovereign.

Although both sovereigns may punish the offender for

11

the same act, the Double Jeopardy Clause is not invoked

because the offender has committed two different of-

fenses—one against each sovereign—and is not subject

to punishment twice for the same offense. “(I]t cannot

be truly averred that the offender has been twice pun-

ished for the same cffence; but only that by one act he

has committed two offences, for each of which he is

justly punishable.” Heath v. Alabama, 474 U.S. 82, 88

(1985) (quoting Moore v. Illinois, 14 How. 13, 20

(1852) ).

The dual sovereignty doctrine stems from a recogni-

tion that federal and state governments must have au-

thority to punish violations of their own organic law and

thereby to protect their own distinct interests. “Each

government in determining what shall be an offense

against its peace and dignity is exercising its own sov-

ereignty, not that of the other.” Heath, 474 U.S. at

89 (quoting United States v. Lanza, 260 U.S. 377, 382

(1922)). Therefore, a federal prosecution generally will

not bar a state prosecution for the same act, nor will

a state prosecution generally bar later prosecution by

the federal government. Bartkus v. Illinois, 359 U.S. 121

(1959), Abbate v. United States, 359 U.S. 187 (1959).

This Court in Bartkus, 359 U.S. 121, however, recog-

nized that the dual sovereignty doctrine was not with-

out limits. In Bartkus, the Court upheld a subsequent

state prosecution for a crime for which the defendant had

already been acquitted in federal court, but the Court

stated that the Double Jeopardy bar would apply in the

context of dual sovereigns in circumstances where one

sovereign merely was acting on behalf of the other as its

agent. Jd. at 123-24. Thus, if a state undertook to prose-

cute a defendant on behalf of the federal government, it

would be “in essential fact another federal prosecution’’

and double jeopardy would prevent the subsquent prosecu-

tion. Jd. at 124.

12

2. Because the court of appeals applied the dual sov-

ereignty doctrine in circumstances in which the state and

federal penalties are based on the same authority, the deci-

sion below is wholly inconsistent with basic principles un-

derlying the dual sovereignty doctrine of the Double Jeop-

ardy Clause as articulated by this Court in Bartkus, 359

U.S. at 121. The fines petitioners paid to the Board were

based on alleged violations of federal standards adopted

by the Board, pursuant to authority delegated by an Act

of Congress. See supra p. 5. In fact, Kentucky, and the

Board as the subdelegatee of the State, were prohibited

by the Clean Air Act from seeking to enforce any stand-

ards which did not meet minimum federal requirements.

42 U.S.C. § 7416. Furthermore, the federal authorities

were empowered to derail the Board’s penalty proceedings

at any time by revoking Kentucky’s delegation. Delega-

tion Notice, 42 Fed. Reg. 64,736 B(10) (1977).

Thus, the Board in this case, while ostensibly operat-

ing to enforce its own laws, was in reality operating as

an agent of Congress and enforcing national emission

standards on behalf of the EPA. The Board’s authority

in these circumstances was fundamentally inconsistent

with the basic principles of independent “sovereignty”

underlying the dual sovereignty doctrine. Allowing the

federal government to thwart the prohibitions of the

Double Jeopardy Clause by imnosing a second punish-

ment on petitioners would directly conflict with the limi-

tations inherent in the dual sovereignty exception to the

Double Jeopardy Clause. See supra p. 10.

In this case, the Board and the federal government

clearly were not protecting their own distinct sovereign

interests. Unlike cases where the same “conduct” im-

plicated diverse federal and state statutory prohibitions,

see United States v. Patterson, 809 F.2d 244 (5th Cir.

1987) (state prosecution for murder and federal prosecu-

tion for civil rights violations), the same statute—the

Clean Air Act—created the enforcement authority relied

13

on by both the Board and the federal government. See

supra pp. 3-4, 6. Thus, this is unlike those cases where

the Bartkus exception to the dual sovereignty doctrine has

been held to be inapplicable. The Board did not merely

inform the EPA of its negotiations and “cooperate” with

the federal government in the investigation or prepara-

tion of its case. See United States v. Jordan, 870 F.2d

1310 (7th Cir.) , cert. denied, 110 S. Ct. 101 (1989) (state

informed Bureau of Alcohol, Tobacco and Firearms of

possible weapons charge); United States v. Aboumous-

sallem, 726 F.2d 906 (2d Cir. 1984) (state/federal joint

investigation), United States v. Russotti, 717 F.2d 27

(2d Cir. 1983), cert. denied, 465 U.S. 1022 (1984) (fed-

eral government withdrew from murder investigation and

later filed RICO charges) ; United States v. Aleman, 609

F.2d 298, 309 (7th Cir. 1979), cert. denied, 445 U.S. 946

(1980) (FBI agent testified at state trial). Instead, the

very authority invoked by the Board in penalizing peti-

tioners was drawn directly from the federal government.

See supra pp. 5-8.

This Court in Bartkus stated that “if the state courts

had become empowered to try the defendant for the fed-

eral offense, then such a state trial would bar a federal

prosecution.” Bartkus, 359 U.S. at 130. In this case, the

penalties imposed by the state were based on federal law

standards, incorporated into state law by means of con-

gressional and EPA delegation of circumscribed enforce-

ment authority. Accordingly, the federal indictment is

based on the “very statute whose violation by the same

conduct has already been tried in the courts of another

government empowered to try that question.” Jd. If the

explicit delegation of federal authority at issue in this

case does not meet the Bartkus exception to the dual sov-

ereignty doctrine, then Bartkus is meaningless.

3. The rule of law announced by the court below,

which authorizes multiple state and federal punishments

for violation of identical Clean Air Act standards, will

14

substantially undermine the efforts of local governments

attempting to enforce air quality control standards under

the Clean Air Act. If the fines imposed by the Board,

pursuant to statutory notices of violation, do not bar sub-

sequent federal criminal enforcement, alleged violators

will have little or no incentive to settle with the local

authority.’ Rather than resolving violations through nego-

tiated settlement, parties who risk duplicative federal en-

forcement will vigorously resist liability. Such a develop-

ment is contrary to overall enforcement efforts. See Marek

v. Chesny, 473 U.S. 1, 10 (1985) (“clear policy of favor-

ing settlement of all lawsuits”). Moreover, such a rule

is totally at odds with the purpose of delegating enforce-

ment to local authorities. The advantages of such dele-

gation, including swift and certain resolution of viola-

tions, will be impaired significantly if all private entities

must insist upon formal federal approval or resolution

of state-initiated claims.

