Petition for Writ of Certiorari — Hansen v. United States

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Supreme Court, Us

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011104 yan 24 2002

No. __ SEICE OF THE C

IN THE

Supreme Court of the Anited States

RANDALL W. HANSEN,

Petitioner,

Vv.

UNITED STATES OF AMERICA,

Respondent.

Petition for a Writ of Certiorari to the

United States Court of Appeals

for the Eleventh Circuit

PETITIC™ FOR A WRIT OF CERTIORARI

DEBORAH BRAND BAUM *

THOMAS C, HILL

GREGORY J. PHILLIPS

ELIZABETH B. WYDRA

SHAW PITTMAN LLP

2300 N Street, N.W.

Washington, D.C. 20037-1128

(202) 663-8000

* Counsel of Record Counsel for Petitioner

January 24, 2002

WitSON-EPES PRINTING Co., INC. — (202) 789-0096 — WASHINGTON, ®.C. 20001

\Yor’

I.

If.

IH.

QUESTIONS PRESENTED

Whether the “Responsible Corporate Officer” Doc-

trine Permits Felony Conviction of Individual

Corporate Officers for “Failure to Detect” Violations

Under Environmental Statutes .vr Which Congress

~ Required Proof of Actual Knowledge.

Whether a “Responsible Corporate Officer” Jury

Instruction May Permit Conviction for “Knowing

Endangerment” Under 42 U.S.C. §§ 6928(e) and (f)

Without the Statutorily Required Jury Finding that the

Individual Corporate Officer was Actually Aware or

Actually Believed that His Conduct was Substantially

Certain to Place Others in Imminent Danger of Death

or Serious Bodily Injury.

Whether Purely Intra-Corporate Discussions and

Decision-Making can Satisfy the Plurality Require-

ment for Conviction of Individual Corporate Officers

for Felony Conspiracy under 18 U.S.C. § 371.

(i)

———————————

ii

PARTIES TO THE PROCEEDING

I. Petitioner

Randall W. Hansen

II. Respondents

United States of America

Christian A. Hansen (expected to petition separately)

Alfred R. Taylor (expected to petition separately)

TABLE OF CONTENTS

QUESTIONS PRESENTED. .......-::-sceeseesrereesssnenenssssees®

PARTIES TO THE PROCEEDING ........:ce:csesreersreeeee

TABLE OF AUTHORITIES ......-+-+:csssresrsererrerrrsrrr

OPINION BELOW .......-.csecsssssreeseesrennseest etter

JURISDICTION .......-:ssssesseessensessesenseneeneessnnensensenseseeeree"

STATUTES INVOLVED ......-.:ssesssererrssrsrrertetterse ee

STATEMENT OF THE CASE. ...cccccccssscccoececsscsecesseoseees

REASONS FOR GRANTING THE PE TITION .........--

I.

Il.

THE CULPABILITY STANDARDS FOR

ENVIRONMENTAL CRIMES SHOULD BE

CLARIFIED. ......:-:-:-cessesssrvesnsvcnssenensnenonsnesenesesees

A. The Eleventh Circuit Upheld a Diminished

Mens Rea Requirement for Corporate

COTES sececesesovoveveccrscevesesnevverenensnonensesnensessres

B. The Error Was More Dramatic With

Respect to the Knowing Endangerment

C. The Judicial Creation of New Crimes

Violated Separation Of POWETS.........-----++-++

D. The Court of Appeals’ Decision Conflicts

with Decisions of the First, Fifth, and

Ninth Circuits..........scscsssesrereerssenennsnensnenene

CRIMINAL LIABILITY FOR INTRA-

CORPORATE “CONSPIRACIES” CONTRA-

DICTS COURT PRECEDENT AND BASIC

PRINCIPLES OF LAW ......seessssssersrersssnsnensreret®

(iii)

——————————™"™SES”—”=—“‘;‘;€U;i‘(‘i;

17

17

20

23

24

26

iV

TABLE OF CONTENTS—Continued

Page

A. The Circuit Courts Treat Intra-corporate

Conspiracies Inconsistently .............c:cccceees 27

B. The Court Should Interpret Any Ambig-

uity in 18 U.S.C. § 371 in Favor of Lenity .. 29

C. Public Policy Concerns Also Militate

against Criminalizing Intra-corporate Com-

munications Regarding Environmental

IND scunicnchscsereptiinnddiencertmienbacsameaiies 30

ea ta TUTIY site cihdciiuislesicicchesssusesieeopbnebinbilebaanumneiastonieniedasias 30

APPENDIX A

Court of Appeals Panel Opinion.................cccccceseeeees la

APPENDIX B

Court of Appeals Order Denying Rehearing ............. 64a

APPENDIX C

Court of Appeals Stay of the Issuance of the

PN eiibtil eines ihiclaindicaaMcetedtilgia calc 66a

APPENDIX D

42 U.S.C. § G92Z8(a), (eo), and (8) .0.0.secsererseeveceseeserssenes 68a

Fe ee Fe caeesehcnnsbanlainesdncenansiomaditidinnsen 72a

Ge a 0 cccccensntncichcsntnsndieccesineanesielininerasaienesimeee 74a

APPENDIX E

District Court’s Written Instructions to the Jury........ 75a

APPENDIX F

Excerpts from the Government’s Amended Request to

Ui csceitesiei tcioecieisbsasacaisandicabasaiaiguactueaiinoasdesremuiienalotmaauadaaan 99a

OO Ee

Vv

TABLE OF AUTHORITIES

CASES Page

Bryan v. United States, 524 U.S. 184 (1998)....... 17

Buschi v. Kirven, 775 F.2d 1240 (4th Cir. 1985)... 27

Copperweld Corp. Vv. Independence Tube Corp.,

467 U.S. 752 (1984)...cscecceseeseeerserseeteeenesensennees passim

Doherty v. American Motors Corp., 728 F.2d 334

(6th Cir. 1990).....cccccsecesesseeessenseneersesensnneneessesess 28

Hanousek v. United States, 528 U.S. 1102

(2000).....esescrscessosesrernssssesevorsesnensesonsseesenssnscsseeses 2

Johnson v. Hills & Dales Gen. Hosp., 40 F.3d

837 (6th Cir. 1994)...cccseseseeeeereerersessesrsnsenensesess 27

Morissette v. United States, 342 U.S. 246

(1952)...cccscscscssssoseessrsrscsceceessrscerorasconsnscssoraroceeees passim |

People v. Curtis, 627 P.2d 734 (Colo. 1981)........- 23

Pinkerton v. United States, 328 U.S. 640 (1946)... 3

Rewis v. United States, 401 U.S. 808 (1971)........ 29

Staples v. United States, 511 U.S. 600 (1994)....... 17

State v. Lambert, 929 P.2d 846 (Mont. 1996)........ 22. #2

Tanner v. United States, 483 U.S. 107 (1987)......- 28

Travis v. Gary Cmty. Mental Health Ctr., 921

F.2d 108 (7th Cir. 1990) ......ecsccseeeesreesssersenes 27, 29, 30

United States v. Ahmad, 101 F.3d 386 (Sth Cir.

1996), reh’g denied, 108 F.3d 335 (Sth Cir.

1996) ...-cccceccsrssossersecsssssersssssssssensrssnsencnersseseoreree+s 26

United States v. Ames Sintering Co., 927 F.2d

232 (6th Cir. 1990)... cccccscesesessresenessesssrenenenenses 28

United States v. Dege, 364 U.S. 51 (1960) .......-+. 28

United States v. Dotterweich, 320 US. 27

(1943) ..ccoresecssnssecensevsoesesensensenvenssorencessaevesenssoressst passim

United States v. Eidson, 108 F.3d 1336 (11th

Cir.), cert. denied, 522 U.S. 899 (1997) .....eeeeee 6

United States v. Elias, 269 F.3d 1003 (9th Cir.

vi

TABLE OF AUTHORITIES—Continued

Page

United States v. Greer, 850 F.2d 1447 (11th Cir.

TOIT sverdnnsisantincehesiiniabeiaadodabasamemudinacaiies 6

United States v. Hartley, 678 F.2d 961 (11th Cir

TOGA sinsssnevesdusosnbeeaieasenvecsiienmaaliaieanisaaimaaaaiadl 27

United States v. Hoflin, 880 F.2d 1033 (9th Cir

EPRI sstincovscicesseciistuisaiisnanicubemianatinmanalaitieeniiasaiiic 6

United States v. Hudson and Goodwin, \1 U.S.

CT CIID SSC iscnsineneeeiacieeens: 24

United States v. Iverson, 162 F.3d 1015 (9th Cir.

