Petition for Writ of Certiorari — Shaw v. United States (No. 05-1220)

6

4. Petitioner sought a rehearing en banc in the Tenth Circuit.

Rehearing was denied without comment on November 21,

2005. App. 45a-46a. Petitioner also sought and was granted

an extension of time in which to file a petition for writ of

certiorari which was granted. The deadline was extended to

March 21, 2006.

REASONS FOR GRANTING THE PETITION

18 U.S.C. § 1001 is one of the broadest provisions within

the criminal code and as such, has been the subject of much

litigation. Despite its breath, it is not without limitation. In

United States v. Rodgers, 466 U.S. 475, 104 S. Ct. 1942, 80

L. Ed. 2d 492 (1984), this Court determined that key to the

government's jurisdiction under 18 U.S.C. § 1001 is the

authority of the agency to act. What this Court has never

considered is whether Congress, in specifically limiting a

federal agency’s authority, nonetheless intended for 18 U.S.C.

§ 1001 to be an alternative vehicle for criminal prosecution.

Second, this Court has never considered if the legal duty

requirement under 18 U.S.C. § 1001 does not exist by virtue

of a statute or regulation, whether it can nonetheless be

created by virtue of completing a form without violating the

fair warning provision of the Due Process Clause. This case

presents an ideal vehicle for resolving these two issues.

|. Whether Congress, in limiting the scope of a federal

agency’s authority in criminal matters, nonetheless intended

for 18 U.S.C. § 1001 to be an alternate vehicle for criminal

prosecution, notwithstanding United States v. Rodgers, 466

U.S. 475 (1984).

The modern day version of 18 U.S.C. § 1001 was passed

in 1934 at the urging of newly created regulatory agencies to

7

include false statements “in any matter within the jurisdiction

of any department or agency of the United States. United

States v. Rodgers, 466 U.S. 475, 477, 104 S. Ct. 1942, 80

L. Ed. 2d 492 (1984). In Rodgers, this Court was called on

to interpret “jurisdiction” as that word is used, but not

defined, in the statute. The Court found that a man’s false

statement to the FBI and Secret Service that his wife had

been kidnaped and was part of a plot to assassinate the

president in order to manipulate those agencies to investigate

the whereabouts of his estranged wife fell within the

jurisdiction of the FBI and Secret Service. /d. at 476-77.

Crucial to the Court’s ruling was statutory authority for

concluding that the FBI had jurisdiction as the FBI is charged

with detecting and prosecuting crimes of which kidnaping is

one. Similarly, the Secret Service is charged with protecting

the President. /d. at 481. “Jurisdiction” exists, in the context

of 18 U.S.C. § 1001, when a department or agency has

the power to exercise authority in a particular situation.

Id. at 479.

Congress enacted the Clean Air Act in 1963 for the

limited purpose of making the Act the basic authority for

appropriations for air pollution programs. The history of the

Clean Air Act and responsibility of the Environmental

Protection Agency (EPA) is documented in 7rain v. National

Resources Defense Council, Inc., 421 U.S. 60,95 S. Ct. 1470

(1975). The purpose was to encourage and assist the States

in addressing the problem of air pollution. H.R. Rep. 88-

508 (1963). In enacting the Clean Air Act Amendments of

1970, Congress attempted to foster a symbiosis between two

perceived needs. 42 U.S.C. § 1857, ef seq. First, Congress

wanted to preserve the basic state and local control of the

design and enforcement of air pollution regulations. Besides

a deference to the states, such a state role permitted more

8

awareness of individual and local problems to be considered

in formulating pollution abatement plans. Second, Congress

sensed that there was as rising dissatisfaction with the results

being attained by the states, operating under the then existing

legislation. Therefore, there was a desire for federal standards

and enforcement. Further, Congress, apprised of the public

concern, manifested its insistence on expedition in cleaning

the air. See, Note, Clean Air Act Amendments of !970:

A Congressional Cosmetic, 61 Geo. L.J. 153, 154-9 (1972).

While the Clean Air Act gives the EPA the authority to

promulgate regulations and standards, federal enforcement

authority is either delegated to the states or in the alternative,

exercised in a limited fashion when certain specific criteria

have been met. See 42 U.S.C. § 7413.

Congress titled 42 U.S.C. § 7413 as “Federal

Enforcement.” Under42 U.S.C. § 7413(a), Congress detailed

when the EPA could enforce the laws and regulations in

administrative, civil or criminal contexts. With respect to

criminal enforcement, 42 U.S.C. § 7413{a)(3) is unequivocal

in authorizing prosecutions only in accordance with

subsection (c) of section 7413. App. 49a-S0a.

The EPA and the Clean Air Act came long after the

enactment of 18 U.S.C. § 1001. Presumably Congress was

aware of the potential breadth of 18 U.S.C. § 1001. Given

the hundreds of federal agencies and departments to which

this statute potentially applies, limitations on applicability

most appropriately exist within the context of the later

enacted legislation rather than repeated modifications to

18 U.S.C. § 1001 as new agencies or departments are created.

Because Congress has specifically limited criminal

prosecutions for violations of the Clean Air Act in 42 U.S.C.

9

§ 7413(c), the generic terms of 18 U.S.C. § 1001 can not

overcome that limitation without express Congressional action.

Given the multitude of federal agencies and departments

which exist and whose scope of authority and jurisdiction are

defined by specific legislation, this case presents an excellent

vehicle to determine whether Congress can specifically limit

an agency’s jurisdiction or whether 18 U.S.C. § 1001 overrides

that limitation contrary to Rodgers.

2. Whether fair warning under the Due Process clause is

violated when a legal duty under 18 U.S.C. § 1001 is created by

virtue of completing a form rather than by statute or regulation.

In order to impose criminal liability on an individual, he or

she must have fair warning that his or her conduct is illegal.

Otherwise, it violates the fair warning provision of the Due

Process clause of the Fifth Amendment. “Due process requires

that a criminal statute provide adequate notice to a person of

ordinary intelligence that his contemplated conduct is illegal,

for ‘no man shall be held criminally responsible for conduct

which he could not reasonably understand to be proscribed.’ ”

Buckley v. Valeo 424 U.S. 1, 77, 96 S. Ct. 612, 662 (1976)

(quoting United States v. Harriss, 347 U.S. 612, 617, 74S. Ct.

808, 812, 98 L. Ed. 989 (1954)). See also Kolender v. Lawson,

461 U.S. 352, 357, 103 S. Ct. 1855, 1858, 75 L. Ed. 2d 903

(1983) (“[A] penal statute [must] define the criminal offense

with sufficient definiteness that ordinary people can understand

what conduct is prohibited and in a manner that does not

encourage arbitrary and discriminatory enforcement.”). Cnminal

liability can be imposed under 18 U.S.C. § 1001(a) only if the

individual has a legal duty to disclose information. App. 33a. _

10

At least three Circuit Courts are in conflict as to how a

legal duty is created. In United States v. Anzalone, 76 F.2d

676 (1" Cir. 1985), the issue was whether the defendant had

a legal duty to disclose “structured” transactions designed

to avoid certain mandatory reporting requirements. Charged

under the concealment provision of 18 U.S.C. § 1001(a)(1),

the Court looked to whether the act itself imposed such a

duty or whether a duty could be implied. The Act itself did

not specifically impose a duty on the defendant and concerned

-with Due Process implications, the Court declined to impose

one. The Court found that criminal sanctions where no duty

existed either by statute or by regulation violated the fair

warning requirements of the due process clause of the Fifth

Amendment and set aside the defendant’s conviction under

18 U.S.C. § 1001. /d. at 682.

In United States v. Larson, 796 F.2d 244 (8" Cir. 1986),

the Eighth Circuit reached a similar result. The defendant

structured numerous transactions at less than $10,000 in order

to avoid the bank’s compliance with the mandatory reporting

requirements under the Currency and Foreign Transactions

Reporting Act. Although the Eighth Circuit was satisfied that

the defendant’s scheme was designed to avoid this reporting

requirement, the filling out of the requests for money orders

or cashier’s checks did not impose a duty on Larson to

disclose what he was doing to the bank and therefore he was

not guilty of concealing information from the government

under 18 U.S.C. § 1001. The lower court's finding that such

a duty existed violated his due process rights under the Fifth

Amendment. .

In contrast, the Tenth Circuit in this case concluded

Petitioner had a legal duty to disclose the presence of

asbestos. App. 33a. Despite the Court’s agreement with

Petitioner’s argument that he was not an owner or operator

of the facility and thus, under the regulations not required to

disclose the presence of asbestos, the Court concluded that

mere submission of the Notification of Demolition and

Renovation form created the legal duty. App. 33a. Apparently

the Circuit felt a misplaced reliance on an earlier Tenth

Circuit decision in United States v. Kingston, 971 F.2d 481,

489 (10" Cir. 1992) which relied on United States v. Tobon-

Builes, 706 F.2d 1092, 1097 (C.A. Fla. 1983) for the same

proposition. 7Jobon-Builes states in dicta that concealment

violations relate to nondisclosure of statements required by

statute, government regulation or form. In a rather circular

fashion, Jobon-Builes borrows that language from the Tenth

Circuit opinion in United States v. Irwin, 654 F.2d 671 (10"

Cir. 1981), rehrg en banc denied. In Irwin, the defendant, in

a sufficiency of the evidence argument, argued that the

government had failed to show any statute or regulation or

form requiring disclosure without stating any authority that

a statute, regulation or form was required to show a legal

duty to disclose. /d. at 678. The case involved including

unauthorized expenses in bills submitted to a government

agency. In overturning the convictions for concealment, the

Court noted that the bills themselves did not create any legal

duty to disclose. /d.

The Tenth Circuit decision raised for the first time the

Due Process issue. By concluding that a legal duty was

created by form, Petitioner had no notice that mere

submission or completion of_a form which he had no

obligation to complete or submit could subject him to

criminal liability. Petitioner contends that this lack of notice

violates the fair warning provision of the Due Process clause.

Despite a request to rehear the case on these grounds, the

Court declined. Because the widespread reach of

12

18 U.S.C. § 1001(a)(1) extends to hundreds of federal

agencies and departments and in turn impacts the millions

of persons which interact with these federal agencies and

departments, this Court should grant certiorari to resolve the

conflict. The Petitioner requests that if certiorari is granted

that this Court find that only a legal duty created by virtue of

statute or regulation can satisfy Due Process under the Fifth

Amendment.

CONCLUSION

For the foregoing reasons, this Court should grant the

petition for writ of certiorari.

Respectfully submitted,

MELANIE S. MORGAN

ATTORNEY AT LAW

816 Ann Avenue

Kansas City, KS 66101

(913) 371-5559

Attorney for Petitioner

APPENDIX

la

APPENDIX A — OPINION OF THE UNITED STATES

COURT OF APPEALS FOR THE TENTH CIRCUIT

FILED OCTOBER 13, 2005

UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

Nos. 01-3344, 01-3310

(D. Kansas)

(D.Ct. No. 99-CR-10081-01-JMT)

UNITED STATES OF AMERICA,

Plaintiff - Appellant,

V.

EDWARD A. SHAW,

Defendant - Appellee.

ORDER AND JUDGMENT*

Before TACHA, ANDERSON, and O’BRIEN, Circuit

Judges.

Edward Shaw was convicted by a jury of knowingly

engaging in a scheme to falsify, conceal or cover up the

* This order and judgment is not binding precedent except under

the doctrines of law of the case, res judicata and collateral estoppel.

The court generally disfavors the citation of orders and judgments;

nevertheless, an order and judgment may be cited under the terms

and conditions of 10th Cir. R. 36.3.

2a

Appendix A

presence of asbestos at the Shallow Water Refinery, in

violation of 18 U.S.C. § 1001(a)(1).' He was sentenced to

four months imprisonment, which was stayed pending this

appeal. On appeal, Shaw challenges his conviction and

sentence on the following grounds: (1) the district court

lacked subject matter jurisdiction over his prosecution under

18 U.S.C. § 1001 because 42 U.S.C. § 7413(c) is the

exclusive means by which the Government may prosecute

the making of a false statement on a form required by the

Clean Air Act (CAA), (2) his prosecution under 18 U.S.C.