The proper application of the Bartkus exception by the

court below also would have done nothing to undermine

the basic interests endorsed by Congress in delegating

Clean Air Act enforcement authority to the states. If the

EPA had been dissatisfied with the state’s handling of

the federal air quality standards it simply could have

revoked the state’s delegated authority “in whole or in

part.” Delegation Notice, 42 Fed. Reg. 64,736 B(10)

(1977). In fact, this right of revocation was a specific

condition on which the delegation of authority to Ken-

tucky was based. Jd. at B. Congress implemented the

5 The notices of violation by the Board in this case, as in many

instances, were resolved by settlement between the Board and peti-

tioners. See supra pp. 6-7. For a discussion of the value of settle-

ment in environmental cases in general, see D. Selmi & K. Manaster,

supra p. 3, §7.03 [1] (“increased use of negotiated rulemaking,

mediation, and other alternative dispute resolution techniques for

the settling of environmental controversies is a further indication of

this [negotiated problem-solving] orientation”).

15

concurrent enforcement provision in order to reserve the

federal government’s right to prosecute offenders itself in

the event state authorities failed to enforce the fed-

eral standards as vigorously as the federal authorities

preferred. See H.R. Rep. No. 1146, 91st Cong., 2d Sess.

23, reprinted in 1970 U.S. Code Cong. & Admin. News .

5356, 5379-80; Delegation Notice, 42 Fed. Reg. 64,735-36

at B(5) (1977); cf. 42 U.S.C. § 7420(b)(2) (EPA

authorized to collect noncompliance penalty only if state

has not received delegation of authority or if state

fails to collect penalty itself). However, there is no sug-

gestion that Congress ever contemplated that federal au-

thorities would use their concurrent authority in order to

enforce the Act after the state already had done so.

4. Not only is the decision below inconsistent with

the Bartkus exception, it also is inconsistent with the re

lated Double Jeopardy principles articulated by this Court

in United States v. Wheeler, 485 U.S. 313, 320 (1978).

In Wheeler, the United States indicted a Native American

for statutory rape after a Navajo tribal court already

had convicted him of contributing to the delinquency of

a minor in connection with the same incident. The de

fendant argued that because the Navajo Tribe was an

arm of the federal government and the offense for which

he had been convicted was a lesser included offense of

statutory rape, the Double Jeopardy Clause barred the

subsequent federal prosecution. Jd. at 316.

In determining whether to apply the dual sovereignty

doctrine to bar the double jeopardy claim, this Court in

Wheeler noted that “the ‘dual sovereignty’ concept does

not apply . ..in every instance where successive cases

are brought by nominally different prosecuting entities.”

Id. at 318. The Court noted, for example, that dual

sovereignty did not apply and the Double Jeopardy Clause

therefore precluded a territorial court in the Philippines

from retrying a soldier for an offense after acquittal by

a federal court-martial. Jd. (citing Grafton v. United

| i

16

States, 206 U.S. 333 (1907)). Such successive prosecu-

tions were held to be impermissible because both courts

were “creations emanating from the same sovereignty.”

Id. (quoting Puerto Rico v. Shell Co., 302 U.S. 253, 264-

66 (1937)). Similarly, Waller v. Florida, 397 U.S. 387

(1970) held that “a city and the State of which it is a

political subdivision could not bring successive prosecu-

tions for unlawful conduct growing out of the same epi-

sode, despite the fact that state law treated the two as

separate sovereignties.” Wheeler, 435 U.S. at 318.

Thus, Waller makes clear that two government entities

may be treated as separate “sovereigns” for some pur-

poses and not be treated as “dual sovereigns” for pur-

poses of the Double Jeopardy Clause. That principle—

that sovereign status is not immutable—underlies both

Bartkus and Wheeler.

The common thread that precluded application of the

dual sovereignty doctrine in all those cases “was not the

extent of control exercised by one prosecuting authority

over the other but rather the ultimate source of the power

under which the respective prosecutions were undertaken.”

Id. at 320 (emphasis added). In the Wheeler case, this

Court found that “the sovereign power to punish tribal

offenders has never been given up by the Navajo Tribe

and that tribal exercise of that power today is therefore

the continued exercise of retained tribal sovereignty.” Jd.

at 323-24. Thus, because the “power to punish offenses

against tribal law ... was part of the Navajos’ primeval

sovereignty, has never been taken away from them...

and is attributable in no way to any delegation to them of

federal authority,” the Court concluded that the dual

sovereignty doctrine was applicable. Jd. at 328 (em-

phasis added).

The Court in Wheeler expressly declined to offer an

opinion on the “interesting question” whether the outecme

would have been different if the prosecuting entity—in

that case the Navajo tribe—had been “deprived” of its

17

right to enforce certain laws (i.e., its “sovereignty”) by

Act of Congress and then regained that right pursuant to

congressional delegation. Jd. at 328, n.28. This case

presents just that issue.

Unlike the Navajo tribal court, whose primeval sover-

eignty to punish tribal offenders was affirmed in Wheeler,

the Commonwealth of Kentucky has no independent right

to enact and enforce laws regulating the handling or emis-

sion of asbestos on any terms and conditions it chooses.

The Clean Air Act specifically deprives the state of en-

forcement authority (42 U.S.C. § 7416) and then “re

grants” that authority to the states—subject to federal

approval, oversight and conditions. See supra pp. 2-4.

Thus, while this Court in Wheeler found no “explicit[{] or

implicit{]” divestiture of tribal court sovereignty over

the matters in question, the Clean Air Act’s divestiture of

state sovereignty over hazardous air pollutant regulation

is explicit. 42 U.S.C. § 7416. And, while the Court in

Wheeler found no federal delegation of power to the

tribal court over the matter in question, id. at 327, the

state enforcement authority at issue in this case is de

rived directly from the federal government, and then only

upon EPA review and approval. 42 U.S.C. § 7412(d)

(1).