FEED isvetsvissinesininsiseionneiasenaaiinaandneaaee 25, 26

United States v. Lanier, 520 U.S. 529 (1997)........ 24

United States v. Laughlin, 10 F.3d 961 (2nd Cir.

FIPIEED vecyivsiiessmegiinteasshdiamibasaaadsdemanaaain toeiaciiaas 6

United States v. MacDonald & Watson Waste Oil

Co., F353 F.28 SS (lat Cie, IDE) ..cccceevecveesdbevecees 25, 26

United States v. Park, 421 U.S. 658 (1975)........... passim

United States v. Sellers, 926 F.2d 410 (Sth Cir.

PIP O shi ccceyithinnsanicseelslaadlasubdieddndaian ieee 6

United States v. Weitzenhoff, 35 F.3d 1275

(9th Cir. 1994), cert. denied, 513 U.S. 1128

Ear ee nstiisinininuinindinieplouiceenitaieeiiashicanta keene ane 6, 16, 26

United States v. Wiltberger, 18 U.S. (S-Wheat)

Fe 6 eit hivninvennctnsinicicsictenanaimmcinaieea 24

STATUTES AND RULES

FE ee. © PE ED sessvisinicetsdiacceninmmiaadaaieaitaae 7

ERLE fo | | RENO NeNCr Nr c me LO 7

Se ax ae aie Rndecicistiiarntiveitenitibontmuaiamaniatee: 7

By ee & SE IE a iccscicercisereeunatctaniaie 4

BO i FC iniovictccccncnincnuenpaderascbélipaamaieaacs 4

PO APs S BILD Scvinescctasensenseninatdibedbaaouaided 4

SF Ol & 7, nen MEM ONE 2 Ate passim

Be es BCE EP eeiicceeredinecdinena l

ee

Vil

TABLE OF AUTHORITIES—Continued

Page

33 U.S.C. § 1319(C)( ZA) «.-eeseecerereerereneereteseenenens if

A2 U.S.C. § 1985(2) ...ceccscssereseereerereeneenseneerennenensens 27, 29

42 U.S.C. § 1985(3) ..cececcseseesereesesseteeneeeeseeneenenenens 27, 29

42 U.S.C. § 6928(d)(2) 8 (3)...eecceeererererserererrenenens passim

42 U.S.C. § 6928(€) ..secceresceressererseensenersenseesnnsnenenes passim

42 U.S.C. § 69286 f)....eecceceereeseeereersnenerenesneensnenenens passim

42 U.S.C. § 6973(a) (1994 €d.)...cecseseereereresesrersens 9

42 U.S.C. § 9603(b)(3) ...-.ecercecereseeretssteeretseeacertnens 4

Fed. R. App. P. 41 (d)(2)(A) -----seseeeeserereeseesenerenteees 16

LEGISLATIVE HISTORIES

H.R. Conf. Rep. No. 96-1444 (1980), reprinted

in 1980 U.S.C.C.A.N. S019... esceeeeeseseneeeeeeees passim

S. 1722, 96th Cong., Ist Sess., § 302 (1979)......... 20

OTHER AUTHORITIES

Jason Blacksberg et al., Environmental Crimes,

38 Am. Crim. L. Rev. 607 (2001).........-+++ sania 2, a2

Kenneth R. Feinberg, Toward a New Approach

to Proving Culpability: Mens Rea and the

Proposed Federal Criminal Code, 18 Am.

Crim. L. Rev. 123 (1980).....:cscsccesseeeereereeeessees 20

Brenda S. Hustis and John Y. Gotanda, The

Responsible Corporate Officer: Designated

Felon or Legal Fiction?, 25 Loy. U. Chi. L. J.

169 (1994)....ccscssssssessessesensssesssnsenenencaserscsseesnsnees 25

Wayne R. LaFave and Austin W. Scott, SJr.,

Criminal Law § 3.5(b) (2d ed. 1986).....-..+---++ 18

Shaun P. Martin, Intracorporate Conspiracies,

50 Stan. L. Rev. 399 (1998).......:cseesereeeererees 2, 27, 29

Model Penal Code § 2.02(7) (Proposed Official

Draft 1962).......sccsscssssesesececesseersseesrssensasesnsesncnees 19

Vili

TABLE OF AUTHOR!TIES—Continued

Model Penal Code § 2.02(2)(b) (Proposed

a eee

Paul H. Robinson and Jane A. Grall, Element

Analysis in Defining Criminal Liability: The

Model Penal Code and Beyond, 35 Stan. L.

Rev. 681 (1983) -

Page

20

cetenaltoeis

a eee -?

a

PETITION FOR A WRIT OF CERTIORARI

Randall W. Hansen hereby petitions for a writ of certiorari

to review the judgment of the United States Court of Appeals

for the Eleventh Circuit in this case.

OPINION BELOW

The opinion of the court of appeals (App. |a-63a) is

reported at 262 F.3d 1217.

JURISDICTION

The judgment of the court of appeals was entered on

August 24, 2001. The court of appeals denied a timely peti-

tion for rehearing on October 26, 2001. The jurisdiction of

this Court is invoked under 28 U.S.C. § 1254(1).

STATUTES INVOLVED

The statutes involved are the Resource Conservation and

Recovery Act, 42 U.S.C. §§ 6928(d)(2), (€), & (f), the Clean

Water Act, 33 U.S.C. § 1319(c)(2)(A), and the federal

conspiracy statute, 18 U.S.C. § 371. Pertinent portions of

these statutes are reproduced in Appendix D, 68a-74a.

STATEMENT OF THE CASE

Introduction. Criminal penalties are undeniably an impor-

tant weapon in the government’s environmental enforcement

arsenal. With this case, however, the balance between the

need for strong environmental enforcement and fundamental

principles of criminal jurisprudence has tipped radically

askew. In upholding the conviction and four-year prison

sentence of Randall Hansen, who learned of the environ-

mental violations at issue, in the district court’s words, “after

the fact,” R14-235-6, the Eleventh Circuit has further

complicated an already opaque morass of opinions variously

attempting to define the point at which business decisions

2

become felonious criminal conduct under the “responsible

corporate officer” doctrine.’

This case preserits the Court with an opportunity to clarify

the parameters of the doctrine of vicarious “responsible

corporate officer” criminal liability as it has evolved since

United States v. Dotterweich, 320 U.S. 277 (1943), and

United States v. Park, 421 U.S. 658 (1975). At the same

time, it permits review of the related issue of intra-corporate

conspiracy liability under 18 U.S.C. § 371, which, though

tolerated by numerous lower courts, recent legal scholarship

has called seriously into doubt.2 No previous case, to

petitioner’s knowledge, has presented these broad issues so

squarely,’ nor has the misapplication of the relevant doctrines

led to so profoundly unjust a result for an individual

petitioner.

The troubling outcome in this case had its genesis in a jury

instruction that permitted conviction of Mr. Hansen for serious

felonies under the Resource Conservation and Recovery Act

(RCRA) based on the fact of his corporate position and a

' See, e.g., Jason Blacksberg et al., Environmental Crimes, 38 Am.

Crim. L. Rev. 607, 617 (2001) (surveying circuit decisions: “[t]he degree

to which the responsible corporate officer doctrine eliminates the mens

rea requirement of various environmental statutes is not well settled.”).

>See generally Shaun P. Martin, J/ntracorporate Conspiracies,

50 Stan. L. Rev. 399 (1998) (comprehensively and critically examining

the federal judicial response to the doctrine of intracorporate conspiracy).

> Cf. Hanousek v. United States, 528 U.S. 1102 (2000) (denying

certiorari on the question whether a misdemeanor conviction under the

Clean Water Act’s criminal negligence provisions violated the defendant’s

due process rights). Dissenting from the denial of certiorari, Justice

Thomas, joined by Justice O’Connor, noted that “[w]hatever the merits of

petitioner’s underlying due process claim, . . . it is erroneous to rely, even

in small part, on the notion that the CWA is a public welfare statute.” /d.

(Thomas, J., dissenting). The dissent noted that the circuits were split on

this issue, arguing persuasively that the Court should “further delineate

[the] limits” of the public welfare doctrine. /d

3

“failure to detect” the violations at issue. The district court

erroneously applied the mere “failure to detect” standard not

only to RCRA’s basic felony of treating, storing, or disposing

of hazardous wastes without a permit (which itself requires

proof of actual knowledge f the facts constituting the

violation), but also to its “knowing endangerment” provision,

which has enhanced scienter requirements and concomitantly

enhanced penalties, including up to fifteen years in prison.

This standard completely subverted Congress’ explicit intent to

punish as knowing endangerment only the most culpable,

egregious, life-threatening conduct. By contrast, the district

judge himself summarized Randall Hansen’s supposedly

culpable conduct as a “lack of action, whether intentional or

unintentional.” R14-235-8 (emphasis added).

