INDEX TO MEMORANDUM OPINION
PRELIMINARY STATEMENT 1 DISCUSSION 7
I. APPLICABLE GUIDELINE EDITION 7
II. CHAPTER TWO CALCULATIONS 10
A. OSHA-RELATED OFFENSES 10
1. Application of Section 2J1.2 to these offenses 10
2. USSG § 2J1.2(a) - Base offense level
3. USSG § 2J1.2(b)(2) - Substantial interference with the administration of justice 12
B. CWA-RELATED OFFENSES 30
1. Review of convictions 30
2. USSG § 2Q1.3 - Mishandling of environmental pollutants 31
3. USSG § 2Q1.3(a) - Base offense level 36
4. USSG § 2Q1.3(b)(1)(A) or (B) - Discharge, release, or emission of pollutant 37
5. USSG § 2Q1.3(b)(4) - Discharge without or in violation of permit 54
6. USSG § 2Q1.3, Notes 4 and 7 - Departure of up to two levels either direction 55
7. USSG § 2Q1.3, Note 3 - Departure involving negligent conduct 68
8. USSG § 2F1.1(a) - Base offense level 72
C. CAA-RELATED OFFENSES 73
1. Review of convictions 73
2. USSG § 2Q1.3 - Mishandling of environmental pollutants 73
3. USSG § 2Q1.3(a) - Base offense level 75
4. USSG § 2Q1.3(b)(1)(A) or (B) - Discharge, release, or emission of pollutant 75
5. USSG § 2Q1.3(b)(4) - Discharge without or in violation of permit 80
6. USSG § 2Q1.3, Notes 4 and 7 - Departure of up to two levels 81
III. CHAPTER THREE, PART B (ROLE IN OFFENSE) 87
A. Guidelines Introductory Commentary 87
B. USSG § 3B1.1 - Aggravating Role 90
C. USSG § 3B1.2 - Mitigating Role 121
D. USSG § 3B1.3 - Abuse of Position of Trust 126
1. This enhancement has been applied most commonly in the contractual setting. The contracts can be in the public or the private sector. 130
2. The enhancement has also been applied to public employees occupying positions of trust. 136
3. The enhancement has been applied to certain persons holding government-issued professional or occupational licenses. 136
4. The enhancement has been applied to a manager for abuse of trust by forcing mine workers to falsify safety training certifications. 141
5. There is sharp disagreement whether the enhancement applies to environmental offenses by private persons. 142
IV. CHAPTER THREE, PART C (OBSTRUCTION OF JUSTICE) 154
A. USSG § 3C1.1 - Obstructing or Impeding the Administration of Justice - Perjury 154
B. USSG § 3C1.1 - Obstructing or Impeding the Administration of Justice - Unlawfully Influencing or Attempting to Influence a Witness 335
V. CHAPTER THREE, PART D (MULTIPLE COUNTS) 352
A. USSG § 3D1.1 - Procedure for Determining Offense Level on Multiple Counts 352
B. USSG § 3D1.2 - Groups of Closely Related Counts 352
C. USSG § 3D1.4 - Determining the Combined Offense Level 359
This memorandum opinion pertains to the sentencing of all defendants convicted in this case: ATLANTIC STATES CAST IRON PIPE CO., JOHN PRISQUE, SCOTT FAUBERT, JEFFREY MAURY, and CRAIG DAVIDSON. A summary of the counts of conviction as to each defendant may be found on the docket. (See dkt. 721 at 1-3, 112-13, 133-34.)*fn1 The parties were given notice of the contents of this memorandum on December 31, 2008, in the form of tentative rulings. Sentencing was completed on April 20 - 24, 2009. These tentative rulings were made final at the sentencing hearings, after the parties had been afforded full opportunity to respond.
The Court must sentence each defendant individually. However, the convictions in this multi-count, multi-defendant prosecution raise some common sentencing issues, as well as some separate issues. In addition, the post-Booker sentencing process for each defendant must include three steps, in which the Court must: (1) determine the guideline range; (2) rule on departure motions under the guidelines; and (3) determine the sentence pursuant to 18 U.S.C. § 3553(a), including ruling on any requests for variance from the guideline rulings. See United States v. Levinson, 543 F.3d 190, 194-95 (3d Cir. 2008). An indispensable part of arriving at a reasonable sentence is a correct calculation of the advisory guidelines range. See United States v. Cooper, 437 F.3d 324, 330 (3d Cir. 2006).
A ruling at Step 1 pertaining to a particular defendant here may be dispositive of an issue common to one or more other defendants. Therefore, the parties were given the opportunity to brief their arguments at Step 1 simultaneously, pursuant to scheduling orders entered for that purpose. (Dkt. 728, 729.) In doing so, the parties raised arguments on potential departures mentioned in the application notes for the Clean Water Act ("CWA") and Clean Air Act ("CAA") offenses. This memorandum contains a preliminary discussion of those issues, which were to be decided along with any other departure issues at Step 2.
This memorandum sets forth our guideline rulings at Step 1, concentrating primarily upon the calculations for each individual defendant. Some of these points also pertain to the corporate defendant, but the primary focus here is on guideline calculations for the individual defendants.
The purpose of this memorandum, when circulated to the parties on December 31, 2008, was to notify all parties of these Step 1 rulings, by reference to the trial record and pertinent authorities. It is now being filed on the Docket as a sentencing opinion, without substantial modification. The topic headings emerge from the issues identified by the parties.*fn2
The following discussion provides the Court's rulings on guideline issues identified by the parties and/or the U.S. Probation Office ("Probation") in preparation of drafts of the Presentence Investigation Reports ("PSRs") pertaining to the named defendants. The contents of PSRs are not public, nor are the sentencing memoranda submitted by the parties. (Dkt. 639.)*fn3
The Court has considered the extensive briefing materials and oral arguments on those topics.*fn4
The guideline rulings in this memorandum are based on the public trial record and legal authorities as cited herein, rather than on the contents of any PSR drafts.
The trial record in this case is extremely lengthy, totaling approximately 20,000 pages of transcript and many exhibits over the course of the trial. (See dkt. 721 at 3, n.5.) The parties argue many aspects of the evidence in their sentencing memoranda submitted to date.*fn5
The findings set forth in this memorandum are based on the summary of the record contained in our Memorandum Opinion on the Rule 29 and Rule 33 motions (dkt. 721), except where otherwise noted. In making each ruling we will cite to the relevant portion of our summary of the evidence contained in that Memorandum Opinion, and thus incorporate that portion of the record without repeating it here.
This memorandum makes only those factual findings necessary to a ruling on each disputed guideline point, applying the standard of preponderance of the evidence. United States v. Grier, 475 F.3d 556 (3d Cir. 2007). There is certainly more evidence that the parties can argue, and have argued, supports their respective positions. However, we decline to elaborate on the factual support for these findings beyond what is necessary to rule on each disputed guideline issue.
Here we present a very brief overview of the structure of the sentencing guidelines, as pertinent to the guideline calculation issues raised by the parties. The discussion in this memorandum follows that structure, with reference to each individual defendant in those portions relevant to that defendant.
Chapter Two of the guidelines pertains to offense conduct, and is organized by offense statute. "Each offense has a corresponding base offense level and may have one or more specific offense characteristics that adjust the offense level upward or downward." USSG Ch.2, intro. cmt.*fn6 For each type of substantive offense in this case, a part of Chapter Two will apply. See generally USSG § 1B1.6 (structure of the guidelines).
Where there are also convictions on a multi-object conspiracy count, the guidelines provide: "A conviction on a count charging a conspiracy to commit more than one offense shall be treated as if the defendant had been convicted on a separate count of conspiracy for each offense that the defendant conspired to commit." USSG § 1B1.2(d).*fn7
Parts A, B, and C of Chapter Three set forth some factors that may be relevant to the offense that are not covered in Chapter Two, including role in the offense and similar factors. USSG Ch.2, intro. cmt.
Chapter Three, Part D, is a separate part that "provides rules for determining a single offense level that encompasses all the counts of which the defendant is convicted." These are the so-called grouping rules. USSG Ch.3, Pt. D, intro. cmt.
There are sentencing issues in this case under Chapter Two pertaining to the three main types of substantive convictions in this case. We will address those Chapter Two issues by type of substantive offense statute, and by individual defendant, as follows:
(1) OSHA-related offenses [PRISQUE, FAUBERT, MAURY];
(2) CWA-related offenses [PRISQUE, MAURY, DAVIDSON]; and
(3) CAA-related offenses [PRISQUE].*fn8
The substantive false statement convictions related to categories (1) and (2) are addressed under those categories and later in the discussion of the grouping rules.
There are also Chapter Three issues as to each defendant under Part B (role in the offense), and Part C (obstruction of justice).
The grouping calculations are disputed under Chapter Three, Part D, by those whose guideline calculations may be enhanced by those provisions [PRISQUE, MAURY].
I. APPLICABLE GUIDELINE EDITION
The Court will use the November 1, 1998, edition of the Guidelines Manual, based on United States v. Bertoli, 40 F.3d 1384 (3d Cir. 1993). The government's objection is noted.*fn9
Bertoli held, based on ex post facto concerns, that the date of the earliest completed offense should dictate the edition to be used, and grouping cannot be used to determine date of offense for the purpose of choosing the applicable guideline edition. Id. at 1402-04. This is contrary to USSG § (hereinafter in text, "Section") 1B1.11(b)(3), effective 11-1-93, which was in effect when Bertoli was decided but was not mentioned in the decision.
Bertoli relied on United States v. Seligsohn, 981 F.2d 1418 (3d Cir. 1992), which has since been recognized as ineffective as against Section 1B1.11(b)(2) (one book rule). See United States v. Corrado, 53 F.3d 620, 623-24 (3d Cir. 1995). Bertoli remains undisturbed as to its ex post facto holding, however, and the Third Circuit has not addressed Section 1B1.11(b)(3). See generally United States v. Sullivan, 255 F.3d 1256, 1260-62 (10th Cir. 2001) (describing circuit split and collecting cases). Thus, we will use the manual for the earliest completed substantive crime, as to each defendant, notwithstanding the fact that the conspiracy allegation runs the whole period of the substantive counts (to August, 2003).
The earliest count of conviction as to ATLANTIC STATES is Count 12, a CWA violation in December, 1998. (Dkt. 721 at 3, n.4, & 189.) The counts of conviction as to each individual defendant (citing dkt. 721) are: PRISQUE Ct. 1 (all five objects) c. 10-31-95 - Aug., 2003 Ct. 8 (Owens OSHA obstruction, p. 159) July, 1999 Ct. 9 (Coxe OSHA obstruction, p. 163) 3-24/25-00 Ct. 11 (Velarde OSHA obstruction, p. 176) Dec., 2002 Ct. 27 (CWA neg. only, p. 215) 12-4/5-99 Ct. 34 (CAA, p. 243) Feb. - Aug. 2003 FAUBERT Ct. 1 (objects C, D, E [all OSHA-related])
Ct. 7 (false statement re: Marchan injury, p. 149) 5-11-00 Ct. 9 (Coxe OSHA obstruction, p. 163) 3-24/25-00 Ct. 10 (OSHA obstruction re: Marchan injury, p. 157) 7-24-00 MAURY Ct. 1 (objects A, C, D, E [all except CAA])
Ct. 3 (false statement re: 12-4/5-99 CWA discharge, p. 136) 2-24-00
Ct. 9 (Coxe OSHA obstruction, p. 163) 3-24/25-00 Ct. 27 (CWA neg. only, p. 215) 12-4/5-99 Cts. 28-32*fn10 (CWA discharges from #4 pit, p. 231) May-Oct. 1999 DAVIDSON Ct. 1 (objects A, D [both CWA-related])
Ct. 4 (false statement re: 12-4/5-99 CWA discharge, p. 141) 2-24-00
Cts. 12-20,*fn11 22-26 (CWA neg. only, p. 189) Dec. 1998 to Feb. 2000 Ct. 27 (CWA neg. only, p. 215) 12-4/5-99.
The completion date of the earliest count of conviction for PRISQUE is July, 1999 (Ct. 8); for FAUBERT is March 25, 2000 (Ct. 9); for MAURY is May, 1999 (Ct. 28); and for DAVIDSON is December, 1998 (Ct. 12). (Dkt. 721 at 3, n.4 & 159, 163-164, 189, 231.)
Each of those convictions falls within the guidelines edition effective November 1, 1998, except FAUBERT's on Count 9, which technically falls within the November, 1999 edition. But the November, 1999 edition was identical to the November, 1998 edition. Therefore, we will refer to the November, 1998 edition for all defendants. See supra n.9. All of the other arguments of the parties are addressed within that framework.
II. CHAPTER TWO CALCULATIONS
1. Application of Section 2J1.2 to these Offenses
Defendants PRISQUE, FAUBERT, and MAURY were convicted of conspiracy and substantive offenses for obstruction of OSHA in relation to worker injuries.*fn12 Those substantive counts of conviction are:
PRISQUE Ct. 8 (Owens OSHA obstruction, pp. 159-163)
Ct. 9 (Coxe OSHA obstruction, pp. 163-176)
Ct. 11 (Velarde OSHA obstruction, pp. 176-188) FAUBERT Ct. 7 (false statement re: Marchan injury, pp. 149-159)
Ct. 9 (Coxe OSHA obstruction, pp. 163-176)
Ct. 10 (OSHA obstruction re: Marchan injury, pp. 149-159) MAURY Ct. 9 (Coxe OSHA obstruction, pp. 163-176).
Counts 8, 9 and 10 are felony OSHA obstruction offenses under 18 U.S.C. § 1505. (Dkt. 721 at 133.) The basic guideline section for that statute is Section 2J1.2, "Obstruction of Justice." See USSG § 2J1.2, cmt., stat. prov.
Count 11 is a felony OSHA obstruction offense under 18 U.S.C. § 1519 (altering object with intent to obstruct OSHA). (Dkt. 721 at 133.) We will also apply Section 2J1.2 to that count. See USSG § 2X5.1 (apply most analogous guideline for felony offense for which no guideline expressly has been promulgated).
Counts 5 and 7 are false statement offenses under 18 U.S.C. § 1001. The offense conduct for Counts 5 and 7 is related to, and similar to, the offense conduct underlying Counts 9 and 10 (obstruction of OSHA investigation of Coxe fatality), as we explain in the margin.*fn13 Therefore, Counts 5 and 7 are analyzed under Section 2J1.2, rather than under the general fraud guidelines. See USSG § 2F1.1, cmt. n.14 (where the indictment setting forth the count of conviction establishes an offense more aptly covered by another guideline, apply that guideline rather than Section 2F1.1).*fn14
The following discussion addresses each of the OSHA-related counts as a separate count. Grouping of counts, where applicable, is addressed infra, Sec. V.
2. USSG § 2J1.2(a) - Base Offense Level
Section 2J1.2 covers "Obstruction of Justice" offenses, as we have described above. The background commentary to this section states: "Numerous offenses of varying seriousness may constitute obstruction of justice: ... obstructing a civil or administrative proceeding." USSG § 2J1.2, cmt. Thus, obstruction of a civil or an administrative proceeding is expressly covered by this section.
The government advised during this prosecution, and we can confirm, that the OSHA statute itself contains very limited criminal enforcement provisions. See 29 U.S.C. § 666. In other words, a violation of the OSHA workplace safety law and its rules and regulations can give rise to criminal liability, but those provisions are narrowly drawn.*fn15 It appears that interference with civil OSHA investigations is therefore commonly prosecuted, as in this case, under federal conspiracy, false statement, and obstruction laws.
The base offense level under Section 2J1.2 is 12. USSG § 2J1.2(a). We will apply this base offense level to each of the OSHA-related offenses.
3. USSG § 2J1.2(b)(2) - Substantial Interference with the Administration of Justice
Subsection 2J1.2(b)(2) provides as a specific offense characteristic: "If the offense resulted in substantial interference with the administration of justice, increase by 3 levels." USSG § 2J1.2(b)(2). Application note 1 states: "'Substantial interference with the administration of justice' includes ... the unnecessary expenditure of substantial governmental or court resources." Id., cmt. n.1 (emphasis added). The commentary adds that the "specific offense characteristics reflect the more serious forms of obstruction." Id., cmt.
The government argues in favor of this enhancement for all three individual defendants who sustained the OSHA-related convictions, PRISQUE, MAURY, AND FAUBERT. (Gov. I at 26-29, 41-44; Gov. II at 1.) Those defendants object, contending that the OSHA incident investigations at Atlantic States during the relevant time frame were normal investigative measures and that OSHA was generally complete and thorough, so OSHA was not substantially interfered with in performing its functions. They also argue that the evidence does not quantify the amount of governmental resources unnecessarily expended, and that the conduct for the enhancement would be the same conduct producing the base offense level, thus creating unwarranted double-counting if we apply this enhancement. (Prisque I at 104; Maury I at 54; Prisque II at 32; Faubert II at 3; Maury II at 26; Faubert III at 2-5; Prisque III at 1-2; Maury III at 1-4; Faubert IV at 1-2.)
Any discussion of the legal principles governing this potential guideline enhancement must begin with the recognition that this 3-level adjustment for a specific offense characteristic is found in Chapter 2, Part J of the guidelines. That is the Part covering "Offenses Involving the Administration of Justice," which contains sections covering obstruction-type offenses such as contempt (§ 2J1.1), obstruction of justice (§ 2J1.2), perjury, suborning perjury, or bribery of a witness (§ 2J1.3), impersonation of a federal agent (§ 2J1.4), failure to appear by a material witness (§ 2J1.5), failure to appear by defendant (§ 2J1.6), commission of an offense while on release (§ 2J1.7), and payment to a witness (§ 2J1.9). See USSG Ch. 2, Part J. We have determined that all of the OSHA-related offenses in this case fall within Chapter 2, Part J, and specifically Section 2J1.2. See supra Sec. II.A.1.
Sections 2J1.2(b)(2) and 2J1.3(b)(2) are in pari materia, insofar as each provides a 3-level enhancement to a base offense level of 12, where the particular obstruction-type offenses covered by those sections resulted in "substantial interference with the administration of justice." Each contains an identical application note including the ground of "unnecessary expenditure of substantial governmental or court resources." Compare USSG § 2J1.2, cmt. n.1 with USSG § 2J1.3, cmt. n.1. Case law addressing Section 2J1.2(b)(2) or Section 2J1.3(b)(2) is therefore relevant to interpretation of those parallel subsections. See United States v. Tackett, 193 F.3d 880, 886 & n.2 (6th Cir. 1999). However, case law addressing the 2-level adjustment for obstruction of justice found in Chapter 3, Part C, Section 3C1.1 is not applicable to Sections 2J1.2(b)(2) and 2J1.3(b)(3), as we explain in the margin.*fn16
The Third Circuit Court of Appeals addressed a 3-level adjustment under Section 2J1.3(b)(2) for unnecessary expenditure of substantial governmental resources in United States v. Serafini, 233 F.3d 758 (3d Cir. 2000). There, the defendant was a state legislator convicted of having committed perjury while testifying under immunity before a grand jury that was investigating possible violations of federal election laws involving campaign contributions. The district court imposed the 3-level enhancement under Section 2J1.3(b)(2), finding that if defendant had testified truthfully to the grand jury the government would not have been put to significant additional effort that it described. The Court of Appeals affirmed, observing that the district court made explicit factual findings that defendant's perjury was a "but-for cause" of substantial additional expenditures of the government's time and effort in conducting the underlying investigation of the election law issues. Id. at 771 & n.19. It rejected, as did the district court, defendant's argument that the government's investigation expenditures would have been undertaken even in the absence of his perjury, agreeing with the district court's findings that certain investigative steps were necessitated by defendant's obstructive conduct. Id. at 771 & n.19.
A 3-level enhancement under Section 2J1.2(b)(2) or its analogue, Section 2J1.3(b)(2), where the offense resulted in the unnecessary expenditure of substantial governmental or court resources, does not require that defendant's obstructive conduct have occurred during a criminal investigation. The conduct can be committed during civil proceedings. See, e.g., United States v. Fiore, 381 F.3d 89 (2d Cir. 2004) (conviction for perjury and related offenses arising out of civil SEC investigation; perjury calculation enhanced under Section 2J1.3(b)(2)); United States v. Tankersley, 296 F.3d 620 (2d Cir. 2002) (conviction for criminal contempt of court for selling a yacht in violation of civil injunction and attempting to conceal sale proceeds; calculation enhanced under Section 2J1.2(b)(2)); United States v. Weissman, 195 F.3d 96 (2d Cir. 1999) (convictions for obstruction and perjury in connection with Senate committee investigation of health care providers; calculation enhanced under Section 2J1.2(b)(2)).
Some courts have stated that a Section 2J1.2(b)(2) enhancement should not be imposed for the governmental effort in exposing and prosecuting the obstruction offense itself. See infra n.18. The guidelines commentary indicates that an adjustment under Section 3C1.1 should not be imposed on that basis. See application notes quoted in the margin.*fn17 However, whether substantial governmental effort in exposing and prosecuting the obstruction offense itself will support an adjustment under Sections 2J1.2(b)(2) or 2J1.3(b)(2) appears to be an open question. See infra n.19.
We need not resolve that issue here, because that same body of case law demonstrates that if the obstructive conduct that is the basis of an obstruction conviction also results in significant additional governmental effort in conducting the investigation or prosecution that defendant obstructed, Section 2J1.2(b)(2) applies. Compare Tackett, 193 F.3d at 883-87 (where defendants' conduct underlying their obstruction convictions caused substantial additional governmental expenditures to prosecute those convictions as well as other charges against a related party for conduct already under investigation, and defendants' obstructive conduct was directed to defeat that previously-commenced investigation, Section 2J1.2(b)(2) enhancement was warranted);*fn18 United States v. Sinclair, 109 F.3d 1527, 1538-40 (10th Cir. 1997) (Section 2J1.3(b)(2) adjustment affirmed where defendant's conduct underlying perjury conviction also caused increased governmental expenditures in prosecution of his two acquaintances already under indictment); United States v. Harrington, 82 F.3d 83, 86-87 (5th Cir. 1996) (additional governmental expenditures caused by defendant's obstruction offense aided in prosecution of defendant for obstruction but were also necessary for the government to convict defendant in the previously-commenced prosecution for other criminal conduct; Section 2J1.2(b)(2) enhancement was proper); with United States v. Duran, 41 F.3d 540, 542-43, 546 (9th Cir. 1994) (Section 2J1.3(b)(2) adjustment reversed where it was based solely on the cost of prosecuting defendants for offenses including obstruction and perjury);*fn19 cf. United States v. McSherry, 226 F.3d 153, 157-59 & n.1 (2d Cir. 2000) (reversing enhancements under Sections 2J1.2(b)(2) and 2J1.3(b)(2) where defendant parole official falsely denied in grand jury testimony that he was improperly influenced or corrupt, thus causing general bad publicity for the administration of the parole system, but no further basis was given for imposing the enhancement; appeals court stated in footnote that "[c]onceivably, a public official who lies to a grand jury and thereby misdirects the grand jury's inquiry may be said to 'substantial[ly] interfere with the administration of justice.'").
The case law has uniformly rejected arguments that a Section 2J1.2(b)(2) enhancement is improper because it is based on the same conduct that is the subject of the underlying obstruction conviction, and therefore constitutes improper double counting. The Second Circuit in Tankersley, for example, addressed this argument as follows:
[Defendant] contends that because his base offense level for criminal contempt was calculated using the guideline for obstruction of justice, it is not logical to allow an enhancement for substantially interfering with the administration of justice. This argument is misplaced. The Sentencing Guidelines expressly contemplate analyzing the same conduct that constitutes obstruction of justice to determine whether "the offense result[s] in substantial interference with the administration of justice" and, if so, the Sentencing Guidelines direct the sentencing court to enhance the sentence by three levels. U.S.S.G. § 2J1.2(b)(2).
[Defendant] further contends that this enhancement cannot apply to him because the district court engaged in double counting by considering the same conduct to enhance his sentence as it considered to punish him for criminal contempt. Contrary to [defendant's] argument, however, double counting occurs when a sentencing court applies two or more upward adjustments based on the same conduct.... In this case, the district court convicted [defendant] of criminal contempt because he sold his yacht and he attempted to transfer the proceeds of this sale to the Bahamas. Then, at sentencing the district court enhanced [his] sentence because [his] conduct resulted in a substantial interference with the administration of justice. 296 F.3d at 623-24 (emphasis in original).
These authorities demonstrate that one of the circumstances warranting enhancement under Section 2J1.2(b)(2) is where the defendant's obstructive conduct, which did result in an obstruction conviction, also had but-for consequences of causing unnecessary additional expenditure of substantial government resources in an underlying investigation or prosecution that was already in progress. That investigation or prosecution could be of defendant himself, or of other persons or entities. As the Sixth Circuit explained in Tackett, "§ 2J1.2(b)(2) increases the punishment for a defendant who obstructs justice when such obstruction has negative consequences." 193 F.3d at 886 n.3.
The guidelines do not define "substantial" as used in this context. Id. at 887. However, "[t]he government need not particularize a specific number of hours expended by a government employee." Id., citing Jones, 900 F.2d at 522; accord, Weissman, 195 F.3d at 100; Sinclair, 109 F.3d at 1540; United States v. DeSalvo, 26 F.3d 1216, 1224 (2d Cir. 1994); United States v. Bradach, 949 F.2d 1461, 1463 (7th Cir. 1991). Indeed, the necessary proof by "a preponderance of the evidence may consist of reasonable inferences drawn from circumstantial evidence." Jones, 900 F.2d at 522.
Courts have generally agreed with the Second Circuit in Jones, that in at least one factual situation, substantiality may be inferred. That court stated: "In some cases, when the defendant has concealed evidence and is the only known source of information, substantial interference with the administration of justice may be inferred." Id., citing United States v. Barnhart, 889 F.2d 1374, 1379-80 (5th Cir. 1989); accord, Tackett, 193 F.3d at 887; Sinclair, 109 F.3d at 1539-40; DeSalvo, 26 F.3d at 1224; Bradach, 949 F.2d at 1463. As the Tackett court observed:
This is a logical proposition: if a person is the only source of important information, her active concealment of this information will almost certainly change the course of the proceedings, making the investigation more difficult and costly, and hampering the truth-seeking function of government agents.
Tackett, 193 F.3d at 887-88 (affirming Section 2J1.2(b)(2) enhancement based upon inference of substantiality and stating that evidence in the record corroborated the inference).
The district court must, in deciding whether to apply Section 2J1.2(b)(2) on this ground, make a specific finding that the defendant's conduct resulted in the expenditure of substantial government resources. See, e.g., id. at 887; Serafini, 233 F.3d at 771; Jones, 900 F.2d at 521-22. The Sixth Circuit in Tackett described this obligation thus:
Specifically, we believe the district court must: (1) identify a particular expenditure of governmental resources (time or money), (2) which but for the defendant's conduct would not have been expended, and (3) was "substantial" in amount. Tackett, 193 F.2d at 887 (citations omitted).
Enhancements under Sections 2J1.2(b)(2) or 2J1.3(b)(2) have been affirmed, and the requisite "substantiality" was found to exist, in a wide range of circumstances. See, e.g., United States v. Leung, 360 F.3d 62, 67-68 (2d Cir. 2004) (extra investigative steps were required to be undertaken by U.S. Marshals to find bail-jumping defendant because he faked his own death); Tankersley, 296 F.3d at 623 (many weeks of investigative work went into tracking down and determining what happened to the assets defendant sold in committing criminal contempt); Serafini, 233 F.3d at 771 & n.19 (district court specifically found that defendant's perjury resulted in the need to re-interview a witness who was defendant's employee); Weissman, 195 F.3d at 100 (Senate subcommittee staff was required to spend significant additional time on the investigative hearings as a result of defendant's obstructive conduct); Tackett, 193 F.3d at 888 (inference of substantiality supported because defendants were sole source of knowledge of falsity; record also showed that truthful testimony by defendants would have changed the course of investigation of the underlying events); Sinclair, 109 F.3d at 1539-40 (government had to re-interview and re-call two witnesses who had been induced to perjure themselves); United States v. Atkin, 29 F.3d 267, 268 (7th Cir. 1994) (defendant's perjury caused the grand jury to summon five additional witnesses to complete the underlying investigation, one from a distant state); DeSalvo, 26 F.3d at 1223-24 (defendant, who was in high position in law firm being investigated and had personal knowledge of cases under investigation, had he testified truthfully "[w]ithout doubt .... would have saved the government substantial investigative and trial expenses"); United States v. Butt, 955 F.2d 77, 87-88 (1st Cir. 1992) (but for defendant's perjury to grand jury, the government would not have needed to locate several corroborating witnesses and might not have immunized persons whom it otherwise could have prosecuted); Bradach, 949 F.2d at 1463 (defendant suborned perjury from all persons who knew the true nature of the events under investigation, thus impairing the grand jury investigation as well as necessitating perjury-related trials of the defendants and the other perjured witnesses); United States v. Lueddeke, 908 F.2d 230, 232-34 (7th Cir. 1990) (defendant's perjury before grand jury resulted in the work of two officers for "two weeks trying to sort out the truth"); Barnhart, 889 F.2d at 1374, 1379-80 (defendant's uncooperative and untruthful statements to FBI agent and perjury to grand jury hindered investigation of underlying events and persons involved); see also United States v. Kilgarlin, 157 Fed.Appx. 716, 720-21 (5th Cir. 2005) (substantial government expenditure recognized as supporting enhancement where EPA investigators had to conduct further investigation into company procedures and equipment, and interview witnesses, to prove that documents provided by defendants were fabricated; also substantiality was inferred to extent defendant was sole source of the information she was concealing).
This Court makes the following factual findings based on the trial record, applying Section 2J1.2(b)(2) and the judicial interpretations summarized above. Here we incorporate by reference and cite the detailed description of the relevant trial evidence, including evidence of the expenditures of time and effort of government investigators in the civil OSHA investigations, set forth in our post-trial Memorandum Opinion, dkt. 721.
The Coxe investigation is the subject of substantive convictions of PRISQUE, FAUBERT, and MAURY on Count 9 (obstruction), and of FAUBERT also on Counts 7 and 10 (false statements and obstruction). See supra n.13. Each of those defendants was also convicted of every alleged objective of the Count 1 conspiracy that refers to OSHA: Objective C, defraud the United States; Objective D, false statements; and Objective E, obstruction of OSHA. See supra n.12. In other words, the verdict found that their obstructive conduct as to that workplace fatality was not unilateral but rather that they each knowingly participated in a conspiratorial agreement with the objective of obstructing OSHA as to that investigation.
We find that the record supports a 3-level enhancement for substantial interference with the administration of justice under Section 2J1.2(b)(2), as to each of defendants PRISQUE, FAUBERT, and MAURY in connection with the Coxe investigation. We base this finding on the evidence pertaining to obstruction of the OSHA efforts to investigate the Coxe forklift fatality by PRISQUE, FAUBERT, and MAURY. (See dkt. 721 at 147-159, 163-176.)
This conclusion, as to PRISQUE, FAUBERT, and MAURY in relation to the OSHA investigation of the Coxe fatality, is supported by the inference of substantiality permitted where, as here, all the relevant knowledge was in the control of those defendants and subordinates whom they could influence. Further, it is fully corroborated by the trial evidence itself, which demonstrates that the obstructive actions of those defendants caused substantial unnecessary interference with OSHA's efforts to investigate that fatality. Those obstructive actions were undertaken collectively by PRISQUE, MAURY, and FAUBERT, and by seeking the assistance of lower-level employees whose communications with OSHA they were in a position to influence. The facts that OSHA eventually uncovered -- despite the ongoing obstructive actions of those defendants -- were that the driver of the forklift that ran over Coxe had been involved in a prior, unreported incident in which he ran over and seriously injured another supervisor (Marchan), and that the forklift itself was not in good operating condition. Those two key facts were concealed by the obstruction and conspiratorial conduct of those defendants, thus requiring substantial unnecessary expenditure of time and effort by OSHA investigators to unravel the truth about the circumstances of Coxe's death. (See dkt. 721 at 147-159, 163-176.)
Specifically as to the condition of the forklift, the trial evidence documented the painstaking efforts required of OSHA to get to the truth on that topic, caused by the coordinated obstructive conduct of defendants. It began with the untruthful statement of FAUBERT (the designated company liaison to OSHA) to OSHA inspector Tiedeman, just hours after the Coxe fatality, that nothing had been done to the forklift post-incident. That statement, and the deceptive forklift demonstration that defendants were able to present that day, caused OSHA to undertake an extensive investigation to ultimately determine that the forklift had been tampered with while in the maintenance garage so that its pre-incident defects such as impaired brakes had been corrected by the time OSHA arrived that day. Also, the untruthful statements on a document resulting from efforts of MAURY and FAUBERT, which FAUBERT presented to OSHA the next day, stating that the forklift was in "perfect operating condition" when inspected on that day, formed part of the puzzle that OSHA had to unravel.*fn20 To do so, OSHA had to undertake an exhaustive examination of forklift maintenance records, as to the subject forklift as well as similar forklifts, that revealed a pattern of defects both before and soon after the Coxe incident. That extensive document review was coupled with interviews of numerous workers during several more visits to the plant by OSHA inspectors, as the inspectors sought to understand the forklift maintenance practices and failures that featured in causation of the Coxe fatality. Even after conducting most of that review, the OSHA inspector interviewed MAURY who continued to give evasive answers to the questions OSHA had about forklift driver checklists. The investigation included numerous interviews of workers, some who testified at trial, as to the poor condition of the forklifts they were forced to use at the plant. The evidence at trial revealed that all of this OSHA investigation was done in an atmosphere where workers were warned not to reveal the truth. One foreman, for example, testified at trial that on the day of the Coxe fatality he was warned by PRISQUE not to tell the truth to OSHA investigators about the incident. This was conduct covered by Count 9 of the indictment. (See dkt. 721 at 163-176.) We find that those obstructive actions by defendants PRISQUE, FAUBERT, and MAURY can be inferred to have caused, and the record shows that they did in fact cause, substantial expenditure of OSHA investigative effort that would not have been necessary if they had been truthful about material facts pertaining to the forklift involved in the Coxe fatality.