In sum, the Commonwealth of Kentucky, like the

Navajo tribe, is undoubtedly a “sovereign” entity. How-

ever, unlike the Navajo tribe in the Wheeler case, Ken-

tucky—and its subdelegatee, the Board—are not enforcing

their own sovereign authority when they act pursuant to

Clean Air Act delegation. Kentucky’s hazardous air pol-

lutant laws were passed pursuant to, and are only en-

forceable under, the federal authority delegated to them.

42 U.S.C. § 7412(d) (1988); see also Delegation Notice,

42 Fed. Reg. 64,736 (1977). The Kentucky legislature

adopted the specific federal asbestos standards found in

40 C.F.R. 61, Subpart M, verbatim. 401 K.A.R. 57:011

§ 2, C.A. App. 204. These standards were also adopted

18

by the Board as its own regulations. A.P.C. 5.04, C.A.

App. 212. These are the identical standards—i.e., the

same “substantive” law—that the federal government now

wishes to enforce against petitioners. Superseding In-

dictment, C.A. App. 4.

Congress certainly was entitled to choose to proceed

under the enforcement scheme of the Clean Air Act, which

extracted certain intrinsic authority from the states and

replaced it with the authority to enforce federally-

approved standards pursuant to delegated federal author-

ity. However, “ ‘dual sovereignty’ . . . does not permit a

single sovereign to impose multiple punishment for a

single offense merely by the expedient of establishing

multiple political subdivisions with the power to punish

crimes.” Wheeler, 435 U.S. at 322. The Double Jeopardy

Clause does not permit the federal government to punish

petitioners twice by delegating concurrent enforcement

authority to the states for prosecution and then, depending

on their satisfaction with the results achieved, to prose-

cute petitioners again. Because the issue reserved in

Wheeler is essentially presented in this case, review by

this Court of the holding below that the Double Jeopardy

Clause is no bar to this prosecution is important.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted,

FRANK E. HADDAD, JR. CARTER G. PHILLIPS *

Kentucky Home Life Building MARK D. Hopson

Louisville, Kentucky 40202 SIDLEY & AUSTIN

(502) 583-4881 1722 Eye Street, N.W.

Washington, D.C. 20006

(202) 736-8000

Counsel for Petitioners

July 12, 1991 * Counsel of Record

a ete

APPENDICES

la

APPENDIX A

UNITED STATES COURT OF APPEALS

_ SIXTH CIRCUIT

No. 90-6026

UNITED STATES OF AMERICA,

Plaintiff-Appellee,

Vv.

LOUISVILLE EDIBLE OIL PRopucTs, INC. also known as

LOUISVILLE E.O.P., INC.; PRESIDENTIAL, INC.; FRANK

REED MeETTS; A. DEAN HUFF; RAYMOND CARL MAR-

RILLIA, JR., also known as SAMMY MARRILLIA,

Defendants-Appellants.

Argued Jan, 24, 1991

Decided March 1, 1991

Joseph M. Whittle, U.S. Atty., Richard A. Dennis, Asst.

U.S. Atty., Louisville Ky., James B. Gelin, Vicki B. Plaut

(argued), U.S. Dept. of Justice, Land & Natural Re-

sources Div., Paul S. Rosenzweig, U.S. Dept. of Justice,

Environmental Crimes Section, Washington, D.C., for

plaintiff-appellee.

Frank E. Haddad, Jr. (argued), Louisville, Ky., for

defendants-appellants.

Before MARTIN and KRUPANSKY, Circuit Judges,

and PECK, Senior Circuit Judge.

2a

BOYCE F. MARTIN, Jr., Circuit Judge.

We have before us the denial of a motion to dismiss a

nine count indictment charging asbestos related viola-

tions of the Clean Air Act, 42 U.S.C. § 7401 et seq., and

the Comprehensive Environmental Response Compensation

and Liability Act, 42 U.S.C. § 9601 et seg. Defendants

claim this federal prosecution is barred by the double

jeopardy clause of the fifth amendment because previous

fines levied by a local environmental enforcement agency

were, in effect, federal punitive measures carried out

through a state agency to regulate the same conduct. De-

fendants also argue that prosecution under both the Clean

Air Act and the Comprehensive Environmental Act vio-

lates the double jeopardy clause by subjecting them to

multiple prosecution for the same conduct. Because the

actions taken by the federal and state government are

those of independent sovereigns, and because the Clean

Air Act and the Comprehensive Environmental Act en-

compass separate offenses requiring differing elements

of proof, we affirm the judgment of the district court that

double jeopardy has not attached.

Louisville Edible Oils Products is a Kentucky corpora-

tion engaged in the business of producing edible oils such

as salad oil. A federal indictment charges that Louis-

ville Edible owned two facilities in Louisville, one at

2500 South Seventh Street and the other at 1303 South

Shelby Street, from which it knowingly emitted friable

asbestos, an air pollutant, and demolished or renovated a

stationary asbestos source in violation of the Clean Air

Act and the Comprehensive Environmental Act. These ac-

tions were allegedly carried out in whole or in part by

Louisville Edible and its co-defendants: Presidential, Inc.,

an Indiana corporation affiliated with Louisville Edible

operating as its construction and demolition unit, Frank

R. Metts, former Chief Executive Officer and controlling

stockholder of Louisville Edible, who died August 20,

1990, A. Dean Huff, director and President of Presi-

dential and Special Products Manager of Louisville Edi-

2 AMA at ath ait tb ec NEA Ae PELE

Ci Eee thts Pom

34

ble, and Raymond Car! Marillia, Jr., director and Secre-

tary Treasurer of Presidential and Vice President for

Facilities Management of Louisville Edible. Defendants

conce’ that each facility contained equipment insulated

with asbestos which may have emitted asbestos into the

air during the removal process.