Under the “responsible corporate officer” doctrine as applied

here, any CEO would be criminally liable for all environmental

violations, known or unknown, that occurred within the realm of

his or her corporate employer. Compounding this legal error,

the courts vastly overextended the criminal responsibility of

corporate officers by simultaneously rejecting the precept of

corporate unity in converting intra-corporate management

discussions into a supposed “conspiracy” to continue operating

the bankrupt company’s Georgia plant. This created a truly

slippery slope because the jury was in turn permitted to convict

petitioner for substantive offenses committed by alleged

“coconspirators” under Pinkerton v. United States, 328 U.S. 640

(1946). The interrelated nature of these issues—“responsible

corporate officer” and “intra-corporate conspiracy” —suggests

the wisdom of simultaneous review, though either issue standing

alone would warrant the Court’s attention.

The Indictment. In 1998, a federal grand jury sitting in the

Southern District of Georgia, Brunswick Division, returned a

42-count indictment against petitioner Randall Hansen,

charging him with violations of the federal conspiracy statute,

18 U.S.C. § 371 (count 1); the Clean Water Act, 33 U.S.C.

§ 1319(c)(2)(A) (CWA) (counts 2-21); and RCRA, 42 U.S.C.

4

§§ 6928(d)(2)(A) and (e) (counts 22-34). App. 13a-14a.*

The allegations in the indictment arose from the operation,

primarily in 1993 through February 1, 1994, of a chlor-alkali

plant in Brunswick, Georgia, owned by LCP Chemicals

(LCP), a division of Hanlin Group, Inc. (Hanlin). R1-1-2.

During this period, Randall Hansen served—from the com-

pany’s headquarters in New Jersey—as its Executive Vice

President and, beginning in April 1993, as its interim Chief

Executive Officer (CEO). App. 2a; GX1-2c. Also indicted

“were petitioner’s father, Christian Hansen, founder and

former Chairman and CEO of LCP; Alfred Taylor, the

Brunswick plant manager; and Brent Hanson, the plant’s

environmental manager.” RI-1-3; R16-95; App. 13a-14a.

None of LCP’s four corporate-level environmental officers

was charged. R20-50-51.

The CWA counts (2-21) alleged that the defendants, on

various occasions, “knowingly” discharged mercury and

chlorine in excess of the amounts allowed by the plant’s

National Pollutant Discharge Elimination System (NPDES)

permit. R1-27-31. The first eleven RCRA counts (22-33)

alleged that the defendants “knowingly” treated, stored, and

* Petitioner was not charged under counts 35-41, which alleged

reporting violations under the Comprehensive Environmental Response

Compensation and Liability Act, 42 U.S.C. § 9603(b)(3) (CERCLA).

R1-37-39. At the close of the evidence, the district court entered

judgment of acquittal on count 42, which alleged the criminal “taking” of

the wood stork under the Endangered Species Act, 16 U.S.C.

§§ 1538(a)(1)(B), 1538(g) and 1540(b)(1) (ESA). App. 14a.

* Brent Hanson, no relation to Randall Hansen, pled guilty to count 41, a

CERCLA offense not charged against petitioner, and count 42, the ESA

offense dismissed at the close of the case. App. 14a. Former employees

with operational responsibilities at the Brunswick plant entered into plea

agreements and later testified for the government. App. 13a, n.14. In

exchange for testimony, the government immunized other corporate-level

officers, including James Mathis, former Chairman of the Environmental

Committee of LCP’s Board of Directors. R19-172-73; R19-133.

5

disposed of hazardous waste without a permit. R1-31-36.°

Various factual nuances colored each RCRA count as to the

specific manner and dates of the alleged illegal treatment,

storage, or disposal. For example, counts 22 and 23 alleged

that, from May 29 through November 14, 1993, and again

from November 15, 1993, through February |, 1994, the

defendants “cause[d} the disposal of hazardous waste” (é.g.,

mercury contaminated wastewater) by allowing it to seep

through holes, cracks, and gaps in the plant’s cell room floor,

“thereby causing the identified hazardous wastes to flow into

and on the land and into the groundwater beneath” the floor.

R1-31-32.

The last RCRA count (34) charged Randall’ with knowing

endangerment, alleging that he “knowingly” treated, stored,

and disposed of hazardous waste without a permit, while

“knowing at that time that such unpermitted treatment, storage

and disposal thereby placed Hanlin employees and other

persons in imminent danger of death and serious bodily injury

_” RI1-36-37. When, in 1980, Congress enacted RCRA’s

knowing endangerment provisions with substantially enhanced

criminal penalties, it defined this crime narrowly and precisely,

with a clear expectation that the statute would be invoked

sparingly, in “the occasional case where the defendant’s

knowing conduct shows that his respect for human life is

6 RCRA provides a range of administrative, civil, and criminal

penalties by which the government may enforce the Act’s restrictions on

the handling of hazardous wastes. 42 U.S.C. § 6928. Under Section

6928(d)(2(A) RCRA provides for felony criminal penalties (up to five

years in prison) against any person who “knowingly treats, stores, OF

disposes of any hazardous waste” without a permit. RCRA also pro-

scribes a number of other acts, not charged in this case, with penalties

ranging from two to five years of imprisonment. See, e.g., id.

§ 6928(d)(3) (for knowingly making false statements in connection with

reporting obligations under RCRA).

7 Given the number of similar surnames in this case, we informally

refer to petitioner, as did the court of appeals, by his first name.

6

utterly lacking and it is merely fortuitous that his conduct may

not have caused a disaster.” H.R. Conf. Rep. No. 96-1444, at

38 (1980), reprinted in 1980 U.S.C.C.A.N. 5019, 5038."

The case against Randall Hansen stands in'$tark contrast to

virtually all prior RCRA and CWA prosecutions.” Here,

there was no evidence or allegation that he personally

dumped or discharged hazardous wastes into the environ-

ment, or that he ordered a corporate agent to do so. Similarly,

the case involved no evidence that he failed to report

violations to the government or mislabeled containers of

waste materials to deceive inspectors (two recurrent fact

patterns in environmental prosecutions) or caused such vio-

lations. Nor did he turn a blind eye: “Randall attempted to

find additional funds [for plant repairs] by selling excess

equipment and reducing the payroll but the funds remained

limited.” App. 6a. Instead, the case against Randall, as the

* The Ninth Circuit recently affirmed a conviction for RCRA knowing

endangerment where the defendant personally ordered his employees to

clean out tanks containing cyanide\residue, repeatedly refusing their

requests for protective gear, and causing the near death of one. United

States v. Elias, 269 F.3d 1003 (9th Cir. 2001).

* See, e.g., United States v. Eidson, 108 F.3d 1336, 1340 (11th Cir.)

(one defendant gave another “permission to have the driver dump the

contents of the truck into the sewer”), cert. denied, 522 U.S. 899 (1997);

United States v. Greer, 850 F.2d 1447, 1450-52 (llth Cir. 1988)

(defendant directly ordered illegal dumping); United States v. Laughlin,

10 F.3d 961, 963 (2nd Cir. 1993) (defendant first “began to demand

repeatedly that [agent] release the contents of the tanker car onto the

ground,” and then, when agent refused, personally “released the entire

contents of the tanker car directly onto the ground”); United States v.

Weitzenhoff, 35 F.3d 1275, 1282 (9th Cir. 1994) (defendants “instructed

two employees at the plant to dispose of [sludge] on a regular basis by

pumping it from the storage tanks . . . directly into the ocean”), cert.

denied, 513 U.S. 1128 (1995); United States v. Sellers, 926 F.2d 410, 412

(Sth Cir. 1991) (defendant personally dumped sixteen 55-gallon drums of

paint waste onto creek embankment); United States v. Hoflin, 880 F.2d

1033, 1035 (9th Cir. 1989) (defendant “instructed an employee to haul the

paint drums to the sewage treatment plant and bury them”).

J

government argued both at trial and on appeal, arose from his

alleged “complicity” in LCP’s corporate decision to continue

operating the Brunswick plant until February 1, 1994. The

government essentially contends that, because the plant

repeatedly reported environmental violations during the year

prior to its closure, without adequate funds for repairs and

maintenance at the plant to prevent the violations, Randall,

as CEO, should have caused the company to shut down the

plant sooner.

Count |, for conspiracy, encapsulated the government’s

theory of the case against Randall, alleging, inter alia, that he

and his codefendants, “{a]s part of the conspiracy, . . .

continued to operate the Brunswick facility in such a manner

as to continue the disposal of these hazardous wastes without

expending adequate funds to maintain and repair the floors of

the cell room buildings so as to prevent the disposal of such

hazardous wastes into the environment.” R 1-11.