The evidence of unnecessary expenditure of OSHA investigative time and effort was also established, for the aspect of the Coxe investigation that came to focus on the forklift driver's earlier mishap in which he ran over supervisor Marchan and caused him injury. OSHA had to read about that incident in the newspaper. When the OSHA investigator asked FAUBERT about it, he responded orally that he did recall such an incident in about 1999. The investigator asked for any accident reports and entries in log records, as were required to be maintained. When that investigator and a colleague next returned to the plant, FAUBERT and his subordinate handed OSHA a written document signed by Marchan that contained false statements so as to justify the lack of any accident report or log entries. OSHA was then given access to the worker, Marchan, to interview him, at which point Marchan lied consistently with the written statement. FAUBERT and his subordinate backed up that fiction while again being interviewed by OSHA.
Only through further investigation by OSHA was it determined that Marchan had (1) been treated for a fracture at the local hospital, (2) been in a cast and on crutches for about five weeks, and (3) lied under instructions of FAUBERT as reinforced by PRISQUE. This was the conduct covered by Counts 7 and 10 of the indictment. (See id. at 149-159.)*fn21 We find that this concert of obstructive actions by PRISQUE and FAUBERT can be inferred to have caused, and the record shows that it did in fact cause, further substantial expenditure of OSHA investigative effort that would not have been necessary if they had been truthful about facts pertaining to the accident history of the driver of the Coxe forklift.
The civil investigation of the Coxe fatality did not result in a separate prosecution of defendants under the OSHA statute. See supra n.15. The obstruction of that civil OSHA investigation by those defendants did, however, clearly prolong and unnecessarily complicate that OSHA investigation, as we have explained above. This reason alone requires application of the enhancement under Section 2J1.2(b)(2) as to the Coxe investigation. That same obstruction was also very intricate and time-consuming for law enforcement to present through numerous witnesses at trial, even if that alone might not support this enhancement because no substantive OSHA offenses were charged at trial. Id. (Gov. I at 42-43.) For these reasons, we will apply the 3-level enhancement under Section 2J1.2(b)(2) to the base offense level for the OSHA obstruction-related convictions of PRISQUE, FAUBERT, and MAURY pertaining to the Coxe fatality investigation.*fn22
This Court also finds that the same 3-level enhancement under Section 2J1.2(b)(2) is warranted for the conduct of defendant PRISQUE in obstructing the separate OSHA investigations of the serious workplace injuries sustained by employees Owens and Velarde. PRISQUE was convicted of obstructing both of those OSHA investigations as well as the Coxe investigation. Here again, the trial evidence amply documents that substantial unnecessary governmental expenditures were caused by PRISQUE during those OSHA investigations. The investigating OSHA officers had to spend unnecessary and substantial effort to "sort out the truth," in the face of elaborate deceptions by PRISQUE and his involved subordinates. The material facts that OSHA eventually obtained -- despite the ongoing obstructive efforts of PRISQUE -- were regarding the workplace conditions at a cut saw station where employee Owens was struck by a flying saw blade fragment and sustained a fractured skull and lost eye, and at a "jumpered" cement mixer where employee Velarde lost three fingers to rotating mixer blades.
Obstruction of the OSHA investigation of the Owens incident was charged in Count 8, and obstruction of the OSHA investigation of the Velarde incident was charged in Count 11, and on both of those counts PRISQUE was convicted. See text accompanying n.10 supra. PRISQUE's obstructive conduct pertaining to the Owens incident was to instruct line worker Marchand-Mendoza to lie to OSHA about the pre-incident condition of a safety shield, which the OSHA inspector testified at trial was material to his investigation. That worker later withdrew his lie as a result of further government investigation, and provided the truthful information before and during trial. (Dkt. 721 at 159-163.) PRISQUE'S obstructive conduct pertaining to the Velarde investigation was his participation in an amazing series of steps to prevent OSHA from discovering that the electrical safety mechanism on the cement mixer had been bypassed at PRISQUE's direction. The steps that it took OSHA in turn to unravel that deception were very involved, including actually watching the night shift in operation, taking repeated series of pictures, reviewing the manual, re-interviewing co-conspirator Harbin (who again changed his story), and contacting the out-of-state manufacturer for information and documentation. (Dkt. 721 at 176-188.) As in the case of the OSHA investigation of the Coxe incident, we find that the untruthful and deceptive actions of PRISQUE and his involved subordinates in the Owens and Velarde investigations were a "but-for" cause of substantial investigative effort by OSHA inspectors to discover the causes of those injuries.*fn23
To summarize, the Court finds that a 3-level enhancement is warranted pursuant to Section 2J1.2(b)(2) for PRISQUE, FAUBERT, and MAURY in connection with their obstruction of the Coxe forklift fatality investigation by OSHA. We further find that this enhancement is supported, as to PRISQUE, in connection with his obstruction of the Owens and Velarde injury investigations by OSHA.
Defendants PRISQUE, MAURY, and DAVIDSON were convicted of conspiracy and substantive offenses relating to violations of the CWA.*fn24 Those substantive counts of conviction are: PRISQUE Ct. 27 (CWA neg. only, pp. 215-231)
MAURY Ct. 3 (false statement re: 12-4/5-99 discharge, pp. 136-141)
Ct. 27 (CWA neg. only, pp. 215-231)
Cts. 28-32 (CWA discharges from #4 pit, pp. 231-243) DAVIDSON Ct. 4 (false statement re: 12-4/5-99 discharge, pp. 141-146)
Cts. 12-20, 22-26 (CWA neg. only, pp. 189-215)
Ct. 27 (CWA neg. only, pp. 215-231)
Counts 12-20 and 22-27 were charged as felony offenses under 33 U.S.C. §§ 1311(a) and 1319(c)(2)(A). (Dkt. 721 at 133-134.) ATLANTIC STATES was convicted of those felony offenses, but the named individual defendants (PRISQUE, MAURY, and DAVIDSON on the stated counts) were convicted of the lesser-included substantive negligent offenses under 33 U.S.C. § 1319(c)(1)(A). (Id. at 3 n.4.)
Counts 28-32 were also charged as felony offenses under 33 U.S.C. §§ 1311(a) and 1319(c)(2)(A). (Id. at 133-134.) Both named defendants, ATLANTIC STATES and MAURY, were convicted on those counts as charged. (Id. at 3 n.4.)
Counts 3 and 4 are false statement felony counts under 18 U.S.C. § 1001, related to the unpermitted discharge of petroleum-contaminated wastewater from the cement pit underlying Count 27 ("the 12-4/5-99 discharge"), and the subsequent CWA-related investigation. (Dkt. 721 at 136-146, 215-231.) Defendant MAURY was convicted on Count 3, and DAVIDSON was convicted on Count 4.
It can be argued that the false statement offenses that are the subject of Counts 3 and 4 should be calculated under the Chapter Two guideline section for the corresponding CWA substantive violations, because those false statements directly related to the environmental offenses about which the false statements were made.*fn25 No party has urged that treatment of Counts 3 and 4, and we conclude that those counts of conviction are properly analyzed under the general fraud provisions of Chapter Two, Part F. See infra Sec. II.B.8.
The following discussion addresses each of the CWA-related counts as a separate count. Grouping of counts, where applicable, is addressed infra Sec. V.
2. USSG § 2Q1.3 - Mishandling of Environmental Pollutants
The Court will apply Section 2Q1.3 rather than Section 2Q1.2 to the CWA offenses in this case.
The Statutory Index states that for violations of 33 U.S.C. § 1319(c)(1) and (c)(2), either Section 2Q1.2 or Section 2Q1.3 may apply. USSG App. A. Section 1B1.2, entitled "Applicable Guidelines," provides in pertinent part:
(a) Determine the offense guideline section in Chapter Two (Offense Conduct) most applicable to the offense of conviction (i.e., the offense conduct charged in the count of the indictment or information of which the defendant was convicted)....
(b) After determining the appropriate offense guideline section pursuant to subsection (a) of this section, determine the applicable guideline range in accordance with § 1B1.3 (Relevant Conduct).
As explained in Watterson v. United States, 219 F.3d 232, 235 (3d Cir. 2000), the sentencing court may not consider relevant conduct until after it selects the appropriate offense guideline section. See United States v. Pizzuto, No. 94-5433, 1995 WL 610346 (4th Cir. 1995) (once the applicable guideline is known, relevant conduct is used to determine which specific offense characteristics apply); United States v. Goldfaden, 959 F.2d 1324, 1329 (5th Cir. 1992) ("The district court ... should have relied solely on Appellant's offense of conviction to determine the base offense guideline;" district court erred in selecting Section 2Q1.2 instead of Section 2Q1.3 where offense conduct involved non-toxic industrial waste, and hazardous waste was only involved in relevant conduct.).*fn26
Section 2Q1.2, by its title, applies to "Mishandling of Hazardous or Toxic Substances or Pesticides". Its commentary, quoted in the margin, describes what is meant by those terms for guideline purposes.*fn27 Its base offense level is 8. USSG § 2Q1.2(a). That commentary explains, "[a]lthough other sections of the guidelines generally prescribe a base offense level of 6 for regulatory violations, § 2Q1.2 prescribes a base offense level of 8 because of the inherently dangerous nature of hazardous and toxic substances and pesticides." USSG § 2Q1.2, cmt. background.
Section 2Q1.3, by its title, applies to "Mishandling of Other Environmental Pollutants". Its commentary states that "[t]his section parallels § 2Q1.2 but applies to offenses involving substances which are not pesticides and are not designated as hazardous or toxic." USSG § 2Q1.3, cmt. background. Its base offense level is 6. USSG § 2Q1.3(a).
The statutory structure of the CWA does distinguish the general term "pollutants" from more specifically identified substances including "oil," "hazardous substances," and "toxic pollutants." Compare 33 U.S.C. § 1362(6) ("pollutant") with id. § 1321(a)(1) ("oil"), §§ 1321(a)(14) and (b)(2)(A) ("hazardous substance," other than oil, to be designated by regulation), and § 1362(13) ("toxic pollutant").
Defendants PRISQUE, MAURY, and DAVIDSON were Convicted of Substantive offenses of discharging "a pollutant," in the form of "petroleum-contaminated wastewater." (See dkt. 721 at 189-190, 215, and 231 (quoting text of Counts 12-26, 27 & 28-32).) That conduct was also described in Count 1, alleged Overt Acts 1, 3, and 4, respectively. (Dkt. 711 at 15-16.) The jury was instructed that to prove the CWA offenses, as charged in the indictment, the proof must establish "that a discharge of a pollutant" occurred, and that the defendant knew "that he was discharging petroleum-contaminated wastewater." (Dkt. 721 at 11.) The term "pollutant" was defined in the jury instructions to mean "solid waste and industrial waste discharged into water, including petroleum-impacted wastewater." (Dkt. 717 at 53.)
Defendants PRISQUE, MAURY, and DAVIDSON were also convicted of conspiring to knowingly violate the CWA, Objective A of the Count 1 conspiracy. See supra n.24. There were numerous overt acts alleged as part of this objective. (See dkt. 711 at 15-17.) However, the jury was not asked to render verdicts as to which alleged overt acts were or were not established by the evidence. (Dkt. 721 at 15, 262; dkt. 717 at 37.)
The government does not contend that petroleum-contaminated wastewater is designated as hazardous or toxic. Rather, it argues that we should apply Section 2Q1.2 to the CWA offenses, "because Defendants' conduct included the discharge of hazardous paint into the Delaware River." (Gov. I at 32.) This is a reference to evidence presented at trial in support of Count 1, Overt Acts 7-9, which alleged that ATLANTIC STATES, PRISQUE, MAURY, and co-conspirators also took affirmative steps to conceal from authorities the discharge of asphalt-based waste paint to the storm sewers. (Gov. I at 29-32.) Defendants contend that Section 2Q1.3 is applicable to the CWA offenses of which they were convicted. (Atlantic States I at 77-79; Prisque I at 105-110; Maury I at 38-44; Davidson I at 50-54; Prisque II at 32-35; Maury II at 4-7, 11-15; Davidson II at 23-25.)
Section 1B1.2(a) directs the court to "[d]etermine the offense guideline section in Chapter Two ... most applicable to the offense[s] of conviction." USSG § 1B1.2(a) (emphasis added). Clearly, here the CWA offenses on which the jury was instructed, and on which these defendants were convicted, primarily involved discharge of the "pollutant" of "petroleum-contaminated wastewater." The jury was instructed on the definition of "pollutant" under the CWA. (Dkt. 717 at 53.) The jury was given no definition of "hazardous" or "toxic" under that statute. Indeed, not one of the 108 verdict points presented to the jury for decision in this case required the jury to make a factual finding as to any substance meeting a definition of "hazardous" or "toxic."*fn28
The indictment charged 22 substantive counts of CWA violations involving discharges of petroleum-contaminated wastewater, with corresponding overt acts alleged under Count 1. Convictions were obtained on the charged offense on 5 of those counts (Cts. 28-32), and on the lesser-included offense under 15 of those counts (Cts. 12-20, 22-27). The indictment charged no substantive counts involving discharge of asphalt-based paint into the water.
It is true that several alleged overt acts of the Count 1 conspiracy referred to efforts to conceal discharges of asphalt-based waste paint into the storm sewers, and trial evidence was presented on that topic. However, given the nature of the CWA charges and convictions in this case, we do not believe that concealment of mishandled asphalt-based paint can be considered the determinant offense conduct for purposes of selecting the applicable guideline section. We conclude that the offense guideline section in Chapter Two that is "most applicable" to the CWA offenses of conviction as to PRISQUE, MAURY, and DAVIDSON is Section 2Q1.3. See USSG § 1B1.2(a).*fn29
3. USSG § 2Q1.3(a) - Base Offense Level
The base offense level for each of the CWA offenses is 6. USSG § 2Q1.3(a).*fn30
4. USSG § 2Q1.3(b)(1)(A) or (B) - Discharge, Release, or Emission of Pollutant
The guidelines recognize that not all environmental offenses involving mishandling of a pollutant also include an actual discharge, release, or emission of the pollutant. See United States v. Ellen, 961 F.2d 462, 468-69 (4th Cir. 1992) ("§ 2Q1.3 applies to offenses that do not involve the discharge of a pollutant, see, e.g., 33 U.S.C. § 403 (prohibiting, inter alia, the obstruction of navigable waters)"). For those that do involve an actual discharge, an incremental specific offense adjustment is provided as follows:
(A) If the offense resulted in an ongoing, continuous, or repetitive discharge, release, or emission of a pollutant into the environment, increase by 6 levels; or
(B) if the offense otherwise involved a discharge, release, or emission of a pollutant, increase by 4 levels.
USSG §§ 2Q1.3(b)(1) ("Subsection (b)(1)") (A) and (B).*fn31
The application note to Subsection (b)(1) states in pertinent part: Subsection (b)(1) assumes a discharge or emission into the environment resulting in actual environmental contamination.
USSG § 2Q1.3, cmt. n.4 (emphasis added) ("Note 4, First Sentence").*fn32
There is a line of case law interpreting Subsection (b)(1) and Note 4, First Sentence. The opinions differ somewhat in articulating what the Subsection (b)(1) standard is, and the Third Circuit has stated that the "circuits are split on the question whether [under that provision] the government must prove that the discharge caused actual environmental contamination." United States v. Chau, 293 F.3d 96, 99-100 (3d Cir. 2002). We present here a brief summary of that case law, because it concerns whether a Subsection (b)(1) adjustment applies in a given case, and the Third Circuit has not expressly adopted either view. Id. As will be seen, it also becomes relevant when considering the guided departure language in Notes 4 and 7. See infra Sec. II.B.6.
The text of Subsection (b)(1) requires a "discharge, release, or emission" for the adjustment to apply. See USSG § 2Q1.2(b)(1)(A)-(B); USSG § 2Q1.3(b)(1)(A)-(B). (We use emphasis here to identify the key terms discussed in the cases.) The adjustment under Subsection (b)(1)(A) for "ongoing, continuous, or repetitive" further requires that the discharge, release or emission be "into the environment." Id. The sentence we call "Note 4, First Sentence," under 2Q1.3(b) (as well as Note 4 analogue under Section 2Q1.2(b)), states that "Subsection (b)(1) assumes a discharge or emission into the environment resulting in actual environmental contamination." See USSG § 2Q1.3, cmt. n.4; USSG § 2Q1.2, cmt. n.5.
Note 4, First Sentence, explains whether to impose the Subsection (b)(1) adjustment. The remaining text of Note 4 lists factors to consider for possible guided departure from a Subsection (b)(1) adjustment. See infra text quoted in Sec. II.B.6. One of those factors is "harm resulting from the emission, release or discharge." USSG § 2Q1.3, cmt. n.4.; USSG § 2Q1.2, cmt. n.5. In other words, Note 4 read literally does not require evidence of harm to the environment for the adjustment to apply. Harm becomes relevant as one of the factors to consider for possible upward or downward departure.
The Ninth Circuit Court of Appeals has interpreted [Note 4 analogue], First Sentence, using a dictionary definition of "contamination" meaning '"to soil, stain, or infect by contact or association' or 'to make ... impure by admixture.'" United States v. Ferrin, 994 F.2d 658, 664 (9th Cir. 1993) (quoting dictionary source). The Ferrin defendant pled guilty to illegal disposal of hazardous waste under a section of the Solid Waste Disposal Act that defined the offense as "discharge ... so that such [waste] may enter the environment." Id. at 662 (emphasis in original). The evidence at sentencing showed that the waste defendant had deposited in a dumpster was retrieved by officials before it leaked out, but defendant had also mixed the waste in open air "as clouds of gas [were] emitted from a fuming drum." Id. at 660. The circuit court upheld refusal to impose a Subsection (b)(1) adjustment for the material placed in the dumpster, "because, owing to the fortuitous intervention of the authorities, there was no actual contamination." Id. at 664. It reversed for findings, however, as to whether the gas released into the air was a
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hazardous substance "since, if it was, its escape into the atmosphere contaminated the environment," and Subsection (b)(1) would apply. Id.*fn33
The Ferrin court noted with some approval three earlier decisions applying Subsection (b)(1) where there was evidence of actual contamination of the environment, but not necessarily evidence of actual harm. Id. at 663, citing United States v. Bogas, 920 F.2d 363 (6th Cir. 1990) (offense was failure to report release of hazardous wastes into the environment, and there was visual contamination of the soil); United States v. Sellers, 926 F.2d 410 (5th Cir. 1991) (offense was improper disposal of hazardous waste, and one drum was actually leaking onto creek embankment); and Goldfaden, 959 F.2d 1324 (offense was discharge of industrial waste, and there was evidence of illegal dumping of wastewater into municipal sewer system). Ferrin commented that although offenses such as in Goldfaden "necessarily embrace a contaminating environmental discharge[, o]ther types of offenses covered by Section 2Q1.2, such as the illegal hazardous waste disposal engaged in by Ferrin, however, may or may not result in de facto environmental contamination." Id. at 663. The Ferrin court concluded that "an enhancement under subsection (b)(1) requires a showing that some amount of hazardous substance in fact contaminated the environment." Id. It added: "Proof of environmental contamination does not necessarily require a full-blown scientific study. We see no reason why in most cases reasonable inferences from available evidence concerning the offense at issue would not suffice to support a conclusion that the illegal acts resulted in contamination." Id. at 664. The Ninth Circuit reiterated its view in United States v. Cooper, 173 F.3d 1192 (9th Cir. 1999): "The [Subsection (b)(1)] enhancement requires 'actual environmental contamination,' not actual environmental harm." Id. at 1205 (quoting Ferrin, 994 F.2d at 664). It appears to us that what Ferrin did was refuse to conflate the terms "contamination" and "harm," each term being used separately in Note
4. Ferrin states the view that no finding of harm is required for Subsection (b)(1) to apply, so long as contamination of the environment is shown.
Most of the circuits that have considered this topic simply use the terms contamination and harm as if they were synonymous, for purposes of determining what proof is necessary for a Subsection (b)(1) adjustment to apply. See, e.g., Goldfaden, 959 F.2d at 1331 ("[W]e interpret [Note 4 analogue] to explain that subsection (b)(1) takes environmental contamination as a given, but allows for upward or downward departures depending on the potency, size, or duration of the contamination;" United States v. Liebman, 40 F.3d 544, 550-51 (2d Cir. 1994) ("[Note 4 analogue] states the obvious -- that when a hazardous or toxic substance is discharged into the environment, it will be assumed that contamination of that environment ordinarily ensues.... Alternatively, the district court ... may be regarded as implicitly having inferred that the ... asbestos discharges inevitably resulted in contamination to the environment."); United States v. Cunningham, 194 F.3d 1186, 1201-02 (11th Cir. 1999) ("We join the Second and Fifth Circuits in holding that [Note 4 analogue] does not impose any additional requirements on the application of the [Subsection (b)(A)] enhancement beyond those contained in the guideline itself. The government does not have to prove actual environmental contamination in order for the enhancement to apply."); United States v. Perez, 366 F.3d 1178, 1182 (11th Cir. 2004) ("We reach the same conclusion with respect to § 2Q1.3. The Commentary for § 2Q1.3 does not impose any additional requirements on the application of the § 2Q1.3(b)(1)(A) enhancement beyond those contained in the guideline itself.")
Each circuit court case decided under Sections 2Q1.2 and 2Q1.3, in which a Subsection (b)(1) adjustment was considered appropriate, did involve a discharge, release, or emission of the substance into the environment, thus "contaminating" the environment. In other words, once those facts were shown (at trial and/or in the sentencing process), the Subsection (b)(1) adjustment was seen to be applicable. This was the result regardless of whether the decision applied the "majority" view or the Ferrin test, or did not reach the "circuit split" issue, or simply noted the adjustment because it was not an issue on appeal.
We have described those rulings and circumstances in Ferrin, Bogas, Sellers, and Goldfaden, supra. The other pertinent decisions are: United States v. Ortiz, 427 F.3d 1278, 1280-81, 1285-86 (10th Cir. 2005) (polluted wastewater discharged into storm drains via toilet and pumping onto ground); United States v. Rubenstein, 403 F.3d 93, 97, 99-100 (2d Cir. 2005) (exposed asbestos hanging from pipes and in open boxes); Perez, 366 F.3d at 1180-83 (pollutants dumped by truck into wetlands); United States v. Kuhn, 345 F.3d 431, 433, 438 (6th Cir. 2003) (sewage sludge dumped into ditch); United States v. Technic Servs., 314 F.3d 1041, 1047-48 (9th Cir. 2002) (asbestos washed down the drains and escaping into air); United States v. Ho, 311
F.3d 589, 608-609 (5th Cir. 2002) (asbestos removal project in unsealed building); United States v. Overholt, 307 F.3d 1231, 1256-57 (10th Cir. 2002) (hazardous wastes dumped into Class II disposal wells); Chau, 293 F.3d at 99-100 (asbestos disturbed in building and exposed to the air); United States v. Hoffman, Nos. 99-4515, 99-4516, 99-4517, 2000 WL 309001 (4th Cir. Mar. 27, 2000) (contaminated wastewater discharged into sewer system); United States v. Van Loben Sels, 198 F.3d 1161, 1165-66 (9th Cir. 1999) (same); Cunningham,194 F.3d at 1201-02 (hazardous substance released in landfill and on the ground); United States v. Tomlinson, No. 99-30020, 1999 WL 511496 (9th Cir. July 16, 1999) (asbestos released into the air and down sinks and toilets during renovation project); Cooper, 173 F.3d at 1205 (sewage sludge dumped on farmland); United States v. Shurelds, No. 97-6265, 1999 WL 137636 (6th Cir. Mar. 2, 1999) (asbestos released outside containment area); United States v. W. Indies Transp., 127 F.3d 299, 303-04, 315 (3d Cir. 1997) (pollutants dumped into bay); United States v. Jarrell, No. 95-5718, 1996 WL 690062 (4th Cir. Dec. 3, 1996) (pollutants discharged into public waters); United States v. Hart, No. 94-1005, 1995 WL 445685 (10th Cir. July 28, 1995) (dumping hazardous waste into treatment plant headworks); Pizzuto, 1995 WL 610346 (PCBs released into environment by leaking onto ground, remaining as film on scrap sold, and escaping into air when scrap burned); United States v. Catucci, 55 F.3d 15, 16-18 (1st Cir. 1995) (PCB-laden transformers leaked onto streets and highway, and contents dumped into gravel pit); Liebman, 40 F.3d at 549-51 (asbestos emitted into air and dumped into gravel pit in open bags); United States v. Suarez, No. 92-10674, 1994 WL 6663 (9th Cir. Jan. 10, 1994) (fill material placed into wetlands); United States v. Strandquist, 993 F.2d 395, 399-400 (4th Cir. 1993) (raw sewage discharged into storm grate); Ellen, 961 F.2d at 463-64, 468 (filling in wetlands); United States v. Irby, No. 90-5113, 1991 WL 179110 (4th Cir. Sept. 13, 1991) (sewage sludge discharged into river).
None of the cases have required the government to prove actual environmental harm to support a Subsection (b)(1) adjustment, where the facts do show an actual release into the environment. In addition, none to date have presented the rare hypothetical situation envisioned in Ferrin, where an environmental offense prosecuted and sentenced under Section 2Q1.2 [or 2Q1.3] did not result in the escape of at least some of the substance onto land or into air or water. As our Court of Appeals observed in Chau, without taking a position whether to agree with the Ferrin interpretation: "even under Ferrin, the record here supports a [Subsection (b)(1)] enhancement.... Here, there is substantial evidence that Chau disturbed the asbestos in the building. There is also evidence that some asbestos became exposed to the air.... Thus, the district court correctly applied this enhancement to Chau's sentence." Chau, 293 F.3d at 100.
All of the pertinent decisions do agree that when the standard of Subsection (b)(1) is met, the sentencing court is required to apply a Subsection (b)(1) adjustment. Failure to do so is error. See, e.g., Ho, 311 F.3d at 589-611 (reversing district court refusal to impose Subsection (b)(1) adjustment where preponderance of evidence showed that asbestos escaped into environment); Van Loben Sels, 198 F.3d at 1164-66 ("The record here supports the district court's finding that hazardous material had been continuously discharged into the environment. This is the appropriate predicate for upward adjustment under subsection (b)(1), ... and thus, it is reasonable to infer ... that [defendant's] illegal acts resulted in contamination, necessitating application of section 2Q1.2(b)(1)(A);" reversing district court refusal to impose Subsection (b)(1) adjustment); Suarez, 1994 WL 6663, at *1 ("Either subsection [(b)(1)] (A) or subsection (B) always applies to violations that involve a discharge, release, or emission of a pollutant. As it is undisputed that [defendant's] offense involved a discharge of a pollutant into the environment, the remaining question is whether that discharge was ongoing...;" reversing district court refusal to impose Subsection (b)(1) adjustment); Ferrin, 994 F.2d at 664 ("On remand, the court must consider whether the gas was a hazardous substance since, if it was, its escape into the atmosphere contaminated the environment, and an increase in [defendant's] offense level is warranted under subsection (b)(1)"); Bogas, 920 F.2d at 368 ("[I]t would be clearly erroneous, on this record, to find no actual environmental contamination. There may have been no actual harm, but there was at least some visual contamination of the soil at the disposal site, and there must have been some water contamination even if the fortuitous presence of the nearby foundry sand filter prevented any possible damage to anyone's water supply;" reversing with instructions for district court to apply Subsection (b)(1) adjustment before considering any requested departures).
Two or more discharges require application of Subsection (b)(1)(A), the 6-level adjustment for an "offense result[ing] in an ongoing, continuous, or repetitive discharge, release, or emission of a pollutant into the environment." USSG § 2Q1.3(b)(1)(A). See, e.g., Ortiz, 427 F.3d at 1285-86 ("[Defendant] stands convicted of discharging pollutants in contravention of the CWA on two dates: [stated dates]. These two convictions suffice for application of the § 2Q1.3(b)(1)(A) enhancement.... The finding that [defendant's] offense did not result in an ongoing, continuous, or repetitive discharge of a pollutant is clearly erroneous.");*fn34 Rubenstein, 403 F.3d at 99-100 ("We agree ... that the illegal asbestos removal ... was repetitive. It occurred during two separate one-week periods [in specified months] -- on multiple floors of the building. There was sufficient evidence of this conduct to support the six-level [Subsection (b)(1)(A)] enhancement."); Catucci, 55 F.3d at 18 ("[Defendant] argues that it was mere happenstance that the two PCB-laden transformers were dumped on different days.... We discern no error....
U.S.S.G. § 2Q1.2(b)(1)(A) is triggered if the offense resulted in an ongoing, continuous or repetitive discharge.... [T]he two PCB-laden transformers were dumped on separate occasions. Nothing more need be shown to activate the repetitive discharge adjustment."); Strandquist, 993 F.2d at 400-01 (district court properly applied Section 2Q1.2(b)(1)(A) adjustment because discharges occurred on two different dates, even where underlying counts of conviction were subject to grouping).
The issue of relevant conduct must be addressed in making guidelines calculations for each defendant at sentencing. The guidelines instruct that after the court selects the applicable offense guideline section [here, we have selected Section 2Q1.3], the court must "determine the applicable guideline range in accordance with § 1B1.3 (Relevant Conduct)." USSG § 1B1.2. Section 1B1.3 directs in pertinent part that the specific offense characteristics and cross-references in Chapter Two, as well as adjustments in Chapter Three, shall be determined on the basis of all relevant conduct, as defined in that section. USSG § 1B1.3(a).*fn35
Section 1B1.3 provides in pertinent part that relevant conduct includes:
(1) (A) all acts and omissions committed, aided, abetted, counseled, commanded, induced, procured, or willfully caused by the defendant; and
(B) in the case of a jointly undertaken criminal activity..., all reasonably foreseeable acts and omissions of others in furtherance of the jointly undertaken criminal activity,
that occurred during the commission of the offense of conviction, ... or in the course of attempting to avoid detection or responsibility for that offense; [and]
(2) solely with respect to offenses of a character for which § 3D1.2(d) would require grouping of multiple counts, all acts and omissions ... that were part of the same course of conduct or common scheme or plan as the offense of conviction....
The commentary states, "In order to determine the defendant's accountability for the conduct of others under subsection (a)(1)(B), the court must first determine the scope of the criminal activity the particular defendant agreed to jointly undertake (i.e., the scope of the specific conduct and objectives embraced by the defendant's agreement). The conduct of others that was both in furtherance of, and reasonably foreseeable in connection with, the criminal activity jointly undertaken by the defendant is relevant conduct under this provision." Id., cmt. n.2. In making the further determination whether acts and omissions were part of a common scheme or plan under subsection (a)(2), "they must be substantially connected to each other by at least one common factor, such as common victims, common accomplices, common purpose, or similar modus operandi." Id., cmt. n.9(A). Also, in evaluating whether the same course of conduct is present under subsection (a)(2), the court should consider "the degree of similarity of the offenses, the regularity (repetitions) of the offenses, and the time interval between the offenses." Id., cmt. n.9(B).
The scope of evidence used to determine relevant conduct for guideline calculation purposes is expressly not confined to the offense conduct. See Witte v. United States, 515 U.S. 389, 399-401 (1995) (guidelines sentence validly based on conduct not charged in indictment); United States v. Watts, 519 U.S. 148, 156-7 (1997) ("jury's verdict of acquittal does not prevent the sentencing court from considering conduct underlying the acquitted charge, so long as that conduct has been proved by a preponderance of the evidence"); see, e.g., United States v. Brennan, 326 F.3d 176, 195, n.5 (3d Cir. 2003) ("[I]f both the concealment of the bearer bonds [charged conduct] and concealment of the profits [uncharged conduct] are part of the same course of conduct, the profits may be included in the loss calculation."); United States v. DeLaurentis, 47 Fed.Appx. 170, 173 (3d Cir. 2002) ("[Defendant] contends it was error to consider conduct underlying acquitted Counts 1 through 4 in enhancing his sentence under [Section] 2C1.1(b)(1) (requiring an increase of two levels if the offense involved more than one extortion). This assertion is contrary to U.S.S.G. § 1B1.3(a)(2) and ... Watts"). Uncharged conduct and acquitted conduct, if meeting the criteria of Section 1B1.3, thus will be included in relevant conduct subject to the limitations announced in Booker. USSG § 1B1.3, cmt. n.1; id., cmt. background ("Conduct that is not formally charged or is not an element of the offense of conviction may enter into the determination of the applicable guideline sentencing range."). See Booker, 543 U.S. 220, 240-41 (2005) ("None of our prior cases is inconsistent with today's decision;" discussing, inter alia, Witte and Watts.).
Sentencing decisions in environmental cases provide examples of the relevant conduct rules applied in this context. See, e.g., United States v. LeBlanc, 119 Fed.Appx. 654 (5th Cir. 2005) (conviction for discharge of pollutants into wetlands without a permit; relevant conduct included unauthorized operation of landfill beginning in 1995); United States v. Morris, 85 Fed.Appx. 117 (10th Cir. 2003) (conviction for falsifying hazardous waste manifests; relevant conduct included illegal storage of hazardous waste without a permit); United States v. Moran, 69 Fed.Appx. 398 (9th Cir. 2003) (conviction for negligent discharge of pollutant into publicly owned water treatment works; circuit opinion does not specify nature of relevant conduct but states, "the district court did not err in relying on acquitted conduct that was proved by a preponderance of the evidence in sentencing"); United States v. Freeman, 43 Fed.Appx. 233 (10th Cir. 2002) (conviction for aiding and abetting in injection of hazardous waste without permit, and in disposal of hazardous waste without a permit; relevant conduct included foreseeable conduct of co-conspirators in also discharging on roads and in overflow pit); Jarrell, 1996 WL 690062 (guilty plea to one count of illegal discharge of pollutants into public waters; relevant conduct included similar discharges underlying dismissed counts); Pizzuto, 1995 WL 610346 (guilty plea to three counts involving illegal storage of PCBs; relevant conduct included repetitive discharge of PCBs into the environment underlying dismissed count); Hart, 1995 WL 445685 (guilty plea to three counts of falsifying records in violation of CWA; relevant conduct included dumping of hazardous waste in violation of RCRA underlying dismissed counts).
We now turn to application of these principles to the guideline calculations of the named defendants for their CWA-related conduct in this case. We think it is clear that the trial evidence of the discharges from the cement pit and the #4 pit in this case will satisfy any of the views expressed in the case law as to what constitutes a discharge meeting the criteria stated in Section 2Q.1.3, Subsection (b)(1), as explained in Note 4, First Sentence. This is because the discharges of polluted industrial wastewater from the cement pit and the #4 pit were discharges into the municipal storm sewer system. (See, e.g., dkt. 721 at 214 (cement pit) and 271 (#4 pit).) That sewer system is part of the "environment" as described in the case law. See supra n.33. On those facts, Subsection (b)(1) applies because "contamination" of the environment resulted from those discharges. See, e.g., Chau, 293 F.3d at 100. The parties do not appear to dispute that basic point.