The local environmental enforcement agency, the Jef-

ferson County Air Pollution Control District, had re-

peatedly fined Louisville Edible for its disregard of state

environmental legislation. Beginning in April of 1977,

the Air Poilution Board fined Louisville Edible $25,000

for the release of asbestos from its Seventh Street facility.

Louisville Edible was cited on several other occasions and

was fined an additional $24,000 in July of 1988 for an

illegal renovation of the asbestos containing facility at

Shelby Street. Another $125,000 was assessed against

Louisville Edible in July of 1989 for asbestos violations

at both facilities. These fines were levied only against

Louisville Edible.

In their motion to dismiss, defendants asserted that the

magnitude of the Air Pollution Board fines evidenced an

intent to criminally punish Louisville Edible. On this

premise, defendants argued that the federal indictment

based on the same conduct is barred as successive prose-

cution under the double jeopardy clause analysis of

United States v. Halper, 490 U.S. 435, 109 S.Ct. 1892, 104

L.Ed.2d 487 (1989) (concluding that imposition of civil fine

subsequent to criminal prosecution may trigger double

jeopardy protection if that fine is punitive in nature and

aimed at the same conduct); see also Blockburger v.

United States, 284 U.S. 299, 52 S.Ct. 180, 76 L.Ed, 306

(1932) (prohibiting multiple prosecutions by a sovereign

for a single offense). Defendants also challenged the

Clean Air Act and the Comprehensive Environmental

Act counts, claiming they are multiple prosecutions for

the same conduct under Grady v. Corbin, US. —,

110 S.Ct. 2084, 109 L.Ed.2d 548 (1990) (Double jeopardy

=?

4a

clause prohibits subsequent prosecution in which the gov-

ernment must prove as an essential element of the charged

offense conduct for which the defendant has already been

prosecuted) .

The district court rejected these arguments and we

agree. Defendants’ Halper claim was rejected without

reaching the issue of whether the fines levied against

Louisville Edible constituted punishment for double jeop-

ardy purposes because the dual sovereignty exercised by

the federal government and the Air Pollution Board elim-

inates any double jeopardy concern. The court also found

no merit to the defendants’ argument that Grady pre-

vented prosecution on both the Clean Air Act and the

Comprehensive Environmental Act counts because it

found each charge to be a separate offense requiring dif-

fering elements of proof.

As a preliminary issue, we must confront Presidential,

Huff, and Marrillia’s claim that they are somehow pro-

tected by the double jeopardy clause if we find the pen-

alties assessed against Louisville Edible to be punitive

under Halper. It is well established that the protection

of the double jeopardy clause is “intrinsically personal.”

Halper, 109 S.Ct. at 1901. However, defendants argue

that Louisville Edible’s corporate structure as a Sub-

chapter S corporation, 26 U.S.C. § 1361 et seq., extends

any protection from prosecution granted to Louisville

Edible to them as well. As employees of a Subchapter S

corporation, Huff and Marrillia are employed by Louis-

ville Edible on a direct percentage of profits basis. There-

fore, defendants argue, any penalty accessed against

Louisville Edible was passed directly onto them, preclud-

ing further punishment for the same conduct.

Subchapter S is merely a taxing statute under which

small closely-held corporations may avoid tax liability

by treating shareholders as partners in determining that

shareholder’s individual tax liability based on his or

her pro rata share of the corporation’s items of income,

wot te ee

5a

loss, deduction or credit. 26 U.S.C. § 13866(a) (1) (A).

Subchapter S corporations do not give their employees

or shareholders any unique double jeopardy protection.

Indeed, taking defendants’ argument on its face would

allow any individual who gains income on a pro rata

basis, whether employed by a subchapter S or not, to

claim double jeopardy protection when the income pro-

ducer has been punished. We agree with the district court

that the:

constitutional protection against double jeopardy to

which the Halper court referred does not extend to

the defendants Presidential, .. . Huff, and Marrillia.

Except for applauding the ingenuity of counsel, we

reject his first argument.

Thus as to all of the defendants except Louisville Edible

there is no second prosecution.

The next basic issue in controversy is whether Halper

bars the United States prosecution of Louisville Edible

because of the penalties assessed by the Jefferson County

Board. Halper addressed the issue of whether a civil

sanction following a criminal conviction for the same

conduct would violate the double jeopardy clause of the

fifth amendment. 109 S.Ct. at 1892. The United States

charged Halper with submitting 65 false claims for Medi-

care reimbursement, in violation of 18 U.S.C. § 287. As

a result of Halper’s conduct, the government suffered a

total loss of $585. He was sentenced to two years in

prison and fined $5,000.

After the criminal proceedings were complete, the

United States brought a civil action under the False

Claims Statute, 31 U.S.C. §§ 3729-3731, which authorized

a penalty of $2,000 per violation, double the damages

sustained by the government, and costs. The district court

found that the subsequent civil fine imposed of over $130,-

000 was so severe as to violate the double jeopardy clause

6a

as additional punishment for the same conduct for which

Halper had been earlier prosecuted. On review it was

stated that although civil penalties do not ordinarily rise

to the level of punishment, there exists

the possibility that in a particular case a civil pen-

alty authorized by the Act may be so extreme and so

divorced from the Government’s damages and ex-

penses as to constitute punishment. . . . Under the

Double Jeopardy Clause, a defendant who already has

been punished with criminal prosecution may not be

subjected to an additional civil sanction to the extent

that the second sanction may not fairly be categorized

as remedial but only as a deterrent or retribution.

Id. at 1898-1902.

Louisville Edible claims that Halper should apply in

this case to bar prosecution of its asbestos violations be-

cause the fines imposed by the Air Pollution Board for

this same conduct were so disproportionate to any reme-

dial purpose as to constitute punishment under the double

jeopardy clause. This claim is misplaced; the double jeop-

ardy clause of the fifth amendment bars only additional

prosecution by the same sovereign. Heath v. Alabama,

474 U.S. 82, 106 S.Ct. 433, 88 L.Ed.2d 387 (1985). Even

if the fines levied by the Jefferson County Board were so

severe as to be punitive under Halper, federal prosecution

of the same conduct subsequent to that punishment would

not offend the double jeopardy clause because of the dual

sovereignty possessed by the state and the federal gov-

ernment over this matter. See 42 U.S.C. § 7416 (author-

izing state development and enforcement of emissions

standards).