§ 1001 was barred by the five year statute of limitations,

(3) the Government failed to show he_had a legal duty to

disclose the presence of asbestos at the refinery, and (4) the

district court erred in holding Shaw accountable under USSG

§ 2F1.1 for the cost of the clean up of the buried asbestos at

the refinery. The Government cross-appeals, arguing the

district court erred in denying a two level enhancement to

Shaw’s sentence for more than minimal planning under

USSG § 2F1.1(b)(2). After briefing was completed in this

1. 18 U.S.C. § 1001(a)(1) provides:

(a) Except as otherwise provided in this section,

whoever, in any matter within the jurisdiction of the

executive, legislative, or judicial branch of the

Government of the United States, knowingly and

willfully—

(1) falsifies, conceals, or covers up by any trick,

scheme, or device a material fact...

shall be fined under this title [and] imprisoned not more

than 5 years....

3a

Appendix A

matter, the United States Supreme Court decided Blakely v.

Washington, 542 U.S. 296, 124S.Ct. 2531, 159 L.Ed.2d 403

(2004). Shaw requested permission to file supplemental

briefing addressing Blakely, which was granted. In his

supplemental brief, Shaw argues Blakely applies to the federal

sentencing guidelines and he was sentenced in violation of

the Sixth Amendment. Exercising jurisdiction under 28

U.S.C. § 1291 and 18 U.S.C. § 3742(a), we affirm Shaw’s

conviction but remand for resentencing.

Because of the complexity of this appeal, we divide our

discussion in two— first addressing Shaw’s appeal of his

conviction and then addressing all sentencing issues.

I. Conviction

A. Factual Background

Shaw, a professional engineer, owns and operates ESCM

& Associates Inc. (ESCM), an engineering and environmental

consulting firm. In 1993, EZ Serve, one of ESCM’s clients,

contacted Shaw concerning the Shallow Water Refinery, an

abandoned oil refinery located near Scott City, Kansas, which

EZ Serve owned.’ EZ Serve wished to demolish the refinery

and requested Shaw’s assistance. Shaw decided to obtain bids

for the demolition. On July 15, 1993, as part of the bidding

process, Shaw escorted several metal salvage companies

through the refinery. One of those companies was Southwest

Wrecking, a small company owned by Jean Stiffler and

2. The Shallow Water Refinery was abandoned in the early

1980’s. It consists of approximately eighty acres.

4a

Appendix A

operated by Carl and Jean Stiffler and three of their children,

Lee, Scott and Carla (the Stifflers). Also present at the walk-

through were Steve Allred and Barry Yaffe, representatives

of the Yaffe Companies, another potential bidder.

At trial, Allred and Yaffe testified that during the walk-

through, they observed materials throughout the refinery

which they believed contained asbestos. They raised these

observations with Shaw. According to Yaffe and Allred, Shaw

informed them the property was clean and the materials they

observed contained calcium silicate (cellulose) not asbestos.*

Lee Stiffler testified Shaw informed his family at the walk-

through that the property did not contain asbestos, that the

insulation throughout the refinery contained cellulose and

that the only concern was the presence of hydrocarbons,

which Shaw indicated he would help abate. Carl Stiffler

testified he did not recall Shaw making any representations

concerning asbestos during the walk-through; he stated Shaw

informed the Stifflers the insulation material was cellulose.

A week after the walk-through, EZ Serve requested that

ESCM purchase the Shallow Water Refinery. Immediately

thereafter, the Stifflers contacted Shaw, informing him they

wished to purchase the refinery for $50,000. Therefore, Shaw/

3. Disagreeing with Shaw's representations concerning the

presence of asbestos, Yaffe and Allred offered-EZ Serve a negative

bid of $225.000- $250,000 to demolish the refinery. They believed

they could sell the scrap metal on the property for $500,000.

However, they calculated it would require $225,000-$250,000 to

demolish the refinery and $225,000-$250,000 to remove the asbestos

and hydrocarbons. Thus, in order to realize a profit, Yaffe and Allred’s

bid required EZ Serve to pay for abatement.

Sa

Appendix A

ESCM decided to purchase the property from EZ Serve and

immediately reconvey it to the Stifflers. ESCM purchased

the property from EZ Serve for $5,000. On August 23, 1993,

ESCM sold it to the Stifflers for $50,000. Pursuant to the

terms of the sales agreement, the Stifflers agreed to pay

$20,000 at closing* and remit the balance (without interest)

on or before August 31, 1994.° The agreement also informed

the Stifflers that (1) the property may contain asbestos,

gasoline hydrocarbons, and other contaminants, (2) the

property was being sold “ ‘AS IS,’ ” and (3) the Stifflers

assumed “all responsibility for complying with and/or

bringing the [property] into compliance with any

environmental law or regulation.” (R. Supp. Vol. I at 36.)

Jean Stiffler testified she had“complete[ ] trust” in Shaw

and that neither she nor any of her family members read the

sales agreement before signing it.° (R. Vol. IV at 410.)

Therefore, she stated she never knew the agreement indicated

asbestos may be on the property and Shaw never told her or

her family that asbestos may be present.

In addition to the sales agreement, Shaw wrote a letter

addressed to Carla Stiffler outlining the terms of a separate

4. The Stifflers obtained the $20,000 down payment with a bank

loan. Shaw assisted them in securing the loan by writing a letter to

the bank estimating the value of the scrap metal on the property at

$725,000.

5. The Stifflers have only paid Shaw $1,000 of the $30,000

balance.

6. Jean Stiffler testified she only has an eighth grade education

and usually needs someone to explain to her what she reads.

6a

Appendix A

agreement between ESCM and the Stifflers. This letter, dated

August 23, 1993, stated in relevant part:

This letter also serves as an agreement by ESCM

to conduct up to six site visits to the property

during the next 24 months, as deemed necessary

by [the Stifflers], to provide engineering

consulting. These site visits will be for a

maximum eight hour duration each and all travel

will be paid for by ESCM. Phone consultation for

engineering matters will be provided during the

24 months following closing in regards to

engineering concerns with the demolition of the

refinery; these consultations will be at no cost to

[the Stifflers].

(R. Supp. Vol. I at 38.) In conclusion, the letter stated,

“We look forward to working with you on this project.” (/d.)

Jean Stiffler testified she never saw this letter. She believed,

based on conversations with Shaw, that he would be the

Stifflers’ consultant regarding the removal of insulation

(which she believed, based on Shaw’s representations,

contained cellulose) and he would complete all necessary

paperwork for them. Carl Stiffler testified Shaw told his

family he would be their “environmental consultant.” (R. Vol.

IV at 562.)

After closing, the Stifflers began demolishing the refinery

and salvaging the scrap metal for sale. On November 3, 1993,

David Branscum from the Kansas Department of Health and

Environment (KDHE) arrived at the refinery to inspect it.

He was approached by Jean Stiffler who refused to allow

7a

Appendix A

him on the property, stating she would have to contact Shaw,

“their environmental guy,” to see if she could let him on the

property. (/d. at 585.) Branscum left the refinery and returned

to Scott City, where he learned no Notification of Demolition

and Renovation had been filed for the refinery.’

Branscum returned to the refinery the next day. This time,

Branscum was met by Lee Stiffler. Branscum requested

access to the refinery to photograph and take samples of

suspected asbestos materials.* Lee informed Branscum they

needed to contact Shaw before permitting him on the

property.’ Eventually, Shaw was contacted by telephone;

Shaw informed Branscum he could enter the property

escorted by Lee Stiffler. Accompanied by Lee, Branscum

inspected the property and took pictures. After his inspection,

Branscum informed Lee there were some compliance issues,

7. Federal regulations require an owner or operator of a

demolition or renovation activity involving the presence of asbestos

to provide the Environmental Protection Agency with written notice

of the intent to demolish or renovate and to update this notice if the

amount of asbestos changes by at least twenty percent. 40 C.F.R.

§ 61.14S(a), (b)(1),(2). This notice must be filed with the EPA at

least ten days before asbestos stripping and removal begins or

demolition work commences, depending on the specific

circumstances of each project. 40 C.F.R. § 61.145(b)(3)(1). This

notice is referred to throughout this opinion as a “Notification of

Demolition and Renovation.”

8. Branscum testified experience had taught him that refineries

often had asbestos-containing insulating material.

9. Both Lee and Jean Stiffler testified they denied Branscum

access to the refinery because Shaw had told them not to let any

government inspectors on the property without contacting him first.

8a

Appendix A

including licensing requirements, which needed to be

addressed, and it would be in the Stifflers’ best interests to

cease their demolition activities.

The next day (November 5), pursuant to the Stifflers’

request, Shaw arrived at the refinery. The Stifflers informed

Shaw they needed an asbestos inspection performed and a

Notification of Demolition and Renovation submitted to the

Government. They further informed him they could not

continue their demolition of the refinery until the notification

was submitted. They asked Shaw to fill out and submit the

notification for them. Based on recent training he had

received in the supervision of asbestos abatement,'’ Shaw

agreed to inspect the property and complete and submit the

notification. He did not require the Stifflers to pay him for

these services. While Shaw completed the necessary

paperwork, Shaw arranged for the Stifflers to work on a

demolition project in Texas."'

On November 8, 1993, Shaw telephoned Alice Law,

NESHAP® asbestos coordinator at the Environmental

10. Shaw obtained accreditation as a supervisor of asbestos

abatement projects from the Georgia Institute of Technology on

October 15, 1993.

11. Lee Stiffler testified that the Texas project involved the

removal of asbestos, which Shaw supervised. He stated Shaw

required the asbestos to be wetted prior to its removal, bagged and

hauled to a landfill. He also testified Shaw required the workers to

be suited properly when handling asbestos. Lee admitted he believed

the regulation of asbestos was “overrated.” (R. Vol. III at 364.)

12. NESHAP stands for National Emissions Standards for

Hazardous Air Pollutants. These standards were established by the -

(Cont'd)

9a

Appendix A

Protection Agency (EPA), seeking general information

concerning the EPA’s regulations. He informed her of his

qualifications and told her there was-no asbestos in Area A

of the Shallow Water Refinery, only bear metal tanks and

piping.'* The next day, Law received a Notification of

Demolition and Renovation concerning the Shallow Water

Refinery. The notification, dated November 8, 1993,

indicated there was no asbestos in Area A of the refinery.

Specifically, it stated: “Area ‘A’ consist[s] of bare metal

carbon steel tanks. No insulation or other material to test.

Cut only bare metal carbon steel piping.” (R. Vol. I at 106.)

It also stated: “If unexpected asbestos or suspected asbestos

material is encountered, all work will stop and area secured

until properly abated.” (/d. at 107.) The notification also

indicated demolition of Area A would begin on November

18, 1993, and end on December 31, 1994. The space

designated “Signature of Owner/Operator” was signed by

“Edward A. Shaw, Agent for S.W. Wrecking.” (/d.)

Accompanying the notification was a certificate of

Shaw’s accreditation as a supervisor of asbestos abatement

(Cont'd)

Environmental Protection Agency pursuant to the CAA and

specifically regulate any activity which may result in the emission

of asbestos into the atmosphere, including the disposal of asbestos.

See 42 U.S.C. § 7412(b), (d)(1); 40 C.F.R. §§ 61.140 et seq.

13. The refinery was divided into three areas—A, B and C.

Area A was referred to as the “light product storage area” where the

oil was once stored prior to processing. (R. Vol. VI at 886.) Area B

was the hot storage area and Area C was the main process area,

containing heaters and distillate columns.

10a

Appendix A

projects, a map of the refinery and a cover letter. The cover

letter, written by Shaw and dated November 8, 1993, stated

in relevant part:

On November 3, 1993, [the Stifflers] were advised

by ... David Branscum [ ] that they had not filed

the proper notification with your office in regards

to the demolition. They immediately halted the

demolition effort and commissioned me to

conduct the proper inspection and file the proper

notifications.

As we discussed, I have inspected the facility. . . .

Area A consist[s] of only bare steel tanks and bare

steel piping. There is no asbestos material in the

area to be removed. There may be asbestos

containing materials in areas B and C.

The attached notice is for demolition of Area A

only. No work will be conducted in Areas B or C

at this time. I will be conducting an extensive

survey in Areas B and C, collecting samples of

materials that may contain asbestos, and

forwarding them to a laboratory for analysis. After

receipt of the laboratory report, I will provide a

completed asbestos survey report and will submit

notification of demolition activities and asbestos

removal abatement activities for Areas B and C.