The succeeding sentences of Note 4 provide for a possible guided departure of up to two levels in either direction, based on stated factors. The individual defendants who have CWA-related convictions indicate that they each seek a downward departure under Note 4, and under Note 7 that contains similar factors. See infra Sec. II.B.6. First we must see whether and to what extent Subsection (b)(1) applies to these defendants for their CWA-related conduct. See, e.g., Morris, 85 Fed.Appx. at 122 ("The distinction between an adjustment and a departure is critical. . . . The district court may consider a departure only after completing the adjustments required in the offense guideline. Application [Note 7 analogue] necessarily presumes all adjustments have been made when it invites departure consideration.").
We find that the repetitive discharges shown in the substantive CWA convictions against MAURY and DAVIDSON are thereby established for purposes of applying the 6-level enhancement to each of them under Subsection (b)(1)(A). Specifically, the convictions of DAVIDSON under Counts 12-20 and 22-27 (lesser-included negligent offense), and MAURY under Count 27 (lesser-included negligent offense) and on Counts 28-32 (felony offense), did involve discharges of petroleum-contaminated wastewater during successive months -- and, as to Count 27, on a specific date during a successive month. (See dkt. 721 at 189, 215, 231 (quoting text of indictment, Cts. 12-26, 27, 28-32); id. at 208, n.117 (distinguishing Cts. 24 and 27 as to date of offense in Dec., 1999).) The fact that some of those convictions were for lesser-included negligent offenses does not alter this conclusion.
Our analysis of this issue does not end there, however. We must also determine which sources of contaminated wastewater discharge can be attributable to which named defendants, in order to complete our rulings on the Subsection (b)(1) adjustments and to discuss any potential guided departures infra.
It will be recalled that the substantive convictions on Counts 12-20 and 22-27 established wastewater discharges from the cement pit, located in the pipe finishing area. On the other hand, the convictions on Counts 28-32 established wastewater discharges from the #4 pit, located in the casting area. (Dkt. 721 at 192-193, 232.) Evidence of numerous similar discharges from both pits is contained in the evidence pertaining to Objective A of the conspiracy (to knowingly cause discharge of a pollutant into the waters, in violation of the CWA).
DAVIDSON received multiple convictions for repetitive wastewater discharges from the cement pit (Cts. 12-20, 22-27), for which he receives the 6-level enhancement under Subsection
(b)(1)(A). We will refer to the discharges established in those counts as "the cement pit discharges." We do not recall any evidence linking DAVIDSON to the ongoing discharges from the #4 pit, for sentencing accountability purposes. See USSG § 1B1.3(a)(1). We will not include the discharges from the #4 pit as relevant conduct of DAVIDSON under Section 2Q1.3.
There is, however, ample evidence linking MAURY to the ongoing cement pit discharges. We find as to defendant MAURY, under Sections 1B1.3(a)(1)(A), 1B1.3(a)(1)(B), and 1B1.3(a)(2), that the cement pit discharges were (1) aided, abetted, commanded, induced, or willfully caused by him; (2) reasonably foreseeable conduct of others in furtherance of the scope of criminal activity that this particular defendant agreed to jointly undertake; (3) of a nature that would require grouping of multiple counts, see infra Sec. V; and (4) part of both the same course of conduct and the common scheme or plan underlying his convictions on Count 27 and Count 1, Objective A. For these findings, we rely primarily on the summary of evidence relevant to cement pit discharges contained in our post-trial memorandum opinion. (See dkt. 721 at 136-146, 189-231, 257-260, 265.) This finding is further supported by the convictions of PRISQUE and DAVIDSON, along with MAURY, on Count 1, Objective A. Therefore, although MAURY was charged and convicted under only one substantive count as to the cement pit (Ct. 27), we find that a preponderance of the trial evidence requires us to ascribe to MAURY the ongoing discharges from the cement pit, as well as those from the #4 pit, as relevant conduct supporting application of Subsection (b)(1)(A) to him.
PRISQUE was not substantively charged with repetitive CWA discharges, such as under Counts 12-26 and 28-33. The only CWA-related substantive count charged against PRISQUE was Count 27, on which he was convicted of the lesser-included negligent offense. (Dkt. 721 at 3, n.4.) Count 27 alleged a discharge of petroleum-contaminated wastewater from the cement pit on 12-4/5-99. (Dkt. 711 at 46.) PRISQUE clearly qualifies for the 4-level adjustment under Subsection (b)(1)(B) for his Count 27 conviction. However, the government argues that all CWA-convicted defendants, including PRISQUE, qualify for the 6-level adjustment under Subsection (b)(1)(A). (Gov. I at 15; tr. 738 at 133-134.)
We do find that the relevant conduct of defendant PRISQUE includes accountability for the ongoing, successive, and repetitive pattern of discharges of petroleum-contaminated wastewater from the cement pit. We do not make a similar finding linking PRISQUE to the ongoing discharges from the #4 pit, for sentencing accountability purposes.*fn36 Specifically, we find as to PRISQUE, under Sections 1B1.3(a)(1)(A), 1B1.3(a)(1)(B), and 1B1.3(a)(2), that the cement pit discharges were (1) aided, abetted, commanded, induced, or willfully caused by him; (2) reasonably foreseeable conduct of others in furtherance of the scope of criminal activity that this particular defendant agreed to jointly undertake; (3) of a nature that would require grouping of multiple counts, see infra Sec. V; and (4) part of both the same course of conduct and the common scheme or plan underlying his convictions on Count 27 and Count 1, Objective A. For these findings we rely primarily on the summary of evidence relevant to cement pit discharges contained in our post-trial memorandum opinion. (See dkt. 721 at 136-146, 189-231, 257-260, 265.) This finding is further supported by the convictions of MAURY and DAVIDSON, along with PRISQUE, on Count 1, Objective A. Therefore, although PRISQUE was charged and convicted under only one substantive count as to the cement pit (Ct. 27), we find that a preponderance of the trial evidence requires us to ascribe to PRISQUE the ongoing discharges from the cement pit (but not from the #4 pit), as relevant conduct supporting application of the 6-level Subsection (b)(1)(A) adjustment to him.
The government suggests that in addition to the evidence of petroleum-contaminated wastewater discharges, the evidence pertaining to concealment of discharges of asphalt-based waste paint into storm sewers on several occasions should support a 6-level Subsection (b)(1)(A) enhancement for the CWA offenses. (Gov. I at 15.) We do not find that evidence, even by the preponderance standard, establishes a basis for the Subsection (b)(1) enhancements, because there was no evidence that as to any of these defendants the discharges themselves were other than accidental. (See, e.g., tr. 416 at 75-81, & evidence summarized in Atlantic States I at 19- 20.) A failure to report such spills can be posited as a "recordkeeping" offense.*fn37 That evidence therefore is part of the body of evidence supporting the conspiracy convictions of those convicted on Count 1, Objectives A (violate CWA), C (defraud EPA) and D (obstruct EPA). (See dkt. 711 at 16-17, Overt Acts 7-9.) However, we would not see that as conduct supporting a Subsection
(b)(1) enhancement for the discharge itself.
The commentary provides for a potential departure under Subsection (b)(1). We address that topic, as to the CWA offenses of conviction, in Section II.B.6 infra. 5. USSG § 2Q1.3(b)(4) - Discharge without or in violation of permit Section 2Q1.3 provides a 4-level enhancement if the environmental offense "involved a discharge without a permit or in violation of a permit." USSG § 2Q1.3(b)(4) ("Subsection (b)(4)").
The Court does find, for purposes of sentencing, that the discharges of petroleum- contaminated wastewater from the cement pit and the #4 pit that were the subject of the substantive CWA counts of conviction, and the additional similar discharges indicated in the evidence of the conspiracy, were in violation of the Atlantic States water permits. (See summary of evidence, dkt. 721 at 189-243.) See, e.g., Ortiz, 427 F.3d at 1284-85 (factual impossibility of obtaining a permit is not a defense to a Subsection (b)(4) enhancement); Perez, 366 F.3d at 1186, n.10 (same); United States v. Fitzpatrick, No. 96-4713, 1997 WL 639334 (4th Cir. Oct. 17, 1997) (this adjustment is not limited to those who operate a plant subject to permit; it applies to anyone convicted of a violation of the statute); United States v. Spanish Cove Sanitation, Nos. 94-6508 & 94-6509, 1996 WL 366313 (6th Cir. June 28, 1996) (this adjustment applied where permit allowed discharge from one point and defendant discharged from four points of discharge); Ferrin, 994 F.2d at 664-65 (reversing district court failure to impose 4-level Subsection (b)(4) adjustment where employee convicted under RCRA of illegal disposal of hazardous waste, and employer lacked permit for disposal; appeals court noted possibility of departure on remand but only on bases authorized by [Note 7 analogue]). Therefore, we find that the 4-level enhancement under Subsection (b)(4) applies to defendants PRISQUE (Count 27), MAURY (Counts 27-32), and DAVIDSON (Counts 12-20, 22-27).
The commentary provides for a potential departure under Subsection (b)(4). We address that topic, as to the CWA offenses of conviction, in the next section infra.
6. USSG § 2Q1.3, Notes 4 and 7 - Departure of up to two levels either direction
Note 4 of the commentary to Section 2Q1.3 ("Note 4") provides for a potential departure of up to two levels in either direction under Subsection (b)(1), stating as follows:
Subsection (b)(1) assumes a discharge or emission into the environment resulting in actual environmental contamination. A wide range of conduct, involving the handling of different quantities of materials with widely differing propensities, potentially is covered. Depending on the harm resulting from the emission, release or discharge, the quantity and nature of the substance or pollutant, the duration of the offense and the risk associated with the violation, a departure of up to two levels in either direction from that prescribed in these specific offense characteristics may be appropriate.
USSG § 2Q1.3, cmt. n.4 (emphasis added).
Note 7 of the commentary to Section 2Q1.3 ("Note 7") provides for a potential departure of up to two levels in either direction under Subsection (b)(4), stating as follows:
Subsection (b)(4) applies where the offense involved violation of a permit, or where there was a failure to obtain a permit when one was required. Depending upon the nature and quantity of the substance involved and the risk associated with the offense, a departure of up to two levels in either direction may be warranted. USSG § 2Q1.3, cmt. n.7 (emphasis added).
These provisions reflect the general guidelines rule that in determining the guidelines calculation for specific offense characteristics under Chapter Two of the guidelines, as well as Chapter Three adjustments, the score should be determined based on "all harm that resulted from the acts and omissions [constituting relevant conduct], and all harm that was the object of such acts and omissions". USSG § 1B1.3(a)(3).
The government and defendants take opposing positions as to both Note 4 and Note 7 departures here. Defendants seek 2-level downward departures in relation to their CWA-related conduct under both Note 4 and Note 7. (Atlantic States I at 18-23, 55-56; Prisque I at 19-30, 93-94, 105, 118-121; Maury I at 44-48; Davidson I at 48-49, 54-57; Atlantic States II at 48-51; Prisque II at 26-27, 36-46; Maury II at 7-11; Davidson II at 21-22, 25-28; tr. 738 at 16-26, 81-83, 104-106, 162.) The government opposes any downward departure under those provisions, and seeks 2-level upward departures under both. (Gov. I at 35-37, tr. 738 at 134-139.)
It is evident from the language of these two application notes that a Note 4 departure can only apply to a Subsection (b)(1) enhancement, and a Note 7 departure can only apply to a Subsection (b)(4) enhancement.*fn38 The contentions of the parties under Note 4 and Note 7 tend to merge, however, because the two-factor basis for the Note 7 departure is encompassed within the four-factor basis for the Note 4 departure. See infra n.40. We will also address Note 4 and Note 7 under the CWA together here, recognizing that they are distinct bases for departure, applicable to different specific offense characteristics.
Defendants point out that before trial, the Court granted an in limine motion by the government seeking to exclude any evidence or argument from defendants to the effect that any discharges and emissions shown by the evidence were not harmful in the environment. (Dkt. 168 at 1-4, 12-15, 18; tr. 212 at 64-84.) The sound reason the Court excluded that topic -- at trial -- was that environmental harm was not an element of any of the CWA or CAA offenses charged, nor was lack of harm a defense, so it would be irrelevant and could invite jury nullification.
Defense counsel agreed that there should be no such argument by either side at trial. (See, e.g., dkt. 181 at 2-3.) Indeed, when the Court granted that motion by the government, defense counsel requested and obtained a reciprocal ruling that the government could not suggest at trial that the discharges and emissions were harmful. (Tr. 212 at 74-75; tr. 231 at 23.) The Court's reason for that ruling was obvious, albeit not articulated at the time because the government did not object. Not only that it was it fair to have the prohibition run both ways, but adducing evidence of actual environmental harm at trial would be irrelevant and risked unfair prejudice to defendants.
There was another motion in limine, made by defendants, seeking to exclude any evidence or argument from the government pertaining to potentially hazardous or carcinogenic air pollutants such as arsenic, cadmium, chromium, lead, nickel, and mercury.*fn39 (Dkt. 172; tr. 212 at 97-142.) We directed the government not to mention such substances in its opening arguments (tr. 231 at 28-30), and as the trial progressed we continued that exclusion.
Defense counsel vigorously policed the prohibition against suggestion of environmental harm throughout the trial, and the Court concurred as reflected in its rulings and instructions to the jury. (See, e.g., tr. 464 at 111 (trial); tr. 466 at 34 (trial); tr. 467 at 24-59 (sidebar); tr. 466 at 35-36 (limiting instruction).) In fact, the final jury instructions expressly stated that "the government is not required to prove that the discharge of a pollutant caused any damage or harm in order to establish the criminal offense charged under the [CWA];" and the parallel CAA jury instructions omitted any mention of harm. (Dkt. 717 at 53, 58-60.)
Here at the sentencing stage, defendants argue that they are entitled to downward departures under Notes 4 and 7, because (1) there is no proof in the trial record of environmental harm; and (2) they were prevented from proving lack of environmental harm at trial by the in limine ruling on the government's motion to exclude such evidence. They contend that if permitted, they would have done that through their environmental chemistry expert, Dr. James S. Smith, who did testify at trial on other CWA issues. (See, e.g., Prisque I at 19-30, 93-94.) Defendants submit two post-trial declarations by Dr. Smith (collectively, "the Smith affidavit"), setting forth his opinion that there was "only a de minimis environmental impact, if any, to the ecosystem" by the wastewater discharges shown in the evidence at trial. (See Atlantic States I, Attachment: Smith declaration 10-11-07; Atlantic States II, Ex. P: Smith declaration 12-18-07; copies also attached to sentencing briefs of Prisque, Maury, Davidson.)
The government argues that there is enough evidence in the trial record relating to the CWA offenses to both negate downward departures and support upward departures under Notes 4 and 7. It points out the fallacy in defendants' argument that since proof of environmental harm was not presented at trial, the actual harm must therefore have been limited and deserving of downward departure. The government describes the Smith affidavit as unreliable and submits published Material Safety Data Sheets on the petroleum products discussed in the Smith affidavit. The government also contends that if the Court were inclined to rely on any contents of the Smith affidavit, the Court should have him testify in court subject to cross-examination. The government adds that it would also consider presenting more evidence on these departure issues, which would further prolong the sentencing proceedings. It contends, however, that the trial record is sufficient for the Court to apply the upward departures to the CWA offenses under Notes 4 and 7. (Gov. I at 35-37, 53-54; Gov. I, Attachments A and B; tr. 738 at 134-139.)
This debate presents an evidentiary challenge at sentencing. As previously noted, Note 4 lists four factors, and Note 7 lists two of those factors, as described in the margin.*fn40 We will speak of the Note 4 factors in this discussion, since they cover the Note 7 factors and more. The question is whether the Court must make findings of fact at sentencing addressing all of the factors in Notes 4 and 7, when the trial evidence was deliberately and properly limited to only some of those factors. If so, the further question is how much post-trial evidence should the Court consider, and whether to conduct an evidentiary hearing for that purpose.
There is considerable trial evidence addressing Note 4 factors (2) and (3), namely the quantity and nature of the polluted wastewater discharges, and the duration of the offenses. (See, e.g., evidence summarized in dkt. 721 at 189-243.) There is no trial evidence directly addressing Note 4 factors (1) and (4), the harm resulting from the discharges and the risk associated with the violations. The latter type of evidence was excluded from the trial, at the insistence of both sides, because it was irrelevant to the charges and defenses to be decided by the jury. See supra pp. 55-56. It appears that in these circumstances, the Court should consider evidence outside the trial record if it is to make specific factual findings for either mitigation or aggravation under factors (1) and (4) at sentencing.*fn41
The trial evidence and the convictions indisputably established that there were ongoing and repetitive discharges from the cement pit of polluted industrial wastewater that included petroleum and other materials, during at least the period covered by Counts 12-20 and 22-27. (See dkt. 721 at 189-231.) We have found, pursuant to Subsection (b)(1)(A), that defendants PRISQUE, MAURY, and DAVIDSON are each accountable for those discharges for sentencing purposes. A similar ongoing pattern of discharging polluted industrial wastewater from the #4 pit has also been found attributable to defendant MAURY.*fn42 See supra Sec. II.B.4.
We have considered the post-trial evidence submitted by the parties going to the issue of harm or risk from the cement pit and #4 pit discharges. In our view at this stage of the sentencing process, which is Step 1 rather than Step 2, neither side has met its burden of persuasion in favor of an upward or downward departure from the CWA-related guideline calculations under Note 4 or Note 7. See United States v. McDowell, 888 F.2d 285, 291 (3d Cir. 1989) (stating Government bears burden of persuasion for upward adjustment of sentence, and defendant bears burden of justifying downward departure).
The trial evidence established that during the period covered by Counts 12-20 and 22-27, the contents of the cement pit included industrial wastewater containing petroleum lubricating oil and byproducts of the cement lining operation, including particulate matter. The evidence and the verdicts established that those pollutants were regularly discharged into the Delaware River through the municipal storm system. Those pollutants were among the constituents identified in the samples that were taken from the river on the occasion of the 8 1/2 mile spill that appeared on the river on December 5, 1999, and was traced back to the cement pit by laboratory studies. (See dkt. 721 at 189-230.)
The evidence also established that the cement pit discharges did violate the limited water permit authorization allowing only stormwater to flow down the identified storm drains, and only during rain events. (Id.) We have rejected, as did the jury, defendants' contention that the lack of a visible petroleum sheen on the river during daylight on most other days meant there were little or no such constituents going into the river during those ongoing discharges. (See id. at 230, n.141.)
Based upon the trial evidence and the limited additional evidence presented by the parties thus far in the sentencing process, this Court tentatively concludes that both the cement pit and the #4 pit discharges fall generally within the heartland of cases sentenced with Subsection (b)(1) and (b)(4) specific offense characteristics, and do not likely warrant any departures under Notes 4 and 7 as to PRISQUE, MAURY, or DAVIDSON. In other words, those ongoing polluted wastewater discharges were far from minor in nature, quantity, and degree of resulting contamination of the environment, but neither are they considered to have created major environmental conditions. (Tr. 738 at 135-137.) If anything, such discharges might warrant upward departures under Notes 4 and 7, a point that we understand the government has not fully developed at Step 1 because issues of departures will be fully briefed and resolved only at Step 2 of the sentencing process.
Our review of the case law to date has revealed a few reported cases (published and unpublished) on the subject of guided departures under Notes 4 and 7 of Section 2Q1.3, or the analogous application notes of Section 2Q1.2. Here we provide a summary of those decisions.
A discretionary refusal to depart downward is typically considered to not be reviewable on appeal. See, e.g., United States v. Watson, 482 F.3d 269, 271 n.2 (3d Cir. 2007). This general rule has been applied in environmental sentencing cases. See, e.g., LeBlanc, 119 Fed.Appx. at 655-56 (unpermitted operation of landfill in wetlands for several years; no departure under Note 4 and/or 7); United States v. Jones, No. 99-2433, 2000 WL 1648056 (6th Cir. Oct. 26, 2000) (unpermitted transportation and abandonment of hazardous ink wastes on one occasion; no departure under Note 7 analogue); United States v. Hill, No. 96-30340, 1998 WL 133570 (9th Cir. Mar. 18, 1998) (conviction included two counts of unpermitted transportation of hazardous waste; no departure under Note 7 analogue).
Some appellate decisions, however, have expressly upheld refusal to depart downward based on lack of sufficient mitigating circumstances. See, e.g., Perez, 366 F.3d at 1185-86 (conviction included two counts of unpermitted discharge of pollutants into wetlands; no departure under Note 7; no valid mitigating circumstances raised at sentencing hearing); Freeman, 43 Fed.Appx. at 237-38 (convictions for aiding and abetting injection of hazardous waste and unpermitted disposal of hazardous waste; no downward departure under Notes 4 and 7 analogues; district court considered quantity, nature, and duration of offense and commented that had the concentrations been higher, upward departure would have been appropriate); United States v. Kyle, 24 Fed.Appx. 447, 450-51 (6th Cir. 2001) (convictions and relevant conduct included unpermitted storage and disposal of hazardous waste for approximately two years; defendant presented no evidence at sentencing hearing to support minimal risk argument; appeals court found no merit to contention that district court erred in not making specific factual findings when it denied departure under Note 7 analogue); United States v. Goldsmith, 978 F.2d 643, 646 (11th Cir. 1992) (transportation of approximately 38 drums of hazardous waste to unpermitted facilities during one-month period; no departure under Note 7 analogue; not clearly erroneous despite defense contentions of little environmental damage or risk).
Decisions to grant upward or downward departures are, of course, appealable, but we have found no appellate decisions in which downward departures under Notes 4 and 7 have been challenged by the government on appeal. In one case where the sentencing court granted Note 4 and Note 7 downward departures that the government did not challenge on appeal, the appeals court merely noted the departures without expressing disapproval, based on the facts found by the district court. Those facts were that the discharge was dumping of almost-completely treated sewage sludge into a ditch from which runoff could flow to a creek and thence to a river, but testing of the affected areas did not reveal any presence of PCBs, and the district court could not determine whether any of the ditch contents reached the river, noting that "the environmental harm did not seem to be very great." Kuhn, 345 F.3d at 438; see Strandquist, 993 F.2d at 399-401 & n.5 (convictions for illegally discharging sewage into navigable waters on two separate dates; district court granted one-level downward departure under Note 4; not appealed but noted by appeals court without comment); Ellen, 961 F.2d at 463-65, 467-69 & n.3 (convictions on multiple counts of filling in wetlands without a permit; district court granted two-level downward departures under Notes 4 and 7; not appealed but noted by appeals court without comment).
Upward departures granted under Notes 4 and 7 were upheld by the Fourth Circuit on appeal in Jarrell, 1996 WL 690062. There, based on a guilty plea to one count of illegal discharge in excess of water permit limitations and relevant conduct from dismissed counts, the district court relied upon the PSR and stated:
I could go on and on, but just to indicate that this, in my opinion, is an extremely serious offense. It was a health hazard. It was extremely nasty. It was so derelict on your part, so deliberately derelict on your part.
Id. at *2. The appeals court in Jarrell noted that on at least three occasions, the EPA conducted "grab sampling" of waste water areas around the treatment plant and neighborhood subdivision.
The samples contained 230,000 parts, 750,000 parts, and 830,000 parts of fecal coliform per 100 milliliters of waste water. Defendant's operating permit allowed only 400 parts per 100 milliliters of waste water. The court concluded, "[g]iven the egregiousness of defendant's violations, it can hardly be said that his offenses were of such a minor nature as to prompt this court to hold that the district court abused its discretion" in departing upward under Notes 4 and 7. Id.
A downward departure under Note 4 analogue was granted in an unappealed district court case, United States v. King, 915 F.Supp. 244 (D. Kan. 1996). The case involved a guilty plea (during trial) to knowingly introducing pollutants into the public water treatment plant, and the court took additional testimony in an evidentiary hearing at sentencing. It made findings that (1) the harm resulting from the discharge was relatively minor because the discharge was discovered promptly and officials were able to respond to prevent serious or lasting damage or health effects; (2) the amount of hazardous pollutant was not vast, even by the government's estimates; and (3) the duration of the offense was very short, in contrast with offenses involving a continuing course of conduct over an extended period of time. Id. at 247-48.
Circumstances somewhat factually analogous to the present case were presented in United States v. Hagerman, 525 F.Supp.2d 1058 (S.D. Ind. 2007), which was recently affirmed. See Nos. 07-3874 & 07-3875, 2008 WL 5120116 (7th Cir. Dec. 5, 2008). It was a post-Booker sentencing on a jury conviction of the owner/operator of a plant that held a water permit allowing it to discharge wastewater into the Wabash River, subject to limits on concentrations of listed pollutants. The convictions were for record-keeping offenses, but the relevant conduct was found to include unpermitted discharges of many millions of gallons of polluted wastewater (containing hazardous substances) over at least 10 months. After the court applied the adjustments under Sections 2Q1.2(b)(1)(A) and (b)(4), defendant requested a downward variance (rather than departures under Note 4 and Note 7 analogues). The court denied a variance on that basis, stating:
The defense pointed out that there is no proof of specific environmental harm resulting from WET's wastewater discharges. If there had been such proof, the case might well have warranted a heavier sentence. The argument does not persuade the court to be more lenient because the defendant's own conduct made it very difficult for the government to measure and prove any such harm. By falsifying the MMRs and DMRs, [defendant] concealed from regulatory authorities for many months the quantities of pollutants in the millions of gallons of wastewater that he was discharging into the Wabash River. By the time environmental authorities learned of his violations, those pollutants had washed down-river and could not be traced back to WET. When the authorities finally learned of his violations, they shut down the business promptly to prevent further harm, but the absence of proof of more specific harm is not a significant mitigating factor here.
We can say at this juncture, and based upon our review of this case law, that if this Court finds itself compelled to hold an evidentiary hearing on the Note 4 and 7 issues under the CWA convictions, the relevant evidence would not necessarily be confined to the petroleum hydrocarbons aspect of the wastewater involved. The trial evidence established that large quantities of cement pit wastewater were regularly discharged down the storm drains. This industrial wastewater was polluted in several ways. For example, DEP water inspector Hirsch testified to his observations of the cement pit in full operation on the day of the search warrant execution and during his prior routine inspections: "The water was dark green, very turbid; did not look very good." (Tr. 363 at 135-136.) Therefore, for sentencing purposes the measurement of quantity would not be limited to estimates of the petroleum content. The measurement of quantity would look to the total volume of untreated industrial wastewater being discharged on a regular basis, including but not limited to its estimated petroleum content.
The Court will further, if requested by the government, probably be compelled to consider other constituents involved in the wastewater discharges that were also regulated under the water permits. For example, the trial evidence indicates that additional parameters including zinc, lead, cadmium, total suspended solids and chemical oxygen demand had been identified by DEP as problematic at the storm drain sampling location nearest the cement pit during the relevant period.*fn43 (Tr. 363 at 115-116.) Indeed, at approximately the time of the search warrant execution in February, 2000, ATLANTIC STATES was being placed on monthly DEP monitoring at that location because of repeated serious regulatory violations. (See dkt. 721 at 192-193, 192-193, n.106, 223, n.133.) It is reasonable to infer from the trial evidence that such substances were in the cement pit liquid, or were picked up from the roadway and adjacent surface areas and were carried into the storm drains as the cement pit liquid flowed down the roadway and into the drains. (Id.; tr. 363 at 40-42, 44-47, 50-52, 115-116, 124-137.)
The evidence of discharges from the #4 pit describes similar pollution constituents, and others, contained in the dark-colored liquid discharged from that pit onto the roadway and into the storm drains on numerous occasions. (See dkt. 721 at 231-243.) However, we also do not believe that the available evidence supports an upward or downward departure under Notes 4 and 7 as to defendant MAURY for those additional discharges without a hearing. Our tentative conclusion is that neither upward nor downward departures are appropriate under Notes 4 and 7 as to defendants PRISQUE, MAURY, and DAVIDSON for their CWA-related offenses. If the Court finds that post-trial evidence must be further evaluated to complete Step 2, we will conduct an evidentiary hearing.*fn44
7. USSG § 2Q1.3, Note 3 - Departure involving negligent conduct Note 3 of the commentary to Section 2Q1.3 ("Note 3") provides for a downward departure, relating to the specific offense characteristics of that section, in cases involving negligent conduct. It states as follows:
The specific offense characteristics in this section assume knowing conduct. In cases involving negligent conduct, a downward departure may be warranted. USSG § 2Q1.3, cmt. n.3.
Defendants PRISQUE and DAVIDSON, who were convicted only of lesser-included negligence offenses under the CWA substantive counts, as well as MAURY, who was convicted of both negligence and knowing offenses under the CWA substantive counts, seek a downward departure under this provision. (Prisque I at 134, n.12; ; Davidson I at 57-58; Prisque II at 36-37; Maury II at 7-8; Davidson II at 25-26.) The government opposes any downward departure on this ground. (Tr. 738 at 132-133.) We have located a few cases relevant to this provision, which we summarize here.
Defendant in United States v. Hanousek, 176 F.3d 1116 (9th Cir. 1999), was convicted of negligent discharge of oil into navigable water in violation of 33 U.S.C. § 1319(c)(1)(A), the same statute underlying the substantive CWA convictions of PRISQUE and MAURY in this case. Id. at 1116. His total offense level was stated to be 12. Id. at 1125. Although the circuit decision did not provide his guideline calculation, it can be derived from information in the decision to be as follows, applying Section 2Q1.3 based on the nature of the substance as oil pollutant: Base offense level 6; add 4 levels for one-time discharge under Subsection (b)(1)(B); add 2 levels for supervisory role, id.; total offense level: 12. In other words, it appears that he did not receive a downward departure under Note 3 for negligent conduct. Although Note 3 was not mentioned in the decision, the circuit court did hold that it lacked jurisdiction to review the district court's refusal to depart downward, stating: "The district court recognized that it had the discretion to make the departures requested by Hanousek, but chose not to do so." Id. at 1126.
The Tenth Circuit has observed in dicta that, ["[p]lainly, the commentary contemplates application of a § 2Q1.3(b)(1)(A) enhancement to sentences for negligent discharge violations, but authorizes a downward departure in such circumstances." Ortiz, 427 F.3d at 1285-86 (reversing judgment of acquittal after guilty verdict on CWA negligence offense; also finding error in district court refusal to apply Subsection (b)(1)(A) and (b)(4) enhancements based on both knowing and negligent convictions). The Sixth Circuit also observed in dicta in United States v. Rutana, 932 F.2d 1155 (6th Cir. 1991) that "U.S.S.G. § 2Q1.2 assumes knowing conduct, and downward departure may be warranted in cases involving negligent violations." Id. at 1159 (contrasting issues in appellant's sentencing for knowing CWA violations with situation of non-appealing co-defendants who pled guilty to negligent violations).
A later Sixth Circuit unpublished decision did discuss Note 3 where defendant was convicted under a provision of FIFRA that created a misdemeanor conviction for a "knowing" violation. See United States v. Kelly, No. 99-5327, 2000 WL 1909397 (6th Cir. Dec. 28, 2000). There a jury convicted defendant on 20 counts of knowing sale or use of registered pesticides for unauthorized purposes, which was a misdemeanor under the offense statute. The appeals court reversed a Section 5K2.0 departure, holding that none of the combination of factors described by the sentencing court took the case out of the heartland for guidelines purposes, and that Note 3 did not warrant departure because the violation was "knowing" in that case.*fn45 It also held that neither the misdemeanor nature of the convictions, nor lack of knowledge of serious harm, would justify departure under Section 5K2.0. Id.
The Fourth Circuit noted without comment an unappealed refusal to grant a Note 3 departure in Fitzpatrick, 1997 WL 639334. The facts were unusual. Defendant participated in a theft ring that stole electrical breakers and starters from industrial sites and sold them. When he stole the breakers from the public water treatment plant, the pumps at a lift station were rendered inoperable. This caused the plant to discharge millions of gallons of raw sewage into the river in violation of its permit. Defendant pled guilty to a negligent CWA violation, and appealed his sentence on various grounds not including refusal to grant him a Note 3 departure. The circuit court merely observed that the district court "declined to depart downward on the ground that [defendant] acted negligently rather than knowingly, although the commentary encourages such a departure." Id. at *1.
Our tentative conclusion on this issue is that downward departures are not warranted under Note 3 as to defendants PRISQUE, MAURY, and DAVIDSON for their lesser-included substantive convictions under 33 U.S.C. § 1319(c)(1), for the following reasons. First, they were each convicted also of the conspiracy objective of violating the CWA, Count 1, Objective A. (See dkt. 721 at 113, n.64.) It is undisputed that proof of conspiracy requires a knowing mens rea, which we have found was established in this case as to each conspiracy objective for which a given defendant was found guilty. (Id. at 257-260.) Second, as explained in our post-trial memorandum opinion, we have concluded as a matter of law that the evidence was sufficient, beyond a reasonable doubt, to establish each of the essential elements of the felony offense charged against each of the named defendants on Count 27, including PRISQUE, MAURY, and DAVIDSON. (Id. at 215-231.) We have also made an identical ruling as to DAVIDSON on Counts 12-20 and 22-26. (Id. at 189-215.) In addition, defendant MAURY has felony CWA convictions on Counts 28-32 for knowingly causing or aiding and abetting the discharges from the #4 pit. (Id. at 231-243.) Thus, despite the fact that the verdicts granted those defendants acquittals on certain CWA substantive felony counts and instead found them guilty of the lesser-included negligence offenses, our tentative view is that departure under Note 3 is not appropriate as to any of them based on the trial evidence. All rulings on this and other departure motions must, however, await Step 2 of the sentencing process.
8. USSG § 2F1.1(a) - Base offense level
Defendant MAURY was convicted on Count 3, and defendant DAVIDSON was convicted on Count 4. Each of those offenses was charged as a false statement felony count under 18 U.S.C. § 1001. They were committed in connection with the 12-4/5-99 discharge of petroleum-contaminated wastewater from the cement pit and the subsequent CWA-related official investigation. (Dkt. 721 at 136-146, 215-231.)
We will apply the general fraud guidelines section to these offenses. See supra n.25. That section is Section 2F1.1(a), which provides a base offense level of 6. No specific offense enhancements under that section appear to apply. See generally USSG §§ 2F1.1(b)-(c). We calculate that for each of Counts 3 and 4, the Chapter Two offense level is 6.