Randall Hansen’s Brief Tenure at LCP. After graduating

from Harvard Business School in 1985, Randall joined the

Boston consulting firm of Bain & Company, but later, at his

father’s urging, left to devote his talents to Hanlin’s business,

which faced considerable financial problems. GX 1-2c. In

1991, before LCP hired Randall as Executive Vice President,

Hanlin, the parent corporation, filed a voluntary bankruptcy

petition under Chapter 11, with pre-petition obligations

exceeding $100 million. App. 6a. The company remained in

bankruptcy throughout the relevant period. At all relevant

times, the bankruptcy code restricted management’s ability to

allocate the estate’s assets, or assume new debts, for mainten-

ance, repairs, and environmental compliance. /d.; 11 U.S.C.

§§ 363(c)(1), 363(b)\(1) & 364. Furthermore, the “ultimate

decision-making for all major projects, capital and extra-

ordinary expenditures,” including whether to shut down or

cease operations at any plant, “were subject to the approval of

the Board [of Directors] and the bankruptcy creditor’s

committee and court.” App. 6a; SRII-7.

8

LCP’s parent had purchased the Brunswick plant in 1979

from Allied Chemical. App. 2a. During the relevant time

period, Randall visited the Brunswick plant on only two

occasions (App. 7a-8a.), working principally out of his office

in New Jersey on the company’s intractable financial prob-

lems. The court of appeals concluded that Randall’s “primary

focus was financial and, with the support of the bankruptcy

creditor’s committee and court, he sought to sell the company

to a responsible party who could operate the business and

have the financial resources to deal with the various

environmental conditions.” App. 9a. At the same time,

LCP’s outside environmental counsel—the law firm of

Dechert, Price & Rhoads in Philadelphia—actively pursued

negotiations with the United States Department of Justice

(DOJ), the Environmental Protection Agency (EPA), and the

Georgia Environmental Protection Division (EPD) regarding

LCP’s acknowledged compliance problems. App. 6a; GX 10-

7) & 10-7L; SRII-4. One 1992 report advised Randall and

others, including at least one Board member:

On August 19th, [1992,] a letter from [DOJ] was sent to

both our environmental and bankruptcy attorneys. The

DOJ now seems to understand that Hanlin Group does

not have the financial resources to pay for all the fines

assessed, consent order and permit obligations forced

upon it by regulatory authorities. They are requesting

that Hanlin develop an action plan and present it to

the DOJ, et al for review, comment and implementa-

tion. Data is now being gathered and a strategy will

be developed.

GX10-7}. Management at the Brunswick plant regularly

reported the NPDES permit exceedences to the Georgia EPD

in monthly correspondence from January 1993 until the plant

closed on February 1, 1994. GX13-2v-2jj.'° In April 1993,

'° Despite the ongoing reporting to, and negotiations with, federal and

state authorities, EPA never exercised its statutory authority under RCRA

~~ see ee

9

Randall sought to resign, but was persuaded to stay on by the

Board and creditors committee who urged him to remain to

complete the sale of the business. R21-200-201.

Despite numerous permit violations for the year to date, on

October 30, 1992, the Georgia EPD renewed the plant’s multi-

year permit; but then in the summer of 1993 initiated

proceedings to revoke the renewed permit for noncompliance.

GX 13-lb; App. 10a. LCP filed an appeal, staying the

revocation. App. 12a. The EPD ultimately also sought a TRO

in state court to order the plant closed. /d. By then. however, a

deal was reached te sell the plant back to its former owner,

Allied Signal, and another investor, Holtrachem, which

agreement obligated the purchasers to make a multimillion-

dollar advance investment in improvements at the Brunswick

plant; the buyers immediately began to advance the funds,

prior to the deal’s closing, “to the Brunswick plant for

purchase of critical parts and equipment to improve operat-

ing reliability and environmental compliance.” SRII-2(B). See

also GX 10-6; App. 12a.

With that context, the creditor’s committee pressured

everyone concerned to keep the plant open and allow the

Allied deal to close, specifically warning of the environ-

mental hazards inherent in any plant closure, particularly

where funds were limited. On November 30, 1993, the

creditor’s committee wrote to the state judge in the proceed-

ings initiated by the Georgia EPD to warn her of the “likely

consequences that would result from any closing of the

Brunswick plant,” which would require expenditure of

“considerable amounts of money . . . to avoid the poss-

to seek an injunction of continued operation of the Brunswick plant

because it presented an “imminent and substantial endangerment to health

or the environment.” 42 U.S.C. § 6973(a) (1994 ed.). Nor did the Occu-

pational Safety and Health Administration, after inspecting the plant in

1992, take any action beyond levying minor fines and requiring corrective

action, which LCP promptly implemented. App. 5a; GX 10-7i.

10

ibility of an environmental catastrophe.” App. 12a, n. 12.

Government witnesses admitted at trial that shutting off a

chlor-alkali plant’s power without properly decommissioning

it would cause “the [mercury] cells [to] cool off, the joints

[to] open up, and you would get additional mercury leakage”;

that “you can’t just turn off the switch and leave and not

expect some dramatic consequences”; that one “would expect

to see additional settling and cracking [in the cell room

floors] and buildup of fluids [on the floors] after a plant shut

down”; and that one generally “would expect the conditions

at the plant to possibly worsen after the shutdown.” R20-147;

R19-73, 76, 83-84. On December 1, 1993, the Board

“concluded that it should not shut down the plant until further

information developed because of the fact that a plant shut

down may exacerbate other environmental problems and may

prevent the acquisition by Allied and Holtrachem which

[were] currently funding the plant upgrade and site

remediation.” SRII-1.

On December 6, 1993, the state judge, counsel for EPD,

and representatives of LCP, Allied, and MHoltrachem

personally inspected the plant. GX 13-4; SRII-5; R20-302-03.

Back in court later that day, counsel for EPD complimented

LCP’s “extraordinary efforts” to improve the facility, and

withdrew the TRO request to close the plant. SRII-5. In the

end, however, “the purchase agreement [with Allied] . . . fell

through and shortly thereafter the facility closed. After the

plant closed, Randall . . . requested $1,500,000 in additional

funds from the bankruptcy court to deal with the

environmental impact of closing but the request was denied.”

App. 12a.

The government’s principal witness at trial testified that

Randall was “just as concerned as we [plant workers] were”

about conditions in the plant. App. 8a. Moreover, “[the plant

manager] stressed safety and strict adherence with LCP’s

training and safety programs, and assured employees the right

to refuse to perform any activity if the employee felt it to be

11

unsafe.” /d. In terms of actual injuries from plant conditions,

the government proffered testimony from one former plant

employee who once fell into a sump containing caustic

wastewater; he admitted that he showered off, returned to

work, and did not even report the incident to the plant nurse.

App. 5a, n.6; App. 29a; R19-231. Nor did he even recall the

decade in which the incident occurred. /d.!!

The Verdict and Sentencing of Randall Hansen. The jury

nonetheless returned a guilty verdict against petitioner on

counts 1-34—including knowing endangerment, which

trebled the base offense level under the Federal Sentencing

Guidelines. On June 2, 1999, the Honorable Anthony A.

Alaimo, Senior United States District Judge for the Southern

District of Georgia, who presided over the trial, began the

defendants’ sentencing hearing by calling it “one of the most

difficult days I have experienced since being on the bench for

well-nigh thirty years.” R22-229-2. The district court then

sentenced Taylor to serve 78 months of incarceration, and

petitioner’s father to serve 108 months of incarceration and to

pay a $20,000 fine. App. 14a. The court also began con-

'' As evidence of hazards at the plant, the Eleventh Circuit’s opinion

refers to this incident as well as a NIOSH study of mercury levels in

employees, prepared in 1987 and 1988, years before Randall was hired as

CEO of LCP. App. 20a-22a. At trial there was no hint even that Randall

had ever heard of the incident or the report. The court’s implicit sug-

gestion that a CEO is aware of findings and conclusions in every

document in the company’s files is the very essence of constructive

knowledge. Indeed, on cross-examination of Randall, the government

actively and prejudicially sought to establish such constructive knowledge

by questioning him on the contents of a company document dated 1981,

when he was an undergraduate at Vanderbilt University. R21-203-04

(prosecutor: “you heard the evidence [during trial] about the corporate

knowledge that your company had about the existence of this glob

underneath the cellroom back in 1981 ..-”); R21-205 (prosecutor,

referencing 1987 document: “Doesn’t that indicate that, institutionally,

LCP was well aware of what was happening under cell building #17’)

(emphasis added).

12

sideration of petitioner’s sentencing, noting the outpouring of

glowing supportive letters from his friends and associates,

including Hugh Croom—the Brunswick plant manager and

government’s first witness at trial. R28-248-75. The court

then abruptly deferred ruling on Randall’s sentence, stating

“if I knew of an appropriate way to really depart, | would do

so.” R28-248-78.