As we discussed on the telephone,. [Southwest]

Wrecking is a small family owned business and

[it has] a strong desire.to comply with all

lla

Appendix A -

applicable regulations. Our company will be

working with [the Stifflers] very closely on the

remainder of this project to assist them in their

compliance efforts.

(R. Supp. Vol. | at 39.) .

Thereafter, Shaw informed the Stifflers they could return

to work at the Shallow Water Refinery. The Stifflers returned

to the refinery based solely on Shaw’s representation that

they could do so as they never received written notification

from the KDHE that they could resume their work at the

refinery. Before their return to the refinery, Shaw never

informed the Stifflers there was asbestos on the property or

that they should only cut bare steel tanks and piping. He did,

however,-provide them with a map delineating Areas A, B

and C. He also told them to contact him before moving from

Area A to another area. -

On December 9, 1993, Branscum returned to the refinery

to verify the information in the November 8, 1993

“Notification of Demolition and Renovation.” He was

allowed to enter the refinery, again escorted by Lee Stiffler.

Branscum took several photographs and samples from Area

A of the refinery. Later, he submitted these samples for

testing. Test results revealed the presence of asbestos in Area

A.'* During this December 9, 1993 visit, Branscum did not

14. Lee Stiffler testified that despite numerous calls to the

KDHE, his family never received notice of the results of Branscum’s

sampling.

12a

Appendix A

see any evidence that the asbestos was being wetted prior to

its removal.'°

On March 3, 1994, Shaw visited the Shallow Water

Refinery to take samples. At that time, the Stifflers were

beginning to move their demolition activities from Area A

to Area B. At Shaw’s direction, Lee and Scott Stiffler obtained

forty-eight samples from all three areas of the refinery. Lee

testified that while he and Scott were assisting Shaw, they

came across a hoie they had dug to bury insulation.'®

According to Lee, Shaw told them they could continue to

bury the insulation because it was not asbestos.'’ Carl Stiffler

testified Shaw saw the holes filled with insulation and Jean

Stiffler testified Shaw told them they could bury the

insulation. Later, Shaw submitted the samples he had

collected to a laboratory in Gainesville, Florida, for testing.

Samples from Areas B and C showed the presence of

asbestos; none of the samples from Area A tested positive

for asbestos.

15. One asbestos-removing procedure involves wetting the

asbestos-containing material with a water solution, removing the

asbestos, sealing it in plastic bags and disposing of it in an approved

landfill.

_16. Lee testified insulation was buried in three different

locations on the property. He stated over 100 pounds of insulation

was dumped in each location.

17. Lee also testified that on other visits to the refinery, Shaw

observed other holes where insulation material had been dumped.

Lee stated Shaw did not “really say a whole lot, just carry on.”

(R. Vol. Hf at 352.)

‘13a

Appendix A

Based on these results, Shaw completed and filed a

revised Notification of Demolition and Renovation with the

EPA. This notification, which was mailed on June 20, 1994,

and received by the EPA on June 23, 1994, indicated there

was asbestos on the property and that it would be removed

using the “wet method.” (R. Vol. I at 110): see n. 15, supra.

This notification contained the signature of “C.L. Stiffler”'*

and was dated April 22, 1994. (/d.)

Accompanying the revised notification was a letter from

Shaw dated June 17, 1994, stating asbestos was discovered

on the property. It further stated:

We have arranged, [on] behalf of [the Stifflers],

to have BFI Waste Management haul the removed

[asbestos] and place [it] in [its] landfill in

Fountain, Colorado. [The Stifflers have] indicated.

that they are receiving the necessary training from

Kansas for Asbestos Removal Operations and that

they will have our personnel on site as

Supervisors.

18. It is unclear who signed “C.L. Stiffler” to the notification.

According to Jean Stiffler, who testified she was familiar with her

husband's signature, it was not Carl’s signature. Shaw also denied

forging Carl’s signature. According to Shaw, he left several blank

copies of the notification with Carla Stiffler and she informed him

she would ensure that one of them got signed. Apparently, the Stifflers

returned two forms, one bearing the signature “C.L. Stiffler” and

one bearing the signature “Lee Stiffler.” Shaw completed and

submitted both forms but filed the form containing the “C.L. Stffler”

signature with the EPA.

l4a

Appendix A

We will be collecting air samples on a regular

basis and submitting them for laboratory analysis.

We will also conduct field fiber screening while

the asbestos removal project is in progress.

(/d. at 108.) At trial, the parties stipulated that Shaw “never

requested a contract with BFI pertaining to the disposal of

asbestos from the Shallow Water Refinery on behalf of

himself or as an agent of Carl and Jean Stiffler, doing business

as [Southwest] Wrecking, nor did he ever receive or view

such a contract.” (R. Vol. III at 257.) However, Shaw did

contact BFI inquiring of the cost of removing the asbestos

from the refinery and disposing of it at BFI’s landfill. On

May 20, 1994, BFI responded by letter to Shaw’s inquiry,

discussing the cost of its services.

On September 15, 1994, Russell Brichacek, Branscum’s

supervisor at the KDHE, visited the refinery. He met with

Lee and Carla Stiffler and informed them that state law

required them to have an asbestos contractor’s license to

perform demolition activities at a site involving asbestos.

He then toured the facility with Lee. He observed several

violations of the work practice standards for the removal of

asbestos. In particular, he noticed insulation had been bagged

and stored in the bath house without having been properly

wetted prior to its removal. He was informed by Lee Stiffler

that this insulation material came from Area A. He also

observed insulation debris on the ground throughout the

refinery. Brichacek took two samples from the bath house;

later testing revealed the presence of asbestos.

15a

Appendix A

On March 6, 1996, Kathryn Wright, a special agent in

the Criminal Investigation Division of the EPA, was asked

to investigate the violations taking place at the Shallow Water

Refinery. Shaw was initially the target of her criminal

investigation.'? In June 1996, Wright went to the refinery

but the gate was locked and she was unable to locate anyone

on the property. Wright returned to the property in August.

Again, the gate was locked and she was unable to locate

anyone to allow her access to the property. Therefore, Wright

conducted a fly-over of the property, observing that

demolition activity was being performed at the refinery.

Meanwhile, Wright attempted to contact Shaw. In October

1996, Shaw telephoned Wright and agreed to be interviewed.

Wright testified that during their conversation, Shaw told

her he had instructed the Stifflers not to allow inspectors on

the facility because it “was a refinery and anybody looking

for any violation could find it.” (R. Vol. V at 701.)

On November 14, 1996, Wright and her colleague

William Absher interviewed Shaw. During the interview,

Wright and Absher informed Shaw they wished to inspect

the refinery. Shaw told them he would make arrangements

for the inspection. Shaw eventually informed Wright that the

EPA could inspect the refinery on December 16, 1996.

On that day, Wright and several other individuals from

the EPA arrived at the refinery with a consent to search form.”

19. Later, in April 1996, Southwest Wrecking and Carl and Jean

Stiffler became targets of Wright’s investigation.

20. Jean Stiffler testified that before these individuals arrived

at the refinery, Shaw told her and her family that they needed to

(Cont'd)

l6a

Appendix A

Wright initially attempted to hand it to Shaw but Shaw told

her she must give it to Carl Stiffler because he owned the

property. Carl Stiffler signed the form and Wright and the

other individuals were allowed to enter and inspect the

property. As a result of this inspection, the EPA issued an

emergency cease and desist order to the Strfflers, requiring

them to cease all demolition activity at the refinery.”

In May 1997, Brichacek returned to the property. He was

met by Carl and Jean Stiffler who accompanied him as he

inspected the property. He observed demolition activity had

occurred since his last visit in September 1994; in particular,

he noticed the catalytic cracker unit (cat cracker), which

had been standing during his last visit, was now laying on

its side. He also noticed that much of the insulation from the

cat cracker had been knocked loose and was scattered on the

ground around it. According to Branscum, Carl Stiffler

(Cont'd)

“stick together,” which she interpreted to mean that they not allow

themselves to be separated until they all had the same story to tell.

(R. Vol. IV at 423.)

21. During the EPA’s visit, the Stifflers were interviewed. The

Sufflers stated they had earned $150,000 from the sale of scrap metal

from the refinery and estimated another $35,000 worth of scrap metal

remained on the property.

22. A catalytic cracker/cat cracker is “[a]n oil refinery unit in

which the cracking of petroleum takes place in the presence of a

catalyst.” THE AMERICAN HERITAGE DICTIONARY OF THE

ENGLISH LANGUAGE (4th ed.2000). The “cracking” of petroleum

is the thermal decomposition of petroleum molecules into shorter

molecules to extract low-boiling fractions such as gasoline. /d.

17a

Appendix A

informed him that the cat cracker had been dropped”’ a week

earlier and that Shaw had told Carl there was no asbestos on

the cat cracker.** Brichacek took samples from the insulation

material on the cat cracker; later testing revealed the presence

of asbestos. Shortly after his visit, the KDHE issued an order

citing the Stifflers with various state law violations.

On July 9, 1997, in response to the KDHE order, Jean

Stiffler wrote the KDHE a letter requesting a hearing. In this

letter, she stated, “[t]he samples we had from the catcracker

were negative.” (R. Vol. 1V at 427 (quotations omitted).) Jean

testified she made this statement based on a package she

received from Washington, D.C., which stated the samples

from the cat cracker were negative. She testified Shaw took

those samples.

After the EPA issued the cease and desist order in

December 1996, Wright visited the refinery in June 1997 to

verify whether the order was being complied with by the

Stifflers. Because no one was there to allow her access,

Wright again conducted a fly-over. She observed that the

Stifflers’ heavy equipment was gone. Wright also visited the

refinery in July, August and October 1997. Again, no activity

was OCcUITiNg.

On August 1, 1997, an informal meeting was held

between several KDHE representatives and Carl and Jean

23. When removing asbestos from a height, the proper

procedure is to lower it, not drop it, in order to minimize the potential

for airborne release of asbestos.

24. Jean Stiffler testified they contacted Shaw for permission

prior to dropping the cat cracker. ;

18a

Appendix A

Stiffler concerning the violations occurring at the refinery

and what the Stifflers could do to come into compliance with

state law. Shaw was present and did most of the talking on

behalf of the Stifflers. On October 31, 1997, the Stifflers

received their asbestos control license. In 1998, the Stifflers

hired Dennis Shelton, an accredited asbestos project designer,

to prepare an asbestos abatement plan for the refinery, which

was filed with the KDHE. In June 1998, Brichacek visited

the property for the third time. Although abatement activities

had occurred, Brichacek observed that many of the same

illegal conditions were still present.

B. Procedural Background

On June 15, 1999, Shaw and Carl and Jean Stiffler were

charged by indictment with (1) conspiracy to violate the

NESHAP pertaining to asbestos in violation of 18 U.S.C.

§ 371 (Count I) and (2) violation of the NESHAP pertaining

to asbestos in violation of 42 U.S.C. § 7413 and 18 U.S.C.

§ 2 (Count II). Shaw was additionally charged with engaging

in a scheme to falsify, conceal or cover up the presence of

asbestos in violation of 18 U.S.C. § 1001(a)(1) (Count III)

and making a false statement in violation of 18 U.S.C.

§ 1001(a)(2) (Count IV). On November 17, 1999, a

superseding indictment was issued against Shaw and Carl

and Jean Stiffler. The superseding indictment charged Shaw

with (1) violating the NESHAP pertaining to asbestos in

violation of 42 U.S.C. § 7413(c)(1) and 18 U.S.C. § 2 (Count

I); (2) engaging in a scheme to falsify, conceal, or cover up

the presence of asbestos in violation of 18 U.S.C.

§ 1001(a)(1) (Count II); (3) making a false statement in

violation of 18 U.S.C. § 1001(a)(2) (Count III); and (4)

19a

Appendix A

illegally disposing of asbestos in violation of the

Comprehensive Environmental Response, Compensation and

Liability Act (CERCLA), 42 U.S.C. § 9603, and 18 U.S.C.

§ 2 (Count IV). The superseding indictment charged

Carl and Jean Stiffler with removing asbestos

without accreditation in violation of 15 U.S.C. § 2646(a)(3)

(Count V).

On March 24, 2000, the Government filed a superseding

information against Carl and Jean Stiffler, charging them with

failure to notify the EPA about the storage and disposal of

asbestos at the Shallow Water Refinery, a misdemeanor.