Defendant PRISQUE was convicted on Count 34, a substantive offense involving violation of the CAA. (Dkt. 721 at 3, n.4.) Count 34 alleged that during the period of approximately February to August, 2003, PRISQUE knowingly operated in violation of the Atlantic States Title V air permit requirements by causing more than 55 gallons per day of waste paint to be burned in the cupola, in violation of 42 U.S.C. § 7413(c)(1). (Dkt. 711 at 48.) PRISQUE was also convicted on the corresponding objective of the Count 1 conspiracy, as described in the margin.*fn46
2. USSG § 2Q1.3 - Mishandling of environmental pollutants
The Court will apply Section 2Q1.3 rather than Section 2Q1.2 to the CAA offenses in this case. The distinction between those two guideline sections is described in Sec. II.B.1 supra. The Statutory Index states that for violations of 42 U.S.C. § 7413(c)(1), either Section 2Q1.2 or Section 2Q1.3 may apply. USSG App. A.
As we have seen, Section 1B1.2(a) requires that the "offense conduct" be used to determine which guideline section applies. Only then does "relevant conduct" come into the equation in determining the applicable guideline range. USSG § 1B1.2(b). The sentencing court may not consider relevant conduct until after it selects the appropriate offense guideline section. Watterson, 219 F.3d at 235. See supra Sec. II.B.2.
The government argues that there was trial evidence that some of the paint burned in the cupola during the periods relevant to the CAA offenses was solvent-based waste paint, which was hazardous. It cites the MSDS for the product used at Atlantic States before it switched to water-based paint in the Spring of 2003, which showed it had a flash-point qualifying it as hazardous under federal regulations, such that if the solvent-based paint was in liquid form when disposed of in the cupola it was hazardous. It also cites trial evidence that some of the waste paint burned in the cupola was observed to be in liquid form, including during the time frame of Count 34 (Feb. to Aug., 2003). (Gov. I at 33-35.) PRISQUE argues that the CAA-related counts (Counts 1 and 34) refer only to "waste paint," not "hazardous waste paint;" that the substantive offense of conviction did not require proof of hazardous waste paint, nor was such technical evidence advanced by the government at trial; and that the Court properly rejected the government's effort to obtain a jury instruction on solvent-based paint as being hazardous waste paint. (Prisque I at 110-112, 114-117.) We will rely upon the trial ruling in which we rejected the government's arguments seeking to place the issue of hazardous waste paint before the jury in connection with the CAA-related counts of the indictment. (See dkt. 721 at 247, n.156 & accompanying text.)
The existing case law in this area pertains to CAA offenses involving asbestos, which is a hazardous substance. Those asbestos cases have been sentenced using Section 2Q1.2, without dispute. See, e.g., Rubenstein, 403 F.3d at 99-101; Technic Servs., 314 F.3d at 1047-48; Ho, 311 F.3d at 608-102; Chau, 293 F.3d at 99-103; Tomlinson, 1999 WL 511496; Shurelds, 1999 WL 137636, at *5; Liebman, 40 F.3d at 549-52. The parties have not cited, nor have we located, any reported decisions on the issue of other types of pollutants, including waste paint, as the subject
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Section 1B1.2(a) directs the court to "[d]etermine the offense guideline section in Chapter Two ... most applicable to the offense[s] of conviction." USSG § 1B1.2(a) (emphasis added). Clearly, here the CAA offenses on which the jury was instructed, and on which defendant PRISQUE was convicted, primarily involved discharge of the "pollutant" of waste paint. The jury was instructed only that the air permits prohibited the burning of more than 55 gallons per day of "waste paint" in the cupola. (Dkt. 717 at 58-59.) The jury was not asked to make a factual finding as to any substance that would be "hazardous waste paint" under the CAA counts. We conclude that the offense guideline section in Chapter Two that is "most applicable" to the CAA offenses of conviction as to PRISQUE is Section 2Q1.3.*fn47
The following discussion addresses the CAA-related offenses as separate counts (Cts. 1 and 34). Grouping of counts, where applicable, is addressed infra Sec. V.
3. USSG § 2Q1.3(a) - Base offense level
The base offense level for the CAA offenses is 6. USSG § 2Q1.3(a).
4. USSG § 2Q1.3(b)(1)(A) or (B) - Discharge, release, or emission of pollutant
The guidelines provide a specific offense enhancement for environmental offenses that involve an actual discharge, release, or emission of a pollutant. USSG §§ 2Q1.3(b)(1) ("Subsection (b)(1)") (A) and (B). The Subsection (b)(1) enhancement is 6 levels if the emission was ongoing, continuous, or repetitive, and 4 levels otherwise. See supra Sec. II.B.4.
The charging language of Count 34 does not allege any discharge or emission of a pollutant. Instead, it alleges that from in or about February 2003 to in or about August 2003, the named defendants "knowingly operated such major stationary source in violation of its Title V permit requirements by causing more than 55 gallons per day of waste paint to be burned in the cupola." (Dkt. 711 at 48.)
The CAA-related text of Count 1, the conspiracy count, does allege excess emissions of pollutants as a result of those permit violations. Those allegations include the following:
23. EPA has identified and set standards for six "criteria pollutants" in the ambient air. 40 C.F.R. Part 50. Two such criteria pollutants are carbon monoxide ("CO") and nitrogen oxides ("Nox").
35. For the cupola scrubber system, ... ATLANTIC STATES ... was ... required by the ... permits to maintain equipment to continuously monitor its CO emissions. This equipment was known as the continuous emissions monitor, or "CEM." The maximum hourly average concentration for CO could not exceed 2,500 parts per million ("ppm"). The permits allowed up to three days per quarter with hourly average concentration for CO over 2,500 ppm, but never more than 4,000 ppm.
Overt Act Number 16: From in or about May 2001 to in or about August 2003, on a routine and regular basis, [named defendants including PRISQUE] directed employees ... to burn greater than 55 gallons per day of waste paint in the cupola, which caused an increase in CO emissions and which violated the [air permits]. (Dkt. 711 at 7, 10, & 18.)
The Indictment thus alleged, and the trial evidence established, that carbon monoxide ("CO") is a "pollutant" when released into the ambient air. The air permits issued to Atlantic States limited the permissible amount of those and other emissions from the cupola stack. Those emissions limits were coordinated with the permit limitations on substances that could be burned in the cupola, including the requirement that no more than 55 gallons of non-hazardous waste paint could be burned in the cupola per day. (See dkt. 721 at 243-250.) In other words, under the CAA the air emissions from Atlantic States were regulated through the permit process both at the input side (what could be burned as "fuel" in the cupola), and on the output side after air pollution control treatment (what quantities of "criteria pollutants" could be emitted from the cupola stack into the ambient outside air). (See Gov. I at 16.)
There was trial ample trial evidence that when PRISQUE routinely caused the burning of more than 55 gallons per day of waste paint in the cupola, this was not merely a permit violation on the input side, but actually did cause higher emissions of the pollutant CO into the ambient air on the output side. (See, e.g., dkt. 721 at 250-257; Gov. Ex. 2-293a.) However, PRISQUE objects to any Subsection (b)(1) enhancement, contending that there is no trial evidence that those increased emissions caused any violation of the specific CO limitations of the Atlantic States air permit, or of the National Ambient Air Quality Standards established by EPA. (Atlantic States I at 23-27, 29-30; Prisque I at 30-37, 42-45.)
PRISQUE is correct that there was no testimony at trial to the effect that on a given date or dates, the burning of excess waste paint in the cupola, on the input side, caused a permit violation for CO emissions on the output side. That would have required technical proof that because more than 55 gallons of waste paint were burned in the cupola on a given day or days, the resulting CO emissions violated the permit limits of hourly average concentrations over 2,500 ppm per quarter, except three days over that limit but never more than 4,000 ppm, as measured by the Atlantic States CEM monitoring equipment.
There is, however, trial evidence to support a finding, by at least a preponderance, that on March 17 and 18, 2003, CO emission levels spiked as a direct result of workers following orders by PRISQUE to get rid of approximately forty 55-gallon drums containing waste paint by burning them in the cupola, and that this was accomplished over that two-day period. (See dkt. 721 at 253-256; Gov. Ex. 2-293a.) Witnesses testified at trial that this was the typical result when excessive amounts of waste paint were burned in the cupola. (See dkt. 721 at 253-254.) There is also strong evidence that PRISQUE routinely took deliberate steps to manipulate the reportable cupola emissions so that the quarterly data of exceedances would not be accurately reported. (See id. at 256, n.163.)
This Court does not believe that technical proof of a violation of the permit quarterly CO emission limitations, specifically linked to burning of excess paint in the cupola, is necessary in order for Subsection (b)(1) to apply in these circumstances. We have found no case law addressing this issue. We conclude that the offense conduct and relevant conduct of PRISQUE, as shown in the trial evidence, supports a Subsection (b)(1) adjustment. The evidence supports a finding, by at least a preponderance, that his conduct of violating the air permits by burning more than 55 gallons of waste paint per day did result in CO emissions into the environment that would not have been released but for that conduct.
We next consider whether this Subsection (b)(1) adjustment should be 6 levels for an "ongoing, continuous, or repetitive discharge, release, or emission." USSG § 2Q1.3(b)(1)(A). Otherwise, Subsection (b)(1) imposes a 4-level adjustment for discharge. USSG § 2Q1.3(b)(1)(B). See supra Sec. II.B.4 (text and case law discussed therein). The government contends that the 6-level adjustment is warranted. (Gov. I at 37-38.)
Case law under CAA, consistent with that which we have described above under CWA, holds that two or more discharges require the 6-level adjustment under Subsection (b)(1)(A). See Rubenstein, 403 F.3d at 99-100 (illegal asbestos removal was during two separate one-week periods); Technic Servs., 314 F.3d at 1047 (asbestos removal project involved "long periods of time when this facility ... was not even close to contained for ... asbestos abatement"); Ho, 311 F.3d at 608-10 (reversing district court refusal to apply Subsection (b)(1)(A) for repetitive discharge of asbestos during building renovation); Chau, 293 F.3d 99-100 (asbestos removal project; district court found that there had been continuous discharge, and finding is entitled to deference); Tomlinson, 1999 WL 511496 (same); Liebman, 40 F.3d at 549-51 (adjustment under Section 2Q1.2(b)(1)(A) warranted where defendant had untrained workers remove asbestos from factory, and workers unlawfully dumped the material on several different days). See supra Sec. II.B.4.
PRISQUE argues that the evidence described only one instance, during the Count 34 time frame in 2003, in which he may have directed the burning of more than 55 gallons per day, and no evidence that this resulted in exceeding the permit CO emissions limits. (Prisque I at 122-123; Prisque II at 46-47.) We have already found that the evidence of increased CO emissions from burning of excess amounts of waste paint, whether or not it caused violations of the quarterly CO permit limits, requires a Subsection (b)(1) adjustment. Now we make the further finding that the trial evidence is sufficient to show that those emissions were "ongoing, continuous, or repetitive," thus triggering a 6-level adjustment under Subsection (b)(1)(A).
The "one instance" to which PRISQUE refers occurred in the Spring of 2003, when according to the testimony of several workers, PRISQUE ordered the disposal in the cupola of approximately 40 drums containing waste paint that had accumulated in the scrapyard. The workers could not accomplish the entire disposal in one day, and sent approximately 20 drums into the cupola on two successive days, causing the CO readings to spike each time. (See dkt. 721 at 254-256.) This is corroborated by cupola furnace records for March 17 and 18, 2003. (See Gov. I at 37-38; Gov. Ex. 2-293a; tr. 572 at 146-147.) Moreover, there was strong testimony that it was a routine and regular practice to burn approximately four or more 55-gallon drums containing waste paint per day, under the authority and direction of PRISQUE, during and before the time of that instance. (See dkt. 721 at 243-257.)*fn48 For these reasons we find that the 6-level enhancement under Section 2Q1.3(b)(1)(A) is applicable to defendant PRISQUE for his CAA-related offenses.
The commentary provides for a potential departure under Subsection (b)(1). We address that topic, as to the CAA offenses of conviction, in Sec. II.C.6 infra.
5. USSG § 2Q1.3(b)(4) - Discharge without or in violation of permit
Section 2Q1.3 provides a 4-level enhancement if the environmental offense "involved a discharge without a permit or in violation of a permit." USSG § 2Q1.3(b)(4) ("Subsection (b)(4)"). See supra Sec. II.B.5.
The Court does find, for purposes of sentencing, that the burning of more than 55 gallons of waste paint per day in the cupola, and the related conduct that was the subject of the convictions of PRISQUE on Count 1, Objective B and Count 34, were in violation of the
Atlantic States air permits. (See summary of evidence, dkt. 721 at 243-260; see also environmental offense cases cited supra, Sec. II.C.5.)*fn49 Therefore, the 4-level enhancement under Subsection (b)(4) applies to defendant PRISQUE on his CAA-related offenses.
The commentary provides for a potential departure under Subsection (b)(4). We address that topic, as to the CAA offenses of conviction, in the next section infra.
6. USSG § 2Q1.3, Notes 4 and 7 - Departure of up to two levels
Note 4 of the commentary to Section 2Q1.3 ("Note 4") provides for a potential departure of up to two levels in either direction under Subsection (b)(1), "[d]epending upon the harm resulting from the emission, release or discharge, the quantity and nature of the substance or pollutant, the duration of the offense and the risk associated with the violation." USSG § 2Q1.3, cmt. n.4. See supra Sec. II.B.6.
Note 7 of the commentary to Section 2Q1.3 ("Note 7") provides for a potential departure of up to two levels in either direction under Subsection (b)(4), "[d]epending upon the nature and quantity of the substance involved and the risk associated with the offense." USSG § 2Q1.3, cmt. n.7. See supra Sec. II.B.6.
Defendant PRISQUE seeks 2-level downward departures under both Note 4 and Note 7 for his CAA-related offenses. (Prisque I at 125-127; Prisque II at 46-50.) The government, here at Step 1 of the sentencing process, opposes departure on that basis and indicates that at Step 2 it may seek upward departures under those provisions. (Gov. I at 38-39; tr. 738 at 139-140.)
The burden of persuasion is upon the party seeking a departure. McDowell, 888 F.2d at 291. We have located no case law discussing or applying Notes 4 and 7 in CAA sentencing. Therefore, we will rely on the CWA precedent discussed in Sec. II.B.6 supra, and incorporate that discussion here by reference.
PRISQUE first argues that, "as the government conceded in argument during the Jury Charge Conference, Count Thirty-Four involved the burning of water-based paint rather than solvent-based paint. Thus there was no issue that the nature of the waste paint charged in the cupola was non-hazardous." (Prisque I at 126; see also Prisque II at 47, citing tr. 555 at 106.) This statement is not totally accurate.
The only concession the government made on that topic at trial was that it would make no argument to the jury "there were any issues regarding flash point [referring to solvent-based paint] once the company switched to water base paint." (Tr. 555 at 106 (bracketed material added).) The government contended then, and continues to contend, that it was likely that drums containing hazardous solvent-based waste paint were burned in the cupola during the period of the indictment, including the time period of Count 34. (See id. at 106-109; Gov. I at 33-35, 38-39.) NJDEP inspector Heil testified that hazardous waste paint would be hazardous in the air because of the increased volatile organic chemicals ("VOCs") released when it burned. (See dkt. 721 at 247.)
The time period stated in Count 34 was approximately February, 2003 through August, 2003. (Dkt. 711 at 48.) February 20, 2003 was the effective date of the combined air permit for Atlantic States known as the Title V permit. That permit contained the same 55-gallon per day limitation on burning of waste paint in the cupola that had been in effect since May, 2001. (See dkt. 721 at 245-247.) The time frame stated in Count 1, Overt Act 16, which alleged conspiracy to violate the CAA by burning more than 55 gallons per day of waste paint in the cupola, was approximately May, 2001 to August, 2003. May 18, 2001 was the effective date of the Atlantic States air permit that reduced the allowable quantity of waste paint to be burned in the cupola from 55 gallons per hour to 55 gallons per day. (Id.)*fn50
It was undisputed that Atlantic States switched to water-based paint sometime in the Spring of 2003, and before that it used solvent-based paint. The air permits at no time allowed Atlantic States to burn hazardous waste paint in the cupola. (Dkt. 721 at 247.) The air permits allowed it to burn the solvent-based paint waste in the cupola only if it had been rendered "non-hazardous;" i.e., its characteristics of liquidity and volatility had been reduced below the regulatory definition of "hazardous" before it was introduced into the cupola. In other words, when Atlantic States used solvent-based paint in its operations, that paint formula was hazardous when delivered and would have to be rendered non-hazardous before it could go into the cupola as waste paint. This could be accomplished by allowing the paint to solidify to the point where it no longer had its original liquidity [and/or volatility] characteristic by the time it was burned in the cupola. Whether that was done by Atlantic States remained a disputed issue at trial, upon which the jury was not asked to rule. And neither side did any testing of the waste paint in the drums awaiting disposal in the scrapyard during the relevant period. (See, e.g., tr. 555 at 106-120.)
We note the ongoing dispute by the parties on whether "hazardous" waste paint was burned in the cupola during the period covered by the indictment, but we have no testing or other technical evidence upon which a ruling could be made during this sentencing phase. (Id.; Gov. I at 33-35, 38-39; Atlantic States I at 29-30; Prisque I at 42-45,110-112, 114-117; Prisque II at 35-36.) Nor do we recall any trial evidence of emissions data that might specifically indicate whether "hazardous" waste paint was burned in the cupola during the indictment period.
In our view, if it could be proven that the relevant conduct under Count 1, Objective B and Count 34 included the burning of "hazardous" waste paint in the cupola, that might support an upward departure under Note 4 and Note 7. But it also cannot be proven that "hazardous" waste paint was not burned in the cupola during the indictment time period, and there is at least anecdotal evidence that it was. (See Gov. I at 34.) At any rate, the trial evidence does support a finding, by at least a preponderance, that quantities of waste paint -- whether or not in hazardous state -- in excess of 55 gallons per day were routinely burned in the cupola during the entire period covered by those counts, with the knowledge and direction of defendant PRISQUE. The evidence also supports a finding that excessive amounts of such waste in the cupola did result in increased CO emissions.
PRISQUE also argues that there was no trial evidence that any paint-related CO emissions caused Atlantic States to violate its quarterly CO permit limits. He adds that even when Atlantic States did report exceedances (for whatever cause), those did not violate the National Ambient Air Quality Standards, which were always within EPA compliance in the region during the relevant period; and indeed it was Atlantic States that voluntarily reduced its permit limits to 55 gallons per day rather than 55 gallons per hour in 2001. (Atlantic States I at 56-57; Prisque I at 95-96, 127-127; Prisque II at 46-50; see supra n.50.) We do weigh those facts in determining whether downward departures are warranted under Notes 4 and 7.
The government counters that "[e]nvironmental laws and regulations seek to foster economic activity while controlling environmental harm; the fact that a particular activity is permitted -- or, as here, that it was once permitted -- does not mean that it is not harmful to the environment." (Gov. I at 38-39.) It argues that based on the evidence that defendants routinely burned illegal amounts of waste paint, including as many as 20 drums per day, "even if emissions somehow did stay within regulated limits, this cannot be taken as a certification that no substantial environmental harm occurred." (Id.)
When considering possible departures under Notes 4 and 7 for the CAA-related offenses of defendant PRISQUE, we also bear in mind the considerable evidence of his efforts to manipulate the emissions records that Atlantic States was required to maintain and self-report to NJDEP. The government presented strong evidence that PRISQUE employed various devices to try to keep from reporting excess COs. Those devices included instructing workers to shut down the CO monitor, and to run the cupola extra hours to reduce average emission readings. (See dkt. 721 at 256, n.163; tr. 572 at 190-191.) There was also a body of evidence showing that PRISQUE knowingly participated in deception of NJDEP in formal "stack tests" of emissions, by ordering special raw materials for the testing. (See id. at 249 and evidence summarized in dkt. 641 at 171-172.) This evidence further undercuts his argument that no discernible environmental harm was caused by the practice of burning excess amounts of paint waste in the cupola, and that he should be granted a downward departure with respect to his permit violations and the resulting emissions.
Our tentative conclusion is that neither upward nor downward departures are appropriate under Notes 4 and 7 as to the CAA-related offenses of defendant PRISQUE. We will continue to consider this issue for ultimate resolution at Step 2, although we see no reason to conduct an evidentiary hearing on this aspect of the sentencing.
III. CHAPTER THREE, PART B (ROLE IN OFFENSE)
A. Guidelines Introductory Commentary
Chapter Three, Part B addresses role in the offense. The commentary introducing Part B advises:
This Part provides adjustments to the offense level based upon the role the defendant played in committing the offense. The determination of a defendant's role in the offense is to be made on the basis of all conduct within the scope of § 1B1.3 (Relevant Conduct), i.e., all conduct included under § 1B1.3(a)(1)-(4), and not solely on the basis of elements and acts cited in the count of conviction.
When an offense is committed by more than one participant, § 3B1.1 or § 3B1.2 (or neither) may apply. Section 3B1.3 may apply to offenses committed by any number of participants.
USSG Ch. 3, Part B, introductory cmt.
This commentary expressly states, in the second sentence, that the "determination of a defendant's role in the offense is to be made on the basis of all . . . [relevant conduct, specifically] all conduct included under § 1B1.3(a)(1)-(4)." Id. (emphasis added).
Section 1B1.3(a)(1)(B) "embodies the principle enunciated in Pinkerton v. United States, 328 U.S. 640, 647-48 (1946), that a conspirator is criminally liable for the acts of other members of the conspiracy that were taken in furtherance of the conspiracy and reasonably foreseeable as a necessary and natural consequence of the conspiracy." United States v. Pojilenko, 416 F.3d 243, 248 n.5 (3d Cir. 2005).*fn51 The second sentence of the Introductory Commentary to Chapter Three, Part B, quoted above, expressly includes relevant conduct under all four subsections of Section 1B1.3(a)(1)-(4) as within the scope of conduct to be considered in determining whether Role in the Offense adjustments are warranted. That would seem to include Pinkerton conduct of others.
But we observe that the Third Circuit has sided with the Fourth Circuit in what may be an emerging circuit split on whether Role in the Offense adjustments should be determined on the basis of Pinkerton principles but should be confined to the role the individual defendant played in committing the offense. See Pojilenko, 416 F.3d at 247-49 (remanding for post-Booker sentencing; holding as matter of first impression that co-conspirator's reasonably foreseeable use of a minor cannot be attributed to other conspirators for purposes of applying role in the offense enhancement under Section 3B1.4; discussion broadly addressed all Role in the Offense enhancements under Chapter Three, Part B; not addressing second sentence of Introductory Commentary to Chapter 3, Part B.) But see United States v. Isaza-Zapata, 148 F.3d 236, 239 (3d Cir. 1998) (discussing interplay between Section 1B1.3(a) and Introductory Commentary to Chapter Three, Part B regarding consideration of all relevant conduct under Part B).*fn52
This Court will be guided by Pojilenko and will confine our examination of the Role in the Offense issues in this case to the role the individual defendant played in committing the offense. Under this approach the relevant conduct of that defendant, as defined in the nonPinkerton provisions of Section 1B1.3(a)(1)-(4), must still be included in the analysis.*fn53
B. USSG § 3B1.1 - Aggravating Role
The government seeks upward adjustments for each defendant under Section 3B1.1 (Aggravating Role) at the following levels: PRISQUE (4 levels); FAUBERT (3 levels); MAURY (3 levels); DAVIDSON (3 levels). (See Gov. I at 14-15, 44-47, 50-52.)
Each defendant opposes any upward adjustment under Section 3B1.1. (See Prisque I at 77, 127-129; Prisque II at 51; Faubert II at 4-6; Faubert III at 6-8; Maury I at 33-34, 48-51, 54; Maury II at 26-27; Davidson I at 58-61; Davidson II at 28-30.)
The individual defendants also claim that they should receive a downward adjustment under Section 3B1.2 (Mitigating Role), either instead of or in combination with any upward adjustment imposed for aggravating role. That topic is addressed in the next Section infra.
The guidelines provide upward adjustments for aggravating role as follows: Based on the defendant's role in the offense, increase the offense level as follows:
(a) If the defendant was an organizer or leader of a criminal activity that involved five or more participants or was otherwise extensive, increase by 4 levels.
(b) If the defendant was a manager or supervisor (but not an organizer or leader) and the criminal activity involved five or more participants or was otherwise extensive, increase by 3 levels.
(c) If the defendant was an organizer, leader, manager, or supervisor in any criminal activity other than described in (a) or (b), increase by 2 levels.
A "participant" under Section 3B1.1 "is a person who is criminally responsible for the commission of the offense, but need not have been convicted. A person who is not criminally responsible for the commission of the offense (e.g., an undercover law enforcement officer) is not a participant." Id., cmt. n.1.
"To qualify for an adjustment under this section, the defendant must have been the organizer, leader, manager, or supervisor of one or more other participants." Id., cmt. n.2. Thus, "[t]o apply section 3B1.1, a district court must find that the defendant exercised control over at least one other person." United States v. Katora, 981 F.2d 1398, 1402 (3d Cir. 1992). The district court must also find that there were multiple participants in the crime and that there was some differentiation in their relative culpabilities. Id. at 1405. The Third Circuit has explained that "a manager or supervisor is one who exercises some degree of control over others involved in the offense." Chau, 293 F.3d at 103. This requirement also applies to one who is considered an organizer or leader. United States v. Helbling, 209 F.3d 226, 243 (3d Cir. 2000).
Once it is determined that a defendant exercised control over at least one other person in the criminal activity, a 2-level adjustment is appropriate under Subsection 3B1.1(c). Katora, 981 F.2d at 1405. However, to meet the criteria of "five or more participants," for 3-level or 4-level adjustments under subsections (a) and (b), it is not required that defendant have exercised control over at least five participants. Under those subsections defendant himself is counted as one of the five or more participants. See United States v. Inigo, 925 F.2d 641, 660 (3d Cir. 1991) (counting defendant as one of the required five participants to meet that criteria). Also, some of the other four participants may actually be higher than defendant in the criminal activity, so long as defendant exercised control over at least one other person. See, e.g., United States v. Ortiz, 878 F.2d 125, 127 (3d Cir. 1989) ("five or more participants" included defendant and several of his subordinate participants, along with higher-level participant).
Even when the criminal activity involves fewer than five participants, the criteria of Section 3B1.1, subsections (a) and (b), can be met if the criminal activity was otherwise extensive. "In assessing whether an organization is 'otherwise extensive,' all persons involved during the course of the entire offense are to be considered. Thus, a fraud that involved only three participants but used the unknowing services of many outsiders could be considered extensive." USSG § 3B1.1, cmt. n.3. In determining whether a criminal activity is "otherwise extensive," the focus is upon the number and roles of the individuals knowingly, and unknowingly, involved. Helbling, 209 F.3d at 245.
The Second Circuit has suggested a three-factor test for "otherwise extensive:" "(i) the number of knowing participants; (ii) the number of unknowing participants whose activities were organized or led by the defendant with specific criminal intent; (iii) the extent to which the services of the unknowing participants were peculiar and necessary to the criminal scheme." United States v. Carrozzella, 105 F.3d 796, 803-04 (2d Cir. 1997), abrogated in part on other grounds, United States v. Kennedy, 233 F.3d 157, 160-61 (2d Cir. 2000). The Third Circuit has adopted this test, and expanded upon it as follows:
The defendant may be considered as one of the participants.... The court must next determine whether the defendant used each non-participants' [sic] services with specific criminal intent. Third, the court must determine the extent to which the services of each individual, non-participant, were peculiar and necessary to the criminal scheme.... Utilizing this test, the ... Second Circuit has upheld the consideration of individuals used by the defendant to legitimize, facilitate or hide the criminal activity.
After deciding which individuals may be counted, the court must then consider whether the sum of the participants and countable non-participants is the "functional equivalent" of five participants.... In deciding whether the total is the equivalent to five participants, the sentencing court may consider other factors, including the nature of the criminal scheme, to evaluate the relative value of the various countable non-participants.
Helbling, 209 F.3d at 248 (internal citations omitted).
Factors to consider in distinguishing the various roles under Section 3B1.1 include the following:
In distinguishing a leadership and organizational role from one of mere management or supervision, titles such as "kingpin" or "boss" are not controlling. Factors the court should consider include the exercise of decision making authority, the nature of participation in the commission of the offense, the recruitment of accomplices, the claimed right to a larger share of the fruits of the crime, the degree of participation in planning or organizing the offense, the nature and scope of the illegal activity, and the degree of control and authority exercised over others. There can, of course, be more than one person who qualifies as a leader or organizer of a criminal association or conspiracy.
USSG § 3B1.1, cmt. n.4. It is clear under this commentary that "more than one person at more than one level of a conspiracy may act as a supervisor." United States v. Garcia, 413 F.3d 201, 224 (2d Cir. 2005) (affirming Section 3B1.1 enhancement for two supervisors, at different levels, who both supervised the same lower-level participant).
The Third Circuit, interpreting this same portion of the commentary, has explained: The commentary to the guidelines purports only to suggest various factors the court should consider. Evidence of every factor is not a prerequisite to a finding that the defendant is a leader or organizer under § 3B1.1, nor is evidence that the defendant is the sole or predominate leader required. The government need only show sufficient authority to justify such a finding.
United States v. Bass, 54 F.3d 125, 128-29 (3d Cir. 1995), citing United States v. Ortiz, 878 F.2d 125, 126-27 (3d Cir. 1989).
"[T]he Guidelines direct that a defendant's role in the criminal activity is the operative issue" in determining whether a role enhancement applies under Section 3B1.1. United States v. DeGovanni, 104 F.3d 43, 46 (3d Cir. 1997) (italics original). Some cases thus present the issue of "when is a supervisor not a supervisor?" Id. at 44. The Third Circuit has ruled that "one must ... have an active supervisory role in the actual criminal conduct of others" to justify a Section 3B1.1 enhancement. Id. at 46 (italics original).
The defendant in DeGovanni was a police sergeant who pleaded guilty to two substantive offenses but was allegedly a participant in a broad-ranging conspiracy involving illegal conduct with fellow police officers.*fn54 The evidence showed that although his job as sergeant placed him in a supervisory role in the police force, the criminal activity in which he and others engaged did not require that he play an active supervisory role in the criminal offenses of the others, nor did he play such a role. The district court imposed a Section 3B1.1(c) adjustment. The circuit reversed, holding that "one is only a 'supervisor' under U.S.S.G. § 3B1.1(c) when he is so involved in, and connected to, the illegal activity of others that he actually supervises their illegal conduct, and is not just a supervisor by virtue of his de jure position in the police department hierarchy." Id. at 44.
This issue has arisen in other factual contexts, with varying results depending on the circumstances. For example, United States v. Gonzales, 436 F.3d 560 (5th Cir. 2006), involved a law enforcement officer whose Section 3B1.1(c) role enhancement was affirmed on appeal. Gonzales was the designated team leader in an INS unit assigned to track down and deport illegal aliens. He and his co-defendants were convicted of criminal civil rights violations for excessive force and indifference to medical needs while apprehending a suspect. Defendant's conduct included supervising his subordinates in the criminal activities and participating in them himself. There the court distinguished DeGovanni on the facts, observing that Gonzales "both led and participated in the criminal activity." Id. at 584-85; see United States v. Gotti, 459 F.3d 296, 347-50 (2d Cir. 2006) (holding there was no clear error in district court's refusal to apply Section 3B1.1(a) based on factual finding that, despite "acting boss" status, defendant did not exercise sufficient level of control to be deemed an organizer or leader of the enterprise); United States v. Woods, 335 F.3d 993, 1002-03 (9th Cir. 2003) (reversing Section 3B1.1(a) adjustment where defendant, "corporate secretary" for company engaged in telemarketing scheme involving at least five criminally responsible participants including herself, did not manage or supervise any of them).
Environmental case law rulings give us some factual context for evaluating the parties' contentions here.*fn55 The following decisions have affirmed district court rulings applying aggravating role adjustments under Section 3B1.1.
United States v. Rubenstein, 403 F.3d 93, 99-100 (2d Cir. 2005), involved CAA offenses during an asbestos removal project in a building of a family-owned corporate entity. The father was president and adult son was his "right-hand man," who were among "at least two knowing participants." Id. at 99. They used at least 7 workers (the "unknowing participants") to perform the removal, and took other steps to further the criminal activity. Each defendant received a Section 3B1.1 adjustment, the president as "leader" and the son as "supervisory." Id. at 99. The district court had ruled that the "otherwise extensive" criteria of Section 3B1.3 was met (thus indicating that the president received 4 levels and the son received 3 levels under subsections (a) and (b), respectively). See Reply Brief for Appellants, 2004 WL 3525372, at *8. The circuit decision upheld the Section 3B1.1 adjustment as to both defendants, observing as to the unknowing workers that the "labor of these persons was clearly necessary to the violation." Rubenstein, 403 F.3d at 99.
United States v. Technic Services, 314 F.3d 1031, 1048 (9th Cir. 2002), involved a corporate defendant and its secretary/treasurer convicted of CAA and CWA offenses committed during asbestos removal. Five workers, including two who said they "worked for" the individual defendant, stated that he played an active role in leading the practical aspects of the demolition, and that they did not adhere to asbestos work place standards. Their testimony was found sufficient to establish that he was the leader of a criminal endeavor involving five or more people who violated the CAA, thus supporting a 4-level aggravating role adjustment under Section 3B1.1(a).
United States v. Chau, 293 F.3d 96, 103 (3d Cir. 2002), was a CAA conviction of a building owner who hired a laborer and ordered him to clean up the asbestos-laden structure, then participated with the laborer and the building handyman to dump the asbestos illegally. His 2-level supervisory role adjustment under Section 3B1.1(c) was upheld based on a finding that he did exercise some degree of control over the two other participants.
United States v. Overholt, 307 F.3d 1231 (10th Cir. 2002), involved a multi-object conspiracy and numerous substantive convictions for mail fraud and environmental offenses in connection with unlawful injection of petroleum-impacted wastewater into disposal wells. One of the individual defendants attempted to appeal the 4-level adjustment he received under Section 3B1.1(a), but the appeals court ruled that he was procedurally barred. (Id. at 1251-52.) That defendant was the owner of a trucking company. He had his workers dump truckloads of the untreated wastewater in underground disposal wells and other unlawful locations, instructing them to act at night and falsify bills of lading to misrepresent the origin and characteristics of the loads. Id. at 1237. (This ruling was thus not affirmed because the issue was not reached on appeal, but we include it in this discussion because it is illustrative and the result was that the 4-level Section 3B1.1(a) enhancement was not overturned.)