On July 1, 1999, at the reconvened sentencing hearing, the

court summarized the evidence against Randall by observing

that Randall “was never directly involved in the discharging

or dumping of hazardous waste, nor did he order such con-

duct to take place.” R14-235-12. The court found that

Randall’s responsibilities within LCP gave him “knowledge

[that] concerned itself more with the financial aspects of the

corporation and not the day-to-day operations of the various

chlor-alkali plants opened by the Hanlin Group.” R14-235-5.

The court further found that LCP’s “willful violation[s] of the

EPD permits were done without [Randall’s] prior consent or

knowledge.” R14-235-13. The court then characterized the

case against Randall as essentially one of negligence, finding

that he “failed to act in an appropriate and reasonable manner

when various violations were reported to him,” but that “he

was notified of these violations after the fact. And his failure

to act in a reasonable manner caused further harm to the

environment.” R14-235-6. As for the alleged knowing

endangerment of plant employees, the court stated: “Mr.

Randall Hansen’s lack of action, whether intentional or

unintentional, seriously placed the workers at LCP and this

community in danger.” R14-235-8 (emphasis added). '

'? Not only is negligence an insufficient basis for conviction of these

crimes, Congress specifically considered and rejected a House proposal

based on the concept of “reckless endangerment” during the conference

on RCRA’s knowing endangerment provisions. See H.R. Conf. Rep. No.

96-1444, at 37 (1980), reprinted in 1980 U.S.C.C.A.N. at 5037.

13

After making reductions to the offense levels but denying

Randall’s request for a downward departure under Chapter 5

of the Federal Sentencing Guidelines, the court then sen-

tenced Randall to serve 46 months of incarceration and to pay

a $20,000 fine. App. 14a, 59a; R14-235-12-13.

The District Court’s Instructions to the Jury. The instruc-

tions in this case explain how the jury could have found

Randall guilty on this record. After initially instructing the

jury on the elements of the substantive CWA and RCRA

offenses, eight transcript pages later the court read a

“responsible corporate officer” instruction—to which trial

counsel for petitioner and his codefendants made several

objections—which articulated an alternative basis for con-

viction and effectively dispensed with the statutory mens rea

elements of 42 U.S.C. §§ 6928(d)(2)(A), (e), and (f)'?:

Now each Defendant under consideration may be found

guilty of Counts 22 through 34 of the Indictment if you

find that the Government has proven the following

beyond a reasonable doubt:

First, that the Defendant under consideration had a

responsible relationship to the violation—that is, that it

occurred under his area of authority and supervisory

responsibility;

Second, that the Defendant had the power or capacity to

prevent the violation; and

'’ The court gave the “responsible corporate officer” instruction by

listing elements—just like elements of a substantive crime—of

responsible corporate officer liability in the same numerical, sequential

manner as is normally done (“First, . .. Second, . . . Third, . . .”), and as

the court had done, when giving its conspiracy, CWA, and original RCRA

instructions. See, e.g, CWA (R22-189-90), and RCRA (R22-191-92).

The plain meaning was that the jury need consider only the three listed

responsible corporate officer “elements” in deciding whether to convict or

acquit petitioner of counts 22-34 under RCRA. The written instructions

are reproduced at Appendix E, 75a-98a; the transcript of the oral instruc-

tions appears at R22-171-209.

14

Third, that the Defendant acted knowingly in failing to

prevent, detect or correct the violation.

R22-200; App. 95a (hereinafter the “responsible corporate

officer” instruction). The government had submitted this

proposed jury instruction, titled “Intent—Responsible Indi-

vidual Instruction (RCRA),” before trial, and cited Dotter-

weich and Park for support. R6-106-56; see Appendix F,

App. 99a-i00a.

Earlier in the charge, the court read to the jury the standard

definition of “acted knowingly,” which appears in the third

element of the “responsible corporate officer” instruction:

Now with respect to the remaining counts of the

Indictnient—that is, those other than the conspiracy

count—the Government must prove that each Defendant

under consideration acted knowingly. In that regard, a_

person acts knowingly if he acts intentionally and

voluntarily, realizing what he .s doing, and not because

of ignorance, mistake, accident, or carelessness. . . .

R22-187-88; App. 85a. Read together with the “responsible

corporate officer” instruction, this instruction thus permitted the

jury to convict Randall of any RCRA offense (and likely the

charged CWA offenses as well) based on a finding that he

consciously went about performing his job in the ordinary course

of business, but failed to detect the violations. This simply is not,

has never been, and certainly should not be, the standard

applicable to environmental felonies requiring actual knowledge.

Proceedings in the Court of Appeals. On appeal, petitioner

challenged his conviction based, inter alia, on the sufficiency

of the trial evidence to support his conviction on all counts

(1-34), and the error in the district court’s “responsible

corporate officer” instruction. Petitioner argued that the

district court had extended the Dotterweich and Park “public

welfare” concept to felony offenses under RCRA without

requiring proof of their statutory mens rea elements. On

August 31, 2000, approximately two weeks before the

15

scheduled oral argument, the panel requested that the

government make a supplemental filing that, “with respect to

each of the Appellants,” set forth record citations to the

evidence for each material element of each separate offense.

At oral argument, the panel ordered the government to clarify

and resubmit the requested supplemental filing consistent with

its initial instructions.

On August 24, 2001, in a 74-page per curiam opinion, the

panel affirmed the convictions of Christian Hansen, Taylor,

and petitioner in all respects. In a highly disjointed

discussion of the various challenges to the jury instructions,

the panel devoted just two sentences to the district court’s

instruction that the jury could convict petitioner of knowing

endangerment on a “responsible corporate officer” theory:

As to Count 34, RCRA’s knowing endangerment pro-

vision also requires proof that the hazardous waste

violation placed persons in “imminent danger of death or

serious bodily injury” and that the defendant had

knowledge of that danger. 42 U.S.C. § 6928(e).

Because the instructions clearly set forth that a finding

of “acted knowingly” was required for a conviction,

there was no error in the instruction.

App. 53a-54a. The second sentence, a confounding non

sequitur to the first, now stands as the law of the Eleventh

Circuit, in one of the first published appellate decisions to

interpret the definition of knowing endangerment under RCRA.

The panel also affirmed petitioner’s conviction for an

exclusively intra-corporate “conspiracy” under 18 U.S.C. § 371:

The evidence showed that the defendants admitting [sic]

to sharing the common goal to operate the plant until a

buyer could be found. The jury could infer from this

goal and the defendants’ knowledge of the plant’s

continuing problems with worker safety and environ-

mental compliance that they reached a tacit agreement to

operate the plant in violation of the environmental laws.

App. 43a.

16

The court of appeals granted petitioner’s motion for a stay

of the issuance of the mandate pending this Petition, im-

plicitly concluding it would present “a substantial question.”

Fed. R. App. P. 41(d)(2)(A); Appendix C, App. 66a-67a.

REASONS FOR GRANTING THE PETITION

The Eleventh Circuit has upheld a shocking and unprece-

dented extension of the “responsible corporate officer”

doctrine, first articulated by this Court in Dotterweich and

Park for strict liability misdemeanor offenses, to the most

serious felony environmental crimes. The decision further

eroded the required standards for criminal liability of

individual corporate officers by sustaining an intra-corporate

“conspiracy” theory, predicated solely on standard business

discussions among corporate executives dealing with a

bankruptcy situation. The resulting standard is fraught with

legal and policy implications; it not only will permit

conviction of innocent individuals, but ultimately will deter

participation in responsible corporate behavior essential to

environmental compliance.

The importance of this case is manifest, presenting as

it does questions concerning “a fundamental purpose of

criminal justice, sorting out the innocent from the guilty

before imposing punishment.”’* The court of appeals’

decision runs seriously afoul of this Court’s decisions

relevant to the interpretation of federal criminal statutes, as

well as the prohibition against judicial crime creation implicit

in the Constitution’s separation of powers, by expanding the

statutory definitions of multiple crimes. The decision also

creates a direct conflict within the courts of appeals as to the

'* United States v. Weitzenhoff, 35 F.3d 1275, 1293 (9th Cir. 1994)

(Kleinfeld, J., dissenting from denial of rehearing en banc) (“Dilution of

the traditional requirement of a criminal state of mind, and application of

the criminal law to innocent conduct, reduces the moral authority of our

system of criminal law.”), cert. denied, 513 U.S. 1128 (1995).

er

17

proper application of the “responsible corporate officer”

doctrine to environmental crimes.