The dual sovereignty doctrine holds that the double

jeopardy clause “does not apply to suits by separate sov-

ereigns, even if both are criminal suits for the same of-

fense.” United States v. A Parcel of Land, Etc., 884 F.2d

41, 43 (1st Cir.1989). The doctrine is based on the prem-

ise that

7a

[wle have here two sovereignties, deriving power

from different sources, capable of dealing with the

same subject matter within the same territory... .

Each government in determining what shall be an

offense against its peace and dignity is exercising its

own sovereignty, not that of the other.

It follows that an act denounced as a crime by

both national and state sovereignties is an offense

against the peace and dignity of both and may be

punished by each.

United States v. Lanza, 260 U.S. 377, 382, 43 S.Ct. 141,

142, 67 L.Ed. 314 (1922). Here the state prosecution was

directed by the Air Pollution Board, which derives its ju-

risdiction from state law (Ky.Rev.Stat.Ann. § 77.005 et

seq. (Michie/Bobbs-Merrill 1980) ); as a state actor the

Air Pollution Board is a “separate sovereign[] with

respect to the Federal Government because each state’s

power to prosecute is derived from its own ‘inherent sov-

ereignty,’ not from the federal government.” Heath, 474

U.S. at 88, 106 S.Ct. at 437 (citing United States v.

Wheeler, 485 U.S. 313, 320, n. 14, 98 S.Ct. 1079, 1084,

n. 14, 55 L.Ed.2d 303 (1978)). Accordingly, the Jeffer-

son County Air Pollution Board and the United States,

through the Environmental Protection Agency, may each

pursue claims against Louisville Edible for the same con-

duct without subjecting the defendant to double jeopardy.

Louisville Edible argues that the dual sovereignty doc-

trine does not apply in this case because the Air Pollution

Board and the United States Environmental Protection

Agency were not acting as separate entities; but rather,

that the Jefferson County Board was acting as a “tool”

for federal enforcement. See, e.g., Bartkus v. Illinois, 359

U.S. 121, 79 S.Ct. 676, 3 L.Ed.2d 684 (1959) (discussing

exception to dual sovereignty doctrine where state pros-

ecution is merely a “cover and tool of federal authori-

ties”). Louisville Edible claims that correspondence be-

tween the Chief of Air Compliance of Region IV of the

8a

Environmental Protection Agency, and the Secretary-

Treasurer of the Air Pollution Control District for Jef-

ferson County, establishes that the local agency was acting

at the direction of the Environmental Protection Agency

in imposing civil fines.

We agree with the district court that a review of these

documents does not suggest that the Jefferson County

Air Pollution Board was acting as a conduit for federal

government enforcement. Indeed, these documents estab-

lish that the Board rejected a number of the Environ-

mental Protection Agency’s recommendations, including a

request to defer prosecution pending Agency action.

Rather than acting as a “tool,” the Board engaged in

inter-sovereign dialogue before pursuing its own prose-

cution. See Bartkus, 359 U.S. at 123, 79 S.Ct. at 678

(discussing benefits of federal-state cooperation in law

enforcement).

The Environmental] Protection Agency has no statu-

tory authority to control the actions of the local board.

See 42 U.S.C. §$§ 7401, 7412(d), 7416; Clean Air Act

§ 112(d) ; Ky.Rev.Stat.Ann. § 77.010 (Michie/Bobbs-Mer-

rill 1980). Indeed, the record demonstrates that the Jef-

ferson County Board often conflicted with the Environ-

mental Protection Agency over the way to properly ad-

dress Louisville Edible’s actions, before the Environmental

Protection Agency determined to initiate its own claim.

The last issue Louisville Edible raises deals solely with

its double jeopardy concerns regarding the federal prose-

cution alone. Louisville Edible asserts that the Compre-

hensive Environmental Act and Clean Air Act claims are

predicated on the same conduct, and thus are barred by

Grady v. Corbin, —— U.S. ——, 110 S.Ct. 2084, 109

L.Ed.2d 548 (1990). We disagree. We read Grady as

barring successive prosecutions for the same offense, not

simultaneous prosecutions for separate offenses. Jd. 110

S.Ct. at 2095 (discussing states’ ability to proceed against

defendant in a single proceeding asserting multiple

ee he eR ae RN a RT Thar

nS we iets wo es oe

9a

claims). We find nothing in Grady to alter the established

principle that

where the same act or transaction constitutes a viola-

tion of two distinct statutory provisions, the test to

be applied to determine whether there are two offenses

or only one is whether each provision requires proof

of an additional fact which the other does not.

Blockburger v. United States, 284 U.S. 299, 304, 52 S.Ct.

180, 182, 76 L.Ed. 306 (1932).

We agree with the conclusion reached by the district

court:

A conviction under the Clean Air Act requires the

government to prove either that defendants emitted

asbestos into the atmosphere or that they violated the

work practice standards adopted by the Environ-

mental Protection Agency, Title 42 U.S.C. § 7412(e}.

See 40 C.F.R. § 61.140 et seq.

To obtain a conviction under CERCLA requires the

government to prove that defendants were in charge

of the facility from which a hazardous substance was

released and that they failed to notify immediately

the appropriate agency as soon as they had knowledge

of the release. Title 42 U.S.C. § 9603. (footnote

omitted).

It is apparent that each offense charged requires

proof of an element which the other offense does not.

Accordingly, we find the indictment does not violate the

double jeopardy clause by including both the Clean Air

Act and the Comprehensive Environmental Act charges.

All other claims are without merit.

For the foregoing reasons, the judgment of the district

court is affirmed.