United States v. Cooper, 173 F.3d 1192, 1207 (9th Cir. 1999), was a CWA conviction of a secretary/treasurer and half-owner of a small company that contracted to haul sewage sludge from a municipal treatment plant that had an NPDES permit. He caused quantities of sludge to be dumped at an unauthorized location, a farm that he contacted. In the process, he hired and supervised one worker whom he instructed to falsify records, and he induced trucking contractors to violate trucking regulations. A 2-level adjustment under Section 3B1.1(c) was upheld on the ground that he had supervised at least one other participant.
United States v. Hanousek, 176 F.3d 1116 (9th Cir. 1999), was the case of the railway roadmaster convicted of a negligent CWA offense. He was responsible for safe performance of projects, and during his tenure a contractor's employee operating a backhoe in a construction project on the tracks struck the adjacent petroleum pipeline, causing discharge into the river. The evidence showed that after defendant took over project responsibility, the sections of track on which the work progressed did not include construction of proper temporary protection for the pipeline. His 2-level supervisory role adjustment under Section 3B1.1(c) was upheld, the circuit court stating: "[T]he district court did not clearly err by finding that Hanousek was a supervisor because, although the backhoe operator was not prosecuted, he was nonetheless a participant in the criminal activity, and Hanousek supervised the project at 6-mile." Id. at 1125.
United States v. Shurelds, 1999 WL 137636 (6th Cir. 1999), was a CAA conviction of a company employee for improper asbestos removal. The company and three other individuals pleaded guilty; defendant was convicted at trial. Many witnesses testified that defendant was in charge of the project and exercised direct control over the site workers. The district court imposed a 4-level leadership role adjustment under Section 3B1.1(a), finding that the criminal activity had five or more participants. The ruling was affirmed, despite the failure of the district court to name who those participants were. The circuit court held that based on the evidence, there were at least five "criminally responsible" participants. It listed the defendant, the three other convicted individuals, and two others as to whom it said their participation was clear: those two workers testified that they witnessed and participated in dry asbestos removal at the site.
United States v. Liebman, 40 F.3d 544 (2d Cir. 1994), was another asbestos removal case. Defendant was in a family-owned company that was selling its mill. Prior to sale, the owner was required to remove existing asbestos including two large asbestos-insulated boilers. Defendant had allowed his real estate broker, on his behalf, to hire two individuals who were local salvagers to remove the boilers. Those individuals hired two teenagers and another man as additional workers. The broker did not continue, and defendant himself eventually dealt directly with the workers and paid them directly. He and the broker and the two salvagers pleaded guilty to CAA offenses. The district court imposed a 3-level adjustment on him under Section 3B1.1(b). The circuit court upheld the district's court finding that defendant was a supervisor of a criminal activity, but remanded for specific factual findings on whether it involved five or more participants or was otherwise extensive. Id. at 547-49. At resentencing the district court made factual findings and ruled that the criminal activity in which defendant was a supervisor did involve five or more "participants," and that it was otherwise extensive. The ruling was affirmed on appeal. United States v. Liebman, No. 95-1190, 1995 WL 760395 (2d Cir. Dec. 26, 1995).
United States v. Dean, 969 F.2d 187 (6th Cir. 1992), involved multiple counts of conviction under RCRA of the production manager of a corporate facility that did metal stamping, plating, and painting and used hazardous materials in the process. As production manager, defendant had day-to-day supervision of the plant's production process and employees. His duties included instructing employees on hazardous waste handling and instruction, whereas no permit was sought for the plant, and numerous practices at the plant violated RCRA. In addition, he instructed employees to shovel solid wastes from hazardous-contaminated rinse tanks into 55 gallon drums, and ordered construction of a pit where the drums were dumped. Other individuals indicted were the two corporate owners and the plant manager. Defendant (production manager) obtained a trial severance and was convicted, and the opinion did not state the resolution of the other indictments. Nevertheless, defendant's 3-level supervisory role adjustment under Section 3B1.1(b) was affirmed, based on his role as manager or supervisor (but not organizer or leader) of criminal activity involving five or more participants. The circuit court stated:
Defendant argues that the enhancement was error because there was evidence that, at most, he supervised only two persons. This contention mistakes the language of the Guideline, which refers not to "subordinates" but to "participants," thus encompassing those on an equal footing or superior to defendant in a criminal hierarchy as well as those below. In addition to defendant and the two employees concededly involved, the owners and [the plant manager] are also relevant for purposes of the Guideline. Accordingly, there were five or more participants in the offense, and the district court did not err in enhancing defendant's sentence on this ground.
United States v. Irby, 1991 WL 179110 (4th Cir. Sept. 13, 1991), was a CWA conviction of the plant manager of a wastewater treatment plant. The record showed that he ordered discharge of approximately 500,000 gallons of partially treated sludge into the river at least twice a week for two years. A 2-level adjustment imposed under Section 3B1.1(c) was upheld, the circuit court stating: "The district court found that Irby 'exercised decision-making authority and authority to direct other employees in the plant.' The court also found that Irby supervised an employee whom he directed to bypass the sludge treatment system at night after hours.... Thus, the court's finding of fact is not clearly erroneous." Id.
We have located no appellate decisions in the environmental context holding that aggravating role adjustments that were imposed under Section 3B1.1 were improper. The only reversals have been for legal error, failure to make sufficient factual findings, or unwarranted departures after imposing such adjustments. We summarize those few decisions here.
United States v. Kuhn, 345 F.3d 431 (6th Cir. 2003), involved CWA convictions of the superintendent of a municipal water treatment plant for causing workers to dispose of sewage sludge improperly and causing them to assist him in falsifying discharge monitoring reports. His guideline offense level calculation included a 2-level role enhancement under Section 3B1.1(c), to which he did not object. He also received other adjustments, including a 2-level enhancement for abuse of position of trust under Section 3B1.3 (discussed infra Sec. III.D). The district court granted an unguided departure, stating as one of its reasons that applying those two specific offense characteristics cumulatively did not technically constitute double-counting, but it amounted to over-counting in the instant case. The appeals court reversed that departure, stating, inter alia, that the Section 3B1.1 adjustment for supervisory role was correctly applied. Id. at 437.
United States v. Ho, 311 F.3d 589 (5th Cir. 2002), involved CAA convictions of a building owner for improper asbestos removal. Defendant hired a handyman to supervise the work, who in turn hired at least ten Mexican nationals (apparently illegal aliens, the court noted) to perform the work. Defendant also hired another individual whom he directed to provide supplies to the workers, monitor their hours, and perform related work on-site (which did not go well: a resulting explosion burned that individual and three workers, and blew a hole in the building). No one contended that the Mexican workers were "participants" for purposes of a role adjustment. The district court refused the government's request for a 4-level enhancement under Section 3B1.1(a), and instead imposed a 2-level role adjustment under Section 3B1.1(c), finding that defendant was an organizer, but the criminal activity did not involve at least 5 participants nor was it "otherwise extensive." The appeals court reversed and remanded. It ruled as a matter of law that the application note explaining "otherwise extensive" (Section 3B1.1, cmt. n.3) "instructs the court to examine number of persons involved in the activity, not the nature of the criminal organization." Id. at 610. It held that the district court "erred by interpreting the phrase 'otherwise extensive' in § 3B1.1(a) to refer to the nature of the criminal organization, as distinguished from the number of participants and persons involved." Id. at 611.
United States v. Rutana, 932 F.2d 1155 (6th Cir. 1991), was an early guidelines sentencing case in which the government appealed an unguided departure down to a probationary sentence and the circuit court reversed. It held, inter alia, that where different defendants received differing role adjustments but the district court departed as to the lead defendant in order to give uniform sentences to all, "departure in order to achieve conformity among co-defendants is not appropriate where there is a basis for disparity." Id. at 1159. There the lead defendant, part-owner and CEO of a company operating a metal finishing plant, pleaded guilty to 18 felony CWA charges. His guideline score included a 2-level upward role adjustment under Section 3B1.1(c), to which he did not object. His co-defendants, the plant manager and a minority shareholder, received plea deals allowing them to plead to superseding negligent CWA charges, and each also received 4-level "minimal participant" downward adjustments under Section 3B1.2. (The facts upon which those downward adjustments were based were not stated or discussed in the opinion.) The appeals court concluded: "Rutana's situation was not the same as that of his co-defendants, and we decline to hold as a matter of law that his sentence should be the same." Id. at 1159.
PRISQUE, FAUBERT, MAURY, and DAVIDSON each argue that they should not receive enhancements under Section 3B1.1. (See Prisque I at 127-130; Prisque II at 51; Faubert II at 4-6; Faubert III at 6-8; Maury I at 50-51; Maury II at 26-27; Davidson I at 59-61; Davidson II at 28.) They rely upon a Fifth Circuit decision, United States v. Moeller, 80 F.3d 1053 (5th Cir. 1996), which we will now address as to all defendants.*fn56 To the degree that each defendant advances additional arguments in opposition to a Section 3B1.1 adjustment, we address those arguments in the context of their individual relevant conduct.
Defendant Mike Moeller was deputy commissioner of the Texas Department of Agriculture ("Department"). He was indicted with four other individuals in connection with a "contracts for politics" scheme in which two "political consultants" did fund-raising for Moeller's intended election campaign, and in return the Department awarded sham consulting contracts to the two consultants. The illegal fund-raising efforts successfully victimized employees of the Department, officers of banks where the Department held funds, and the businesses regulated by the Department. The other four defendants were the two consultants (Boyd and Koontz), and two of Moeller's underlings at the Department (McRae and Quicksall). McRae "worked closely with Moeller, holding positions as Moeller's special assistant at [the Department], and as the associate director of [a related agricultural inspection agency]." Moeller, 80 F.3d at 1055-56. Quicksall, an older man of long government service and limited education, "also worked for Moeller, holding various positions at both [the Department and the inspection agency]." Id. at 1056.
The two consultants were severed before trial. Id. at 1055, n.2. Moeller, McRae, and Quicksall, who were thereafter referred to as "the defendants," were all convicted of conspiracy and underlying substantive offenses of misapplication of state funds and bribery. The circuit court found the evidence sufficient to establish that "the defendants were acting on their agreement to exchange state funds for Boyd's and Koontz' political efforts." Id. at 1059.
The government cross-appealed three aspects of the sentencing rulings in Moeller.*fn57
First, it challenged the district court's creative approach to selecting a base offense level by making a "compromise" between Sections 2C1.1 and 2C1.2, both of which were potentially applicable.*fn58 That ruling was firmly reversed, thus necessitating a remand for resentencing. Id. at 1061.
The government also challenged a downward departure granted to Quicksall under Section 5K2.12 on grounds of duress. The district court based that departure on a finding that Quicksall was "economically and psychologically pressured by fear of career loss into following the orders he was given." The circuit court also reversed that ruling, referring to the guidelines commentary and concluding that economic hardship "is not the type of duress contemplated by § 5K2.12." Id. at 1063. It did, however, state that Quicksall would likely qualify for a 4-level downward "departure" [sic] as a minimal participant under Section 3B1.2(a), and it encouraged the district court to consider that on remand. Id.
The third sentencing ruling challenged by the government in Moeller was the refusal of the district court to impose a 4-level adjustment for defendant Moeller under Section 3B1.1(a), and a 3-level adjustment for defendant McRae under Section 3B1.1(b). The circuit court approached the issue as a factual finding reviewable for clear error, and upheld the ruling under that standard. Id. at 1062. It articulated its reasoning as follows:
Moeller occupied a high-ranking position within [the Department], and was the political candidate for much of the fundraising involved in the offense. McRae was his assistant, and worked closely with Moeller in a variety of capacities. Nonetheless, the record as a whole does not support the conclusion that Moeller and McRae either initiated the bribery scheme or participated in a more culpable manner than other co-conspirators, with the possible exception of Quicksall. The defendants' "inheritance" of a historically corrupt and deep-rooted system is not immaterial. The continuance of the exact same conduct after Moeller announced he would not run for office indicates that the scheme alleged was not dependent upon the managerial or leadership roles of these defendants, and depended instead largely upon the energy and creativity of Boyd and Koontz.
Defendants here argue that part of the government's theory of this case is that the parent company, McWane, imposed a corporate culture of violating environmental and workplace safety laws and regulations and obstruction to conceal those violations, which defendants here simply inherited. Therefore, following the logic expressed in Moeller, they should receive no role adjustments under Section 3B1.1. We reject this argument for several reasons, not the least of which is that each of the individual defendants in this case testified at trial, and said no such thing. They each denied that they were criminally involved in any such conduct at Atlantic States. We understand, however, that defendants are raising this argument because of the position advanced in the government's theory of the case, so we will address it in the context of the Moeller ruling.
Our research has not revealed any case law discussing this aspect of the Moeller decision, nor is it binding precedent in the Third Circuit. However, we have pondered it carefully, and we respectfully disagree with that holding on both factual and legal grounds. First, as to the legal basis, we believe that the Moeller court overlooked binding Fifth Circuit precedent that if defendant exercised a supervisory role over at least one criminally responsible participant, a role enhancement under Section 3B1.1 was applicable. See United States v. Okoli, 20 F.3d 615, 616 (5th Cir. 1994), discussed infra. The Moeller court simply failed to hold the district court to the requirement of making a factual determination on that point. Second, if the district court had addressed that issue, it would likely have found that both Moeller and McRae supervised at least one participant in the criminal activity, and the criminal activity did involve at least five criminal participants. The evidence was that Moeller supervised both McRae and Quicksall, and McRae also supervised Quicksall -- in the criminal activity -- and the two "consultants" brought the total to five criminally responsible participants. Those portions of the Moeller opinion are quoted in the margin.*fn60
The inescapable conclusion is that while it may have been factually correct to conclude that Moeller and McRae did not supervise the two consultants -- who played their role with well-honed experience and needed no direction -- it was abundantly clear that McRae was Moeller's immediate subordinate in carrying out the criminal activity at the Department, and Quicksall, at the bottom of the totem pole, was a criminal subordinate of both Moeller and McRae. In addition, the circuit court in Moeller ended its analysis too soon when it concluded that since Moeller and McRae did not "organize or plan" the criminal activity but rather inherited it, they could not qualify for a role enhancement. As Section 3B1.1 and its commentary make clear, "organizing and planning" is only one of the factors to consider in determining what level of role enhancement is appropriate. A person can be a "leader," "manager," or "supervisor" and thus eligible for a Section 3B1.1 enhancement, even if that person is not an "organizer."
Fifth Circuit precedent at the time of Moeller had adopted the teaching of Note 2 of the commentary to Section 3B1.1, which states in relevant part: "To qualify for an adjustment under this section, the defendant must have been the organizer, leader, manager, or supervisor of one or more other participants." USSG § 3B1.1, cmt. n.2 (1993). This Note was added to the guidelines effective November 1, 1993. See USSG App. C, Amend. 500. As explained in the Amendment, it was added as a clarification, to resolve a split in the circuits over whether a defendant could receive a Section 3B1.1 enhancement even if defendant did not directly supervise other persons. The result, as expressly accepted by the Fifth Circuit in 1994, was that Section 3B1.1 is read to require that defendant was the "organizer, leader, manager, or supervisor of one or more other participants." Okoli, 20 F.3d at 616 (italics original). The Moeller sentencing was conducted under the 1993 version of the guidelines, see supra n.57, so that commentary was applicable.
We also have serious reservations that a factor such as "inherited corruption" is material to the specific offense characteristics analysis under Section 3B1.1, as the Moeller court seemed to suggest. As we have noted, the Introductory Commentary to the Role in the Offense provisions states that the determination of a defendant's role in the offense is to be made on the basis of relevant conduct. See supra Sec. III.A. The commentary to the relevant conduct guideline, Section 1B1.3, states that "[a] defendant's relevant conduct does not include the conduct of members of a conspiracy prior to the defendant's joining the conspiracy, even if the defendant knows of that conduct (e.g., in the case of a defendant who joins an ongoing drug distribution conspiracy knowing that it had been selling two kilograms of cocaine per week, the cocaine sold prior to the defendant joining the conspiracy is not included as relevant conduct in determining the defendant's offense level)." USSG § 1B1.3, cmt. n.2. In other words, the relevant conduct of a given defendant does include events that occur after that defendant joins an ongoing conspiracy. To the degree that Moeller would absolve a defendant of enhancement as an organizer, leader, manager, or supervisor because he enters the criminal activity after it has begun, that aspect of the Moeller decision appears to conflict with these provisions of the guidelines.
For all of these reasons, we decline to follow Moeller in making determinations under Section 3B1.1 in this case. Relying on the applicable and analogous authorities discussed above, we make the following rulings.
This Court finds that the evidence supports a 4-level role adjustment for defendant PRISQUE under Section 3B1.1(a). This finding is not based upon his title as plant manager at the Atlantic States foundry, but rather upon his active participation in a primary leadership role in the criminal activities shown in the evidence. Just as the alleged conspiracy was many-faceted, so too were his leadership activities. His offense conduct includes convictions under all five alleged objectives of the conspiracy, and under all but one of the substantive counts against him. (See dkt. 721 at 3 n.4 & 112-113 n.64.)
The relevant conduct of PRISQUE, exclusive of foreseeable acts of others under Pinkerton analysis, places him squarely in an active leadership role in most of the criminal conduct depicted in the evidence. Without attempting an exhaustive summary of all that conduct, we find that the trial evidence established, by at least a preponderance, the following facts:
(1) PRISQUE was convicted on Count 8 (obstruction of OSHA's investigation of the injury of worker Owens by a saw blade), and on the corresponding conspiracy objectives, Count 1, Objectives C, D and E. (See dkt. 721 at 3 n.4 and 112-113 n.64.) That aspect of the conspiracy involved at least two other knowing participants: FAUBERT (who was the "white shirt" having direct contact with OSHA about the Owens incident, under PRISQUE'S command), and the worker Marchand-Mendoza who, although unwilling, nevertheless lied to OSHA at the instruction of PRISQUE. (See dkt. 721 at 159-163.)*fn61
(2) PRISQUE was convicted on Count 9 (obstruction of OSHA's investigation of the Coxe forklift fatality), and on the corresponding conspiracy objectives, Count 1, Objectives C, D, and E. That aspect of the conspiracy involved FAUBERT and MAURY, who were also convicted on Count 9 and the same conspiracy objectives. (See dkt. 721 at 3 n.4 & 112-113 n.64.) It also involved Shepherd, who testified at trial as to his knowing participation under directions from PRISQUE. Another worker, foreman Robert Rush, testified to being instructed by PRISQUE to lie to OSHA about the condition of the forklift but objecting. Shepherd also testified that before OSHA arrived that day, PRISQUE held a meeting with "white shirts" including himself, MAURY, and DAVIDSON, and told them to make preparations for the expected OSHA visit. (Id. at 163-176.) The evidence pertaining to the related counts, Counts 7 and 10, showed that PRISQUE intervened directly in the further efforts of FAUBERT to obstruct that investigation by having worker Marchan lie to OSHA, and that both Marchan and FAUBERT's subordinate Maddock were also knowing participants in that sub-plot of the obstruction of that OSHA investigation.*fn62
(3) PRISQUE was convicted on Count 11 (obstruction of OSHA by altering the cement mixer involved in amputation injury of worker Velarde), and on the corresponding conspiracy objectives, Count 1, Objectives C, D, and E. (See dkt. 721 at 3 n.4 and 112-113 n.64.) That aspect of the conspiracy also involved knowing participants "maintenance manager" Harbin and "white shirt" Shepherd, both of whom were subordinate to PRISQUE in the criminal hierarchy for that activity. (Id. at 176-188.)
(4) PRISQUE was convicted, along with his subordinates MAURY and DAVIDSON, of the lesser-included CWA negligent offense under Count 27 (contaminated wastewater from cement pit into Delaware River during the 12-4/5-99 discharge). He was also convicted on the conspiracy objective of knowingly violating the CWA, Count 1, Objective A. He was not charged in any of the false statement counts relating to the 12-4/5-99 discharge, but his subordinates MAURY and DAVIDSON were convicted on Counts 3 and 4, respectively, for those offenses. PRISQUE was also convicted, along with MAURY and DAVIDSON, of the false statements objective of the conspiracy, Count 1, Objective D. (See dkt. 721 at 3 n.4 & 112-113 n.64.) We have found that the evidence was sufficient to support convictions of knowing CWA violations of PRISQUE, MAURY, and DAVIDSON as to the pattern of intentional cement pit discharges (including but not limited to the 12-4/5-99 discharge), even though they were convicted of lesser-included substantive negligent offenses regarding the cement pit. In so ruling, we have also found that the relevant conduct of PRISQUE included his own misleading statements to investigators on the day of the search warrant execution investigating the 12-4/5-99 discharge. (Id. at 225-231.) The relevant conduct of PRISQUE on that aspect of the conspiracy demonstrated that his leadership role over MAURY and DAVIDSON extended to those ongoing cement pit discharges and the efforts to obstruct inspectors and investigators in that connection. We hereby also find that there were other knowing participants in the cement pit aspect of the conspiracy, including foremen Scott Rodney and Rush, who in turn were supervised in this criminal activity by DAVIDSON. (See id. at 192-231.) We hesitate to include workers such as Chase and Owens as "knowing" participants, but it is clear that they and many other workers were at least "unknowing" participants in the routine cleaning out of the cement pit by discharging its polluted contents down the storm drains. (Id.)*fn63
(5) PRISQUE was convicted under Count 34 (violating the CAA by burning excess amounts of waste paint in the cupola in violation of the air permits). He was also convicted on the conspiracy objective of knowingly violating the CAA, Count 1, Objective B. (See dkt. 721 at 3 n.4 and 112-113 n.64.) We have found that his relevant conduct on that aspect of the conspiracy included efforts to obstruct EPA and NJDEP in their regulatory duties. (See supra Sec. II.C.) We find that "knowing" participants in that aspect of the conspiracy included Harbin, the "white shirt" serving as "maintenance manager;" Dalrymple, the casting/melting department superintendent who was another "white shirt" reporting to PRISQUE; and foremen Rush and Kolbe, who also had direct and indirect supervision from PRISQUE in their CAA-related criminal activities.*fn64 "Unknowing" participants would include the many workers who routinely brought excess amounts of waste paint to the cupola from the finishing department and scrapyard crane operators such as Johnson and Zettlemoyer, who lifted the paint into the cupola and on more than one occasion were instructed to hide drums containing waste paint by covering them with scrap metal when inspectors were expected. (See dkt. 721 at 243-257; supra Sec. II.C.)
This Court finds, on the basis of the evidence to which we refer here and the balance of the relevant trial evidence, that PRISQUE did directly supervise one or more criminal participants, and that he was actively involved as a leader in criminal activity that (1) had at least five "knowing" participants, and (2) was otherwise extensive. Therefore, a 4-level adjustment under Section 3B1.1(a) applies to PRISQUE. This ruling is made under Section 3B1.1 and its commentary, and in recognition of the relevant case law as summarized above.
Our findings identifying "knowing" participants in relation to PRISQUE's role in the offense is not intended to be exhaustive, but it is more than sufficient to support this ruling.*fn65 In
making this ruling we have considered each of the factors delineated in Note 4 of the commentary to Section 3B1.1, quoted supra. We find that, with the possible exception of the financial share factor, the evidence on all of the stated factors strongly supports this enhancement on the basis that PRISQUE was a "leader" based on his relevant conduct. Therefore, we find that a 4-level adjustment is applicable to PRISQUE under Section 3B1.1(a). A further finding that he was also an "organizer" is not required for Section 3B1.1(a) to apply. We do find, however, that at least as to obstruction of the OSHA investigations of the Coxe forklift fatality and the Owens saw blade injury, as well as the CAA violations, PRISQUE was both an "organizer" and a "leader."
We find that the evidence supports a 3-level supervisory role adjustment for defendant FAUBERT under Section 3B1.1(b). This finding is not based upon his various titles as human resources manager or safety director at Atlantic States, but rather upon his active participation in those aspects of the criminal activities constituting his offense conduct and his relevant conduct (exclusive of foreseeable acts of others under Pinkerton analysis). Without attempting an exhaustive summary as to FAUBERT's conduct, we find that the trial evidence established, by at least a preponderance, the following facts.
FAUBERT was convicted on Counts 7, 9 and 10 (false statements and obstruction of OSHA's investigation of the Coxe forklift fatality and the related Marchan forklift injury). He was also convicted on the corresponding conspiracy objectives, Count 1, Objectives C, D, and E. (See dkt. 721 at 3 n.4 and 112-113 n.64.) We find that aspect of the conspiracy involved knowing participants including, at a minimum, PRISQUE, FAUBERT, MAURY, Shepherd, Maddock, and worker Marchan. See supra n.62. FAUBERT acted in a supervisory role over at least two participants in that criminal activity, namely Maddock and Marchan. (See dkt. 721 at 149-159.) We further find that FAUBERT exercised a similar supervisory role over Maddock in obstructive conduct relating to OSHA's investigation of the workplace injuries of Lieberman and Eloy Rocca. See supra n.22.
The additional relevant conduct of FAUBERT described in certain Overt Acts alleged under Count 1, which we hereby find was established by a preponderance of the evidence, is described in the margin.*fn66
Based on these facts, we find that the criminal activity in which FAUBERT was involved did include at least five criminally responsible participants, and he exercised a supervisory role over at least one of those participants. Therefore, a 3-level role adjustment under Section 3B1.1(b) applies to FAUBERT.
We find that the evidence supports a 3-level supervisory role adjustment for defendant MAURY under Section 3B1.1(b). This finding is not based upon his title as maintenance superintendent at Atlantic States, but rather upon his active participation in those aspects of the criminal activities constituting his offense conduct and his relevant conduct (exclusive of foreseeable acts of others under Pinkerton analysis). Without attempting an exhaustive summary as to MAURY's conduct, we find that the trial evidence established, by at least a preponderance, the following facts:
(1) MAURY was convicted on Count 3 (false statement about the 12-4/5-99 discharge into Delaware River). He was also convicted, along with PRISQUE and DAVIDSON, of the false statements objective of the conspiracy, Count 1, Objective D. (See dkt. 721 at 3 n.4 and 112-113 n.64.) We have summarized the evidence supporting those convictions. (Id. at 136-141, 257-260.)
(2) MAURY was convicted on Count 9 (obstruction of OSHA's investigation of the
incident. (Id. at 28-29.) We find those allegations established by a preponderance, by the trial testimony (and related exhibits) of witnesses including the injured worker, Rocca (dkt. 422 at 146-160; dkt. 424 at 4-29), treating physician Dr. Noel (dkt. 422 at 102-120), and OSHA compliance officer Tiedeman (dkt. 424 at 146-156; dkt. 428 at 18-24). The obstructive conduct pertaining to the Rocca incident was jointly committed by FAUBERT and his subordinate, Maddock, as described by officer Tiedeman.
Coxe forklift fatality), and on the corresponding conspiracy objectives, Count 1, Objectives C, D, and E. PRISQUE and FAUBERT were also convicted on those offenses. (See dkt. 721 at 3 n.4 and 112-113 n.64.) We have summarized the evidence supporting those convictions. (Id. at 163-176, 257-260.)
(3) MAURY was convicted, along with PRISQUE and DAVIDSON, of the lesser-included CWA negligent offense under Count 27 (the 12-4/5-99 discharge). He was also convicted, with them, on the conspiracy objective of knowingly violating the CWA, Count 1, Objective A. (See dkt. 721 at 3 n.4 and 112-113 n.64.) We have found that the evidence was sufficient to support convictions of knowing CWA violations of PRISQUE, MAURY, and DAVIDSON as to the pattern of intentional cement pit discharges, including but not limited to the 12-4/5-99 discharge. (Id. at 225-231.) We have also found that there were other knowing participants in the cement pit aspect of the conspiracy, including foremen Rodney and Rush. We have found that there were numerous "unknowing" participants in this criminal activity, including Chase (who was supervised indirectly by MAURY and DAVIDSON), foremen and millwrights who were part of the maintenance staff under MAURY, and foremen and workers (such as Owens) who worked in the finishing department under DAVIDSON.
(4) MAURY was convicted on Counts 28-32 (discharges from pit under casting machine #4). We disregard his similar conviction on Count 33, which we have dismissed post-trial. As noted above, he was also convicted on the corresponding conspiracy objective of knowingly violating the CWA, Count 1, Objective A. (See dkt. 721 at 3 n.4, 112-113 n.64, 242-243.) We have found that knowing participants in this aspect of the criminal activity included foreman Bobinis, supervised by MAURY. Unknowing participants included foremen, millwrights (such as Schultz and Delker), crane operators and electricians working in maintenance functions under MAURY. (Id. at 231-243.) We also find, by a preponderance based on the trial evidence, that then-Atlantic States president James Singleton, identified as Co-conspirator X in the Indictment and by name in the jury instructions, was a criminal participant in this phase of the criminal activity. (See dkt. 711 at 15-16, Overt Acts 4 and 5; dkt. 717 at 38.) Bobinis testified that when he was fired, MAURY and PRISQUE refused to speak with him. He had received a company-issued list of the management hierarchy. He went up the chain of command until he succeeded in getting in to see Singleton. Bobinis testified that he told Singleton about the regular intentional discharges of pollutants from the #4 pit into the storm drains, but Singleton took no action. (Dkt. 721 at 238-239.)
Based on these facts, we find that the criminal activity in which MAURY was involved did include at least five criminally responsible participants, and he exercised a supervisory role over at least one of those participants. It was also "otherwise extensive," given the numerous "unknowing" participants necessary to carry out the practice of regularly discharging polluted wastewater from the cement pit and the #4 pit. Therefore, a 3-level role adjustment under Section 3B1.1(b) applies to MAURY.
We find that the evidence supports a 3-level supervisory role adjustment for defendant DAVIDSON under Section 3B1.1(b). This finding is not based upon his title as finishing department superintendent at Atlantic States, but rather upon his active participation in those aspects of the criminal activities constituting his offense conduct and his relevant conduct (exclusive of foreseeable acts of others under Pinkerton analysis). Without attempting an exhaustive summary as to DAVIDSON's conduct, we find that the trial evidence established, by at least a preponderance, the following facts:
(1) DAVIDSON was convicted on Count 4 (false statement about the 12-4/5-99 discharge into Delaware River). He was also convicted, along with PRISQUE and MAURY, of the false statements objective of the conspiracy, Count 1, Objective D. (See dkt. 721 at 3 n.4 and 112-113 n.64.) We have summarized the evidence supporting those convictions. (Id. at 141-146, 257-260.)
(2) DAVIDSON was convicted, along with PRISQUE and MAURY, of the lesser-included CWA negligent offense under Count 27 (the 12-4/5-99 cement pit discharge). He was also convicted, individually, of the lesser-included CWA negligent offenses under Counts 12-20 and 22-26 (cement pit discharges during specified time periods). We disregard his similar conviction on Count 21, which we have dismissed post-trial. He was also convicted, with PRISQUE and MAURY, on the conspiracy objective of knowingly violating the CWA, Count 1, Objective A. (See dkt. 721 at 3 n.4, 112-113 n.64, 208-209, 257-260.) We have found that the evidence was sufficient to support convictions of knowing CWA violations of PRISQUE, MAURY, and DAVIDSON with respect to the pattern of intentional cement pit discharges, including but not limited to the 12-4/5-99 discharge. (Id. at 189-231.) We hereby also find that there were other knowing participants in the cement pit aspect of the conspiracy, including foremen Scott Rodney and Robert Rush, who in turn were supervised in this criminal activity by DAVIDSON. (See id. at 192-231.) We have found that there were numerous "unknowing" participants in this criminal activity, including Chase (who was supervised indirectly by MAURY and sometimes DAVIDSON), foremen and millwrights who were part of the maintenance staff under MAURY, and foremen and workers (such as Owens) who worked in the finishing department under DAVIDSON. (Id.)
Based on these facts, we find that the criminal activity in which DAVIDSON was involved did include at least five criminally responsible participants, and he exercised a supervisory role over at least one of those participants. It was also "otherwise extensive," given the numerous "unknowing" participants necessary to carry out the practice of regularly discharging polluted wastewater from the cement pit. Therefore, a 3-level role adjustment under Section 3B1.1(b) applies to DAVIDSON.*fn67
C. USSG § 3B1.2 - Mitigating Role
The guidelines provide downward adjustments for mitigating role as follows: Based on the defendant's role in the offense, decrease the offense level as follows:
(a) If the defendant was a minimal participant in any criminal activity, decrease by 4 levels.
(b) If the defendant was a minor participant in any criminal activity, decrease by 2 levels.
In cases falling between (a) and (b), decrease by 3 levels. USSG § 3B1.2.
"This section provides a range of adjustments for a defendant who plays a part in committing the offense that makes him substantially less culpable than the average participant. The determination whether to apply subsection (a) or subsection (b), or an intermediate adjustment, involves a determination that is heavily dependent upon the facts of the particular case." Id., cmt. background. A "participant" under Section 3B1.2 has the same meaning as under Section 3B2.1. Id., cmt. n.1.
The familiar commentary describing "minimal participant" and "minor participant" is quoted in the margin.*fn68 It expressly states that in order to receive even a two-level mitigating role reduction, the defendant must be "less culpable than most other participants." Id., cmt. n.3. The Third Circuit has noted that:
[T]he mere fact that a defendant was less culpable than his co-defendants does not entitle the defendant to "minor participant"status as a matter of law.... If this were the case, then the least culpable member of any conspiracy would be a minor participant, regardless of the extent of that member's participation. We reject this approach because there are varying degrees of culpability present in virtually every criminal conspiracy.
United States v. Brown, 250 F.3d 811, 819 (3d Cir. 2001) (internal citation omitted).
The Third Circuit has recommended that in assessing eligibility for a mitigating role adjustment, district courts consider factors such as the following to determine the defendant's relative culpability: (1) the nature of the defendant's relationship to the other participants; (2) the importance of the defendant's actions to the success of the venture; and, (3) the defendant's awareness of the nature and scope of the criminal enterprise. United States v. Headley, 923 F.2d 1079, 1085 (3d Cir. 1991), citing United States v. Garcia, 920 F.2d 153 (2d Cir. 1990).
"[T]he Court is not limited to the three Headley factors if it can come up with other relevant considerations." United States v. Rodriguez, 342 F.3d 296, 301 (3d Cir. 2003). The sentencing court must consider a defendant's involvement, knowledge, and culpability when determining whether the defendant is a minor participant, and only grant the role reduction to a defendant who is "substantially less culpable than the average participant." Isaza-Zapata, 148
courier for a single smuggling transaction involving a small amount of drugs.