I. THE CULPABILITY STANDARDS’ FOR

ENVIRONMENTAL CRIMES SHOULD BE

CLARIFIED

In Dotterweich and Park, this Court adopted the “respons-

ible corporate officer” doctrine for a very limited category of

strict liability, misdemeanor, “public welfare” statutes, under

which criminal liability may be imposed “upon a person

otherwise innocent but standing in responsible relation to a

public danger.” Dotterweich, 320 U.S. at 281. The statute

interpreted in Dotterweich and Park—the Federal Food,

Drug, and Cosmetic Act—itself “dispense[d] with the con-

ventional requirement for criminal conduct—awareness of

some wrongdoing.” Jd. The Court, however, has long

resisted arguments to “expand the doctrine of crimes without

intent” beyond minor public welfare offenses, Morissette v.

United States, 342 U.S. 246, 260 (1952), and nothing in

Dotterweich or Park would support expanding the doctrine to

crimes for which Congress supplied heightened culpability

requirements and lengthy prison sentences.

A. The Eleventh Circuit Upheld a Diminished

Mens Rea Requirement for Corporate Officers.

The “responsible corporate officer” instruction eliminated

the statutory mens rea not only for knowing endangerment

(count 34), but also for the eleven lesser RCRA offenses

(counts 22-33). A person violates RCRA if he “knowingly

treats, stores, or disposes of any hazardous waste identified or

listed under this subchapter” without a permit. 42 U.S.C.

§ 6928(d\(2)(A). This Court has held that the use of the word

“knowingly” in a federal criminal statute requires “proof of

knowledge of the facts that constitute the offense.” Bryan v.

United States, 524 U.S. 184, 193 (1998). Cf Staples v. United

States, 511 U.S. 600, 619 (1994) (interpreting implied statutory

18

knowledge element to require proof “that petitioner knew of

the features of his AR-15 [gun] that brought it within the scope

of the Act”); Morissette, 342 U.S. at 271 (interpreting implied

statutory knowledge element to require proof that defendant

“had knowledge of the facts . . . that made the taking a

conversion”). Knowledge of such facts, if acquired after the

fact, cannot suffice because of the required “concurrence of an

evil-meaning mind with an evil-doing hand.” /d. at 251. Thus,

Section 6928(d)(2)(A) required proof that petitioner had

knowledge of—and caused—the specific treatments, storage,

and disposals of hazardous waste charged in counts 22-33,

when each violation allegedly occurred.

;

The “responsible corporate officer” instruction required no :

knowledge of any particular facts constituting these offenses; |

it permitted the jury to convict only if petitioner “acted

knowingly in failing to . . . detect or correct the violation.”

R22-200 (emphasis added). The concept of failure to correct

a violation that, tautologically, had already occurred, allowed

conviction even if the jury found that petitioner first acquired

knowledge of the violation after its occurrence, as the district

court concluded he did.'° The concept also eliminated the

actus reus of the offense, which required proof that he caused

the violation, not that he failed to take corrective steps after it

happened. Similarly, the concept of failure to detect a vio-

lation explicitly authorized conviction absent any knowl-

edge at any point in time. Indeed, the concepts of “failure

to detect” and actual knowledge would logically seem

mutually exclusive.'®

'S E.g., R14-235-6 (Randall “was notified of these violations after the

fact”); R14-235-13 (violations of the environmental permits “were done

without [Randall’s] prior consent or knowledge”).

'© To “knowingly fail to detect” a fact—whatever this means—is far

removed from the concept of “willful blindness,” which occurs when a

person acts purposefully to shield himself from the truth. See Wayne R.

LaFave and Austin W. Scott, Jr., Criminal Law § 3.5(b) (2d ed. 1986).

SN ——————

19

While the district court supplied an ersatz mens rea in the

instruction (i.e., “acted knowingly”), it elsewhere instructed

the jury that, for each substantive count, the. phrase “acted

knowingly” meant only that a person “act[ed] intentionally

and voluntarily, realizing what he [was] doing, and not

because of ignorance, mistake, accident, or carelessness.”

R22-188 (emphasis added). For a person simply to “realiz[e]

what he is doing” (i.e., to be generally aware of the nature of

his conduct) falls far short of an actual awareness of the

circumstances and results of his conduct. Thus, the “respons-

ible corporate officer” instruction replaced the statutory mens

rea for all of the RCRA offenses with one that meant little

more than “not sleepwalking.” '’ Indeed, the government in

its closing argument erroneously analogized the mens rea

applicable to the charged CWA and RCRA offenses to the

classic strict liability offense of speeding. '®

Furthermore, “to ensure that the purpose to avoid learning the truth is

culpable,” id., the Model Penal Code’s formulation of willful blindness

requires an “aware[ness] of a high probability of [the] existence” of the

fact. American Law Institute, Model Penal Code § 2.02(7) (Proposed

Official Draft 1962) (hereinafter “Model Penal Code”).

'” Due to the confusing manner in which the court instructed the jury,

particularly the court’s comment “wherever I have used the term

‘corporate officers,’ | mean responsible corporate officers,” (R22-209),

which the court made in passing literally moments before sending the

jurors into the jury room to begin deliberations, the jury likely applied the

instruction to all CWA as well as all RCRA counts.

'® The government told the jury that the “knowing” requirement for the

CWA and RCRA offenses was

probably comparable to if we’re driving 60 in a 30 zone and we

have taken our eyes off of the speedometer and we’re caught. We

have done it knowingly. We’re not doing it by some happenstance,

thinking that we are in another situation. We were driving.

R21-160 (emphasis added).

20

B. The Error Was More Dramatic With Respect

to the Knowing Endangerment Offense.

The starkest error in this case was in the “responsible

corporate officer” instruction’s application to knowing

endangerment under RCRA. By statute, knowing endanger-

ment occurs only if “a person who knowingly transports,

treats, stores, disposes of, or exports any hazardous waste,”

in violation of 42 U.S.C. § 6928(d), also “knows at that time

that he thereby places another person in imminent danger of

death or serious bodily injury.” 42 U.S.C. § 6928(e). To

assure proper implementation of Section 6928(e), Congress

took the rare step of codifying a version of the Model Penal

Code’s definition of knowledge solely for RCRA’s knowing

endangerment statute. Compare 42 U.S.C. § 6928(f)(1),

with Model Penal Code § 2.02(2)(b).'”

Congress also added clarifying provisions that expressly

require proof of the defendant’s actual knowledge “that his

conduct placed another person in imminent danger of death or

serious bodily injury,” see 42 U.S.C. § 6928(f)(2)(A) (provid-

ing that a person can be held “responsible only for actual

awareness or actual belief that he possessed”), and that

expressly prohibit constructive knowledge as a predicate for

liability. Jd. at § 6928(f)(2)(B) (forbidding attribution to the

defendant of “knowledge possessed by a person other than the

defendant but not the defendant himself’). Congress deemed

'? The House Conference Report on the Solid Waste Disposal Act

Amendments of 1980 states that the “basic definition” of “knowing” that

now appears at 42 U.S.C. § 6928(f)(1) was “derived from the general

definition of this mental element proposed in the Criminal Code Reform

Act, S. 1722.” H.R. Conf. Rep. No. 96-1444, at 39 (1980), reprinted in

1980 U.S.C.C.A.N. at 5038; S. 1722, 96th Cong., Ist Sess., § 302 (1979);

Kenneth R. Feinberg, Toward a New Approach to Proving Culpability:

Mens Rea and the Proposed Federal Criminal Code, 18 Am. Crim. L. Rev.

123, 129 (1980) (“S. 1722 replaces the confusing and inconsistent ad hoc

approach to culpability that now characterizes federal criminal law with a

new system that has its genesis in the Model Penal Code”).

21

these provisions necessary to hone the jury’s understanding of

the mens rea required for conviction, and to protect corporate

managers and officers from overreaching federal prosecutions:

[T]he ultimate issue for the jury will be whether the

defendant . . . was actually aware or actually believed

that his conduct would create a danger described in

subsection (e). . . . The conferees believe that these

clarifying provisions are appropriate to accompany the

creation of this new federal crime and are appropriate to

protect persons engaged in complex decision-making

from unjust indictment or conviction. . . . [R]espons-

ibility for the felony of criminal endangerment should

properly be confined only to those persons who them-

selves have actual knowledge of the danger resulting

from their conduct. A supervisor, for example, who

personally lacks the necessary knowledge, should not be

criminally prosecuted for knowledge that only his subor-

dinates possessed.

H.R. Conf. Rep. No. 96-1444, at 39-40 (1980), reprinted in

1980 U.S.C.C.A.N. at 5039 (emphasis added).

Reflecting the Model Penal Code’s definition of

knowledge, Section 6928(f)(1) creates separate culpability

requirements for each objective element (i.e., conduct,

attendant circumstances, and results) of the crime of knowing

endangerment. See 42 U.S.C. § 6928(f)(1)(A)-(C).”° Thus,

with respect to a person’s conduct, his state of mind is

“knowing” if “he is aware of the nature of his conduct,” id.