The Stifflers entered into a plea agreement with the

Government whereby they agreed to plead guilty to the

superseding information. In exchange for their guilty pleas

and their cooperation in the Government’s prosecution of

Shaw, including providing truthful testimony at his trial, the

Government agreed to recommend a two point downward

adjustment to their sentences for acceptance of responsibility

and to file a motion for downward departure. It was not until

they received this bargain that the Stifflers admitted they had

buried asbestos on the property. On March 27, 2000,

Carl and Jean Stiffler pled guilty; they were eventually

sentenced to one year unsupervised probation.

On March 28, 2000, Shaw proceeded to trial. At trail, he

testified that during the walk-through on July 15, 1993, he

informed the Stifflers there was a possibility the property

contained asbestos. He denied ever representing that the

refinery was a clean plant. With regards to the separate

agreement between ESCM and the Stifflers (outlined in

-Shaw’s August 23, 1993 letter to Carla Stiffler), Shaw

20a

Appendix A

testified the agreement pertained to ESCM assisting the

Stifflers in the designing of riggings and the testing of any

liquids discovered in the tanks on the refinery. He stated he

never agreed to be their environmental consultant end indeed,

at the time of the August 1993 agreement, he did not have

any training in asbestos abatement. He further testified he

told Lee Stiffler to escort Branscum through the refinery to

allow Branscum to relate any concerns directly to Lee and

for Branscum’s safety. Shaw also testified that on March 3,

1994, he did not attempt to collect clean samples from Area

A and took samples from materials containing insulation.

Shaw conceded he could have made mistakes in sampling

Area.A but stated he never deliberately misled anyone

concerning what he believed was on the property. Lastly,

Shaw testified he never instructed any of the Stifflers to bury

insulation.

On April 12, 2000, the jury returned its verdict, finding

Shaw guilty on Count II but not guilty on Counts | and IV.

No verdict was returned on Count III because it was charged

and presented to the jury in the alternative to Count II. During

trial and after the jury’s verdict, Shaw moved for a judgment

of acquittal, arguing (1) insufficient evidence demonstrating

a scheme to conceal, (2) the statute of limitations barred the

prosecution of Count II, and (3) he had no duty to report the

presence of asbestos. The court rejected these arguments and

denied his motion. Shaw also filed a motion to set aside the

verdict, arguing the district court lacked subject matter

jurisdiction over his prosecution under 18 U.S.C. § 1001.

The court also denied this motion.

2la

Appendix A

C. Discussion

Shaw attacks his conviction on three grounds: (1) the

district court lacked subject matter jurisdiction over his

prosecution under 18 U.S.C. § 1001 because 42 U.S.C.

§ 7413(c) is the exclusive means by which the Government

may prosecute the making of a false statement on a form

required to be filed under the CAA, (2) his prosecution under

18 U.S.C. § 1001 was barred by the five year statute of

limitations, and (3) the Government failed to present

sufficient evidence demonstrating he had a legal duty to

disclose the presence of asbestos at the refinery.

Shaw raised the latter two arguments to the district court

in a motion for judgment of acquittal. “[We] review[ ] a denial

of a motion for judgment of acquittal de novo, viewing the

evidence in the light most favorable to the government in

determining if there is substantial evidence from which a

jury could find the defendant guilty beyond a reasonable

doubt.” United States v. Austin, 231 F.3d 1278, 1283 (10th

Cir.2000). We review jurisdictional issues and a district

court’s interpretation of the statute of limitations de novo.

United States v. Anderson, 319 F.3d 1218, 1219 (10th

Cir.2003) (statute of limitations); United States v. Cuch, 79

F.3d 987, 990 (10th Cir. 1996) (jurisdiction).

1. Subject Matter Jurisdiction

) pas |

. The CAA, 42 U.S.C. § 7401 ef sey., contains a provision

* entitled “Federal Enforcement.” See 42 U.S.C. § 7413. Within

that provision is a subsection entitled “Criminal penalties”

which states in relevant part:

22a

Appendix A

(2) Any person who knowingly—

(A) makes any false material statement,

representation, or certification in, or

omits material information from, or

knowingly alters, conceals, or fails to

file or maintain any notice, application,

record, report, plan, or other document

required pursuant to this chapter to be

either filed or maintained (whether with

respect to the requirements imposed by

the Administrator or by a State);

shall, upon conviction, be punished by a fine

pursuant to Title 18, or by imprisonment for not

more than 2 years, or both....

42 U.S.C. § 7413(c)(2)(A).

Shaw contends 42 U.S.C. § 7413(c)(2)(A) is the sole

and exclusive means by which the Government may

prosecute the making a false statement to the EPA in violation

of the CAA. Thus, he argues the district court lacked subject

matter jurisdiction over his prosecution under 18 U.S.C.

§ 1001. Shaw also maintains that because 42 U.S.C.

§ 7413(c)(2)(A) and 18 U.S.C. § 1001 proscribe the same

conduct, § 7413(c)(2)(A), the specific statute, trumps § 1001,

the general statute, unless Congressional intent demonstrates

the general statute is to control. He asserts the language of

§ 7413(c)(2)(A) and the legislative history of the two statutes

23a

Appendix A

indicate Congress intended § 7413(c)(2)(A) to trump § 1001.

Lastly, to the extent there is any ambiguity as to which statute

controls, Shaw contends the rule of lenity requires application

of § 7413(c)(2)(A) because its penalty provision maximizes

punishment at two years as opposed to five years under

§ 1001.

The Government maintains § 100I1(a)(1) and

§ 7413(c)(2)(A) are two separate statutes which criminalize

different behavior—the former criminalizes a scheme to

conceal a material fact from the Government and the latter

prohibits the making of a false statement within a document

required to be filed by the EPA. It argues it was not required

to choose one statute over the other and Shaw’s conduct

(knowingly and willfully submitting false and fraudulent

representations to the EPA over a lengthy period of time)

was prohibited by § 1001(a)(1). The Government further

contends that because § 1001(a)(1) is not ambiguous, the

rule of lenity is inapplicable.

Shaw’s jurisdictional argument is without merit. It is well

settled that “when an act violates more than one criminal

statute, the Government may prosecute[ ] under either so

long as it does not discriminate against any class of

defendants.” United States v. Batchelder, 442 U.S. 114, 123-

24, 99 S.Ct. 2198, 60 L.Ed.2d 755 (1979) (“Whether to

prosecute and what charge to file or bring before a grand

jury are decisions that generally rest in the prosecutor’s

discretion.”). This is true even when one statute provides a

harsher penalty. In Batchelder, the Supreme Court was

confronted with two statutes, 18 U.S.C. § 922(h) and

18 U.S.C. § 1202(a), which proscribed the same conduct but

24a

Appendix A

which carried different statutory maximums—five years and

two years, respectively. /d. at 116-17, 99 S.Ct. 2198. The

Government decided to prosecute the defendant under

§ 922(h) and its attendant penalty provision, !8 U.S.C.

§ 924(a); the defendant was sentenced to the five year

statutory maximum term of imprisonment. /d. On appeal,

the Seventh Circuit concluded the defendant’s sentence was

‘limited to the two year statutory maximum applicable to.

violations of § 1202(a). /d. The Supreme Court reversed.

Id. at 118, 99 S.Ct. 2198. It concluded nothing in the

legislative history of § 1202(a) (which was enacted after

~ §922(h) and § 924(a)) revealed Congress intended its penalty

provision to override § 924(a). /d. at 119-21, 99 S.Ct. 2198.

It also rejected the application of the rule of lenity, stating §.

924(a) unequivocally applies to convictions under § 922(h). %

Id. at 121-22, 99 S.Ct. 2198. Lastly, the Court found no

constitutional infirmity with the Government’s choice to

prosecute the defendant under the statute carrying the harsher

punishment. /d. at 124-25, 99 S.Ct. 2198.

We addressed a similar issue in United States v. Wiles,

102 F.3d 1043 (10th Cir.1996). There, the defendant was

charged with making a false statement to the Security and

Exchange Commission (SEC) under 18 U.S.C. § 1001.

Id. at 1066. On appeal, he alleged that Congress intended

the Government to prosecute the making ofa false statement

to. the SEC under 15 U.S.C. § 78ff, a specific provision in

the Securities Exchange Act of 1934 which criminalizes the

willful making ofa false or misleading statement to the SEC.

Id. Thus, the defendant argued that the making of a false

. Statement to the SEC could not support a conviction under

§ 1001. /d. We rejected this argument, holding: “Without

25a

Appendix A

any express indication that Congress intended otherwise, we

... conclude that both § 78ffand § 1001 proscribe the making

of false statements to the SEC, and the government may

prosecute such conduct under either statute.” /d. at 1067.

See also United States v. Radetsky, 535 F.2d 556, 567-68

(10th Cir. 1976) (rejecting argument that the defendant should

have been prosecuted under specific statute criminalizing the

making of false statements in connection with medicare

claims rather than § 1001 because there was no evidence of

an intent to make the specific statute a substitute for any

part of § 1001).

The same reasoning applies here. Despite Shaw’s attempt

to persuade us otherwise, we fail to discern from either the

language of the CAA or its legislative history any

Congressional intent to foreclose prosecutions under § 1001

where § 7413(c)(2)(A) may also apply. Without such intent,

we defer to the Government's prosecutorial discretion.”°

Moreover, the Government alleged Shaw engaged in a

scheme to conceal the presence of asbestos. Section

7413(c)(2)(A) of the CAA does not proscribe such conduct.

Consequently, charging Shaw under § 1001(a)(1), which does

prohibit such conduct (see n. 1, supra ), was proper.

25. Because we find no ambiguity in either statute, the rule of

lenity does not apply. Callanan v. United States, 364 U.S. 587, 596,

81 S.Ct. 321, 5 L.Ed.2d 312 (1961) (holding that the rule of lenity,

“as is true of any guide to statutory construction, only serves as an

aid for resolving an ambiguity; it 1s not to be used to beget one”).

26a

Appendix A

2. Statute of Limitations

A five year statute of limitations applies to prosecutions

under 18 U.S.C. § 1001. See 18 U.S.C. § 3282 (providing a

five year statute of limitations for noncapita! offenses). Shaw

contends the statute of limitations began to run in November

1993, when he submitted the original Notification of

Demolition and Renovation denying the presence of asbestos

in Area A of the Shallow Water Refinery. Because the original

indictment was not filed until June 15, 1999, he argues his

prosecution under 18 U.S.C. § 1001 was time-barred. He

further maintains that the Government cannot rely on the

June 17, 1994 Notification of Demolition and Renovation

and accompanying letter because neither of these documents

contained false information. He alleges that at the time he

made the representations within those documents, he had

been negotiating with the Stifflers to supervise the asbestos

abatement project and had made the preliminary

arrangements for BFI to remove and dispose of the asbestos

at the refinery. He also states the evidence at trial did not

show he signed Carl Stiffler’s name to the notification.

Indeed, he states his undisputed testimony demonstrated he

provided the Stifflers with a blank notification form and they

submitted it to him with Carl Stiffler’s signature. Moreover,

he argues the Government cannot rely on the letter Jean

Stiffler wrote to the KDHE in 1997 because she never

testified that Shaw told her the cat cracker did not contain

asbestos. More importantly, he contends there is nothing in

the record demonstrating that Jean’s conduct in 1997 should

be imputed to him. Lastly, Shaw maintains that the

superseding indictment charged him with concealing the

presence of asbestos. Because the alleged false statements

27a

Appendix A

occurring in 1994 or 1997 concerned the removal of asbestos,

not its presence, Shaw asserts the Government cannot rely

on these statements as conduct occurring within the five years

preceding the original indictment.

The Government argues Shaw’s prosecution under

§ 1001 was not time-barred. It asserts Shaw’s ongoing scheme

to defraud continued until at least June 20, 1994, but also

into 1997. [t points to the June 17, 1994 correspondence to

the EPA (which Shaw mailed on June 20, 1994) and the

enclosed Notification of Demolition and Renovation which

contained the forged signature of “C.L. Stiffler.” It contends

these documents falsely stated that the Stifflers would have

ESCM personnel on site as supervisors and that arrangements

had been made with BFI to remove and dispose of any

asbestos. The Government also points to Shaw’s

representation to Jean Stiffler in 1997 that the cat cracker

had been tested for asbestos and no asbestos had been found.

Relying on this representation, Jean wrote the KDHE stating

the Stifflers had been informed the cat cracker did not contain

asbestos and it could be demolished.