3. For purposes of § 3B1.1(2)(b), a minor participant means any participant who is less culpable than most other participants, but whose role could not be described as minimal.
USSG § 3B1.2, cmt. F.3d at 238-39.
A defendant bears the burden of demonstrating that other participants were involved and
that, under these standards and the facts of a particular case, the minor role adjustment should apply. Id. at 240. See, e.g., United States v. Perez, 280 F.3d 318, 352 (3d Cir. 2002) (no clear error in denying a minor role reduction to defendants who knew of scope of conspiracy and performed a different role than other co-conspirators but without which "the conspiracy could not have succeeded.")
The Third Circuit holds that an upward adjustment for aggravating role and a downward adjustment for mitigating role, for the same defendant, are not mutually exclusive. United States v. Tsai, 954 F.2d 155, 167 (3d Cir. 1992) (sentence vacated and remanded because district court erroneously assumed that an enhancement under Section 3B1.1 precluded consideration of a downward adjustment under Section 3B1.2). Accord, United States v. Jackson, 207 F.3d 910, 921-22 (7th Cir. 2000) ("Section 3B1.2 does not say that a manager or supervisor cannot be a minor participant; all that is required is that he be less culpable than more of the other participants"), remanded for consideration in light of Apprendi, 531 U.S. 953 (2000); judgment reinstated, 236 F.3d 886 (2001); but see United States v. Conley, 156 F.3d 78, 85-86 (1st Cir. 1998) (stating contrary view); see also United States v. Perry, 340 F.3d 1216 (11th Cir. 2003) (noting apparent circuit split; remanding for further legal and factual rulings; no appeal from resentencing).
Defendant DAVIDSON contends that he should receive a 4-level minimal role adjustment under Section 3B1.2(a). (See Davidson II at 30.) He relies upon all of the arguments advanced in his individual objections to upward role adjustments under Section 3B1.1. (Id.) He cites Tsai, pointing out that applicability of Section 3B1.2 is not mutually exclusive to an enhancement under Section 3B1.1. He argues that "the facts of this case as they relate to [him] ... clearly establish that [his] role, like his culpability, in the government's theory of a multi-faceted long range and wide sweeping conspiracy, makes him a minimal participant under § 3B1.2(a)." (Id.)
We agree that Tsai is good legal authority in this circuit, but we disagree that the downward adjustment is warranted with respect to DAVIDSON. For the reasons stated in the preceding section, we have found that DAVIDSON was one of the key participants in the aspect of the conspiracy pertaining to the cement pit discharges and the obstructive efforts to conceal those CWA violations from inspectors and investigators. In that aspect of the conspiracy he was subordinate to PRISQUE and on a managerial level with MAURY, while knowing participants including foremen Rush and Rodney were subordinate to him. We have also found that there were numerous "unknowing" participants who carried out orders from foremen acting under his direction, resulting in the continuous discharges of contaminated wastewater from the cement pit. We have also rejected the argument that his substantive convictions for negligent CWA violations should prevent any upward role adjustment under Section 3B1.1. See supra Sec. III.B.
Even looking at only the aspects of the conspiracy for which we have found DAVIDSON responsible for guideline calculation purposes, it is evident that he was not "substantially less culpable" than the average participant. (Id.) Looking out across the broader conspiracy, we cannot say that DAVIDSON occupied a less culpable position than others in the criminal hierarchy. Others were involved in some of the same aspects, and in other aspects of the multi-faceted conspiracy. However, the structure of the other aspects was much similar to the structure of the cement pit aspect, with PRISQUE at the apex and "white shirts" such as DAVIDSON, FAUBERT, and MAURY at the next supervisory level, and other "knowing" participants acting at and below their level in the criminal activities. (Id.) For these reasons, we find that a mitigating role adjustment is not warranted based upon the offense conduct and relevant conduct of DAVIDSON. We also reject such arguments on behalf of defendants PRISQUE, FAUBERT, and MAURY. See supra Sec. III.B.
D. USSG § 3B1.3 - Abuse of Position of Trust
The guidelines provide a two-level upward adjustment for abuse of a position of trust, in pertinent part as follows:
If the defendant abused a position of public or private trust, or used a special skill, in a manner that significantly facilitated the commission or concealment of the offense, increase by 2levels. This adjustment may not be employed if an abuse of trust or skill is included in the base offense level or specific offense characteristic. USSG § 3B1.3.
The pertinent application note is quoted in the margin.*fn69 "This adjustment applies to persons who abuse their positions of trust or their special skills to facilitate significantly the commission or concealment of a crime." Id., cmt. background.*fn70
The Third Circuit employs a two-step analysis in applying this guideline: whether the defendant (1) occupied a position of public or private trust; and, (2) abused this position of trust in a way that significantly facilitated the crime. United States v. Iannone, 184 F.3d 214, 222 (3d Cir. 1999) (citing United States v. Craddock, 993 F.2d 338, 340 (3d Cir. 1993)).*fn71
"Determining what constitutes a position of trust for the purposes of § 3B1.3 is not a simple task. Neither Section 3B1.3 nor its applicable Commentary clearly defines what is meant by a 'position of trust.'" Id. (citing United States v. Smaw, 993 F.2d 902, 905 (D.C. Cir. 1993)).
The Third Circuit has articulated a three-factor test to determine that first question, whether defendant occupied a position of trust. As announced in United States v. Pardo, 25 F.3d 1187 (3d Cir. 1994), those factors are: "(1) whether the position allows the defendant to commit a difficult-to-detect wrong; (2) the degree of authority which the position vests in defendant visa-vis the object of the wrongful act; and (3) whether there has been reliance on the integrity of the person occupying the position. These factors should be considered in light of the guiding rationale of the section -- to punish 'insiders' who abuse their position rather than those who take advantage of an available opportunity." Id. at 1192. "'[T]he primary trait that distinguishes a person in a position of trust from one who is not is the extent to which the position provides the freedom to commit a difficult-to-detect wrong.'" United States v. Lieberman, 971 F.2d 989, 993 (3d Cir. 1992) (quoting United States v. Hill, 915 F.2d 502, 506 (9th Cir. 1990)).
A determination that a person occupied a position of trust "is a necessary, but not a sufficient, condition to warrant the ... increase for abuse of position of trust." Lieberman, 971 F.2d at 993. The Court must also find that the second step of the analysis is supported by the evidence. The key to applying the enhancement is that defendant abused, rather than merely breached, a duty of trust. United States v. Georgiadis, 933 F.2d 1219, 1225 (3d Cir. 1991).
The defendant "must also have abused his position of trust 'in a manner that significantly facilitated the commission or concealment of the offense.'" Lieberman, 971 F.2d at 993 (quoting Section 3B1.3). "An offense has been 'significantly facilitated' by a position of trust when the trust aspects of the position make the offense substantially easier to commit or conceal." Craddock, 993 F.2d at 342.
"To abuse a position of trust, a defendant must, by definition, have taken criminal advantage of a trust relationship between himself and his victim. The additional wrong undergirding the upward adjustment is the corrupt abuse of that trust relationship." United States v. Hickman, 991 F.2d 1110, 1112 (3d Cir. 1993) (citing Hill, 915 F.2d at 506 & n.3).*fn72 Clearly, the Court is required in each case to identify the "victim" or "victims" of the defendant's conduct. The Court must make this determination in order to determine whether a trust "relationship" existed, and if so whether it was abused within the meaning of Section 3B1.3. See, e.g., United States v. Cianci, 154 F.3d 106, 108-09, 110-13 (3d Cir. 1998), discussed infra n.75. Identification of the "victim" or "victims" is therefore a necessary -- and sometimes pivotal -- step in the Section 3B1.3 analysis.
The government contends that each of the defendants in this case should receive an abuse of position of trust enhancement as to each of their convictions. (See Gov. I at 15, n.3, 47; Gov. II at 1.) The defendants oppose this enhancement. (See Prisque I at 130; Prisque II at 51-61; Maury I at 51-52; Maury II at 16-24; Davidson I at 61; Davidson II at 30-35.) Here again, as with some of the guidelines issues addressed in the preceding sections, there is limited relevant case law. Most of the case law under Section 3B1.3 is not directly on point. Nevertheless, we have found it necessary to survey the broad sweep of appellate decisions in which this enhancement has been addressed in various other factual settings, in order to give context to the abuse of trust issues presented in this case.
Here we provide an overview of case law determining in which factual circumstances an adjustment under Section 3B1.3 is warranted. The ruling usually, but not always, turns on the first prong of the analysis, whether defendant occupied a position of trust in relation to the victim or victims.*fn73 The basic principles appear to have developed fairly consistently, whereas the results have been fact-specific. In the cases summarized here, the abuse of trust enhancement was applied except where noted to the contrary.
1. This enhancement has been applied most commonly in the contractual setting. The contracts can be in the public or the private sector.
A common contractual situation may involve what we could call a "trusted fraud artist." This defendant not only defrauds the victim, but does so by creating -- or exploiting -- a commercial relationship of special trust or reliance. This is sometimes referred to as a "fiduciary or quasi-fiduciary relationship with the victim." Iannone, 184 F.3d at 235 (Becker, C.J., concurring).
Examples of cases in the "trusted fraud artist" category are as follows. Compare United States v. Hoffecker, 530 F.3d 137, 145-50, 202 (3d Cir. 2008) (defendant ran sophisticated and highly successful fraudulent offshore telemarketing scheme targeted at seniors and other vulnerable victims); United States v. Santoro, 302 F.3d 76, 78-82 (2d Cir. 2002) (stock broker convicted of conspiracy to defraud clients lacked discretionary investment authority, but occupied a position of trust in choosing stocks to recommend, and abused it by recommending artificially inflated stocks and not disclosing excessive commissions on those fraudulent sales); Hart, 273 F.3d at 375-78 (enhancement applied in securities fraud conspiracy where defendants used techniques to convince customers to rely on their perceived integrity and advice); United States
v. Hirsch, 239 F.3d 221, 226-28 (2d Cir. 2001) (defendant occupied position of trust as broker and investment advisor entrusted with investment discretion; he abused the position by disbursing funds beyond the scope of his discretion to support Ponzi scheme, and by violating other obligations of the trust granted to him); Iannone, 184 F.3d at 217-19, 222-26 (defendant was CEO of oil and gas drilling business who solicited investment funds from passive investors who entrusted him with the task of completing the drilling project); United States v. Bennett, 161 F.3d 171, 194-96 (3d Cir. 1998) (defendant created fictitious organizations and defrauded donors who trusted him and his promises that their money would be used for charitable purposes); United States v. Sokolow, 91 F.3d 396, 412-13 (3d Cir. 1996) (defendant laundered for his own use monies he obtained by devising and marketing fraudulent insurance plans to small business owners and self-employed persons); with United States v. Garrison, 133 F.3d 831, 837-42 (11th Cir. 1998) (reversing abuse of position of trust enhancement for defendant who was owner/CEO of nursing home convicted of Medicare fraud; holding that the position of that defendant in relation to the victim, Medicare, was "too attenuated" for her to have received the enhancement because the fraudulent claims were prepared by the vice president/CPA of the nursing home, and Medicare relied on an intermediary (Aetna) to review and submit proper claims); United States v. Jolly, 102 F.3d 46, 47-50 (2d Cir. 1996) (defendant running Ponzi scheme was president of a company seeking capital from investors, not acting as an investment advisor; no position of trust resulted); United States v. Brown, 47 F.3d 198, 205-06 (7th Cir. 1995) (defendants perpetrating separate bank fraud and Ponzi-style investor fraud schemes were in commercial relationships, but were not in position of trust in relation to any of the victims); United States v. Moore, 29 F.3d 175, 179-80 (4th Cir. 1994) (appellants, suppliers who engaged in fraud and kickback scheme with an insider of the victim company, were not in position of trust with the company; the victim company was in an ordinary commercial relationship with the suppliers even though the insider abused his position of trust); Pardo, 25 F.3d at 1189-93 (bank customer who committed check kiting scheme was not in position of trust with the victim bank, even though due to his friendship with the branch manager the bank failed to conduct routine background check that would have prevented the loss); United States v. Trice, 245 F.3d 1041, 1042 (8th Cir. 2001) (no abuse of trust for official of non-profit corporation making fraudulent statements to HUD to obtain federally funded loans; although United States was the victim, the defendant was not in a position of trust and the relationship was nothing more than an arms length business relationship).
Another common contractual situation may involve a "trusted unfaithful servant." This defendant is an employee or contractor who is entrusted with significant discretion or managerial control over the property of the victim or the services to be rendered to the victim. This is sometimes referred to as a "trusted employee of the victim" situation. Iannone, 184 F.3d at 235 (Becker, C.J., concurring). The bank executive committing a fraudulent loan scheme is mentioned as an example in the Application Notes. See supra n.69.
Examples of cases in the "trusted unfaithful servant" category are as follows. Compare United States v. Sedore, 512 F.3d 819, 820-26 (6th Cir. 2008) (defendant who prepared tax returns for individuals committed theft of identity information regarding customer's children);*fn74
United States v. Bracciale, 374 F.3d 998, 1005-09 (11th Cir. 2004) (corporate executive abused position of trust when he arranged unauthorized discount sales and received paybacks from the customer); United States v. Cruz, 317 F.3d 763 (7th Cir. 2003) (dishonest employee abused position of trust with her employer when she committed bank fraud using employer's bank account); United States v. Thomas, 315 F.3d 190, 193-94, 204-05 (3d Cir. 2002) (home health care aide for elderly victim abused position of trust when causing victim to sign checks and travel interstate to the bank with defendant in the course of defendant's fraudulent scheme); United States v. Castro, 46 Fed.Appx. 58 (3d Cir. 2002) (bookkeeper/secretary for small company was trusted totally and given almost complete control of financial accounts of the company; she abused that trust by embezzling from employer); United States v. Linville, 228 F.3d 1330 (11th Cir. 2000) (same as Cruz); United States v. Nathan, 188 F.3d 190, 205-08 (3d Cir. 1999) (president of defense contracting company abused position of trust as to the government and was not in merely arm's length relationship because government vested significant unsupervised authority in him and he could instruct workers and suppliers to violate the contract in a manner difficult to detect); Cianci, 154 F.3d at 108-09, 110-13 (high-ranking corporate executive used his position of trust with the employer to obtain money by embezzlement and kickbacks; that relevant conduct supported Section 3B1.3 enhancement although the offense conduct was tax evasion, which would not qualify for this enhancement);*fn75 United States v. Glymph, 96 F.3d 722, 727-28 (4th Cir. 1996) (similar to Nathan; defense contractor abused position of trust when permitted to ship parts to government without inspection based on defendant's certification of compliance with specs); United States v. Boggi, 74 F.3d 470, 472, 478 (3d Cir. 1996) (union official convicted of racketeering in connection with exacting illegal payments from contractors received abuse of trust enhancement on each of three guideline groupings; enhancement was proper because defendant betrayed the victim union's membership to enrich himself through his union position); Craddock, 993 F.2d at 339-44 (teller at wire transfer payment office abused position of trust with employer because position afforded opportunity to pay known imposters without detection by routine auditing and surveillance);*fn76 United States v. Boyle, 10 F.3d 485,
defendant's relevant conduct and upheld an abuse of trust enhancement because the unreported income was obtained by defendant abusing his trust position with the victim employer. Cianci, 154 F.3d at 110-13. This willingness to impose an abuse of trust enhancement where the underlying relevant conduct involves abuse of trust, whether or not the offense conduct involves abuse of trust, appears to be the majority view. Compare United States v. Brickey, 289 F.3d 1144, 1153-55 (9th Cir. 2002) (tax offense calculation properly enhanced where INS border guard abused trust of the employer in accepting bribes for official misconduct); United States v. Young, 266 F.3d 468, 474-81 (6th Cir. 2001) (money laundering calculation properly enhanced for abuse of trust based on underlying embezzlement conduct); United States v. Bhagavan, 116 F.3d 189, 193-94 (7th Cir. 1997) (tax offense calculation properly enhanced for abuse of trust of minority shareholder victims in uncharged relevant conduct); with United States v. Guidry, 199 F.3d 1150, 1159-60 (10th Cir. 1999) (restricting tax offense calculation to offense conduct only, where relevant conduct did involve abuse of trust of defendant's employer); United States v. Barakat, 130 F.3d 1448 (11th Cir. 1997) (same). However, as with other role enhancements, Pinkerton conduct of co-conspirators would appear to be excluded even under the majority rule. See Pojilenko, 416 F.3d at 247-49; Moore, 29 F.3d at 177-79.
488-89 (7th Cir. 1993) (president of armored car company that contracted with Federal Reserve Bank and two other large customers to pick up, store and segregate their cash and deliver it when directed, occupied position of trust and abused that position with all three victims by commingling and misappropriating substantial sums); Lieberman, 971 F.2d at 990-94 (bank executive embezzled from bank fund over which defendant had sole discretion); Georgiadis, 933
F.2d at 1221, 1227 (bank mortgage loan executive embezzled from loan origination fees by re-encoding deposit slips and altering settlement statements under his control); Hill, 915 F.2d at 504-08 (long-distance truck driver was in position of trust in relation to families relocating to Germany whose belongings he was transporting to intermediate shipping point; he abused that position when he stole from the cargo while in his possession); United States v. McMillen, 917 F.2d 773 (3d Cir. 1990) (savings and loan branch manager used his discretionary authority to commit bank fraud scheme); with United States v. Brogan, 238 F.3d 780, 783-86 (6th Cir. 2001) (employee whose position was essentially that of a technician or computer programmer did not occupy position of trust with employer despite fact that he successfully obtained authorization for fraudulent wire transfer from his unwitting supervisor); United States v. Ragland, 72 F.3d 500, 503 (6th Cir. 1996) (bank customer service representative did not occupy position of trust because duties were ministerial rather than discretionary); United States v. Broderson, 67 F.3d 452, 454-56 (2d Cir. 1995) (executive who negotiated contract with NASA on behalf of his employer did not occupy a position of trust in relation to NASA when he made fraudulent statements on contract forms; NASA entrusted defendant with no discretion in compliance with the contract and related statutory and regulatory requirements); United States v. Brunson, 54 F.3d 673, 675, 677-78 (10th Cir. 1995) (reversing abuse of trust enhancement where defendant contractor defrauded customer in contract to construct brick plant: "Even relatively unsophisticated businessmen like the Russian Coal Company would undoubtedly detect that no brick plant was built."); Smaw, 993 F.2d at 905-06 (rejecting notion that merely being an employee would qualify as position of trust in relation to stealing identification data of other employees for fraudulent credit card scheme; remanding for findings on whether defendant's specific job duties gave her special access to information not available to other employees).
In an analogous situation, the president and CEO of a nonprofit rural development organization that was the sub-recipient of federal grant funding did receive an abuse of trust enhancement on convictions for misapplication of federal funds and submitting false documents in connection with receipt of grant moneys. United States v. Buck, 324 F.3d 786, 789-90, 794-95 (5th Cir. 2003). The Buck court affirmed the enhancement, holding that defendant maintained significant direct ties to the government in connection with the participation of the organization in the grants program, and the government relied on the accuracy of her submissions because neither the government agency nor the intermediary entity could easily verify the existence or validity of the grant recipients allegedly served by the organization. The court also held that defendant abused a position of trust with the intermediary entity, which it held was another victim of defendant's wrongful conduct in the grants program. Id. at 794-95.
2. The enhancement has also been applied to public employees occupying positions of trust.
Public employees can be placed in a position of trust where the nature of the position entrusts them with significant discretion or managerial control in relation to the public responsibilities of the position. We could refer to this as the "trusted unfaithful public servant" situation, which is akin to the "trusted unfaithful servant" seen in the contract setting. The postal letter carrier is mentioned as an example in the Application Notes. See supra n.69. A city manager who defrauded his municipality by diverting public funds to fictitious companies he created would be another classic example of this situation. See United States v. Young, 266 F.3d 468, 471-72, 474-75 (6th Cir. 2001).
There are numerous cases where law enforcement personnel have been found to use an acknowledged position of public trust to facilitate criminal offenses. Compare United States v. Brickey, 289 F.3d 1144, 1153-55 (9th Cir. 2002) (INS border inspector abused wide discretion entrusted to him by employer when he participated in scheme to allow cars to cross into U.S. from Mexico without subjecting them to routine inspection); Young, 266 F.3d at 474-81 (city manager with substantial discretionary authority embezzled municipal funds); United States v. Belwood, 222 F.3d 403, 406 (7th Cir. 2000) (corrections officer abused position of trust to smuggle marijuana into prison where by virtue of his supervisory position he was not subject to search when entering the prison); United States v. Sierra, 188 F.3d 798, 802-03 (7th Cir. 1999) (policeman used badge to facilitate entry into store that he robbed); United States v. Pedersen, 3 F.3d 1468, 1471-72 (11th Cir. 1993) (police officer used position of trust to illegally acquire and disseminate confidential information); United States v. Brann, 990 F.2d 98, 102-03 (3d Cir. 1993) (narcotics strike force agent kept government money issued for unsurveilled drug purchases during investigation, faking the transactions and turning in spurious drug mixtures); United States v. Claymore, 978 F.2d 421, 423 (8th Cir. 1992) (tribal police officer stopped minor for violating curfew and raped her in patrol car); with United States v. Nuzzo, 385 F.3d 109, 115-17 (2d Cir. 2004) (INS agent, who did occupy position of trust as to some functions, did not "abuse" that position where his offense of drug conspiracy was not shown to have a direct nexus to his INS position).
We are aware of two reported appellate cases involving environmental offenses by a public employee where the issue of an abuse of trust enhancement arose. Both were in the Sixth Circuit. In each case the defendant was superintendent of a public water treatment plant, and he received an enhancement under Section 3B1.3 for abuse of a position of public trust. The first of those decisions was United States v. White, 270 F.3d 356, 360-61, 371-73 (6th Cir. 2001), which reversed the district court's refusal to impose an abuse of public trust enhancement in sentencing defendant superintendent for false statements contained in required water turbidity reports that he prepared. There the court explained its reasoning as follows:
We do not believe that all members of the general public share such a quasifiduciary relationship with all public servants. It seems impossible that the sentencing commission intended that every "faceless" government bureaucrat performing her duties with some measure of discretion should be subject to an abuse-of-trust enhancement should she be convicted of any crime.... In this case, it is obvious that customers of the Water District placed a high degree of trust in the District to provide them with potable drinking water, and granted the District substantial discretion, subject to federal and state regulation, as to how to provide such a service. The District, in turn, placed White in charge of its water purification efforts with apparently little or no administrative oversight; indeed, it appears that White's misdeeds would never have been discovered had there not been a surprise inspection by Division of Water agents. Given these facts, we believe that the quasi-fiduciary trust relationship between the District and its customers should be imputed to White, and thus that the abuse-of-trust enhancement was appropriate here given his violation of the public trust.... This result also follows the apparent reasoning of our sister circuits that officers charged with protecting public health and safety, whether or not elected by or known to members of the public, enjoy a special trust relationship with the public that is breached when they commit a crime.
The Sixth Circuit followed its White decision in United States v. Kuhn, 345 F.3d 431, 432-38 (6th Cir. 2003) (reversing district court departure after imposing unopposed abuse of trust enhancement). There the defendant was also a superintendent of a municipal water treatment plant, who was convicted of causing a CWA discharge violation and participating in submitting false CWA discharge monitoring reports. The Court of Appeals stated in Kuhn, "[I]t is clear that the enhancement was properly applied. Kuhn was a government employee, charged with the safe and efficient operation of a wastewater treatment operation.... [H]is high-level position with respect to his public function of wastewater treatment, 'contributed in some significant way to facilitating the commission' of his offense." Id. at 437 (quoting Section 3B1.3, cmt. n.1).
3. The enhancement has been applied to certain persons holding government-issued professional or occupational licenses.
A government-issued professional or occupational license can contribute to creation of a position of public and/or private trust, and the enhancement may apply if that privilege is abused. The underlying rationale appears to be that such persons make their livelihood by holding those credentials (or pretending to hold those credentials), and may thereby place themselves in positions of special trust in relation to their victims. The physician sexually abusing a patient and the attorney/guardian embezzling from a client are mentioned as examples in the Application Notes. See supra n.69. Even in this setting, however, the determination must be fact-specific.
Examples of cases involving government-issued professional or occupational licenses are as follows. Compare United States v. Gonzalez-Alvarez, 277 F.3d 73, 75-76, 81-82 (1st Cir. 2002) (licensed dairy farmer abused position of public trust when he knowingly adulterated milk to increase volume and delivered it to processing plant; his position as licensed supplier significantly facilitated his commission of the offense);*fn77 United States v. Liss, 265 F.3d 1220, 1229-30 (11th Cir. 2001) (physicians accepting kickbacks for referrals to specific lab occupied position of trust with Medicare and abused it, even though claims were medically necessary and physicians did not submit fraudulent claims to Medicare); United States v. Velez, 185 F.3d 1048, 1050-51 (9th Cir. 1999) (operator of private immigration consulting firm possessing statutorily-designated status with INS to assist aliens submitting legalization applications abused position of trust in submitting false statements that could not be discovered in routine review);*fn78 United States v. Sherman, 160 F.3d 967, 968-71 (3d Cir. 1998) (physician defrauded insurer with claims for medical services never rendered: "The mere possession of a professional license, medical or otherwise by a defrauder, does not mandate a § 3B1.3 enhancement. But where a defendant obtains his minimally-supervised position by virtue of his professional training and license and then takes advantage of the discretion granted to him in a way which significantly facilitates the fraud, we can rightly say that he has abused a position of trust."); United States v. Harrington, 114 F.3d 517, 519 (5th Cir. 1997) (attorney abused position of public trust in attempting to obtain fraudulent affidavits to obstruct justice); United States v. Rutgard, 116 F.3d 1270, 1293 (9th Cir. 1997) (ophthalmologist convicted of Medicare mail fraud); United States v. Adam, 70 F.3d 776, 782 (4th Cir. 1995) (physician convicted of receiving kickbacks paid out of welfare funds); with United States v. Hall, 349 F.3d 1320, 1324-26 (11th Cir. 2003) (church pastor who conducted "roadshow meetings" to attract non-parishioners to fraudulent investment scheme did not occupy position of trust as to victims); United States v. Morris, 286 F.3d 1291, 1297 (11th Cir. 2002) (abuse of trust did not apply where attorney's status may have enhanced his ability to lure victims to investment fraud scheme, but he had no attorney-client relationship with them).
4. The enhancement has been applied to a manager for abuse of trust by forcing mine workers to falsify safety training certifications.
The Fourth Circuit has held that defendants abused positions of public and private trust in a case where defendants were employers who caused their workers to sign false certifications that the workers had received safety training required under a federal mine safety law. In United States v. Turner, 102 F.3d 1350 (4th Cir. 1996), defendants were the operators of a coal mine that was subject to safety training and certification requirements of the Federal Mine Safety and Health Act. They were convicted of violating that law by causing the mine workers to sign certifications falsely stating that they had received required safety training, under threat that if they did not sign they would lose their jobs. Id. at 1352-53. The district court applied a Section 3B1.3 enhancement and the circuit court affirmed, stating:
By virtue of their positions as owner, President, and mine operators of [the mining company], both Turners regularly exercised managerial discretion at the mine. The miners, as employees of the Turners, had to privately trust in them and defer to their judgment regarding mine safety and training. In addition, the rest of society had to publicly trust the Turners to follow the mine safety laws during operation of the ... mine. Accordingly, both Turners held a position of public and private trust.
If a miner was prosecuted, the enhancement for abuse of a position of trust under USSG § 3B1.3 would not apply. Such an enhancement would apply to the Turners, however, because, as mine operators, each held a position in management which gave them leverage over the miners, and which enabled them to convince the miners to commit and conceal the false statements made on the ... forms. Moreover, because society trusted the Turners to follow the mine safety laws and ensure that the ... miners actually received the required safety training, their position of public trust also made detection of the violations ... more difficult. Thus, the district court was not clearly erroneous in giving the Turners a two level enhancement under USSG § 3B1.3 for their abuse of a position of public or private trust.
This holding in Turner has been cited with approval by the Third Circuit in dicta. See Bennett, 161 F.3d at 195, n.15. It has been rejected in part, but only as to its finding of abuse of a public trust, by the Ninth Circuit in United States v. Technic Services, 314 F.3d 1031, 1053, n.15, discussed infra. The Technic Services court did adopt its reasoning as to the potential for an abuse of private trust enhancement where evidence showed that defendant supervisor altered personal air-monitoring devices worn by asbestos removal workers, and solicited the workers to sign false statements denying environmental violations. Id. at 1036-37, 1052-53 (remanding for resentencing to make findings on issue of abuse of private trust). We have not found, nor have the parties cited, any other appellate decisions discussing an enhancement for abuse of private trust in a similar factual setting.
5. There is sharp disagreement whether the enhancement applies to environmental offenses by private persons.
We have noted above that the First Circuit held in 2002 that a licensed dairy farmer abused a position of public trust when he knowingly adulterated milk and delivered it to a processing plant for distribution to consumers. Gonzalez-Alvarez, 277 F.3d at 75-76, 81-82. We have also described the Fourth Circuit ruling in Turner, that mine operators abused a position of public (and private) trust when they caused false certificates to be prepared that they were required to maintain under federal mine safety law. Turner, 102 F.3d at 1360.
There is a sharp conflict in the circuits on the basic issue of whether an abuse of public trust enhancement applies where the defendant is neither a public official nor entrusted with discretionary authority by public agencies, and commits criminal violations of federal environmental or licensing laws directed to public health and safety. Both Turner (re: regulated mine operators) and Gonzalez-Alvarez (re: licensed dairy farmer) were criticized and not followed, as to the abuse of public trust issue, by the Ninth Circuit in Technic Services in 2002. Technic Services, 314 F.3d at 1050-53 & n.15. Technic Services held in pertinent part that defendant, who managed a private contracting entity performing asbestos removal under a government contract (but had no discretion as to how to comply with CAA or CWA restrictions, which he violated along with obstructing environmental agency proceedings), did not occupy a position of public trust. Id. at 1048-52. However, Technic Services itself was a split decision with a strong dissent on this issue. Id. at 1054-59. Next, the Seventh Circuit disagreed with Technic Services in United States v. Snook, 366 F.3d 439 (7th Cir. 2004). Snook held that an environmental manager at a private petroleum refinery, who conspired to defraud the federal government by violating the CWA and concealed information required to be included in discharge reports, abused a position of trust to the municipal water treatment district into which the refinery discharged and to the public. The Snook majority relied in part on Gonzalez-Alvarez and Turner. Id. at 445-46. The Snook dissent, also strongly phrased, sided with the majority position in Technic Services, including its criticism of Gonzalez-Alvarez. Id. at 446-51 & n.3.
We have studied the reasoning expressed in both the majority and dissents in Technic Services and Snook. At the very least, we believe that the cases cannot be readily distinguished on their facts. Defendant Snook was "environmental manager" at a company that discharged water to a municipal water district under regulation but had some discretion in setting up the testing program, whereas defendant in Technic Services was secretary/treasurer and a workplace supervisor at a company that did government-contracted asbestos removal subject to licensing and regulation.
The disagreements expressed in the conflicting opinions in Technic Services and Snook, majority as well as dissent, go to the heart of interpretation of Section 3B1.3, when considering private individuals (not public servants) who commit criminal violations of environmental regulatory laws or related statutes prohibiting false statements and obstruction in that context. Here we quote just a sample of the divergent positions regarding abuse of public trust expressed in those divided opinions:
Majority opinion in Technic Services:
Here, [defendant] was charged with violating the Clean Water Act and the Clean Air Act and with obstructing agency proceedings. Because the Clean Water Act and the Clean Air Act are public welfare legislation, the victim of those offenses is the public.... The victims of [defendant's] obstruction offenses are the federal government, whose proceedings were obstructed, and the public, to the extent that the obstruction interfered with the enforcement of the Clean Air Act and the Clean Water Act. Thus, in order for [defendant] to be eligible for an enhancement for abuse of public trust, he must have been in a position of trust vis-a-vis the public or the federal government.
The record does not support a conclusion that [defendant] held a position of trust with respect to either public victim....
[I]n this case, [defendant] had no trust relationship with the government by virtue of government employment; nor was he a public officer with a "special" or quasifiduciary relationship to particular members of the public because of duties to protect their health; nor did he hold a position in which the public directly delegates duties and places the public welfare in the incumbent's hands....
We decline to find that [defendant's] position as an employee of a private firm that was a government contractor is, without more, one on which the public relied.... Nor are we willing to hold that [defendant's] position with a private firm holding a government contract warrants an "abuse of trust" enhancement because the contract called for dangerous work, asbestos abatement.... [Defendant] was required to follow environmental and safety laws and regulations, and his failure to do so exposed him to criminal liability. But the public's expectation that [defendant] would follow important laws, in itself, is not enough to trigger the "abuse of trust" enhancement.
To put it simply, the public expects everyone to comply with applicable health and safety regulations. This expectation is codified in the substantive law that prohibits the violation of those regulations. To hold that it is relevant that the public expects an individual to conform his or her behavior to the law provides no meaningful screen with which to filter out enhancement-eligible defendants. The abuse-of-trust enhancement would become applicable to nearly any defendant.
The fact that [defendant] was licensed to perform asbestos abatement does not necessarily transform his position into one of public trust, either. Licenses and certification requirements -- which commonly are justified on grounds of public health and safety -- cover many activities, including quite ordinary ones like driving a car. Not every licensed activity is a position of public trust.
[T]here is nothing on which to rest a conclusion that [defendant] occupied a "position of public ... trust." An obligation to follow important laws that further the public health and safety cannot, merely by its own force, create a position of public trust. To hold otherwise would convert the enhancement into the general rule. Technic Servs., 314 F.3d at 1048-51 (italics original; bracketed material added; citations and footnotes omitted).
Majority opinion in Snook: [Defendant] contends that he occupied a position of trust with respect to [his employer] but not to the [municipal water] District or the public. We disagree. The Clean Water Act is public-welfare legislation and the victims of violations are the public.... As Environmental Manager at [the petroleum refinery], [defendant] was given discretion to devise [its] wastewater treatment and testing systems, as well as to decide when to conduct such testing. And although the District did periodically conduct its own testing, it was for the most part dependent on the data that [the refinery] reported. The facts here illustrate this point effectively -- for over three years [the refinery's] wastewater had numerous violations that went undetected because [defendant], in his unique position as Environmental Manager, did not report them. Moreover, unlike other self-reporting situations (taxpayers, for example), the regulations here apply to matters that directly and significantly affect the public's health and safety.... Given the responsibility and discretion given to [defendant] in his position as Environmental Manager in complying with the District's regulations, and his abuse of that position, the district court did not err in applying the sentencing increase.