10a

APPENDIX B

UNITED STATES DISTRICT COURT

FOR THE WESTERN DISTRICT OF KENTUCKY

AT LOUISVILLE

Cr 90-00048-L (B)

UNITED STATES OF AMERICA,

Plaintiff

we

LOUISVILLE EDIBLE OIL Propucts, INC., et al.,

Defendants

MEMORANDUM AND ORDER

[Entered Aug. 3, 1990]

This matter is before the Court on the motion of the

defendants to dismiss Counts 1 through 7 of the super-

seding indictment. Defendants argue that the indictment

violates the Double Jeopardy Clause of the Fifth Amend-

ment.

BACKGROUND

The superseding indictment charges defendants with 9

counts of violating the Clean Air Act, Title 42 U.S.C.

§ 7401 et seqg., and the Comprehensive Environmental Re-

sponse Compensation and Liability Act (CERCLA), also

known as the “Superfund.”

Named as defendants are Louisville Edible Oil Products

(LEOP), Presidential, Inc., Frank Reed Metts, A. Dean

Huff, and Raymond Carl Marrillia, Jr. LEOP is a Ken-

tucky corporation engaged in the business of producing,

as its name implies, edible oil products such as salad oil.

Presidential is an Indiana corporation which functions as

ee ek ne ah Tt Re

aii ci tn

lla

the construction and demolition arm of LEOP. Metts is

Chief Executive Officer and controlling stockholder of

LEOP. Huff is a director and President of Presidential

and Special Products Manager of LEOP. Marrillia is a

director and Secretary Treasurer of Presidental and Vice

President for Facilities Management of LEOP.

Count 1 charges that LEOP owned two facilities in

Louisville. One of the facilities is at 2500 South Seventh

Street (the Seventh Street Facility) and one is at 1303

South Shelby Street (the Shelby Street Facility). It is

further alleged that the Shelby Street Facility was sold

in March, 1989, to Market Street Financial Company,

Inc., of which defendant Metts is President.

Count 1 charges further that in September and Octo-

ber, 1986, LEOP, Presidential, Metts and Huff knowingly

emitted from the Seventh Street Facility friable asbestos,

an air pollutant, and demolished or renovated a station-

ary source in violation of the Clean Air Act.

Count 2 charges the same defendants with violation of

CERCLA in September and October, 1986, at the Seventh

Street Facility.

Count 3 charges all defendants with violation of the

Clean Air Act in August, 1988, at the Seventh Street

Facility.

Count 4 charges all defendants with violation of

CERCLA in August, 1988, at the Seventh Street Facility.

Count 5 charges all defendants with a violation of the

Clean Air Act in April, 1988, at the Shelby Street Facil-

ity.

Count 6 charges all, defendants with violation of the

Clean Air Act in September, 1988, at the Shelby Street

Facility.

Count 7 charges all defendants with violation of

CERCLA in September, 1988, at the Shelby Street Facil-

ity.

12a

Defendants state that the two facilities are older facili-

ties constructed before the hazardous nature of asbestos

fibers became generally known. Defendants concede that

each facility contained equipment insulated with asbestos.

They further concede for the purposes of this motion that,

during renovation of the facilities some asbestos was

“possibly” permitted to escape by the firm LEOP had

retained to remove the asbestos.

Defendants next argue that they were cited on at least

three occasions by the Jefferson County Air Pollution

Control District (JCAPCD). They assert that, as a re-

sult of the events charged in Counts 1 and 2, JCAPCD

assessed a find of $25,000, which was paid by LEOP. As

a result of the events charged in Count 5, LEOP was fined

$24,000, which it paid. As a result of the events charged

in Count 3, 4, 6 and 7, a fine of $125,000 was assessed

and was paid by LEOP in two installments.

Defendants argue that the fines are punitive in nature

by virtue of their magnitude and that further prosecu-

tion under this indictment is barred by the Double Jeop-

ardy Clause of the Fifth Amendment.

DISCUSSION

In United States v. Halper, —— U.S. ——, 109 S.Ct.

1892 (1989), the Court addressed the Double Jeopardy

Clause in a case in which a civil sanction was imposed in

addition to criminal punishment.

In Halper defendant was charged with submitting 65

false claims for reimbursement under Medicare. The total

loss to the government was $585.00. Halper was named

in an indictment charging him with 65 counts of violating

the criminal False Claims Statute, Title 18 U.S.C. § 287.

He was found guilty on all those counts and on an addi-

tional 16 counts of mail fraud. He was sentenced to two

years in prison and fined $5,000.

The government then brought an action under the civil

False Claims Statute, Title 31 U.S.C. 3729-3731. The

at cn ee eee a a

13a

remedial portion of the statute provided for a civil pen-

alty of $2,000 per violation, double the damages sustained

by the government, and the costs of the action.

The district court held that the imposition of civil

penalties of over $130,000 against Halper would consti-

tute double jeopardy.

On direct appeal to the Supreme Court—taken prior to

the repeal of Title 28 U.S.C. § 1252—the government ar-

gued that the Double Jeopardy Clause did not bar assess-

ment of a civil penalty. In rejecting that argument, the

Court held that although, as a general proposition, civil

penalties do not rise to the level of punishment, “the pos-

sibility that in a particular case a civil penalty author-

ized by the Act may be so extreme and so divorced from

the Government’s damages and expenses as to constitute

punishment.” —— U.S. at ——, 109 S.Ct. at 1898.

The Halper Court then refined the question before it:

“whether and under what circumstances a civil penalty

may constitute punishment for the purpose of the Double

Jeopardy Clause.” —— U.S. at ——, 109 S.Ct. at 1901.

The Court rejected the notion that consideration of statu-

tory language structure and intent was appropriate in

deciding the applicability of double jeopardy safeguards:

“(While recourse to statutory language, structure,

and intent is appropriate in identifying the inherent

nature of a proceeding, or in determining the con-

stitutional safeguards that must accompany those

proceedings as a general matter, the approach is not

will suited to the context of the ‘humane interests’

safeguarded by the Double Jeopardy Clause’s pro-

scription of multiple punishments. (Citation omitted).

This constitutional protection is intrinsically per-

sonal. Its violation can be identified only by assessing

the character of the actual sanctions imposed on the

individual by the machinery of the state.”