We reject Shaw’s statute of limitations argument. In

criminal cases, the statute of limitations normally begins to

run when the crime is complete. United States v. Reitmeyer,

356 F.3d 1313, 1317 (10th Cir.2004). “A crime is complete

[when] every element in the crime occurs.” /d. (quotations

omitted). Here, the superseding indictment charged Shaw

with a scheme to conceal the presence of asbestos from 1993

to 1997.*° Therefore, the crime was not completed and the

26. Count II of the superseding indictment stated the following

in relevant part:

(Cont'd)

28a

Appendix A

statute of limitations did not begin to run until this scheme

was completed in 1997. United States v. Jensen, 608 F.2d

1349, 1355 (10th Cir.1979) (“[T]he statute of limitations is

no bar if there is an ongoing scheme continuing into the

(Cont'd)

Commencing in November of 1993 ... and continuing

through September of 1997...

EDWARD A. SHAW

within the District of Kansas, did knowingly and

willfully, in a matter within the jurisdiction of the [EPA],

| | falsify, conceal or cover[ ] up, by a scheme, material

facts, to wit the presence of asbestos at various locations

within the Shallow Water Refinery site. . ..

(R. Vol. | at 40.) Thereafter, Count II alleged Shaw’s scheme to falsify.

conceal and cover up the presence of asbestos at the Shallow Water

Refinery included but was not limited to the following acts: (1) Shaw

advising the Stifflers to deny Branscum access to the facility, (2)

Shaw’s November 8, 1993 letter informing the EPA he had inspected

the refinery, that Area A only consisted of bare steel tanks and piping

and Area A did not contain asbestos, (3) Shaw’s submission of the

November 8, 1993 Notification of Demolition and Renovation

indicating there was no asbestos-containing material in Area A of

the refinery, (4) Shaw’s June 17, 1994 letter informing the EPA that

ESCM had arranged for BFI to haul and dispose of the asbestos

‘from the refinery, (5) Shaw’s filing of the revised Notification of

Demolition and Renovation bearing the purported signature of “C.L.

Suffler” and containing false and misleading representations, (6)

Shaw’s statement at the August 1, 1997 meeting between the KDHE

and the Stifflers indicating the Stifflers had contacted several

environmental firms to address the problems at the Shallow Water

Refinery, and (7) Shaw’s August 15, 1997 letter to the EPA and KDHE

advising of the steps the Stifflers were taking to comply with the

environmental laws and regulations.

29a

Appendix A

[statute of limitations] period.”).’’ Because the scheme

continued into the five years preceding the filing of the

original indictment (June 15, 1999), the indictment was

timely. We also reject Shaw’s argument that his conduct in

1994 and 1997 cannot be included in the scheme to conceal

the presence of asbestos because it involved the removal/

disposal of asbestos, not its presence. Shaw reads the term.

“presence of asbestos” in the superseding indictment too

narrowly. It is clear the Government did not seek to limit his

scheme only to the concealment of the physical presence of

asbestos but also the concealment of its improper removal

and disposal. Indeed, in the superseding indictment, the

Government alleged Shaw’s scheme to conceal included his

preparation and submission of the June 1994 Notification of

Demolition and Renovation and accompanying cover letter

to the EPA. The documents indicated the asbestos discovered

at the refinery would be wetted, bagged and removed by BFI

to its landfill in Fountain, Colorado, and ESCM would be

supervising the Stifflers’ removal of the asbestos. None of

this information was true.** Indeed, Shaw knew the Stifflers

were burying insulation.

27. This is not to be confused with the continuing offense

doctrine. In United States v. Dunne, 324 F.3d 1158, 1166 (10th

Cir.2003), we held § 1001 is not a continuing offense crime for statute

of limitations purposes. However, the fact that § 1001 is not a

continuing offense crime is not dispositive of the statute of limitations

issue because the Government charged Shaw under § 1001’s scheme

provision. /d. at 1164 (stating a continuing offense “is not the same

as a scheme or pattern of illegal conduct”) (quotations omitted).

28. Shaw attempts to minimize the falsity of this information.

He states that at the time he made the representations in the 1994

(Cont'd)

30a

Appendix A

Even limiting Shaw’s scheme to the concealment of the

physical presence of asbestos, we conclude Shaw’s activities

in 1994 and 1997 involved such concealment. In November

1993, Shaw informed the EPA via the Notification of

Demolition and Renovation that Area A of the refinery did

not contain asbestos, when in fact it was riddled with

asbestos. Continuing that concealment, none of Shaw’s

sampling from Area A in March 1994 tested positive for

asbestos. Additionally, Shaw was aware the Stifflers were

burying insulation and told Lee Stiffler they could continue

to do so. Shaw also gave the Stifflers permission to drop the

cat cracker in May 1997, which was subsequently discovered

to contain asbestos. Thereafter, the EPA ordered the Stifflers’

demolition activities to cease and the KDHE cited them for

various state law violations. As a result, Jean Stiffler wrote

to the KDHE in July 1997 informing them no asbestos was

present on the cat cracker. At trial, Jean testified she based

this statement on samples Shaw took from the refinery.

Therefore, contrary to Shaw’s arguments, his activities in

1994 and 1997 concerned the concealment of the presence

of asbestos.

Based on the above, we conclude the statute of

limitations did not bar Shaw’s prosecution under 18 U.S.C.

§ 1001(a)(1).

(Cont'd)

notification and cover letter, ESCM was in the process of negotiating

with the Stifflers to provide them its services and BFI had been

contacted regarding the removal of asbestos. However, the documents

state these representations as established facts—that ESCM had

arranged for BFI to remove the asbestos and that its personnel would

be on site as supervisors.

3la

Appendix A

3. Duty to Disclose

Shaw argues that in order to convict him under § 1001,

the Government had to prove he had a duty to disclose the

presence of asbestos to the EPA. He states that under the

EPA’s regulations, only owners or operators are required to

complete and file a Notification of Demolition and

Renovation and therefore only owners or operators have a

duty to disclose. Shaw contends it is undisputed that he did

not own the refinery. As to whether he was an “operator” of

the facility, he alleges the EPA’s definition of operator as

one who “operates, controls, or supervises a stationary

source” should be declared void for vagueness. See 42 U.S.C.

§ 7412(a)(9). Alternatively, Shaw contends that to be an

“operator,” one must be more than a mere consultant and, at

a minimum, must actively participate in the day-to-day

activities of the demolition/renovation operation. He asserts

the Government’s evidence at trial did not support such a

finding. Specifically, he points out he was not involved in

the day-to-day operations at the refinery and made only a

few visits to the refinery over a four year period.

The Government alleges that although Shaw may not

have had a duty to report the presence of asbestos to the EPA,

once he did so, he was obligated to provide truthful

information under § 1001. The Government also argues there

is no requirement under § 1001 that there be a separate statute

or regulatibn requiring the defendant to provide information.

Section 1001 of Title 18 encompasses two

distinct offenses—concealment of a material fact (18 U.S.C.

32a

Appendix A

§ 1001(a)(1)) and the making ofa false statement (18 U.S.C.

§ 1001(a)(2)).2? Shaw was convicted of the former. A

conviction under § 1001(a)(1), unlike that under § 1001(a)(2),

requires proof that the defendant had a legal duty to disclose

the fact concealed.*° The Government must establish that “the

law required disclosure of the information at the time the

defendant allegedly concealed it. . . .” Jrwin, 654 F.2d at 679

(“[T]here can be no criminal conviction for failure to disclose

when no duty to disclose is demonstrated.”). Thus, to the

29. 18 U.S.C. § 1001(a)(2) states in relevant part:

[W ]hoever, in any matter within the jurisdiction of the

executive, legislative, or judicial branch of the

Government of the United States, knowingly and

willfully—. . .

(2) makes any materially false, fictitious, or

fraudulent statement or representation: ...

shall be fined [or] imprisoned not more than 5 years ....

30. Compare United States v. Kingston, 971 F.2d 481, 489 (10th

Cir.1992) (holding that under § 1001(a)(1), the Government must

prove: “1) the defendant knowingly concealed a fact by any trick,

scheme, or device; 2) the defendant acted willfully; 3) the fact

concealed was material; 4) the subject matter involved was within

the jurisdiction of a department or agency of the United States: and

5) the defendant had a legal duty to disclose the fact concealed”),

with United States v. Irwin, 654 F.2d 671, 675-76 (10th Cir.1981)

(holding that § 1001(a)(2) requires the Government to show: “(1)

the defendant made a statement; (2) the statement was false, fictitious

or fraudulent as the defendant knew: (3) the statement was made

knowingly and willfully; (4) the statement was within the jurisdiction

of the federal agency: and (5) the statement was material”).

33a

Appendix A

extent the Government is arguing that it was not required to

prove that Shaw had a legal duty to disclose the presence of

asbestos to the EPA, it is mistaken. Indeed, the jury

instructions required such a showing.

Nevertheless, the Government met its burden in this case.

The “duty to disclose” element of § 1001(a)(1) can be

established by demonstrating that an agency form required

such disclosure. Kingston, 971 F.2d at 489 (“A defendant’s

duty to disclose is established where a government form

required a disclosure of concealed information.”). In this case,

the Government presented the jury with the November 1993

and June 1994 “Notifications of Demolition and

Renovation.” These forms required disclosure of whether the

demolition or renovation project involved the removal of

asbestos, the approximate amount of asbestos, the description

of the work practices to be used to prevent the emission of

asbestos, and the identity of the waste transporter and waste

disposal site. Thus, these forms created a legal duty on the

one completing and submitting them to disclose the presence

of asbestos and if present, the method of abatement. It is

undisputed that Shaw completed and submitted these forms

to the EPA. Consequently, he had a legal duty to disclose the

presence of asbestos. This is true even if Shaw, as a non-

owner/operator of the refinery, was not required to complete

or submit these forms to the EPA under the federal

regulations. See 40 C.F.R. § 61-145(b) (requiring owners/

operators to provide written notice of demolition activity

involving asbestos to the EPA). The notification form itself,

apart from the federal regulations, created a duty to disclose.

Additionally, nothing in the regulations preclude an owner/

operator from having an agent complete and submit the

notification on his/her behalf.

34a

Appendix A

D. Conclusion

Based on the above, we affirm Shaw’s conviction. We

now turn to the parties’ sentencing arguments.

II. Sentence

In Shaw’s presentence investigation report (PSR), the

probation officer calculated the base offense level as 6

pursuant to USSG § 2F1.1, the guideline applicable for a

violation of 18 U.S.C. § 1001(a)(1).*' The officer enhanced

the base offense level by five based on the EPA’s estimate

that it would cost $50,000 to clean up the asbestos improperly

buried at the Shallow Water Refinery. See USSG

§ 2F1.1(b)(1)(F) (providing for a five level increase in the

base offense level if the “loss” was more than $40,000 but

less than $70,000). The officer also enhanced the base offense

level by two levels because the offense involved repeated

acts and therefore more than minimal planning. See USSG

§ 2F1.1(b)(2). The probation officer further recommended a

two level upward adjustment because the offense was

committed by someone with special skill. See USSG § 3B1.3.

Based on a total offense level of 15 and a criminal history

category of I, the probation officer determined the sentencing

guideline range was eighteen to twenty-four months

imprisonment.

Shaw filed numerous objections to the PSR. In particular,

he opposed the five level enhancement based on the “loss”

31. Because Shaw was sentenced pursuant to the 1995 edition

of the United States Sentencing Guidelines Manual, all guideline

citations refer to the 1995 edition, unless noted otherwise.

35a

Appendix A

exceeding $40,000, the two level enhancement for more than

minimal planning and the two level upward adjustment

because the offense was committed by someone with special

skill. Shaw also filed a motion for downward departure based

on aberrant behavior. Shaw initially appeared for sentencing

on June 29, 2001, but the sentencing hearing was continued

to September 5, 2001, to allow the parties to brief the subject

matter jurisdiction issue. Ultimately, the district court

imposed the five level enhancement based on the “loss”

exceeding $40,000,*° denied the two level enhancement for

more ihan minimal planning, denied the two level upward

adjustment based on the offense being committed by someone

with special skill and denied the motion for downward

departure based on aberrant behavior. Based on these

determinations, the district court calculated an offense level

of 11. With a Criminal History Category I, the court

determined the applicable guideline range was eight to

fourteen months imprisonment. The court sentenced Shaw

to four months imprisonment and two years of supervised

release, recommending that Shaw serve his four month

sentence in a halfway house. As a special condition of

supervised release, the court ordered Shaw to serve four

32. At sentencing, the Government presented the testimony of

Kenneth Rapplean, the on-scene coordinator in the Super Fund

Division of the EPA. He testificd approximately 510 cubic yards of

asbestos was buried at the refinery and estimated it would cost the

EPA a total of $247,479 to clean it up. Based on this testimony, the

district court found that the total cost to clean up the refinery was

close to a quarter of a million dollars and therefore, the cost of

remediation will “clearly” exceed $50,000. (R. Vol. VIII at 1075.)