Snook, 366 F.3d at 445-46 (bracketed material added; citations omitted).
It is noteworthy, we think, that the vast majority of environmental criminal decisions in the appellate case law have not included any reference to Section 3B1.3 as an enhancement issue, nor have they indicated that it was applied in the sentencing of the defendants. We have scrutinized the many environmental decisions cited in all other sections of this memorandum, and in our post-trial opinion (dkt. 721), and none except the handful noted here have contained any reference to this topic. For example, in the Third Circuit, the defendants in each of the following environmental cases appealed their convictions on various grounds, but none of those decisions indicated that defendants had received an abuse of trust enhancement or that the issue had even been considered: United States v. Abrogar, 459 F.3d 430 (3d Cir. 2006); United States v. Chau, 293 F.3d 96 (3d Cir. 2002); United States v. W. Indies Transp., 127 F.3d 299 (3d Cir. 1997). This is true of all the other environmental cases we have discussed in this and our prior opinion, except those described in this subsection. See, e.g., environmental sentencing decisions summarized supra, Sec. III.B. * * *
Given this unsettled state of the case law on facts such as we have in the present case, this Court must choose how to proceed in evaluating whether and how an abuse of trust enhancement may apply to any of the defendants here.
We will follow that aspect of Turner that would apply an enhancement for abuse of a position of private trust if a defendant occupied a "position in management which gave them leverage over the [workers], and which enabled them to convince the [workers] to commit and conceal the false statements" made in responding to required health and safety reporting obligations of the employer. Turner, 102 F.3d at 1360. As noted in the foregoing discussion, Turner was decided in 1996. Its holding regarding private trust on the facts presented has raised no controversy. Neither the Ninth nor the Seventh Circuit, in Technic Services and Snook, respectively, took issue with that aspect of the Turner holding, and the Third Circuit has cited Turner with apparent approval in Bennett, 161 F.3d at 195, n.15. In fact, the majority in Technic Services followed that aspect of Turner in finding that the defendant supervisor did hold a position of private trust with respect to the asbestos workers, and remanding for resentencing to determine whether that position of trust was abused within the meaning of Section 3B1.3.*fn79
We will not follow the other aspect of Turner, as followed by the majority in Snook but rejected by the majority in Technic Services, that would find a position of public trust inherent in the status of being a manager at a private entity required to comply with environmental or health and safety laws and regulations. As we have noted, the Third Circuit has not had occasion to rule in this factual context, and its apparent approval of Turner was in dicta in Bennett, where the facts were a conventional (albeit spectacular) "trusted fraud artist" scenario. This Court is more persuaded by the reasoning of the Technic Services majority and the Snook dissent on this point, rather than the contrary reasoning expressed by the Snook majority and the Technic Services dissent.
Put as simply as possible, in our view the text and commentary of Section 3B1.3 itself, and the vast body of relevant cases as summarized in detail above, lead us to conclude that an individual functioning in a private capacity, not entrusted with any special discretion under law or by a government permit, license, or contract as to how to comply with governmental health and safety standards, does not thereby occupy a "position of trust" in relation to the government or the public. The logic that would extend the concept of a fiduciary or quasi-fiduciary duty to a private actor in relation to the government or the public in those circumstances is simply too attenuated to support a sentencing enhancement under this section of the guidelines. Such a defendant is surely criminally liable, and other enhancements may apply under the guidelines (as we have found here), but we do not think the "public trust" concept is properly applied in that setting. It certainly is not suggested in any of the examples in the commentary to Section 3B1.3, or in the reams of cases presenting typical "public trust" situations through the years. If it is to be determined for sentencing policy reasons that "public welfare" statutes create a "public trust" relationship between a private defendant and the government or public so as to warrant this enhancement, that would seem to be something the Sentencing Commission should consider before we would impose it as part of an individual sentencing decision.
Relying on Section 3B1.3 and its commentary and applicable case law as discussed above, we make the following rulings.
This Court finds that the evidence supports a 2-level upward role adjustment as to defendants PRISQUE and FAUBERT for abuse of a position of private trust in relation to Atlantic States workers, under Section 3B1.3. This finding is not based upon their titles as plant manager or human resources manager/safety director, respectively. Rather, it is based upon their specific offense conduct and relevant conduct (exclusive of foreseeable acts of others under Pinkerton analysis) that is pertinent to this guidelines section. We do not find that the evidence supports an adjustment under Section 3B1.3 for defendants MAURY or DAVIDSON.
This ruling is sufficiently supported by those aspects of the evidence showing that PRISQUE and FAUBERT each held a "position in management which gave them leverage over the [workers], and which enabled them to convince the [workers] to commit and conceal... false statements." Turner, 102 F.3d at 1360. We have described that evidence in detail supra, Sec. III.B., and incorporate that discussion and record citations here by reference. We specifically find, under Section 3B1.3, the following:
(1) PRISQUE was convicted on Count 8 (obstruction of OSHA's investigation of the injury of worker Owens by a saw blade), and on related conspiracy Objectives C, D, and E. That aspect of the conspiracy also involved knowing participants FAUBERT (the manager having direct contact with OSHA about the Owens incident, under PRISQUE's command), and the worker Marchand-Mendoza who, although unwilling, nevertheless lied to OSHA at the instruction of PRISQUE. (See dkt. 721 at 159-163.)*fn80
(2) FAUBERT was convicted on Count 10 (obstruction of OSHA's investigation of the Coxe forklift fatality), and on related conspiracy Objectives C, D, and E. That aspect of the conspiracy also involved knowing participants PRISQUE, and the worker Marchan who, having been threatened with loss of his job if he disobeyed, lied to OSHA at the instruction of FAUBERT and the urging of PRISQUE. (See dkt. 721 at 157-159 & n.88.)
As to defendants PRISQUE and FAUBERT, we find the evidence established, by at least a preponderance, that those defendants (1) occupied a position of private trust in relation to the workers whom they induced to lie to OSHA; and (2) abused that position in a way that significantly facilitated those crimes. Iannone, 184 F.3d at 222.
We base our finding on the first of those prongs on the three-factor Pardo test: (1) their positions did allow those defendants to commit a difficult-to-detect wrong; (2) they did have sufficient authority over those workers to induce those workers to lie under threat of firing; and (3) those workers did have to rely on the integrity of those defendants when the workers were approached by OSHA for information about the worker safety incidents OSHA was investigating. Pardo, 25 F.3d at 1192.
We base our finding on the second prong on the fact that each of those defendants did abuse his position of authority over those workers in such a way as to contribute significantly to the commission and concealment of the worker's misrepresentations to OSHA: "It was [defendant's] supervisory role (and his concomitant power to fire uncooperative employees) that allowed him to convince workers to state falsely" in response to questions asked of them in the OSHA investigations. Technic Servs., 314 F.3d at 1053.
We further find that each of those defendants "abused his position of trust 'in a manner that significantly facilitated the commission or concealment of the offense'" of having the workers participate in the obstruction of OSHA. Lieberman, 971 F.2d at 993 (quoting Section 3B1.3). Workers in the position of those foundry laborers were not likely to come forward and overcome their fears to reveal that they had lied to the government inspectors under threat by their superiors. For these reasons, we find that a Section 3B1.3 adjustment does apply to defendants PRISQUE and FAUBERT.
This Court does not find that type of conduct, specifically inducing workers to make false statements in official records or to inspectors, in the evidence involving defendants MAURY and DAVIDSON. We are not of the view that, at least under the current case law, the Section 3B1.3 enhancement applies to supervisors who direct their workers to participate in violations of OSHA, the CWA, or the CAA, or even to cover up those violations by the workers' actions or their silence, without the added feature of directing those workers to make misrepresentations to authorities in oral statements or written records. Accordingly, we do not impose a Section 3B1.3 adjustment on defendants MAURY or DAVIDSON.*fn81
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IV. CHAPTER THREE, PART C (OBSTRUCTION OF JUSTICE)
A. USSG § 3C1.1 - Obstructing or Impeding the Administration of Justice -Perjury
The guidelines provide a two-level upward adjustment for obstructing or impeding the administration of justice as follows:
If (A) the defendant willfully obstructed or impeded, or attempted to obstruct or impede, the administration of justice during the course of the investigation, prosecution, or sentencing of the instant offense of conviction, and (B) the obstructive conduct related to (i) the defendant's offense of conviction and any relevant conduct; or (ii) a closely related offense, increase the offense level by 2 levels.
Among the types of conduct to which this adjustment applies, the commentary identifies: "committing... perjury." USSG § 3C1.1, cmt. n.4(b).
A "defendant's right to testify does not include a right to commit perjury." United States v. Dunnigan, 507 U.S. 87, 96 (1993) (citations omitted). As the Supreme Court has observed, "[a] sentence enhancement based on perjury does deter false testimony"; and "[i]t furthers legitimate sentencing goals relating to the principal crime, including the goals of retribution and incapacitation." Id. at 97.
The burden is on the government in seeking this as well as other guidelines enhancements. The Third Circuit has described that burden under Section 3C1.1 as follows:
Because the government is the party seeking to upwardly adjust [defendant's] sentence, the government bears the burden of proving by a preponderance of the evidence that the defendant willfully obstructed or impeded, or willfully attempted to obstruct or impede, the administration of justice.... The government bears the ultimate burden of persuasion on this issue: "[t]his prevents the criminal defendant from having to 'prove a negative' in order to avoid a stiffer sentence."
United States v. Belletiere, 971 F.2d 961, 965 (3d Cir. 1992) (internal citations omitted).*fn83
The facts underlying a sentencing enhancement for perjury under Section 3C1.1 need only be proven by a preponderance of the evidence. United States v. Miller, 527 F.3d 54, 60 n.5 (3d Cir. 2008).
The analysis required of the sentencing court is exacting, however, because of the important interests at stake. Thus:
[I]f a defendant objects to a sentence enhancement resulting from her trial testimony, a district court must review the evidence and make independent findings necessary to establish a willful impediment to or obstruction of justice, or an attempt to do the same, under the perjury definition we have set out.... When doing so, it is preferable for a district court to address each element of the alleged perjury in a separate and clear finding. The district court's determination that enhancement is required is sufficient, however, if... the court makes a finding of an obstruction of, or impediment to, justice that encompasses all of the factual predicates for a finding of perjury.
Dunnigan, 507 U.S. at 95. The rationale for this requirement is that "[t]he concern that courts will enhance sentences as a matter of course whenever the accused takes the stand and is found guilty is dispelled by our... explanation that if an accused challenges a sentence increase based on perjured testimony, the trial court must make findings to support all the elements of a perjury violation in the specific case." Id. at 96-97.
The Supreme Court has adopted the federal criminal definition of perjury as the standard for this guidelines enhancement:
In determining what constitutes perjury, we rely upon the definition that has gained general acceptance and common understanding under the federal criminal perjury statute, 18 U.S.C. § 1621. A witness testifying under oath or affirmation violates this statute if she gives false testimony concerning a material matter with the willful intent to provide false testimony, rather than as a result of confusion, mistake, or faulty memory.
Id. at 94 (emphasis added).
The commentary to Section 3C1.1 was amended, effective November 1, 1997, to incorporate this Dunnigan standard for evaluating alleged false testimony of defendant. See USSG, App. C, Amendment 566 (1997). The 1998 version of the guidelines applicable in this case thus provides:
This provision is not intended to punish a defendant for the exercise of a constitutional right. A defendant's denial of guilt (other than a denial of guilt under oath that constitutes perjury), refusal to admit guilt or provide information to a probation officer, or refusal to enter a plea of guilty is not a basis for application of this provision. In applying this provision in respect to alleged false testimony or statements by the defendant, the court should be cognizant that inaccurate testimony or statements sometimes may result from confusion, mistake, or faulty memory and, thus, not all inaccurate testimony or statements necessarily reflect a willful attempt to obstruct justice.
USSG § 3C1.1, cmt. n.2 (emphasis added to indicate revised portion of text).
The text that was deleted in that amendment had stated: "such testimony or statements should be evaluated in a light most favorable to the defendant." See USSG App. C, Amendment 566 (1997). The commentary text emphasized above was inserted in lieu of that deleted clause. Id. Thus, as of November 1, 1997 and all succeeding versions of the guidelines, the "most favorable" language is no longer applicable, and the Dunnigan standard has replaced it. See United States v. Thundershield, 474 F.3d 503, 509 (8th Cir. 2007).*fn84
The essential factual elements of a perjury violation for purposes of a Section 3C1.1 enhancement are therefore "that the defendant (1) gave false testimony (2) concerning a material matter (3) with the willful intent to provide false testimony." United States v. Fiorelli, 133 F.3d 218, 221 (3d Cir. 1998) (citing Dunnigan). It is mandatory, and not discretionary, that the court must apply this enhancement if the court finds that the factual predicates have been met. United States v. Williamson, 154 F.3d 504, 505-06 (3d Cir. 1998).
A "material" matter is defined in the guidelines commentary as "evidence, fact, statement, or information that, if believed, would tend to influence or affect the issue under determination." USSG. § 3C1.1, cmt. n.6. This definition has been adopted by the majority of circuits, including the Third Circuit, for determining whether the materiality element of perjury has been established for the purpose of this enhancement. Miller, 527 F.3d at 79-80 & n.22.
Where a defendant exercises his or her right to testify at their own trial, a "simple denial of guilt... is not a basis for an obstruction-of-justice enhancement." United States v. Godinez, 110 F.3d 448, 456 (7th Cir. 1997); see, e.g., United States v. Keys, 899 F.2d 983, 988 (10th Cir. 1990) ("We agree that a denial of guilt or exercise of the constitutional right to testify in one's own defense is not a proper basis for application of Guidelines section 3C1.1."). But see United States v. Aguilar-Portillo, 334 F.3d 744, 748-49 (8th Cir. 2003) (rejecting this view as not consistent with current Supreme Court precedent).*fn85
On the other hand, "The giving... of perjurious testimony, however, is not the exercise of a constitutional right." Id. Thus, "the law is clear that when a defendant 'decide[s] to take the stand and tell the jury a story,' he does so at his own risk, for if he commits perjury, the court may, at the time of sentencing, enhance his sentence for obstructing justice." United States v. Hickok, 77 F.3d 992, 1007 (7th Cir. 1996) (citation omitted).
This potential guideline enhancement presents courts with "the question of when a defendant's election to testify may serve as a boomerang, elevating his offense level if the judge believes the testimony to have been knowingly false." United States v. Akitoye, 923 F.2d 221, 228 (1st Cir. 1991). The Seventh Circuit in Godinez recognized this inherent tension by quoting with approval the following observation of the sentencing court:
[I]f a defendant gets up and just makes a general denial that he is guilty of the allegations in the indictment, the Court... would be hard pressed to invoke 3C1.1. The problem being is that hardly ever occurs, because... when they do take the stand in their own defense, and when they're waiving their constitutional right... they are not only subjecting themselves to the examination of their client [sic], but also the cross examination of the government attorney. And invariably, you get into specifics through either direct examination or cross examination....
Godinez, 110 F.3d at 456-57. The Godinez court further explained that "[t]he denial of knowledge is not the same as a general denial of guilt." Id. at 457.
Courts generally recognize that "'a guilty verdict, not set aside, binds the sentencing court to accept the facts necessarily implicit in the verdict.'" Boggi, 74 F.3d at 478-79 (quoting United States v. Weston, 960 F.2d 212, 218 (1st Cir. 1992)). However, when a jury renders a general verdict, establishing that the verdict necessarily determined any particular fact can be very difficult. United States v. McLaughlin, 126 F.3d 130, 138 (3d Cir. 1997). The Third Circuit has cautioned that "[g]iven the concerns reflected in Dunnigan's requirement of findings, if a sentencing court is going to rely on the verdict of the jury as laying part of the foundation for a § 3C1.1 enhancement, there should be no question but that the relevant finding was necessarily made by the jury." Fiorelli, 133 F.3d at 225.
Nor is a finding of falsity by the jury sufficient to satisfy the inquiry the sentencing court must make to determine whether defendant committed perjury. "[A] jury finding of falsity does not necessarily mean there has been perjury." Id. at 223. Indeed, "a jury's verdict cannot itself support a finding of perjury." Miller, 527 F.3d at 77 n.19. In other words, "the perjury of the defendant must... be... supported by evidence other than the jury's having disbelieved him...." Id. at 76 (quoting McLaughlin, 126 F.3d at 140 (emphasis in original)). "[W]e prohibit a district court from automatically enhancing a defendant's sentence just because a jury returned a guilty verdict after the defendant testified in his or her own defense. Were it otherwise we would enhance the risk of chilling that constitutionally protected right." United States v. Jones, 983 F.2d 1425, 1430 (7th Cir. 1993). "Dunnigan's requirement of fact-finding insures that courts will not automatically enhance sentences whenever the accused takes the stand and is thereafter found guilty." United States v. Catano-Alzate, 62 F.3d 41, 42 (2d Cir. 1995).
The sentencing court thus has the obligation to determine whether all factual elements of the perjury definition have been met -- that is, falsity, materiality, and willfulness. See Boggi, 74 F.3d at 479. "Although the jury adjudicates guilt, the district court is responsible for making findings relevant to the matter of obstruction, and if the government does not convince the court that the defendant willfully intended to provide false testimony, an enhancement for obstruction because of false testimony is not warranted." Aguilar-Portillo, 334 F.3d at 749.
The Supreme Court in Dunnigan held that there was sufficient evidence, and the district court had made sufficient factual findings, to support a perjury enhancement under Section 3C1.1. Dunnigan, 507 U.S. at 95-96. There, defendant was accused of conspiring to distribute cocaine. The government's case in chief consisted of five witnesses who testified to their personal knowledge of her drug trafficking. Defendant testified and denied all criminal acts attributed to her. On cross-examination, the government questioned her regarding the testimony of the five prosecution witnesses. She denied their inculpatory statements and said she had not possessed or distributed cocaine during that time or at any other time. The government's rebuttal included another witness, who testified to purchasing crack cocaine from defendant. The jury found defendant guilty. Id. at 89-90. The district court's finding of perjury is quoted in the margin.*fn86 The Court concluded, "[g]iven the numerous witnesses who contradicted respondent regarding so many facts on which she could not have been mistaken, there is ample support for the District Court's finding." Id. at 95-96.
The requirements imposed upon the district court when the government seeks a guideline enhancement under Section 3C1.1 for alleged perjury have not changed after Booker. "Post-Booker, it remains the province of the sentencing court to determine by a preponderance of the evidence whether a factual basis for a finding of perjury (and, thus, for an obstruction of justice enhancement) exists." United States v. Gobbi, 471 F.3d 302, 314 (1st Cir. 2006). The process by which the sentencing court makes its independent determination, however, is case-specific and need not become a "mini-trial" in itself. As the Court of Appeals for the Seventh Circuit has stated:
Our review of the relevant case law, including... Dunnigan,... persuades us that the "independent finding requirement" is not as exacting as the appellant would have this court believe.... As Dunnigan makes clear, a district judge deciding whether to apply a sentence enhancement for obstruction of justice need not conduct a mini-trial with respect to each of the defendant's false statements, nor is it necessary for the sentencing judge to set forth his findings specifically in terms of the elements of perjury.... In fact, the findings at issue in Dunnigan were considerably less specific than those challenged in this appeal, yet the Supreme Court held that those findings were adequate for purposes of applying a sentence enhancement pursuant to § 3C1.1.
The court finds that the defendant was untruthful at trial with respect to material matters in this case. The defendant denied her involvement when it is clear from the evidence in the case as the jury found beyond a reasonable doubt that she was involved in the conspiracy alleged in the indictment, and by virtue of her failure to give truthful testimony on material matters that were designed to substantially affect the outcome of the case, the court concludes that the false testimony at trial warrants an upward adjustment by two levels.
Dunnigan, 507 U.S. at 91.
Reported post-Dunnigan appellate decisions affirming imposition of this enhancement, based upon sufficient factual findings of perjury at trial, include the following. See, e.g., Thundershield, 474 F.3d at 507-09; Gobbi, 471 F.3d at 314-15; United States v. Owens, 308 F.3d 791, 794-95 (7th Cir. 2002); United States v. Johnson, 302 F.3d 139, 153-54 (3d Cir. 2002); United States v. Haas, 171 F.3d 259, 268 (5th Cir. 1999); Godinez, 110 F.3d at 456-57; Boggi, 74 F.3d at 478-79; Hickok, 77 F.3d at 1006-09; United States v. Weitzenhoff, 35 F.3d 1275, 1292 (9th Cir. 1993); see also United States v. Lipscomb, 284 Fed.Appx. 924 (3d Cir. 2008) (same).
Circuit court decisions applying the same principles, but reversing and remanding Section 3C1.1 perjury enhancements based upon inadequate factual findings, include the following. See, e.g., Fiorelli, 133 F.3d at 220-25; Catano-Alzate, 62 F.3d at 42-43; United States v. Hilliard, 31 F.3d 1509, 1518-21 (10th Cir. 1994); see also Miller, 527 F.3d at 74-81 (holding that record did not support findings of willful falsity [applying "rule of fundamental ambiguity"], or of materiality); United States v. Friedman, 998 F.2d 53, 57-58 (2d Cir. 1993) (remanding for more specific findings where district court found trial testimony not believable but apparently declined to impose perjury enhancement on the belief that such was discretionary).
Defendants cite one reported appellate decision affirming a district court's refusal to impose a Section 3C1.1 perjury enhancement where it found that the government did not prove that defendant was lying. Aguilar-Portillo, 334 F.3d at 748-49. Defendants also cite two non-appealed district court decisions, each holding that the factual elements of perjury were not sufficiently established to require enhancement under Section 3C1.1. United States v. Lester, 376 F.Supp.2d 679, 683-84 (W.D. Va. 2005); United States v. Biheiri, 356 F.Supp.2d 589, 600 (E.D.Va. 2005).
The government seeks enhancements under Section 3C1.1 for alleged perjury against PRISQUE, FAUBERT, MAURY, and DAVIDSON. (Gov. I at 54-64.) Each of those individual defendants opposes enhancement on that ground. (Prisque I at 91-92; Prisque II at 22-25; Faubert III at 8-14; Maury II at 31-34; Davidson I at 45-47; Davidson II at 17-21.)
Here at the outset of this discussion, the Court must reject any contention by a defendant that if he has an underlying conviction for obstruction of justice (Counts 8-11 in this case), no enhancement under Section 3C1.1 is permissible. (See, e.g., Prisque I at 92.) The application notes to both Sections 2J1.2 and 3C1.1 clearly state that if a significant further obstruction occurs during the prosecution of an underlying obstruction offense, that further obstruction will trigger enhancement under Section 3C1.1, as we explain in the margin.*fn87
We also reiterate that in making all findings on these issues, the Court has used the standard for interpreting a defendant's testimony as set forth in Dunnigan and the corresponding guideline application note, Section 3C1.1, cmt. n.2. See supra n.84 & accompanying text. This means that we recognize that the former standard, which was to interpret defendant's trial testimony in the light most favorable to defendant, is not applicable here. Id. On the other hand, there is no suggestion in the guidelines or the case law that the district court should interpret the evidence in the light most favorable to the government in making findings under this guideline section. That, of course, was the applicable standard for deciding defendants' motions under Rule 29. (See, e.g., dkt. 721 at 130-131.) Rather, here the Court will simply use the Dunnigan standard, basing its findings on the trial evidence and Court's own observation of the trial.
The Court will confine its analysis to the instances of alleged perjury identified by the government against each individual defendant. Belletiere, 971 F.2d at 965 (government bears burden of proof and ultimate burden of persuasion under Section 3C1.1). Relying on the text and commentary of Section 3C1.1 as it pertains to perjury, and the applicable authorities discussed above, we make the following findings.
First, we find that as to all matters discussed below, the testimony of the defendant concerned a material matter because "if believed, [that] testimony would tend to influence or affect the issue under determination." USSG § 3C1.1, cmt. n.6. The government keyed its specific contentions to the counts of conviction of each individual defendant, as cited below, and we agree that those portions of the defendants' testimony were material to the particular count.
We find that the government has carried its burden on the remaining elements of perjury as to some, but not all, of the portions of testimony it cites in support of this enhancement.
The jury found defendant PRISQUE guilty on three counts of obstruction of justice (Counts 8, 9, and 11), and one count of intentional violation of the CAA (Count 34), as well as the Count 1 conspiracy count and all five alleged unlawful objectives of the conspiracy. (See dkt. 721 at 3 n.4 & 112-113 n.64.)*fn88 Defendant PRISQUE testified for three trial days on direct, cross, and redirect examination. He denied all criminal acts attributed to him, by asserting general denials of guilt and by his specific testimony elicited by counsels' questions. (Tr. 485 at 37-224; tr. 487 at 4-130; tr. 489 at 4-189.)
The general denial of guilt by defendant PRISQUE was stated in his direct examination as follows:*fn89
Q: Mr. Prisque, we've been here since, taking testimony since October. And, we're now in the end of February. We've heard witnesses come and make allegations that you involved yourself in wrongdoing. Did you ever involve yourself for the purpose of committing a crime while at work, any time, any day, any minute?
A: No, I didn't. (Tr. 487 at 97.)
The government points to each of his substantive felony counts of conviction, and gives what it considers to be examples of willfully false testimony by him, as we discuss below. PRISQUE argues that he did not commit perjury, and that his convictions hinged upon mental state and not necessarily the act itself. (Prisque II at 22.)
Count 8 alleged that defendant PRISQUE engaged in obstructive conduct with respect to the OSHA investigation of the incident in which employee Robert Owens sustained a fractured skull, shattered nose, and loss of an eye while operating "cut off saw" machinery as a relief worker. Specifically, Count 8 alleged that PRISQUE instructed the regular operator of that machinery, Isabel Marchand-Mendoza, to falsely inform the OSHA inspectors that the safety shield for the saw had not been changed since that incident, when in fact a steel wire screen had been added to the shield post-incident. (See dkt. 721 at 159.)
The government's evidence on that count consisted primarily of testimony of the OSHA inspector, Alex Salerno, and the named worker, Marchand-Mendoza, as well as the injured worker, Owens. Their testimony is summarized in the post-trial opinion. (Id. at 159-163.) Owens and Marchand-Mendoza both testified that the shield had no wire screen at the time of the injury. Salerno testified that he observed what appeared to be a newly-constructed shield when he made his on-site inspection, and it included wire mesh over plexiglas. He said that if the wooden shield had been changed in any way since the Owens injury three weeks prior, he would have needed to know that because it would not depict conditions on the day of the injury. Marchand-Mendoza testified that a few days after the injury, a plant carpenter added the wire mesh to the shield, and that PRISQUE initiated a conversation with him in which PRISQUE communicated that "if somebody asked me if that... metal was there,... I was supposed to say yes." Marchand-Mendoza said he agreed to say that because he wanted to keep his job. Salerno and Marchand-Mendoza both testified that Salerno did ask Marchand-Mendoza that very question during his inspection, and Marchand-Mendoza said he lied when he told Salerno that the shield had always been like that. (Id. at 159-163.)
The finding of this Court on Count 8 in the post-trial opinion (applying the standard of Rule 29), was: "We find that the evidence was sufficient for a reasonable jury to find that Prisque did instruct Marchand-Mendoza to falsely inform the [OSHA] inspectors that the saw safety shield had not been changed since [the Owens incident], when in fact, a steel wire screen had been added to the shield after the accident.... Accordingly, we find that the verdicts of conviction on Count 8 are supported by sufficient evidence." (Id. at 163.)
Defendant PRISQUE testified on cross examination:
Q: And Mr. Isobel Marchan [sic], Mr. Marchan said that you told him to lie to OSHA about the wire mesh being over the -- a protective screen (indiscernible) cut saw, did you A No. No. As far as I can remember (indiscernible).
THE WITNESS: As far as I remember that shield always had a screen on it.
Q: And so he's mistaken about that, correct, that you told him to lie to OSHA?
A: Isobel's trying to help his brother, yeah.
Q: Is that correct, he's mistaken?
A: Yeah. (Tr. 489 at 99.)
This Court makes the following findings as to the government's evidence on Count 8, and the specific contrary testimony of PRISQUE:
(1) The facts in the government's evidence, referred to above, were the essential facts necessary to support the verdict on this count. Therefore, the falsity of the conflicting testimony by PRISQUE is necessarily implicit in the jury's verdict on Count 8. In addition, we find that the government's evidence on that count was sufficiently credible on the essential facts disclosed in that evidence, and that the conflicting testimony of PRISQUE on the same factual issues was false.
(2) The Court makes an independent finding that PRISQUE's testimony on Count 8 was willfully false. This finding is supported by evidence other than the jury's having disbelieved him. Given the nature and extent of the testimony of the government's witnesses who contradicted PRISQUE regarding the essential facts, on which PRISQUE could not have been mistaken (although he certainly did deny those facts), we find that PRISQUE's testimony on those essential facts under Count 8 was willfully false.
Count 9 alleged that defendants PRISQUE, FAUBERT, and MAURY engaged in obstructive conduct with respect to the OSHA investigation of the incident in which employee Coxe sustained fatal injuries when he was run over by forklift #24, driven by a worker named De Los Santos. Specifically, Count 9 alleged that those defendants "[took] steps to conceal facts regarding [that] forklift fatality... from [OSHA] inspectors." (See dkt. 721 at 163.)
The government's evidence on Count 9 consisted of extensive testimony and exhibits in support of the allegation that defendants PRISQUE, FAUBERT, and MAURY took steps to conceal the fact that the particular forklift had defective brakes and other problems at the time of the incident. The government's witnesses in its case in chief included the OSHA inspector, Tiedeman, detective Barsony from the local prosecutor's office, responding police officer Ken Decker, and workers including George Shepherd, Robert Fretz, Robert Rush, and Kevin Redcay. The government also presented rebuttal witnesses including responding police officer Robert Schmeltzly. Both police officers testified that they did not give anyone at the plant permission to move the forklift from the incident scene that morning. (Tr. 372 at 106 (Decker); tr. 554 at 5-9 (Schmeltzly).) The testimony of the other government witnesses on that count is summarized in the post-trial opinion. (See dkt. 721 at 163-176.) Here we give a brief overview of that testimony.
The Coxe incident occurred at approximately 6:00 a.m. on March 24, 2000. PRISQUE was plant manager, FAUBERT was head of human resources and designated OSHA liaison person at the plant, and MAURY was maintenance superintendent. OSHA (Tiedeman) arrived at the plant at about 10:30 a.m. She asked to see the incident location and the forklift involved. FAUBERT showed her the scene, which had been swept clean, and informed her that the forklift was in the maintenance shop. Tiedeman asked for it to be brought out and demonstrated.
FAUBERT drove it, and the brakes, lights and horn were working. Tiedeman asked FAUBERT if anyone had touched the forklift, and he said no. OSHA's later examination of maintenance records indicated that the forklift had a long history of maintenance problems reported by various drivers, and that the driver on the shift immediately before the Coxe incident had written that the headlights and warning lights were not working and the brakes were defective.
Shepherd testified that after the responding police left, PRISQUE told MAURY to have Shepherd, another "white shirt" superintendent, take the forklift down to the garage and have the mechanic go over it, and "make sure there's nothing wrong with it." MAURY came over to Shepherd, and Shepherd got on the forklift and drove down the roadway, past the production areas and the main gate, to the maintenance garage. Shepherd testified that while he was driving, MAURY was walking alongside and MAURY told him to try the brakes, and the brakes were not working right, which Shepherd told MAURY. At the garage, MAURY went away and Shepherd went in and told the mechanic, Yukna, "to go over the forklift, make sure there's nothing wrong with it, to just fix it. And I told him the brakes weren't working." Yukna refused, according to Shepherd. (Neither the driver, De Los Santos, nor mechanic Yukna testified at trial; there were no eyewitnesses to the fatal incident.) Another forklift operator, Fretz, testified that he was in the mechanic's garage at that time, and he heard Shepherd tell Yukna to make sure everything worked. Fretz saw Yukna put his hand on the brake and push it very easily right to the floor, and heard him say that he figured there was no fluid in the master cylinder. Shepherd reported back to FAUBERT's subordinate, safety officer Maddock, that he had taken the forklift to the garage and told Yukna that the brakes weren't working and told him to go over the forklift and make sure there were no problems and fix it. Meanwhile, Rush, a line foreman who saw the condition of Coxe under the forklift, encountered PRISQUE shortly after leaving the scene, and PRISQUE asked what he was going to tell OSHA when asked. Rush replied to PRISQUE that he was going to tell the truth, that the forklift had no horn, no lights, no brake. PRISQUE told Rush to tell OSHA that the forklift was fully operational and the driver was driving recklessly. Rush refused, and PRISQUE told him to do so in the "best interest of your employment." Redcay, a maintenance supervisor under MAURY, testified that within about two hours after the medics left with Coxe, he went to MAURY's office and saw gathered there various "white shirt" individuals including PRISQUE, MAURY, and Shepherd. Shepherd testified that PRISQUE told them in that meeting to go out into the plant and make preparations for the expected OSHA arrival. Later that morning, Shepherd saw FAUBERT participate in the forklift demonstration requested by OSHA, and saw that the brakes worked fine. The government relied on this and other circumstantial evidence to support its contention that someone did fix up that forklift while it sat in the maintenance garage for approximately three hours after the police left and before OSHA arrived. (Id. at 163-176.)
The findings of this Court on Count 9 in the post-trial opinion (applying the standard of Rule 29), were as follows:
We hold that the evidence, together with the reasonable inferences from the evidence, was sufficient to support a verdict based on findings that Prisque, Faubert and Maury each "did corruptly obstruct, impede, and endeavor to obstruct and impede... a pending proceeding... before [OSHA]..., by taking steps to conceal facts regarding the forklift fatality on March 24, 2000 from [OSHA] inspectors," as charged in Count 9.... Specifically, the evidence supports a finding that each of them, anticipating an immediate OSHA investigation in the wake of the Coxe fatality, knowingly participated in causing the forklift to be fixed up sufficiently to pass the OSHA inspection that morning, and did so "corruptly" as defined in the statute, with the specific intent to impede and obstruct OSHA from discovering the defective condition of the forklift at the time of the incident. We also hold that the evidence supported a reasonable finding that someone at Atlantic States did tamper with the forklift while it was out of sight for at least three hours on the morning of the Coxe fatality, with the intention to obstruct the OSHA investigation, and that each of the named defendants knowingly associated with that unlawful conduct with the intention that such persons commit the conduct, and that Prisque, Maury and Faubert each, by his individual acts, knowingly and willfully participated as an aider and abettor..., also charged in Count 9. (Id. at 176.)*fn90
Defendant PRISQUE testified on cross examination concerning Count 9: Q Mr. Prisque, I think you testified -- I think it was Thursday -- that after Mr.