— U.S. at ——, 109 S.Ct. at 1901. The Court held

that: “Under the Double Jeopardy Clause, a defendant

l4a

who already has been punished with criminal prosecution

may not be subjected to an additional civil sanction to the

extent that the second sanction may not fairly be cate-

gorized as remedial but only as a deterrent or retribu-

tion.” —— U.S. at ——, 109 S.Ct. at 1902.

Whether the civil sanction is or is not punishment in-

volves an element of rough justice.

The Court also limited its holding to the rare case

where a prolific but small-gauge offender is subjected to

a sanction overwhelmingly disproportionate to the dam-

ages he has caused.

The threshold question which troubles the Court con-

cerns the applicability, for double jeopardy purposes, of

the fines paid only by LEOP.

The second question of concern is whether the several

sanctions imposed by JCAPCD triggered double jeopardy

defenses against the United States.

The third question is whether the indictment charging

violation of the Clean Air Act and CERCLA amounts to

multiple prosecutions for the same offense.

Turning to our first question, we find guidance from

Halper in the holding quoted above that the protection of

the Double Jeopardy Clause is “intrinsically personal.”

Defendants advance the novel argument that since

LEOP is a Subchapter S corporation, Title 26 U.S.C.

§ 1361 et seq., and defendant Metts is the holder of 36%

of the stock in LEOP, the corporate shield argument of

the government is to no avail.

Defendant’s further argue that since defendants Huff

and Marrillia are compensated on a percentage-of-profits

basis, a fine against LEOP translates into a fine against

them.

Not surprisingly, there is a dearth of authority address-

ing the precise point.

ERS RE SS LIS Bit ARE EAN BENE AL, teh ASN RN COTS hte mlirh A rm racing as Ane

l5a |

We reject defendant’s Subchapter S argument. Sub-

chapter S is a taxing statute under which the shareholders

are effectually treated as partners for the purposes of

calculating their individual tax liability. Included in the

determination of tax liability are the shareholders’ pro

rata share of the corporation’s items of income, loss, de-

duction or credit. Title 26 U.S.C. § 1866(a) (1) (A). The

statute’s purpose is to eliminate any tax liability of small

closely-held corporations by passing the corporate income

directly to the shareholders.

The Court finds that the intrinsically personal nature

of the constitutional protection against double jeopardy

to which the Halper court referred does not extend to the

defendants Presidential, Metts, Huff and Marrillia.

Except for applauding the ingenuity of counsel, we re-

ject his first argument.

We next address the question whether the penalties as-

sessed by JCAPCD bar prosecution of defendant LEOP

by the United States.’

We return briefly to Halper to note that both the crimi-

nal prosecution and the civil action against Halper were

commenced by the United States. That situation does not

exist here. The administrative proceedings resulting in

LEOP’s paying the fines were commenced by Jefferson

County, and the criminal prosecution before this Court

was commenced by the United States.

In Heath v. Alabama, 474 U.S. 82, 106 S.Ct. 433

(1985), the Court addressed the question:

“(Whether the dual sovereignty doctrine permits

successive prosecutions under the laws of different

States which otherwise would be held to ‘subject [the

defendant] for the same offence to be twice put in

—

1Since the Court has concluded that the fines against LEOP do

not cloak the other defendants with double jeopardy immunity, our

discussion will be limited to LEOP’s double jeopardy argument.

léa

jeopardy.’ U.S. Const., Amdt. 5. Although we have

not previously so held, we believe the answer to this

query is inescapable. The dual sovereignty doctrine,

as originally articulated and consistently applied by

this Court, compels the conclusion that successive

prosecutions by two States for the same conduct are

not barred by the Double Jeopardy Clause.”

474 U.S. at 88, 106 S.Ct. at 437.

The Court went on to hold “that the States are separate

sovereigns with respect to the Federal Government be-

cause each state’s power to prosecute is derived from its

own ‘inherent sovereignty,’ not from the federal govern-

ment.” (Citing United States v. Wheeler, 435 U.S. 313,

320, n. 14, 98 S.Ct. 1079, 1084, n. 14 (1978) ).

Further support of the proposition that the dual sov-

ereignty doctrine does not bar dual prosecutions under

the Double Jeopardy Clause may be found in United

States v. A Parcel of Land, Etc., 884 F.2d 41 (1st Cir.

1989) :

“The doctrine of Double Jeopardy does not apply

to suits brought by separate sovereigns, even if both

are criminal suits for the same offense. The appel-

lants were convicted for possession of marijuana with

intent to distribute and for the cultivation of mari-

juana in the Superior Court of the Commonwealth

of Massachusetts, a sovereignty separate from the

federal government. Therefore, even if the federal

government had brought a criminal case against the

appellants on the basis of the same acts, such a case

would not be barred by Double Jeopardy.”

884 F.2d at 43.

It cannot be seriously argued that JCAPCD and the

U.S. Environmental Protection Agency are not separate

entities. KRS Chapter 77 provides for the establishment

of an air pollution control district in each county, KRS

77.010, and that the district has the authority to “make

17a

and enforce all needful orders, rules and regulations nec-

essary or proper to accomplish the purposes of this

chapter for the administration of such district... .”

KRS 77.180(1).?

The Court concludes that the teaching of Health man-

dates the conclusion that the dual sovereignty doctrine

defeats any double jeopardy defense raised by LEOP.

Finally, we address defendants’ argument that Counts

2, 4 and 7 charging CERCLA violations are based on the

same conduct charged in Counts 1, 3 and 6 charging

Clean Air Act violations and therefore amount to mul-

tiple prosecutions for the same offenses in contravention

of the Double Jeopardy Clause.

In support of their argument, defendants rely on two

recent cases, Grady v. Corbin, U.S. ——, 110 S.Ct.

2084 (1990), and Costo v. United States, 904 F.2d 344

(6th Cir. 1990). This reliance is misplaced.

Grady involved an automobile accident in which de

fendant crossed the center line of a highway and struck

two cars. The accident was investigated by an Assistant

District Attorney who went to the scene. Later that eve-

ning, he learned that the driver of one of the cars de

fendant had struck had died. Thereafter, defendant was

charged in two traffic citations with driving under the

influence and driving on the wrong side of the road.