Consequently, the court concluded a five level enhancement to the

base offense level was appropriate under USSG § 2F1.1(b)(1)(F).

36a

Appendix A

months of home confinement. See 18 U.S.C. §§ 3563(b)(19),

3583(d); see also USSG § 5F1.2 (“Home detention may be

imposed as a condition of probation or supervised release,

but only as a substitute for imprisonment.”). The court further

ordered Shaw to pay $50,000 in restitution to the EPA.

On appeal, Shaw challenges the five level enhancement

based on the “loss” exceeding $40,000 under USSG

§ 2F1.1(b)(1)(F) and argues he was sentenced in violation

of the Sixth Amendment under Blakely v. Washington, 542

U.S. 296, 124 S.Ct. 2531, 159 L.Ed.2d 403 (2004). The

Government cross-appeals, arguing the district court erred

in denying the two level enhancement for more than minimal

planning under USSG § 2F1.1(b)(2). As we discuss next,

because we conclude the district court erred in failing to

impose a two level enhancement for more than minimal

planning, we need not reach the other issues.

A. Standard of Review

The Supreme Court recently decided United States v.

Booker, 543 U.S. 220, 125 S.Ct. 738, 160 L.Ed.2d 621 (2005).

In Booker, the Supreme Court invalidated the mandatory-

nature of the federal sentencing guidelines. /d. at 756-57.

It also altered our standard of review, requiring us to review

sentences for unreasonableness. /d. at 765-66. However,

because Shaw was sentenced prior to Booker, we apply the

pre-Booker standard of appellate review, reviewing legal

questions de novo and any factual findings for clear error.

United States v. Souser, 405 F.3d 1162, 1165 (10th Cir.2005);

United States v. Doe, 398 F.3d 1254, 1257 (10th Cir.2005).

37a

Appendix A

B. Denial of Two Level Enhancement for More than

Minimal Planning

Section 2F1.1(b)(2) of the guidelines requires a two level

enhancement to the base offense level if “the offense involved

[ ] more than minimal planning... .” The Commentary to

§ 2F1.1 refers to the Commentary to § 1B1.1 for the definition

of “more than minimal planning.” USSG § 2F1.1 comment.

(n. 2). The Commentary to § 1B1.1 states:

“More than minimal planning” means more

planning than is typical for commission of the

offense in a simple form. “More than minimal

planning” also exists if significant affirmative

steps were taken to conceal the offense. . . . “Morey

than minimal planning” is deemed present in any

case involving repeated acts over a period of time,

unless it is clear that each instance was purely

opportune. Consequently, this adjustment will

apply especially frequently in property offenses.

USSG § 1B1.1 comment. (n. 1(f)). “[T]he ... more than

minimal planning enhancement[ ][is] designed to target

criminals who engage in cOmplicated criminal activity

_ because their actions are considered more blameworthy and

deserving of greater punishment than a perpetrator of a simple

version of the crime.” United States v. Rice, 52 F.3d 843,

851 (10th Cir.1995).

In its cross-appeal, the Government challenges the

district court’s denial of a two level enhancement under

USSG § 2F1.1(b)(2) for more than minimal planning.

38a

Appendix A

It contends this enhancement was appropriate because Shaw

engaged in repeated acts over a period of time, including:

1) making fraudulent written and oral representations to the

EPA ina telephone call, letter and Notification of Demolition

and Renovation in November 1993; (2) conducting a

fraudulent sampling of the refinery on March 3, 1994;

(3) making fraudulent representations to the EPA in a letter

and revised Notification of Demolition and Renovation in

June 1994; (4) obtaining a false signature on the revised

“Notification of Demolition and Renovation:;” and (5)

representing to the Stifflers that the cat cracker did not contain

asbestos. The Government also alleges Shaw’s actions

involved “more planning than is typical fer commission of

the offense in a simple form.” It points out that in November

1993, rather than simply informing the EPA that there was

no asbestos in Area A, Shaw “took pains” in his

correspondence to (1) include his certification as a licensed

supervisor of asbestos abatement projects, (2) advise that he

had personally inspected the premises, and (3) inform the

EPA that demolition activities would stop if any asbestos

was found. (Government’s Br. at 29.) The Government also

refers to the fact that Shaw then conducted a sampling of the

refinery in such a way as to confirm that no asbestos was

present in Area A. It also points to Shaw’s false assurances

to the EPA in 1994 that the Stifflers were complying with

the environmental regulations and ESCM was supervising

their activities. Lastly, the Government points out Shaw

informed the Stifflers it was permissible to bury insulation

from Area A, thereby preventing the EPA from discovering

it.

39a

Appendix A

Shaw contends the district court properly denied the more

than minimal planning enhancement. He contends the March

1994 sampling, the burial of asbestos and the June 1994

correspondence were “purely opportune” and not in

~ furtherance of the offense. He also contends that although

his sampling in Area A did not reveal the presence of asbestos,

many of his other samples tested positive for asbestos. Based

on his sampling, he prepared a revised “Notification of

Demolition and Renovation,” stating “all areas” of the facility

contained asbestos. (R. Vol. I at 109.) Therefore, he contends

he was not trying to deceive the EPA about the presence of

asbestos.

A district court’s decision that the defendant engaged in

more than minimal planning ts reviewed for clear error.

United States v. Orr, 68 F.3d 1247, 1253 (10th Cir.1995);

United States v. Williams, 966 F.2d 555, 558 (10th Cir.1992).

“Clear error occurs ... when we are left with the firm

conviction a mistake has been made.” United States v. Lin,

410 F.3d 1187, 1192 (10th Cir.2005).

At the initial sentencing hearing, the district court denied

Shaw’s objection to the more than minimal planning

enhancement, stating:

In this case it appears to me—and it is accurate—

this occurred over a period of four years, four and

a half years, started in 93 and went into ‘97. ...

I am aware, of course, ... that Mr. Shaw was

acquitted on a couple of counts as well, but the

standard that we use here in terms of whether

minimal planning occurred or not is not whether

40a

Appendix A

it’s been proved beyond a reasonable doubt or not,

but it’s a much lighter standard here. It is my

sense, given the number of contacts that Mr. Shaw

had with the Stifflers, with the state and the other

persons who have been involved in this case

that—let me back up. I think a good case could

be made that there wasn’t more than minimal

planning or he probably would have done a better

job of trying to cover his tracks than what he did.

The more than minimal planning, seems to me

the strongest evidence, is just the period of time

that it went on and the fact that Mr. Shaw did not

disengage himself from this process and made

affirmative representations with respect to the

absence of asbestos at the site and that testing had,

in fact, been done when it appears that that clearly

was not the case.

| think in the circumstance, while it’s a close

question, that the two point increase for more than

minimal planning is appropriate, and I am going

to deny that objection... .

(R. Vol. VIII at 1087-88.) However, at the final sentencing

hearing, the district court reconsidered this determination and

denied the more than minimal planning enhancement.

It stated:

[ W Jhile I think technically I was correct in dealing

with [Shaw’s objection to the more than minimal

planning enhancement] and upholding the two-

level enhancement last time, I’m not satisfied that

4la

Appendix A

maybe being technically correct is appropriate in

this matter and taking a look at what Mr. Shaw’s

responsibilities actually were. I’m planning to

change my ruling on that to grant [Mr. Shaw’s]

objection with respect to minimal planning.

(/d. at 1123.)

The district court was correct the first time. As the

Government argues, and the district court found during the

initial sentencing hearing, Shaw’s offense involved “repeated

acts over a period of time.” “[T]he notion of repeated acts

refers to a series of acts each of which would be criminal

standing alone, rather than referring to a crime that requires

the completion of a series of steps.” United States v. Proffit,

304 F.3d 1001, 1005 (10th Cir .2002). In order to have

“repeated acts,” “there must have been more than two

instances of the behavior in question.” United States v.

Bridges, 50 F.3d 789, 793 (10th Cir.1994).

The evidence at trial clearly showed that Shaw engaged

in more than two acts of concealment of the presence of

asbestos (each of which would be criminal standing alone)

over a four year time span. In 1993, before Branscum’s first

visit to the refinery, Shaw told the Stifflers not to allow any

government inspectors on the property. After Branscum’s

visit, Shaw telephoned Alice Law of the EPA, falsely

informing her no asbestos was present in Area A of the

refinery. The next day, he filed the first Notification of

Demolition and Renovation and cover letter, falsely stating

he had inspected the property, no asbestos was present in

Area A and ESCM would be “working with [the Stifflers]

42a

Appendix A

very closely on the remainder of [the demolition} project to

assist them in their compliance efforts.” (R. Supp. Vol. | at

39.) In March 1994, Shaw conducted a fraudulent sampling

of the refinery. He also observed holes where the Stifflers

had buried insulation and told the Stifflers they could

continue to bury the insulation.** On June 20, 1994, Shaw

submitted another cover letter and the revised Notification

of Demolition and Renovation containing the forged

signature of “C.L. Stiffler.” These documents falsely

indicated that the Stifflers had arranged for BFI to remove

the asbestos from the refinery and that ESCM personnel

would be on site to supervise the Stifflers’ abatement

activities. In 1997, the Stifflers received Shaw’s permission

to drop the cat cracker. In July 1997, based on Shaw’s

sampling of the cat cracker, Jean Stiffler informed the KDHE

that the cat cracker did not contain asbestos. Contrary to

Shaw’s arguments, we find none of the above actions “purely

opportune,” that is, “spur of the moment conduct, intended

to take advantage of a sudden opportunity.” See United States

v. Rust, 976 F.2d 55, 57 (1st Cir.1992). Consequently, a more

than minimal planning enhancement was warranted under

33. Shaw argues that none of the Stifflers testified he told them

they could bury asbestos; rather, he contends the evidence at most

consisted of him telling Jean Stiffler they could bury insulation. This

argument is disingenuous. The evidence at trial demonstrated Shaw

told the Stifflers they could bury the insulation without any testing

as to whether the insulation contained asbestos. The evidence further

showed that the Stifflers relied on Shaw’s advice concerning the

removal of the insulation and Shaw never ensured that the insulation

did not contain asbestos prior to its removal. Moreover, once Shaw

learned the refinery contained asbestos, he never advised the Stifflers

on how to properly remove and dispose of it.

43a

Appendix A

the “repeated acts” provision of USSG § 1B1.1 comment.

(n.1(f)).

We also find that Shaw’s offense involved “more

planning than is typical for commission of the offense in a

simple form.”*4 The proper inquiry is whether Shaw’s actions

“demonstrated a greater amount of planning than [is]

required” to engage in a scheme to conceal the presence of

asbestos from the EPA in its simple form. Proffit, 304 F.3d

at 1006. While Shaw’s scheme to conceal the presence of

asbestos could have been accomplished merely by submitting

the false “Notifications of Demolition and Renovation” in

1993 and 1994, Shaw’s conduct went beyond that. He also

told the Stifflers not to permit any government inspectors on

the property, took a fraudulent sampling of the refinery, told

the Stifflers they could bury insulation from Area A and gave

the Stifflers permission to drop the cat cracker. These actions

demonstrate a level of planning in excess of the amount of

planning required to engage in a scheme to conceal the

presence of asbestos in its simple form.

The district court’s reasons are insufficient for reversing

its previous determination that the offense involved more

than minimal planning. It did not explain why “being

34. We recognize that the district court did not address whether

Shaw’s offense involved more than minimal planning based on it

requiring “more planning than is typical for commission of the

offense in a simple form.” Nevertheless, because the Government

raised it below as a grounds for imposing the more than minimal

planning enhancement and no additional fact-finding need be made,

we address it as an additional reason the court clearly erred in denying

a more than minimal planning enhancement in this case.