§ 6928(f)(1)(A); with respect to an existing circumstance, his

state of mind is “knowing” if “he is aware or believes that the

circumstance exists,” id. § 6928(f)(1)(B); and with respect to

the results of his conduct, his state of mind is “knowing” if

”° See generally Paul H. Robinson and Jane A. Grall, Element Analysis

in Defining Criminal Liability: The Model Penal Code and Beyond, 35

Stan. L. Rev. 681, 692-99 (1983) (knowledge under the Model Penal

Code “is defined in relation to each objective element of the offense—i.e.,

conduct, attendant circumstances, or result’).

22

“he is aware or believes that his conduct is substantially

certain to cause danger of death or serious bodily injury.” /d.

§ 6928(f)(1)(C).

The district court’s “responsible corporate officer” instruc-

tion failed to require proof that petitioner had actual knowl-

edge—i.e., actual awareness or actual belief—of any existing

circumstances or expected results of his conduct, as defined

under Sections 6928(f)(1)(B)-(C) and clarified under Sections

6928(f)(2)(A)-(B). The instruction thus eviscerated the statu-

tory mens rea. It permitted the jury to convict petitioner of

knowing endangerment based only on a finding, at most, that

he had a general awareness of the nature of his conduct

within the meaning of Section 6928(f)(1)(A), ignoring

entirely the additional required elements.

In its per curiam opinion the court of appeals never

addressed the significant differences in these culpability

requirements, cursorily upholding the instruction because it

included the phrase “acted knowingly.” Other courts, how-

ever, have recognized the distinction, particularly in state

jurisdictions that have adopted versions of the Model Penal

Code’s culpability provisions. The Montana Supreme

Court’s decision in State v. Lambert, 929 P.2d 846 (Mont.

1996), which reversed a conviction for criminal endan-

germent under Montana law, is particularly apropos. In

Lambert, the court considered jury instructions that defined

“knowing” to mean either awareness of conduct, awareness

of circumstances, or awareness that there was a high

probability that conduct would cause a specific result.

Id. at 848. Interpreting Montana’s criminal endangerment

statute as “emphasiz[ing] result over conduct,” the court

found these alternative instructions to be erroneous:

[A] person may engage in a wide variety of conduct and

still commit the offense of criminal endangerment,

provided that the conduct creates a substantial risk of

death or serious bodily harm. ... There being no

\

23

particularized conduct which gives rise to criminal

endangerment, applying to that offense’s mental element

the definition of “knowingly” that an accused need only

be aware of his conduct is incorrect. It is the

appreciation of the probable risks to others posed by

one’s conduct that creates culpability for criminal

endangerment; were it otherwise, where culpability

could lie for mere appreciation of one’s conduct, such as

driving a car or shooting a hunting rifle, some very

unfair results could follow.

Id. at 849. This reasoning applies with particular force to

corporate officer liability in the environmental context. 2!

C. The Judicial Creation of New Crimes Violated

Separation of Powers.

By approving the “responsible corporate officer” instruct-

tion, the court of appeals extended Dotterweich and Park to

offenses charged under 42 U.S.C. §§ 6928(d)(2)(A) and (e)

and dispensed with their explicit statutory mens rea

requirements. Despite a clear command from Congress

requiring a jury finding of actual knowledge for liability

under RCRA, the district court’s mens rea (to “act

knowingly”) ranged somewhere between strict liability and

negligence, the standard of culpability ultimately created by

Dotterweich and Park. See Dotterweich, 320 U.S. at 284

(permitting liability “though consciousness of wrongdoing be

totally wanting”); Park, 421 U.S. at 679 (Stewart, J.,

dissenting) (characterizing the Court’s opinion as employing

“the language of negligence”). However, “(t]he spirit of the

doctrine which denies to the federal judiciary power to create

crimes forthrightly admonishes that we should not enlarge the

reach of enacted crimes by constituting them from anything

*! See also People v. Curtis, 627 P.2d 734, 736-37 (Colo. 1981)

(reversing conviction where “[t]he jury instruction on the culpability for

extreme indifference murder was defective because it defined ‘knowingly’

with respect to conduct and circumstance, but not with respect to result.”)

24

less than the incriminating components contemplated by the

words used in the statute.” Morissette, 342 U.S. at 263

The proceedings below thus magnify a separation-of-

powers problem intrinsic to the “responsible corporate offi-

cer” doctrine. The power to define federal crimes belongs

exclusively to Congress, United States v. Hudson and Good-

win, 11 U.S. (7 Cranch) 32 (1812); United States v.

Wiltberger, 18 U.S. (S Wheat) 76 (1820), thus implementing

the principle of legality. United States v. Lanier, 520 U.S.

259, 265 n.5 (1997). Inherent in the judicial exercise of

translating the statutory elements of a crime into a theory of

liability specially tailored for corporate officers is a likelihood

of frequent deviation from “the words used in the statute,”

Morissette, 342 U.S. at 263, and concomitant judicial crime

creation. Even in Dotterweich, the doctrine’s propensity for

ad hoc judicial criminalization of corporate conduct influ-

enced the dissent:

{T]he fact that individual liability of corporate officers

may be consistent with the policy and purpose of a

public health and welfare measure does not authorize

this Court to impose such liability where Congress has

not clearly intended or actually done so. Congress alone

has the power to define a crime and to specify the

offenders. United States v. Wiltberger, 5 Wheat. 76, 95.

It is not our function to supply any deficiencies in these

respects, no matter how grave the consequences.

320 U.S. at 286-87 (Murphy, J., dissenting). The systemic

risk of judicial crime creation resulting from the lower courts’

haphazard attempts to adapt Dotterweich and Park to statutes

with heightened, complicated culpability requirements, calls

for clear guidance from this Court.

D. The Court of Appeals’ Decision Conflicts with

Decisions of the First, Fifth, and Ninth Circuits.

Absent a direct precedent from this Court, the lower courts

have produced an unclear and fragmented body of case law

concerning the application of the “responsible corporate

See

25

officer” and “public welfare” doctrines in environmental

criminal cases. The American Criminal Law Review recently

surveyed these decisions and concluded that “[tJhe degree to

which the responsible corporate officer doctrine eliminates

the mens rea requirement of various environmental statutes is

not well settled.” Jason Blacksberg et al., Environmental

Crimes, 38 Am. Crim. L. Rev. 607, 617 (2001). The

decision in this case promises only to exacerbate this doc-

trinal indeterminacy, on a question that has grown in import-

ance in recent years as “the EPA and the DOJ increasingly

have targeted individual corporate officers, as well as

corporations, for criminal enforcement actions.” /d. at 618.

To the extent that coherent principles had begun to form,

the overarching theme emerging from these cases (at least

prior to the decision below) was that a “responsible corporate

officer” instruction could not require proof of anything less

than the statutory actual knowledge standard required for

conviction under RCRA and CWA. See United States v.

MacDonald & Watson Waste Oil Company, 933 F.2d 35 (1st

Cir. 1991); United States v. Iverson, 162 F.3d 1015, 1026 (9th

Cir. 1998). In MacDonald & Watson, the lower court gave

an instruction that permitted a RCRA conviction if the

corporate officer knew that “illegal activity of the type

alleged occurred.” 933 F.2d at 51. The First Circuit reversed

the conviction because the instruction permitted the gov-

ernment to establish guilt by “simply establish[ing] that the

defendant was a responsible corporate officer,” which—like

the instruction in this case—required proof of only “three

things, none of which, individually or collectively, neces-

” See also Brenda S. Hustis and John Y. Gotanda, The Responsible

Corporate Officer: Designated Felon or Legal Fiction?, 25 Loy. U. Chi.

L. J. 169, 184-85 (1994) (observing that “of those authorities that have

advocated the extension of the RCO doctrine to [federal environmental]

statutes, opinions are divided regarding the extent to which the RCO

doctrine affects the statute’s mens rea requirement.”).

26

sarily established his actual knowledge of the illegal

[transaction] charged.” 933 F.2d at 53. Similarly, in /verson,

a CWA prosecution, the Ninth Circuit upheld a “responsible

corporate officer” instruction, which included an explicit

statement requiring proof that the defendant “had knowledge

of the fact [of the violation charged].” 162 F.3d 1015, 1022.

The court upheld the instruction only because “the govern-

ment still had to prove . . . that the defendant knew that the

discharges were pollutants.” 162 F.3d 1015 at 1026.