Apparently, the bureaucracy in the District Attorney’s

Office strangled on its own red tape and when the cita-

tions came before a local court, the court was not told of

the death of the driver of the car defendant had struck.

Defendant entered guilty pleas to the two citations and,

owing to a further mix-up in the District Attorney’s

Office, the prosecutor at defendant’s sentencing was either

unaware of the fatality or she was unaware that a

2 The establishment of state agencies to adopt and enforce stand-

ards respecting emissions of air pollutants and controlling air pollu-

tion is authorized by Title 42 U.S.C. § 7416.

18a

homicide prosecution was being instituted. She recom-

mended a “minimum sentence,” which the Court imposed.

Thereafter, defendant was indicted on several charges,

including reckless manslaughter, second degree vehicular

manslaughter, and criminally negligent manslaughter.

In holding that the Fifth Amendment barred prosecu-

tion under the indictment, the Court wrote:

“(T]he Double Jeopardy Clause bars any subsequent

prosecution in which the government, to establish an

essential element of an offense charged in that prose-

cution, will prove conduct that constitutes an offense

for which the defendant has already been prosecuted.

This is not an ‘actual evidence’ or ‘same evidence’

test. The critical inquiry is what conduct the State

will prove, not the evidence the State will use to prove

that conduct. As we have held, the presentation of

specific evidence in one trial does not forever prevent

the government from introducing that same evidence

in a subsequent proceeding. See Dowling v. United

States, 493 U.S. ——, 110 S.Ct. 668, 107 L.Ed.2d

708 (1990). On the other hand, a State cannot avoid

the dictates of the Double Jeopardy Clause merely by

altering in successive prosecutions the evidence of-

fered to prove the same conduct.” (Emphasis added. )

-—— USS. at , 110 S.Ct. at 2093.

The Court then urged caution and attention on the part

of prosecutors to avoid the pitfalls which led to the re-

lease of the defendant:

“With adequate preparation and foresight, the State

could have prosecuted Corbin for the offenses charged

in the traffic tickets and the subsequent indictment

in a single proceeding, thereby avoiding this double

jeopardy question. . . . we are confident that with

proper planning and attention prosecutors will be

able to meet this standard and bring to justice those

who make our Nation’s roads unsafe.”

—— US. at , 110 S.Ct. at 2095.

19a

We read Grady as barring successive prosecutions, not

separate prosecutions for separate offenses. The case be-

fore this Court does not involve successive prosecutions.

The Court likewise finds little comfort for defendants

in Costo. In that case, the Court reversed consecutive

sentences imposed for the distribution of cocaine and at-

tempted distribution of cocaine arising out of the de-

livery of cocaine to an informant and the attempt tc

distribute more cocaine to the same informant at the same

time and the same place.

The Court relied on the now well-settled rule announced

in Blockburger v. United States, 284 U.S. 299, 52 S.Ct.

180 (19382):

“The applicable rule is that, where the same act or

transaction constitutes a violation of two distinct

statutory provisions, the test to be applied to deter-

mine whether there are two offenses or only one is

whether each provision requires proof of an addi-

tional fact which the other does not.”

284 U.S. at 304, 52 S.Ct. at 182.

The Costo Court then cited with approval the holding

in United States v. Palafox, 764 F.2d 558 (9th Cir. 1985)

(en banc), in which the Court held that when separate

offenses were charged in a single transaction, verdicts

of guilty may be returned on all counts but defendant

may be punished on only one.

Further militating against defendant’s argument is the

applicability of the Blockburger test.

A conviction under the Clean Air Act requires the gov-

ernment to prove either that defendants emitted asbestos

into the atmosphere or that they violated the work prac-

tice standards adopted by EPA, Title 42 U.S.C. § 7412(e).

See 40 C.F.R. § 61.140 et seq.

To obtain a conviction under CERCLA requires the

government to prove that defendants were in charge of

20a

the facility from which a hazardous substance was re-

leased and that they failed to notify immediately the ap-

propriate agency as soon as they had knowledge of the

release. Title 42 U.S.C. § 9603.*

It is apparent that each offense charged requires proof

of an element which the other offense does not.

The Court rejects defendants’ third argument.

CONCLUSION

The motion to dismiss Counts 1 through 7 of the super-

seding indictment will be denied. Because denial of a

motion to dismiss on grounds of double jeopardy is im-

mediately appealable, Abney v. United States, 431 U.S.

651, 97 S.Ct. 2034 (1977), see also United States v.

Sinito, 723 F.2d 1250 (6th Cir. 1983), cert. denied, 469

U.S. 817, 105 S.Ct. 86 (1984), the Court will defer as-

signing this matter for further proceedings until the time

for appeal has expired or until receipt of the mandate on

appeal, whichever first occurs.

IT IS SO ORDERED this 3rd day of August, 1990.

/s/ Thomas A. Ballantine, Jr.

THOMAS A. BALLANTINE, JR.

United States District Judge

Copies to counsel

3 Whether a conviction under Count 2 is punishable as a mis-

demeanor or as a felony is a question we leave for another day.

2la

APPENDIX C

UNITED STATES COURT OF APPEALS ©

FOR THE SIXTH CIRCUIT

No. 90-6026

UNITED STATES OF AMERICA,

Plaintiff-A ppellee,

V.

LOUISVILLE EDIBLE OIL PRODUCTS, INC., ETC., et al.,

Defendants-A ppellants

ORDER

[Filed Apr. 15, 1991]

MARTIN and KRUPANSKY, Circuit Judges; and

PECK, Senior Circuit Judge.

The court having received a petition for rehearing en

banc, and the petition having been circulated not only to

the original panel members but also to all other active

judges of this court, and no judge of this court having

requested a vote on the suggestion for rehearing en banc,

the petition for rehearing has been referred to the original

hearing panel.

The panel has further reviewed the petition for rehear-

ing and concludes that the issues raised in the petition

were fully considered upon the original submission and

decision of the case. Accordingly, the petition is denied.

ENTERED BY ORDER

OF THE COURT

/s/ Leonard Green

LEONARD GREEN

Clerk

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