44a

Appendix A

technically correct” was inappropriate in this case. Moreover,

it is unclear how “taking a look at what Mr. Shaw’s

responsibilities actually were” constituted grounds for the

district court reversing its prior decision. Therefore, we

conclude the court clearly erred in denying the more

than minimal planning enhancement and a remand for

re-sentencing is necessary.

C Imposition of Five Level Enhancement for Loss

Exceeding $40,000 and Blakely

Shaw contends the district court erred in imposing the

five level enhancement under § 2F1.1(b)(1) based on the

“loss” exceeding $40,000. He also argues his sentence

violates the Sixth Amendment under Blakely. Because we

conclude this case must be remanded for re-sentencing on

other grounds, we need not address these issues. Souser, 405

F.3d at 1163 n. 1; United States v. Cano-Silva, 402 F.3d 1031,

1039 (10th Cir.2005). However, *883 Shaw’s re-sentencing

must be conducted in light of the Supreme Court’s recent

decision in Booker.

Ill. Conclusion

Shaw’s conviction is AFFIRMED. We REMAND this

matter to the district court with instructions to resentence

him in accordance with this order and judgment and Booker.

Entered by the Court:

Terrence L. O’Brien

United States Circuit Judge

45a

APPENDIX B — ORDER OF THE UNITED STATES

COURT OF APPEALS FOR THE TENTH CIRCUIT

DENYING PETITION FOR REHEARING FILED

NOVEMBER 21, 2005

UNITED STATES COURT OF APPEALS

FOR THE TENTH CIRCUIT

Nos. 01-3310 & 01-3344

UNITED STATES OF AMERICA,

Plaintiff - Appellee/Cross

Appellant,

EDWARD A. SHAW,

Defendant - Appellant/Cross-

Appellee.

ORDER

Filed November 21, 2005

Before TACHA, Chief Circuit Judge, ANDERSON and

O’BRIEN, Circuit Judges.

Edward A. Shaw’s petition for rehearing is denied.

The petition for rehearing en banc was transmitted to all

of the judges of the court who are in regular active service as

46a

Appendix B

required by Fed. R. App. P. 35. As no member of the panel

and no judge in regular active service on the court requested

that the court be polled, that petition is also denied.

Entered for the Court

CLERK, COURT OF APPEALS

by: s/ [illegible]

Deputy Clerk

47a

APPENDIX C — RELEVANT STATUTE

42 U.S.C.A. §§ 7413

UNITED STATES CODE ANNOTATED

TITLE 42. THE PUBLIC HEALTH AND WELFARE

CHAPTER 85—AIR POLLUTION PREVENTION

AND CONTROL

SUBCHAPTER I—PROGRAMS AND ACTIVITIES

PART A—AIR QUALITY AND

EMISSIONS LIMITATIONS

Copr. ©© West Group 1999. No Claim to Orig. U.S. Govt.

Works

§§ 7413. Federal enforcement

(a) In general

(1) Order to comply with SIP

Whenever, on the basis of any information available

to the Administrator, the Administrator finds that any

person has violated or is in violation of any

requirement or prohibition of an applicable

implementation plan or permit, the Administrator

shall notify the person and the State in which the plan

applies of such finding. At any time after the

expiration of 30 days following the date on which

such notice of a violation is issued, the Administrator

may, without regard to the period of violation (subject _

to section 2462 of Title 28)—

48a

Appendix C

(A) issue an order requiring such person to

comply with the requirements or prohibitions

of such plan or permit,

(B) issue an administrative penalty order in

accordance with subsection (d) of this section,

or

(C) bring a civil action in accordance with

subsection (b) of this section.

(2) State failure to enforce SIP or permit program

Whenever, on the basis of information available to

the Administrator, the Administrator finds that

violations of an applicable implementation plan or

an approved permit program under subchapter V of

this chapter are so widespread that such violations

appear to result from a failure of the State in which

the plan or permit program applies to enforce the plan

or permit program effectively, the Administrator shall

so notify the State. In the case of a permit program,

the notice shall be made in accordance with

subchapter V of this chapter. If the Administrator finds

such failure extends beyond the 30th day after such

notice (90 days in the case of such permit program),

the Administrator shall give public notice of such

finding. During the period beginning with such public

notice and ending when such State satisfies the

Administrator that it will enforce such plan or permit

program (hereafter referred to in this section as

“period of federally assumed enforcement”), the

49a

Appendix C

Administrator may enforce any requirement or

prohibition of such plan or permit program with

respect to any person by—

(A) issuing an order requiring such person to

comply with such requirement or prohibition,

(B) issuing an administrative penalty order in

accordance with subsection (d)} of this section,

or

(C) bringing a civil action in accordance with

subsection (b) of this section.

(3) EPA enforcement of other requirements

Except for a requirement or prohibition enforceable

under the preceding provisions of this subsection,

whenever, on the basis of any information available

to the Administrator, the Administrator finds that any

person has violated, or is in violation of, any other

requirement or prohibition of this subchapter, section

7603 of this title, subchapter IV-A, subchapter V, or

subchapter VI of this chapter, including, but not

limited to, a requirement or prohibition of any rule,

plan, order, waiver, or permit promulgated, issued,

or approved under those provisions or subchapters,

or for the payment of any fee owed to the United States

under this chapter (other than subchapter II of this

chapter), the Administrator may—

S$0a

Appendix C

(A) issue an administrative penalty order in

accordance with subsection (d) of this section,

(B) issue an order requiring such person to

comply with such requirement or prohibition,

(C) bring a civil action in accordance with

subsection (b) of this section or section 7605

of this title, or

(D) request the Attorney General to

commence a criminal action in accordance

with subsection (c) of this section.

(4) Requirements for orders

An order issued under this subsection (other than an

order relating to a violation of section 7412 of this

title) shall not take effect until the person to whom it

is issued has had an opportunity to confer with the

Administrator concerning the alleged violation. A

copy of any order issued under this subsection shall

be sent to the State air pollution control agency of

any State in which the violation occurs. Any order

issued under this subsection shall state with

reasonable specificity the nature of the violation and

specify a time for compliance which the Administrator

determines is reasonable, taking into account the

seriousness of the violation and any good faith efforts

to comply with applicable requirements. In any case

in which an order under this subsection (or notice to

a violator under paragraph (1)) is issued to a

Sla

Appendix C

corporation, a copy of such order (or notice) shall be

issued to appropriate corporate officers. An order

issued under this subsection shall require the person

to whom it was issued to comply with the requirement

as expeditiously as practicable, but in no event longer

than one year after the date the order was issued, and

shall be nonrenewable. No order issued under this

subsection shall prevent the State or the Administrator

from assessing any penalties nor otherwise affect or

limit the State’s or the United States authority to

enforce under other provisions of this chapter, nor

affect any person’s obligations to comply with any

section of this chapter or with a term or condition of

any permit or applicable implementation plan

promulgated or approved under this chapter.

(5) Failure to comply with new source requirements

Whenever, on the basis of any available information,

the Administrator finds that a State is not acting in

compliance with any requirement or prohibition of

the chapter relating to the construction of new sources

or the modification of existing sources, the

Administrator may—

(A) issue an order prohibiting the

construction or modification of any major

stationary source in any area to which such

requirement applies;!

1. So in original. The semicolon probably should be a comma.

52a

Appendix C

(B) issue an administrative penalty order in

accordance with subsection (d) of this section,

or

(C) bring a civil action under subsection (b)

of this section.

Nothing in this subsection shall preclude the

United States from commencing a criminal

action under subsection (c) of this section at

- any time for any such violation.

~ (b) Civil judicial enforcement

The Administrator shall, as appropriate, in the case of any

person that is the owner or operator of an affected source, a

major emitting facility, or a major stationary source, and may,

in the case of any other person, commence a civil action for

a permanent or temporary injunction, or to assess and recover

a civil penalty of not more than $25,000 per day for each

violation, or both, in any of the following instances:

(1) Whenever such person has violated, or is in

violation of, any requirement or prohibition of an

applicable implementation plan or permit. Such an

action shall be commenced (A) during any period of

federally assumed enforcement, or (B) more than 30

days following the date of the Administrator’s

notification under subsection (a)(1) of this section that

such person has violated, or is in violation of, such

requirement or prohibition.

53a

Appendix C

(2) Whenever such person has violated, or is in violation

of, any other requirement or prohibition of this

subchapter, section 7603 of this title, subchapter IV-A,

subchapter V, or subchapter VI of this chapter, including,

but not limited to, a requirement or prohibition of any

rule, order, waiver or permit promulgated, issued, or

approved under this chapter, or for the payment of any

fee owed the United States under this chapter (other than

subchapter II of this chapter).

(3) Whenever such person attempts to construct or

modify a major stationary source in any area with respect

to which a finding under subsection (a)(5) of this section

has been made.

Any action under this subsection may be brought in the district

court of the United States for the district in which the violation

is alleged to have occurred, or is occurring, or in which the

defendant resides, or where the defendant’s principal place of

business is located, and such court shall have jurisdiction to

restrain such violation, to require compliance, to assess such

civil penalty, to collect any fees owed the United States under

this chapter (other than subchapter II of this chapter) and any

noncompliance assessment and nonpayment penalty owed under

section 7420 of this title, and to award any other appropriate

relief. Notice of the commencement of such action shall be given

to the appropriate State air pollution control agency. In the case

of any action brought by the Administrator under this subsection,

the court may award costs of litigation (including reasonable

attorney and expert witness fees) to the party or parties against

whom such action was brought if the court finds that such action

was unreasonable.

54a

Appendix C

(c) Criminal penalties

(1) Any person who knowingly violates any

requirement or prohibition of an applicable

implementation plan (during any period of federally

assumed enforcement or more than 30 days after

having been notified under subsection (a)(1) of this

section by the Administrator that such person 1s

violating such requirement or prohibition), any order

under subsection (a) of this section, requirement or

prohibition of section 741 1(e) of this title (relating to

new source performance standards), section 7412 of

this title, section 7414 of this title (relating to

inspections, etc.), section 7429 of this title (relating

to solid waste combustion), section 7475(a) of this

title (relating to preconstruction requirements), an

order under section 7477 of this title (relating to

preconstruction requirements), an order under section

7603 of this title (relating to emergency orders),

section 7661a(a) or 7661b(c) of this title (relating to

permits), or any requirement or prohibition of

subchapter IV-A of this chapter (relating to acid

deposition control), or subchapter V1 of this chapter

(relating to stratospheric ozone control), including a

requirement of any rule, order, waiver, or permit

promulgated or approved under such sections or

subchapters, and including any requirement for the

payment of any fee owed the United States under this

chapter (other than subchapter II of this chapter) shall,

upon conviction, be punished by a fine pursuant to

Title 18, or by imprisonment for not to exceed 5 years,

or both. If a conviction of any person under this

55a

Appendix C

paragraph is for a violation committed after a first

conviction of such person under this paragraph, the

maximum punishment shall be doubled with respect

to both the fine and imprisonment. -

(2) Any person who knowingly—

(A) makes any false material statement,

representation, or certification in, or omits

material information from, or knowingly

alters, conceals, or fails to file or maintain any

notice, application, record, report, plan, or

other document required pursuant to this

chapter to be either filed or maintained

(whether with respect to the requirements

imposed by the Administrator or by a State);

(B) fails to notify or report as required under

this chapter; or :

(C) falsifies, tampers with, renders

inaccurate, or fails to install any monitoring

device or method required to be maintained

or followed under this chapter?

shall, upon conviction, be punished by a fine pursuant

to Title 18, or by imprisonment for not more than 2

years, or both. If a conviction of any person under

this paragraph is for a violation committed after a

first conviction of such person under this paragraph,

2. So in original. Probably should be followed by a comma.

56a

Appendix C

the maximum punishment shall be doubled with

respect to both the fine and imprisonment.

(3) Any person who knowingly fails to pay any fee

owed the United States under this subchapter,

subchapter III, IV-A, V, or VI of this chapter shall,

upon conviction, be punished by a fine pursuant to

Title 18, or by imprisonment for not more than | year,

or both. If a conviction of any person under this

paragraph is for a violation committed after a first

conviction of such person under this paragraph, the

maximum punishment shall be doubled with respect

to both the fine and imprisonment.