The panel’s opinion in this case also conflicts with the

Fifth Circuit’s opinion in United States v. Ahmad, 101 F.3d

386 (Sth Cir. 1996), reh’g denied, 108 F.3d 335 (Sth Cir.

1997), insofar as the court in this case approved an instruction

erroneously derived from Dotterweich and Park, which turn

on the precept that “public welfare” statutes may properly be

implemented with reduced mens rea standards to further their

public policy objectives. In Ahmad, the Fifth Circuit held that

the CWA was not a public welfare statute, reversing the

conviction because the jury was not instructed that the

mens rea requirement applied to each element of the offense.

101 F.3d 386 at 391 (citing Staples, 511 U.S. at 607). But cf.

United States v. Weitzenhoff, 35 F.3d 1275 (9th Cir. 1994)

(holding that CWA is a public welfare statute), cert. denied,

1513 U.S. 1128 (1995).

II. CRIMINAL LIABILITY FOR INTRA-CORP-

ORATE “CONSPIRACIES” CONTRADICTS

COURT PRECEDENT AND BASIC _ PRIN-

CIPLES OF LAW

Since this Court’s decision in Copperweld Corp. v. Inde-

pendence Tube Corp., 467 U.S. 752 (1984), the doctrine of

intra-corporate conspiracy has been inconsistently applied in

the circuit courts. In the nearly two decades since Copper-

weld, courts have largely rejected civil intra-corporate con-

spiratorial liability while perfunctorily approving _intra-

27

corporate liability in criminal conspiracy cases. See generally

Shaun P. Martin, /ntracorporate Conspiracies, 50 Stan. L.

Rev. 399 (1998) (comprehensively and critically examining the

federal judicial response to the doctrine of intracorporate

conspiracy). The Eleventh Circuit has long held that intra-

corporate conduct satisfies the plurality requirement for

conviction under 18 U.S.C. §371. See United States vy.

Hartley, 678 F.2d 961, 968 (11th Cir. 1982), cert. denied, 459

U.S. 1170 (1983).

As noted by recent legal scholarship, however, the refusal

to apply the Copperweld reasoning to 18 U.S.C § 371 is

erroneous and inconsistent with this Court’s precedent and

basic principles of law. Martin, supra., 445-446. Moreover,

the policy considerations underlying Copperweld are

profoundly implicated in the environmental context.

A. The Circuit Courts Treat Intra-corporate

Conspiracies Inconsistently.

In Copperweld, the Court held that “the coordinated activ-

ity of a parent and its wholly owned subsidiary must be

viewed as that of a single enterprise for the purposes of § | of

the Sherman Act.” Copperweld, 467 U.S. at 771. As a result,

parent and subsidiary corporations were held to be legally

incapable of conspiring with each other under Section 1. Jd.

at 777. This reasoning has been applied in federal civil

conspiracy cases under statutes with language substantially

similar to 18 U.S.C. § 371, such as 42 U.S.C. §§ 1985(2) and

(3), both civil rights statutes requiring proof that “two or

more persons ... conspire... .” See, e.g., Johnson v. Hills &

Dales Gen. Hosp., 40 F.3d 837, 839-40 (6th Cir. 1994) (citing

Copperweld and applying the intra-corporate conspiracy

doctrine to find no conspiracy under Section 1985(3)); Travis

v. Gary Cmty. Mental Health Ctr., 921 F.2d 108, 109-111

(7th Cir. 1990) (same analysis in Section 1985(2) context);

Buschi v. Kirven, 775 F.2d 1240, 1251-53 (4th Cir. 1985)

(citing Copperweld and dismissing actions alleging conspir-

28

acy in violation of civil rights); Doherty v. American Motors

Corp., 728 F.2d 334, 339-40 (6th Cir. 1984) (finding no

conspiracy under Section 1985(2) based on intra-corporate

conspiracy doctrine). The circuit courts, however, have

refused to apply the Copperweld approach in the criminal

conspiracy context. See, e.g., United States v. Ames Sintering

Co., 927 F.2d 232, 236-37 (6th Cir. 1990) (uphold-

ing criminal intra-corporate conspiracy conviction by limiting

Copperweld and its reasoning to the Sherman Act context

despite its own and other circuits’ application of Copperweld

to non-antitrust civil conspiracy cases).

As this Court has noted, 18 U.S.C. § 371 “is the descendent

of and bears a strong resemblance to conspiracy laws that

have been in the federal statute books since 1867.” Tanner v.

United States, 483 U.S. 107, 128 (1987). However, “[n]either

the original 1867 provision nor its subsequent reincarnations

were accompanied by any particularly illuminating legislative

history.” /d. This Court has previously examined nineteenth-

century common law to discern the legislative intent behind

the federal criminal conspiracy statute. See United States v.

Dege, 364 U.S. 51 (1960) (examining whether common law

fiction of marital unity operated to prevent plurality for

purposes of 18 U.S.C. § 371). In Dege, the Court presumed

that Congress incorporated then-existing common law

principles into the federal conspiracy statute, see id. at 54,

consistent with well-settled principles of statutory interpreta-

tion. See Morissette, 342 U.S. at 263 (stating that when

Congress codifies a preexisting legal concept the judiciary

must assume, in the absence of contrary legislative

instruction, that Congress meant to adopt the accumulated

legal tradition and “cluster of ideas” attached to the concept).

At the time of the “Act of 1867,” referenced by the Court

in Tanner as the basis for the current federal conspiracy law

at issue, wholly intra-corporate conduct failed to meet the

29

plurality requirement of conspiracy law.*> The Seventh Cir-

cuit examined the history surrounding the enactment of the

Civil Rights Act of 1871 with regard to intra-corporate

conspiracy in Travis, 921 F.2d at 110. The court found that

“[w]hen Congress drafted § 1985 [i.e., the Civil Rights Act of

1871] it was understood that corporate employees acting to

pursue the business of the firm could not be treated as

conspirators.” Id. The proposition that “the corporation and

its managers are ‘considered as one person in law’” is a long-

Standing principle and remains the prevailing common

wisdom. /d. (quoting William Blackstone, | Commentaries

on the Laws of England *456 (Ist Ed. 1765) and citing

10 Fletcher Cyclopedia of the Law of Private Corporations

§ 4884 (Lenore M. Zajdel ed. 1986)). Similarly, when

Congress passed the féderal criminal conspiracy statute in

1867—just four years before the Civil Rights Act of 1871-—

intra-corporate conduct could not constitute a criminal

conspiracy. See Martin, supra at 447-50. There is no indica-

tion in 18 U.S.C. § 371 that Congress intended to diverge

from that long-held common law principle of corporate unity.

B. The Court Should Interpret Any Ambiguity in

18 U.S.C. § 371 in Favor of Lenity.

This Court has long held that “ambiguity concerning the

ambit of criminal statutes should be resolved in favor of

lenity.” Rewis v. United States, 401 USS. 808, 812 (1971)

(citing Bell v. United States, 349 US. 81, 83 (1955)).

Because neither the Statutory text, legislative history, nor

common law principles support the notion that intra-corporate

conduct satisfies the plurality requirement for a criminal

conspiracy under 18 U.S.C. § 371, the Court should read the

Statute in favor of lenity to exclude liability for intra-

corporate conduct.

3 Professor Martin’s article comprehensively lays out this historical

analysis. Martin, supra, at 447-50.

30

C. Public Policy Concerns Also Militate against

Criminalizing Intra-corporate Communica-

tions Regarding Environmental Compliance.

In Copperweld, the Court expressed concern that coordi-

nation of a corporation’s internal efforts was essential to

effective competition—the public policy advanced by the

antitrust laws—and that intra-corporate conspiratorial liability

would stifle such coordinated competitive effort. Copper-

weld, 467 U.S. at 769. Similarly, if corporate officers

believed that they could go to prison for discussing envir-

onmental compliance issues as they arise, the free exchange

of information among dispersed corporate agents essential to

achieve compliance with the environmental laws will be

stifled. Cf Travis, 921 F.2d at 111. The logic of Copperweld

thus supports a policy-based reason for precluding liability

for intra-corporate “conspiracies” in matters charging envir-

onmental crimes. Combined with the “responsible corporate

officer” doctrine, the government’s prosecution of an intra-

corporate “conspiracy” has led to an expansive theory of

vicarious individual liability, which will no doubt propagate

unintended, inequitable, counterproductive results that defy

fundamental notions of due process.

CONCLUSION

The petition for a writ of certiorari should be granted.

Respectfully submitted,

DEBORAH BRAND BAUM *

THOMAS C. HILL

GREGORY J. PHILLIPS

ELIZABETH B. WYDRA

SHAW PITTMAN LLP

2300 N Street, N.W.

Washington, D.C. 20037-1128

(202) 663-8000

* Counsel of Record Counsel for Petitioner

January 24, 2002