(4) Any person who negligently releases into the

ambient air any hazardous air pollutant listed pursuant

to section 7412 of this title or any extremely

hazardous substance listed pursuant to section

11002(a)(2) of this title that is not listed in section

7412 of this title, and who at the time negligently

places another person in imminent danger of death

or serious bodily injury shall, upon conviction, be

punished by a fine under Title 18, or by imprisonment

for not more than | year, or both. If.a conviction of

any person under this paragraph is for a violation

committed after a first conviction of such person

under this paragraph, the maximum punishment shall

be doubled with respect to both the fine and

imprisonment.

57a

Appendix C

(5)(A) Any person who knowingly releases into

the ambient air any hazardous air pollutant listed

pursuant to section 7412 of this title or any

extremely hazardous substance listed pursuant

to section 11002(a)(2) of this title that is not

listed in section 7412 of this title, and who knows

at the time that he thereby places another person

in imminent danger of death or serious bodily

injury shall, upon conviction, be punished by a

fine under Title 18, or by imprisonment of not

more than 15 years, or both. Any person

committing such violation which is an

organization shall, upon conviction under this

paragraph, be subject to a fine of not more than

$1,000,000 for each violation. Ifa conviction of

any person under this paragraph is for a violation

committed after a first conviction of such person

under this paragraph, the maximum punishment

shall be doubled with respect to both the fine

and imprisonment. For any air pollutant for

which the Administrator has set an emissions

standard or for any source for which a permit

has been issued under subchapter V of this

chapter, a release of such pollutant in accordance

with that standard or permit shall not constitute

a violation of this paragraph or paragraph (4).

(B) In determining whether a defendant who is

an individual knew that the violation placed

another person in imminent danger of death or

serious bodily injury—

58a

Appendix C

(1) the defendant is responsible only for

actual awareness or actual belief

possessed; and

(ii) knowledge possessed by a person

other than the defendant, but not by the

defendant, may not be attributed to the

defendant;

except that in proving a defendant’s possession

of actual knowledge, circumstantial evidence

may be used, including evidence that the

defendant took affirmative steps to be shielded

from relevant information.

(C) It is an affirmative defense to a

prosecution that the conduct charged was

freely consented to by the nerson endangered

and that the danger and conduct charged were

reasonably foreseeable hazards of —

(1) an occupation, a business, or a

profession; or

(11) medical treatment or medical or

scientific experimentation conducted by

professionally approved methods and

such other person had been made aware

of the risks involved prior to giving

consent.

59a

Appendix C

The defendant may establish an affirmative

defense under this subparagraph by a

preponderance of the evidence.

(D) All general defenses, affirmative

defenses, and bars to prosecution that may

apply with respect to other Federal criminal

offenses may apply under subparagraph (A)

of this paragraph and shall be determined by

the courts of the United States according to

the principles of common law as they may be

interpreted in the light of reason and

experience. Concepts of justification and

excuse applicable under this section may be

developed in the light of reason and

experience.

(E) The term “organization” means a legal

entity, other than a government, established

or organized for any purpose, and such term

includes a corporation, company, association,

firm, partnership, joint stock company,

foundation, institution, trust, society, union,

or any other association of persons.

(F) The term “serious bodily injury” means

bodily injury which involves a substantial risk

of death, unconsciousness, extreme physical

pain, protracted and obvious disfigurement or

protracted loss or impairment of the function

of a bodily member, organ, or mental faculty.

60a

Appendix C ~

(6) For the purpose of this subsection, the term

“person” includes, in addition to the entities referred

to in section 7602(e) of this title, any responsible

corporate officer.

(d) Administrative assessment of civil penalties

(1) The Administrator may issue an administrative

order against any person assessing a civil

administrative penalty of up to $25,000, per day of

violation, whenever, on the basis of any available

information, the Administrator finds that such

person— :

(A) has violated or is violating any

requirement or prohibition of an applicable

implementation plan (such order shall be

issued (i) during any period of federally

assumed enforcement, or (ii) more than thirty

days following the date of the Administrator’s

notification under subsection (a)(1) of this

section of a finding that such person has

violated or is violating such requirement or

prohibition); or

(B) has violated or is violating any other

requirement or prohibition of this subchapter

or subchapter III, 1V-A, V, or VI of this chapter,

including, but not limited to, a requirement or

prohibition of any rule, order, waiver, permit,

or plan promulgated, issued, or approved

under this chapter, or for the payment of any

6la

Appendix C

fee owed the United States under this chapter

(other than subchapter II of this chapter); or

(C) attempts to construct or modify a major

stationary source in any area with respect to

\ which a finding under subsection (a)(5) of this

section has been made.

The Administrator’s authority under this paragraph shall be

limited to matters where the total penalty sought does not

exceed $200,000 and the first alleged date of violation

occurred no more than 12 months prior to the initiation of

the administrative action, except where the Administrator

and the Attorney General jointly determine that a matter

involving a larger penalty amount or longer period of

violation is appropriate for administrative penalty action. Any

such determination by the Administrator and the Attorney

General shall not be subject to judicial review.

(2)(A) An administrative penalty assessed

under paragraph (1) shall be assessed by the

Administrator by an order made after

opportunity for a hearing on the record in

accordance with sections 554 and 556 of Title

5. The Administrator shall issue reasonable

rules for discovery and other procedures for

hearings under this paragraph. Before issuing

such an order, the Administrator shall give

written notice to the person to be assessed an

administrative penalty of the Administrator’s

proposal to issue such order and provide such

person an opportunity to request such a

62a

Appendix C

hearing on the order, within 30 days of the date

the notice is received by such person.

(B) The Administrator may compromise,

modify, or remit, with or without conditions,

any administrative penalty which may be

imposed under this subsection.

(3) The Administrator may implement, after

consultation with the Attorney General and the States,

a field citation program through regulations

establishing appropriate minor violations for which

field citations assessing civil penalties not to exceed

$5,000 per day of violation may be issued by officers

or employees designated by the Administrator. Any

person to whom a field citation is assessed may, within

a reasonable time as prescribed by the Administrator

through regulation, elect to pay the penalty assessment

or to request a hearing on the field citation. If a request

for a hearing is not made within the time specified in

the regulation, the penalty assessment in the field

citation shall be final. Such hearing shall not be

subject to section 554 or 556 of Title 5, but shall

provide a reasonable opportunity to be heard and to

present evidence. Payment of a civil penalty required

by a field citation shall not be a defense to further

enforcement by the United States or a State to correct

a violation, or to assess the statutory maximum

penalty pursuant to other authorities in the chapter, if

the violation continues.

63a

Appendix C

(4) Any person against whom a civil penalty is

assessed under paragraph (3) of this subsection or to

whom an administrative penalty order is issued under

paragraph (1) of this subsection may seek review of

such assessment in the United States District Court

for the District of Columbia or for the district in which

the violation is alleged to have occurred, in which

such person resides, or where such person’s principal

place of business is located, by filing in such court

within 30 days following the date the administrative

penalty order becomes final under paragraph (2), the

assessment becomes final under paragraph (3), or a

final decision following a hearing under paragraph

(3) is rendered, and by simultaneously sending a copy

of the filing by certified mail to the Administrator

and the Attorney General. Within 30 days thereafter,

the Administrator shall file in such court a certified

copy, or certified index, as appropriate, of the record

on which the administrative penalty order or

assessment was issued. Such court shall not set aside

or remand such order or assessment unless there is

not substantial evidence in the record, taken as a

whole, to support the finding of a violation or unless

the order or penalty assessment constitutes an abuse

of discretion. Such order or penalty assessment shall

not be subject to review by any court except as

provided in this paragraph. In any such proceedings,

the United States may seek to recover civil penalties

ordered or assessed under this section.

(5S) If any person fails to pay an assessment of a civil

penalty or fails to comply with an administrative

penalty order—

64a

Appendix C

(A) after the order or assessment has become

final, or

(B) after a court in an action brought under

paragraph (4) has entered a final judgment in

favor of the Administrator,

the Administrator shall request the Attorney General

to bring a civil action in an appropriate district court

to enforce the order or to recover the amount ordered

or assessed (plus interest at rates established pursuant

to section 6621(a)(2) of Title 26 from the date of the

final order or decision or the date of the final

judgment, as the case may be). In such an action, the

validity, amount, and appropriateness of such order

or assessment shall not be subject to review. Any

person who fails to pay on a timely basis a civil

penalty ordered or assessed under this section shall

be required to pay, in addition to such penalty and

interest, the United States enforcement expenses,

including but not limited to attorneys fees and costs

incurred by the United States for collection

proceedings and a quarterly nonpayment penalty for

each quarter during which such failure to pay persists.

Such nonpayment penalty shall be 10 percent of the

aggregate amount of such person’s outstanding

penalties and nonpayment penalties accrued as of the

beginning of such quarter.

65a

Appendix C

(e) Penalty assessment criteria

(1) In determining the amount of any penalty to be

assessed under this section or section 7604(a) of this

title, the Administrator or the court, as appropriate,

shall take into consideration (in addition to such other

factors as justice may require) the size of the business,

the economic impact of the penalty on the business,

the violator’s full compliance history and good faith

efforts to comply, the duration of the violation as

established by any credible evidence (including

evidence other than the applicable test method),

payment by the violator of penalties previously

assessed for the same violation, the economic benefit

of noncompliance, and the seriousness of the

violation. The court shall not assess penalties for

noncompliance with administrative subpoenas under

section 7607(a) of this title, or actions under section

7414 of this title, where the violator had sufficient

cause to violate or fail or refuse to comply with such

subpoena or action.

(2) A penalty may be assessed for each day of

violation. For purposes of determining the number

of days of violation for which a penalty may be

assessed under subsection (b) or (d)(1) of this section,

or section 7604(a) of this title, or an assessment may

be made under section 7420 of this title, where the

Administrator or an air pollution control agency has

notified the source of the violation, and the plaintiff

makes a prima facie showing that the conduct or

events giving rise to the violation are likely to have

66a

Appendix i

continued or recurred past th: date of notice, the days

of violation shall be presumed to include the date of

such notice and each and every day thereafter until

the violator establishes that continuous compliance

has been achieved, except to the extent that the

violator can prove by a preponderance of the evidence

that there were intervening days during which no

violation occurred or that the violation was not

continuing in nature.

(f) Awards

The Administrator may pay an award, not to exceed $10,000,

to any person who furnishes information or services which

lead to a criminal convictior or a judicial or administrative

civil penalty for any violation of this subchapter or subchapter

Ill, 1V-A, V, or VI of this chapter enforced under this section.

Such payment is subject to available appropriations for such

purposes as provided in annual appropriation Acts. Any

officer, or employee of the United States or any State or local

government who furnishes information or renders service in

the performance ofan official duty is ineligible for payment

under this subsection. The Administrator may, by regulation,

prescribe additional criteria for eligibility for such an award.

(g) Settlements; public participation

At least 30 days before a consent order or settlement

agreement of any kind under this chapter to which the United

States is a party (other than enforcement actions under this

section, section 7420 of this title, or subchapter II of this

chapter, whether or not involving civil or criminal penalties,

67a

Appendix C

or judgments subject to Department of Justice policy on

public participation) is final or filed with a court, the

Administrator shall provide a reasonable opportunity by

notice in the Federal Register to persons who are not named

as parties or intervenors to the action or matter to comment

in writing. The Administrator or the Attorney General, as

appropriate, shall promptly consider any such written

comments and may withdraw or withhold his consent to the

proposed order or agreement if the comments disclose facts

or considerations which indicate that such consent is

inappropriate, improper, inadequate, or inconsistent with the

requirements of this \pard softlinechapter. Nothing in this

subsection shall apply to civil or criminal penalties under

this chapter.

(h) Operator

For purposes of the provisions of this section and section

7420 of this title, the term “operator”, as used in such

provisions, shall include any person who is senior

management personnel or a corporate officer. Except in the

case of knowing and willful violations, such term shall not

include any person who is a stationary engineer or technician

responsible for the operation, maintenance, repair, or

monitoring of equipment and facilities and who often has

supervisory and training duties but who is not senior

management personnel or a corporate officer. Except in the

case of knowing and willful violations, for purposes of

subsection (c)(4) of this section, the term “a person” shall

not include an employee who is carrying out his normal

activities and who is not a part of senior management

personnel or a corporate officer. Except in the case of

68a

Appendix C

knowing and willful violations, for purposes of paragraphs

(1), (2), (3), and (5) of subsection (c) of this section the term

“a person” shall not include an employee who is carrying

out his normal activities and who is acting under orders from

the employer.