Coxe was crushed by forklift 24, you did not tell anyone [to move] the forklift. Is that correct?
Q: And you never told anyone to fix the brakes. Is that correct?
Q: Did you tell Jeff Maury to take the forklift to the shop?
Q: Did you tell Jeff Maury to make sure everything worked on the forklift?
Q: Did you tell Jeff Maury to tell George Shepherd to do that?
Q: Did you say anything like that to anyone?
Q: You knew OSHA was expected at the plant later that day. Correct?
A Correct. Anytime there's a fatality, everybody knows that OSHA's going to come in.
Q: And so are you saying you have no knowledge that the forklift would be moved between the time the police was there and the time OSHA got there?
A: I don't think OSHA cares about, you know, where. All they care about is a piece of equipment.
Q: That's what you thought at the time?
A: That's what I think. (Id. at 25.)
Q: Let me get back to my question. Having no knowledge of what the police did that day, nonetheless, you were not concerned about that forklift being moved.
Q: And you had no knowledge that the forklift would be moved. Is that right? A I had no knowledge that it was going to be moved. The second time I went out, it was already gone.
Q: And you had no discussions with anyone about the condition of the forklift
Q: That's your testimony?
Q: So as plant manager, after this fatality of somebody you say is a close friend of yours, you were not interested at all in the condition of that forklift. Is that correct?
Q: You weren't interested in whether the lights worked. Is that correct? A That's correct.
Q: You weren't interested in whether the brakes worked. Is that correct?
Q: But Al Coxe was a close friend of yours?
Q: And as a close friend of yours, you were not interested at all in whether a defect in that forklift had something to do with him getting crushed by it. Is that correct?
A: The forklift was taken down to the garage and parked. The police did their investigation. I don't know. I don't know what was wrong with the forklift.
Q: Well, as plant manager and as Al's good friend, you weren't even remotely curious about the condition of that forklift. Is that what you're saying?
Q: And is it your testimony that you personally -- now we're talking about between the time the police were there and the time OSHA got there. So your testimony is that you personally did nothing to fix the lights or the brakes on that forklift?
A: Nothing to fix the lights.
Q: Is it your testimony that Jeff Maury did nothing to fix the lights or the brakes on the forklift, to your knowledge?
A: To my knowledge, he wouldn't do it. No.
Q: Is it your testimony that Mr. Yukna did nothing to fix the lights or the brakes on that forklift before OSHA got there, to your knowledge?
Q: And you did not direct any of those people to do anything like that. Is that correct?
A: That's correct. (Id. at 28-30.)
Q: And after you met with Mr. Charko, isn't it correct that you then huddled with several of your white shirts in that room off the oven; is that correct?
A: That's not correct.....
Q: Isn't that where Mr. Redcay walked in on you?
A: I don't know where Mr. Redcay walked in at. That's what he testified.
A: That's what he testified to.
Q: You disagree with that.
Q: You say that meeting never happened?
Q: You['re] saying the meeting never happened; is that correct?
A: The meeting never happened. (Id. at 56-57.)
Q: He [Mr. Rush] also testified that you told him to lie to OSHA about the Coxe forklift (indisc.). Do you dispute that?
A: He's around a lot of scenes, isn't he? Q Do you dispute that --
Q: He's mistaken about that?
This Court makes the following findings as to the government's evidence on Count 9, and the specific contrary testimony of PRISQUE:
(1) The facts in the government's evidence concerning the actions of defendants including PRISQUE, to conceal from OSHA the defective condition of the forklift involved in the Coxe fatality, were the essential facts necessary to support the verdict on that count. Therefore, the falsity of the conflicting testimony by PRISQUE is necessarily implicit in the jury's verdict on Count 9. In addition, we find that the government's evidence on that count was sufficiently credible on the essential facts disclosed in that evidence, as corroborated by an array of various witnesses and documents, and that the conflicting testimony of PRISQUE on the same factual issues was false.
(2) The Court makes an independent finding that PRISQUE's testimony on Count 9 was willfully false. This finding is supported by evidence other than the jury's having disbelieved him. Given the nature and extent of the testimony of the government's witnesses who contradicted PRISQUE regarding the essential facts, on which PRISQUE could not have been mistaken (although he certainly did deny those facts), we find that PRISQUE's testimony on those facts under Count 9 was willfully false.
Count 11 alleged that defendant PRISQUE and others engaged in obstructive conduct with respect to the OSHA investigation of the incident in which employee Hector Velarde sustained the loss of three fingers while cleaning the interior of a cement mixer, by altering the condition of the mixer and concealing from OSHA inspectors that they had bypassed a safety device designed to shut it down when the doors were opened. (See dkt. 721 at 176.)
The government's evidence on that count consisted of the testimony of Velarde himself, OSHA officer Tiedeman, a representative of the manufacturer of the cement mixer, and employee Shepherd, who was a "white shirt" and general electrical foreman at the time of the Velarde injury in December, 2002. There were also photographs in evidence of the cement mixer, both at the time of manufacture and at key points in the OSHA investigation. The evidence is summarized in the post-trial opinion. (Id. at 176-188.) Here we give a brief overview of that evidence.
Velarde was injured when he reached inside the cement mixer while cleaning it, and his co-worker activated the mixer without alerting him. The mixing blades rotated and amputated three of his fingers. The mixer had been manufactured with external wires and components (collectively called a "limit switch," "interlock," or similar names) attached to the doors, which operated to cut off the electricity when the doors were opened. The limit switch was not on the mixer when OSHA (Tiedeman) arrived to begin investigating approximately ten days after the Velarde injury. She was escorted to the cement mixer by PRISQUE, Don Harbin (maintenance manager), and Mark Neetz (new safety director). Tiedeman did not recall whether PRISQUE was still present during the ensuing discussion. Harbin told her how the injury occurred, and she asked whether the mixer came with a limit switch on the doors. Harbin said no, but after he spoke with an individual below the mixer platform (who turned out to be Shepherd), Harbin said one probably could be installed. The next time Tiedeman returned to the plant in her continuing investigation, the mixer did have a limit switch, which Harbin and Shepherd proudly demonstrated, along with Joseph Surca, the current human resources person. The problem was -- as Tiedeman's investigation eventually revealed and the manufacturer so testified -- the mixer had arrived new at the plant complete with a limit switch and with a manual giving instructions and the warning, "Do not bypass any electrical safety interlock device." When Tiedeman confronted Harbin with this fact, Harbin changed his story and said the mixer had come with an interlock, but it was removed by a nameless employee who was no longer there. (Harbin was designated an unindicted co-conspirator by the government, and was not called as a witness at trial.) The remainder of the evidence came from the testimony of George Shepherd. He testified that he had been called to the identical prior mixer (the 2000 mixer) by PRISQUE and DAVIDSON,*fn91 who was complaining that the new mixer was stopping every time a worker had to check the cement inside, and it was holding up production on the cement line. Shepherd said he could "jumper" the inside of the wiring box, leaving the limit switch apparatus in place but disabling it from operating. PRISQUE directed Shepherd to do so. When an identical replacement mixer arrived in 2002, Shepherd did the same on his own, following the prior directions from PRISQUE. After the Velarde injury, according to Shepherd, there was a meeting in PRISQUE's office attended by himself and PRISQUE, along with other trusted "white shirts" including Harbin. Shepherd told PRISQUE and the assembled group that he had "jumpered" the new mixer, like the former mixer, so the limit switch was not working at the time of Velarde's injury. As soon as Harbin and Shepherd left PRISQUE's office following that meeting, they devised the charade they later acted out when OSHA first arrived to investigate, including having Shepherd disconnect and hide the limit switch apparatus before OSHA arrived, to make it appear that it never had such equipment. After the "new" limit switch had been installed on the mixer, and the OSHA investigation was over, Shepherd testified that he and Harbin agreed that he should "jumper" it out again so that production could continue unimpeded as before. (Id. at 176-185.)
The findings of this Court on Count 11 in the post-trial opinion (applying the standard of Rule 29), were as follows:
We find that this evidence, together with the reasonable inferences from it, was sufficient to support a verdict based on findings that Prisque knowingly participated in, and approved of, the decision to alter the mixer between the time of the Velarde incident and the first OSHA inspection of it, for the purpose of obstructing the OSHA investigation.... The evidence also supported a reasonable finding that if Prisque did not cause this post-accident alteration to the mixer, he knowingly associated himself with the unlawful conduct of Harbin and Shepherd with the intention that they commit the conduct, and by his acts he knowingly and willfully participated as an aider and abettor..., also charged in Count 11. (Id. at 188.)
Defendant PRISQUE testified on direct examination concerning Count 11:
Q: There's been testimony here about the unfortunate incident that occurred to Mr. Velarde on December 7th of 2002. Okay. At that cement mixer. Do you recall that?
Q: And Mr. Shepherd testified that in 2000 there was a discussion -- where he had a discussion with you about jumpering the limit switch, correct, remember that?
Q: And he said he did it on his own in 2002, because of that conversation in 2000. Did you ever tell Mr. Shepherd to jumper limit switches?
A: I never told Mr. Shepherd to jump limit switches.
Q: Did you ever, when OSHA was coming in to inspect, in connection with the accident on Mr. Velarde, in December of 2002, and whenever they came in 2003, did you ever direct, suggest, request, either Mr. Shepherd or Mr. Harbin to lie, to misrepresent any fact at all in connection with that accident?
Q: Did you ever tell Mr. Shepherd or Mr. Harbin to tell Ms. Tiedeman that the machine did not come with limit switches?
A: No, I didn't. (Tr. 485 at 210-211.)
Defendant PRISQUE testified on cross examination concerning Count 11:
Q: Now, regarding the cement mixer, Mr. Shepherd testified about a meeting where you were there with Mr. Davidson, and Mr. Davidson said, there's no way they can keep up with a cement mixer with the limit switches on and that you approved the bypass. Did that not happen?
Q: You deny there was a conversation where Mr. Davidson told you that there was no way they could keep up with those limit switches on?
Q: And therefore you never approved the bypass of the limit switches, is that correct?
Q: So Mr. Shepherd was mistaken about that?
A: Either that or Mr. Shepherd was scared.
Q: He also testified -- again, I'm still on the cement mixer -- that after Mr.
Velarde's injury there was a meeting in your office and -- where you discussed the issue, and then Mr. Harbin directed Shepherd to hide the limit switches. Did that happen?
Q: So he's mistaken about that?
A: I don't know what he said when he went down (indisc.) at my office we didn't have a meeting.
Q: And isn't it correct that you only had the limit switches put back on the cement mixer after Mr. Velarde lost his fingers?
A: That's incorrect. The limits were always on there, sir.
Q: Well, you saw the photos when they weren't on, didn't you?
A: The day after the accident for that -- on that Saturday when I was informed that there was an accident, that Monday me and Mark Neetz and Joseph went down there. And we checked the mixer out. What we found out is the limits on the door didn't work. That morning I called George Shepherd down there and I said, George, how come the limits ain't working on the door? He went to explain to me that everybody is always knocking them off [with] the jackhammer, they're hard to keep running. So my opinion was the OSHA requirements lock out/tag out. If you have the lock out/tag out in place, that's sufficient for the mixer. That's what happened that time. And limits were on that door that Monday. Q But they were bypassed, were they not?
A: When I opened the door, they didn't work.
Q: That's because they were bypassed?
A: George Shepherd told me that everybody was knocking them off, so I don't know. I didn't get into details. I'm not an electrician. I didn't get into details on the what's and the who's and why's. He explained to me that every time they clean it they bust a conduit, they bust the limits, they're knocking the box off, they went through a whole scenario of what's breaking. So me and Mark Neetz and Joseph felt that the OSHA requirements lock out/tag out [sic]. If you have the lock out/tag out in place, that's what OSHA wants.
Q: And is that what OSHA was told?
A: I don't know what OSHA was told.
Q: And you did not inquire about that either, did you?
A: Why would we tell Carol Tiedeman? It's silly. Why would you tell her something that's not there or something that's there and it's not there when the first thing she does when she comes in on an accident, she wants to look at the service manual. And the service manual will tell you exactly what the mixer is.
Q: So are you saying that Carol Tiedeman's testimony also about what she was told when she came in to look at the mixer, that is also a mistake?
A: No, I'm not saying that. I'm telling you what happened. I'm telling you what really happened.
Q: Well, you heard the testimony?
A: I heard the testimony.
Q: And you deny having a conversation with Mr. Shepherd and Mr. Davidson where this was specifically discussed and it was directed that the limit switches be bypassed, you deny that, correct?
A: I deny that. (Id. at 149-151.)
This Court makes the following findings as to the government's evidence on Count 11, and the specific contrary testimony of PRISQUE:
(1) The facts in the government's evidence concerning the actions of individuals including PRISQUE, to alter the condition of the cement mixer before OSHA arrived to investigate the Velarde injury, and thus conceal that the safety switch on the prior identical mixer had been intentionally disabled at the direction of PRISQUE, were the essential facts necessary to support the verdict on that count. Therefore, the falsity of the conflicting testimony by PRISQUE is necessarily implicit in the jury's verdict against PRISQUE on Count 11. In addition, we find that the government's evidence on that count was sufficiently credible, despite the fact that it relied heavily on the testimony of one witness (Shepherd) for essential details to explain the behavior of PRISQUE and the others as observed by OSHA.
(2) The Court makes an independent finding that PRISQUE's testimony on Count 11, that he did not direct Shepherd to "jumper" the limit switch on the prior mixer, and that he did not conduct a meeting in his office in anticipation of the OSHA investigation of the Velarde injury, was willfully false. This finding is supported by evidence other than the jury's having disbelieved him. Given the detailed nature of the testimony of the government's chief witness on that count (Shepherd), and the corroborating detail provided by Velarde, OSHA and the mixer manufacturer, we find that PRISQUE's testimony on those essential facts was willfully false.
Count 34 alleged that from in or about February 2003 to in or about August 2003, defendant PRISQUE knowingly operated the plant in violation of its CAA permit requirements by causing more than 55 gallons per day of waste paint to be burned in the cupola. (See dkt. 721 at 243.)
The government's evidence on Count 34 consisted of testimony by NJDEP senior officials Heil and Wormley summarizing the features of the air permits issued to ATLANTIC STATES insofar as relevant to Count 34, and the testimony of workers including scrapyard crane operators Mark Johnson, Joe Delker, and Neal Zettlemoyer, paint line foreman Robert Rush, melting and casting area foreman Craig Kolbe, and former "white shirt" Shepherd. Here we give a brief overview of that testimony.
The CAA permit for the cupola, during the period relevant to Count 34, allowed 55 gallons per day of non-hazardous waste paint to be burned in the cupola. ATLANTIC STATES had a long history of civil air permit enforcement problems with its carbon monoxide ("CO") emissions, and in 2001 it installed a major new cupola emissions control system. However, workers testified that the emissions problems continued. PRISQUE was aware of the permit limits on waste paint and as plant manager signed many of the required air emissions reports going to NJDEP. Workers described that the nightly cleanup of the paint line generally included scooping up waste paint into 55-gallon drums, filling the drums to near the top, and adding "chills" (small pieces of iron) into each drum so the magnet of the crane in the scrapyard could lift them to send to the cupola. The drums would be taken to the scrapyard, in quantities of approximately 4 to 8 drums per night. Plastic dropcloth material would also get into the drums, although such materials were not permitted to be burned according to the air permit. Crane operators would see that when the drums broke while being lifted into the cupola, paint would fall out onto the scrap or the ground. Crane operator Johnson testified that during the relevant period for Count 34, he put at least four such 55-gallon drums, full to the top with waste paint, into the cupola charge, periodically on a daily basis. Delker testified to similar experiences. Kolbe, melting and casting foreman, had the responsibility to monitor the cupola emissions data. PRISQUE told him that the permit allowed burning two drums of paint a day, and Kolbe did not question that. He did notice, from his working knowledge, that when he saw emissions data spike, he concluded it was due to paint (and/or tires) being burned in the cupola. Johnson testified that he was told by his supervisors, including PRISQUE, that if he put more than four drums of paint a day in the cupola, emissions would rise. Crane operator Zettlemoyer stated that during the same period, an average of four drums a day went into the cupola, of which at least two would be full with paint to the top and two would include paint and plastic. He recalled at one point in approximately 2003, his supervisor Tom Dalrymple told him to put one drum per hour into the cupola, and he did that. He recalled that about the same time NJDEP was expected at the plant, and Harbin and Shepherd told him to pick up the extra drums containing paint and put them in the cupola, but the crane could not pick them all up, and the ones he could not pick up he covered with fine shredded scrap to hide them. Johnson testified that he was instructed by PRISQUE, on at least one occasion in the presence of Harbin, to bury more than ten drums containing paint with scrap to hide them just before he observed "visitors" in the scrapyard. Shepherd testified that the incident to which Zettlemoyer referred was in approximately April, 2003, when OSHA was expected and PRISQUE called Shepherd and Harbin into his office and told them to walk the plant. When Shepherd reached the scrapyard and saw a lot of drums, he and Harbin directed Zettlemoyer to send them to the cupola, but when that failed Harbin told the yard crane operator, Johnson, to bury the smashed ones with fine scrap. One day shortly after that State inspection, PRISQUE directed Shepherd to get Dittinger and his crew to get rid of those drums in the cupola. That day they burned approximately 20 drums, and immediately Dalrymple and Kolbe called Shepherd because the CO readings had spiked. The next day the same procedure was repeated with the remaining 15-20 drums, and the CO readings again spiked. Shepherd told Dalrymple he would call PRISQUE to tell him those results, and he did. PRISQUE replied that it was fine; that the paint and all had nothing to do with it, and "don't go there." (Id. at 243-256.)
The findings of this Court in the post-trial opinion (applying the standard of Rule 29), were as follows:
We hold that the evidence was sufficient to establish that defendant Prisque, as the plant manager who was acutely aware of the air permit emissions limits and the consequences of exceedances, did know of the waste paint limitation of 55 gallons per day that was... [in] the air permits in effect in 2003. A reasonable jury could further find from the evidence that Prisque knowingly participated in causing a volume of more than 55 gallons of waste paint (exclusive of plastic and any other substances) per day to be burned in the cupola, on one or more days during the period February to August, 2003, as charged in Count 34. (Id. at 256.)
Defendant PRISQUE testified on direct examination concerning Count 34:
Q: Did you ever direct anybody to cover drums with shredded material for the purpose of hiding it from DEP or any other government agency?
A: No, I did not. (Tr. 485 at 140.)
Q: Did you, at any time, in terms of the cupola, while you were plant manager, ever illegally use or manipulate the cupola in any way to violate a permit requirement in any way, shape or fashion?
Q: Did you instruct anybody? A No, I didn't. (Id. at 149.)
Defendant PRISQUE testified on cross examination:
Q: Mark Johnson testified that you were there as he was being instructed to -- directed to bury paint drums. Is that correct or not?
A: It's not correct. (Indisc.) containment area, we could stick all the drums we wanted (indisc.) didn't' have to bury them (indisc.) just load them to the containment area (indisc.) minutes, five minutes.
Q: So he's mistaken about that, is that correct?
Q: Okay. He also testified that you told him to burn more than four paint barrels a day. Did you do that?
A: Who testified to that?
A: I don't remember his testimony (indisc.).
Q: On January 4th, page 194 (indisc.) he testified to that, that he was --
A: I told him to burn more than four?
A: (Indisc.) burn (indisc.) crane, the charging crane.
Q: If he testified to that is he mistaken?
A: Correct. (Tr. 489 at 108-109.)
Q: He [referring to Mr. Shepherd] talked about a particular incident where, and this is the incident about burying scrap, where you told him that the State was coming, make sure there's nothing they could find and they found all these 55 gallon drums of paint, did that happen?
Q: Mr. Shepherd said that happened. That you told them to make sure there's nothing they could find and they found these drums. Did that ever happen?
A: No. I don't remember the testimony --Q (Indisc.) 1/19 transcript, I believe, on Page 5, Mr. Shepherd said that you said that (indisc.) the State's coming make sure there's nothing they could find and then they went out in the scrap yard and found these 55 gallon drums with paint in them?
Q: And then the drums were buried so that DEP couldn't find them, did that happen?
A: You don't have to bury them -- manifest them out.
A: No. It's a lot easier manifesting them out than burying them.
Q: So he's mistaken about that, is that correct?
Q: As is Mr. Johnson, Mr. Zettlemoyer, as well, correct?
A: They testified to different things. They didn't say that.
Q: After DEP left then, Mr. Shepherd testified you told -- you directed them that they had to get rid of these drums and that they were then burned in the cupola, did that happen?
Q: He's mistaken about that?
A: Correct. If you understand how it worked. I guess you don't want to hear it.
Q: They also said that when they did burn these drums then the CO skyrocketed, did that happen?
Q: He says he talked to you about it and you said don't go there, did that happen?
Q: So he's mistaken on both those points?
A: Correct. (Id. at 121-123.)
This Court makes the following findings as to the government's evidence on Count 34, and the specific contrary testimony of PRISQUE:
(1) The facts in the government's evidence concerning the actions of defendant PRISQUE, in causing workers to burn more than 55 gallons per day of waste paint in the cupola, in violation of the air permit limit, were essential facts necessary to support the verdict on that count. Therefore, the falsity of the conflicting testimony on that point by PRISQUE is necessarily implicit in the jury's verdict on Count 34. In addition, we find that the government's evidence on that count was sufficiently credible on the essential facts disclosed in that evidence, as corroborated by various witnesses and other evidence, and the conflicting testimony of PRISQUE on the same factual issues was false.
(2) This Court makes an independent finding that PRISQUE's testimony on Count 34 was willfully false. This finding is supported by evidence other than the jury's having disbelieved him. Given the nature and extent of the testimony of the government's witnesses who contradicted PRISQUE regarding those essential facts, on which PRISQUE could not have been mistaken (despite his denial of those facts), we find that his testimony on those facts under Count 34 was willfully false.
The government points out that the jury convicted PRISQUE of conspiring for all five objectives of the conspiracy count. It argues that all the citations to his testimony outlined as to Counts 8, 9, 11, and 34 (discussed above) are examples of his falsehoods that should produce a perjury enhancement under Section 3C1.1 for PRISQUE as to Count 1 as well. (Gov. I at 59.)
This Court declines to make findings under Count 1 as to alleged perjury of defendant PRISQUE. We do this for two reasons: First, although the jury verdict was against him on all five alleged objectives, there were myriad alleged overt acts in Count 1 of the indictment, including but not limited to the acts underlying Counts 8, 9, 11, and 34. It would be speculation for this Court to attempt to determine what facts found are "necessarily implicit" in the jury's verdict on Count 1. Second, as a practical matter the conspiracy count will group with those respective substantive counts of conviction. See infra Sec. V.A. In these circumstances, we see no purpose in making separate findings under Section 3C1.1 on a potential perjury enhancement under Count 1.*fn92
The jury found defendant FAUBERT guilty on two counts of obstruction of justice relating to the OSHA investigation of the Coxe forklift fatality (Counts 9 and 10), as well as one false statement count in the same investigation (Count 7). It also found him guilty on Count 1, only as to the alleged objectives of the conspiracy involving OSHA, Objectives C, D, and E. (See dkt. 721 at 3 n.4 and 112-113 n.64.)*fn93 Defendant FAUBERT testified for two trial days on direct and cross examination. He denied all criminal acts attributed to him, by asserting general denials of guilt and by his specific testimony in response to questioning. (Tr. 501 at 79-230; tr. 506 at 4- 233.)
The government points to each of his substantive counts of conviction, arguing that with respect to those counts of conviction, "the jury found these denials and the many alternative explanations [he] offered for his conduct, to be patently false." (Gov. I at 59-60.) The government also cites instances in which it contends his testimony was directly refuted. (Id. at 60-61.) FAUBERT argues that the jury's verdict does not disclose whether it rejected any part of his testimony, and he addresses the specific instances of alleged falsehood cited by the government. (Faubert III at 10-14.)
Counts 7 and 10 address a particular aspect of the OSHA investigation of the Coxe forklift fatality. In the course of that investigation, OSHA officer Tiedeman learned that the driver of the forklift in the fatal Coxe incident, De Los Santos, had been involved in an earlier incident in which he ran over another employee while driving a forklift. Tiedeman's investigation thus led her to inquire about that prior incident involving the same driver.
Tiedeman first heard about this prior incident not from a review of the employee injury logs that were required to be maintained at ATLANTIC STATES (the "OSHA 200 logs"), because there was no such entry in those logs. She heard about it from news articles that appeared shortly after the Coxe fatality, and asked FAUBERT for facts pertaining to that incident. The name of the injured employee was Marchan, identified as "employee A" in Counts 7 and 10.
Count 7 alleged that on or about May 11, 2000, defendant FAUBERT knowingly and willfully made a false statement to OSHA inspectors - that the reason why there was no entry on the OSHA 200 log concerning a April 27, 1999 incident was because employee "A" did not break his leg - when FAUBERT then knew and believed that the employee had sustained a fractured bone in his leg on April 27, 1999, after being struck by a forklift. (See dkt. 721 at 149.)
Count 10 alleged that on or about July 24, 2000, defendants FAUBERT and PRISQUE obstructed, and endeavored to obstruct, that OSHA investigation by instructing Marchan to falsely inform the OSHA inspectors that his leg had not been broken when he was struck by a forklift (driven by De Los Santos) on April 27, 1999.
The jury verdict found defendant FAUBERT guilty on both Counts 7 and 10. (See dkt. 721 at 3 n.4.)*fn94 The government's evidence on those counts consisted primarily of the testimony of OSHA officer Tiedeman, injured employee Marchan, and Marchan's treating physician, Dr. Reid, as well as medical records and other documents. Their testimony is summarized in the post-trial opinion. (Id. at 149-159.) Here we give a brief overview of that evidence.
The Coxe forklift fatality occurred on March 24, 2000, launching the resulting OSHA investigation of that incident. The investigation widened into a comprehensive safety and health inspection of the facility, conducted by Tiedeman and accompanying OSHA officers, including Mike Silva. As of April 7, 2000, Tiedeman was aware of the news articles suggesting a prior incident with driver De Los Santos, and she took the OSHA 200 logs from the plant to review. On April 27, 2000, she asked FAUBERT if De Los Santos had been involved in a prior forklift accident in 1999. She testified that FAUBERT at that point "chuckled, and said, yes, he backed up and hit a supervisor and broke his leg." (Id. at 151.) Tiedeman asked when did that occur, and FAUBERT said he thought it was sometime in 1998 or 1999. Tiedeman requested an accident report on that incident. On May 9, Tiedeman and a colleague returned to the plant for several days, commencing the comprehensive inspection that OSHA had determined to perform. While she was at the plant that week, on or about May 11, 2000, FAUBERT handed her a document that was a statement by the injured employee, Marchan, showing that the date of his injury was in April, 1999. There was no corresponding entry in the 1999 OSHA log. Tiedeman read the document and questioned FAUBERT about the lack of entry in the log. Her testimony describing his response is quoted in the margin.*fn95 That is the statement that forms the basis of Count 7. (Id. at 149-157.)
Tiedeman and her colleague interviewed Marchan on July 24, 2000, in the presence of FAUBERT. Marchan told the OSHA officers that the forklift driven by De Los Santos did strike him and went over his foot and he fell and it went over his leg, but he did not break his leg; he only had a scratch and a bruise. That statement about his injuries was false, as Marchan later testified at trial and as confirmed by Dr. Reid and the medical records. In fact, Marchan sustained injuries to both legs that included a non-displaced fracture of the right ankle cuboid bone that was treated with a splint for one week and a cast for 4-5 more weeks. Dr. Reid testified that a fracture of the cuboid bone is not described in laymen's or medical terms as a broken leg; it is part of the foot and part of the ankle, and is obviously connected to the leg. Tiedeman testified that if Marchan had suffered any fracture, including to the foot or ankle, it would have to be recorded in the OSHA 200 log. Marchan testified at trial that he was interviewed about that incident by OSHA, with FAUBERT present, and before the interview FAUBERT told him that he should not tell the interviewers that his foot was broken; to say that he got only a couple of scratches; otherwise he would lose his job. He said he did tell that lie because he was afraid of losing his job. That is the conduct that forms the basis of Count 10. (Id. at 152-159.)
The findings of this Court on Count 7 in the post-trial opinion (applying the standard of Rule 29), were as follows:
We find that the evidence was sufficient to support a finding that when Tiedeman asked Faubert during the May 11 interview why there was no entry of the Marchan injury on the 1999 OSHA log, and he responded that Marchan did not break his leg, the statement meant that the reason the injury was not on the log was because Marchan did not break his leg. Therefore, we find the evidence sufficient to establish that Faubert made the statement alleged.
Defendants also contend that the alleged statement was not false because Marchan in fact did not break his leg; he broke the cuboid bone in his foot. We find that a reasonable jury could conclude from the evidence that Faubert knew Marchan had sustained a fracture in his right lower extremity as a result of the injuries to his legs in the forklift incident, and that the semantic distinction between "leg" and "foot" is not significant in this context. We further conclude that a reasonable jury could conclude that if Faubert said Marchan did not break his "leg," and Faubert thereby meant to obscure the fact that the fracture was actually to a bone in the foot (which is, after all, part of the leg), such a half-truth was materially false. Under either view, a reasonable jury could conclude that the false statement was made with the intent to deceive the OSHA officers who were seeking facts relevant to the Coxe fatality.
(Id. at 156-157 (transcript citations omitted).)
The findings of this Court on Count 10 in the post-trial opinion (applying the standard of Rule 29), were as follows:
We find that the evidence is sufficient as to Count 10. As we have concluded in the discussion of Count 7, supra, the distinction between "leg" and "foot" does not invalidate the evidence the government presented as to the nature of the fracture that Marchan did in fact suffer in that forklift incident. Further, Marchan testified that before OSHA interviewed him about that incident, he was in Faubert's office. Faubert told him not to tell the persons who were going to speak with him that his foot was broken; to say that it was only a couple of scratches. Faubert told Marchan that he had to say that or Marchan would lose his job. Marchan testified that he was then taken to a basement office where a male and a female asked him questions about his injury, with Faubert present. Marchan testified that he told the visitors that nothing was wrong, and nothing was broken. That, according to Marchan, was a lie that he told because he was afraid of losing his job. We conclude that the evidence presented by the government relevant to Count 10 was sufficient to support the verdicts of guilty on Count 10. (Id. at 158-159 (transcript citations omitted).)
Defendant FAUBERT testified extensively about the circumstances surrounding the false statement alleged in Count 7. Here we quote a fair sampling of that testimony, on both direct and cross examination.
On direct examination concerning Count 7, FAUBERT testified: Q And what was the incident?
A This takes context from more than one conversation.
Q: Well, let's go back, let's start at the beginning, though. Let's talk about
April 27, 1999. What was that incident that they made reference to in Count 7?
A That was when Gabriel Marchan's foot got run over by a forklift.....
Q: Did you see the aftermath of the accident?
A: Yes, I was called to the scene.
A: Mr. Marchan was laying on the ground, and I was told by a couple of witnesses that he had run up behind the forklift operator as he was backing up --....
Q: They say you lied about that. You said, they say, that the reason there was no entry on the OSHA log was because he did not break his leg, when in truth, you knew and believed that he had... sustained a fractured bone in his leg after being struck by a forklift.....
Q: Did you know he broke his leg?
A: He didn't break his leg.
Q: Okay now, they say you made that statement on May 11th, 2000. Do you remember May 11th, 2000?
A: Saying that he didn't break his leg?
Q: Well, May 11th, 2000, something happened at the company, where you made a statement to OSHA. Do you remember that particular incident?
A: I remember that day, yeah.
Q: When you spoke to whom, do you remember that?
A: I spoke with Ms. Tiedeman and Mr. Silva.
Q: Do you remember being asked about Marchan's broken leg? A Initially I was asked about the newspaper article regarding that accident. Q What were you asked about the newspaper article regarding that accident? A It was following Mr. Coxe's accident, they were involved in an ongoing investigation.
Q: They were doing a wall to wall, is that the expression?
A: Yes, they were involved in a wall to wall.
Q: Let's put it in context again. Go one step at a time. The Coxe accident occurred --
Q: -- 2000, and by May they were involved in an investigation of that accident, is that right?
Q: And that's the day, May 11th, they say you made this statement about
Marchan's leg, is that correct?
Q: And it started out with, go ahead, tell us.
A: It started out with the newspaper article. They said, didn't this forklift operator have a prior accident? And I told them, yes, he did. And they --
Q: Now, when you say -- did you see the newspaper article?
A: They asked me if I had read the newspaper article, and I --
A: That was where the infamous chuckle came from. I said, yeah, I read it, too, it said he ran over his supervisor and broke his leg.
A: And that was the chuckle.
Q: You didn't chuckle because you thought it was funny that he broke his leg?
A: No, I thought it was, I chuckled because the newspaper article was wrong.
He didn't break his leg.....
Q: First of all, as far as you knew, that incident occurred how long before May of 2000?
Q: Was there any doubt in your mind about the injury that Mr. Marchan suffered?
Q: Did you tell Ms. Tiedeman and Mr. Silva that there was no entry in the OSHA 200 log because he did not break his leg?
A: Actually, I told them, the first thing I told them was I said, look at the log, it should be on the OSHA 200 log.... I told them to look at the OSHA 200 log, it should be there.
Q: Whose job was it in April of 1999 to fill out the 200 log?
Q: Whose job was it in May of 2000 to fill out the OSHA 200 log?
Q: Did you regularly review those logs or not?
Q: Were those logs sent out to OSHA?
A: No, they had to be posted on the bulletin board in plain view of all employees once a year.
Q: Did OSHA ever get to see those logs?
A: They generally asked for the OSHA 200 logs every time they came in.....
Q: They're kept for their ability to audit those logs, is that right?
Q: Now, I interrupted. You're talking about the newspaper article, talking about the injury. What happened at that point?
A: They told me -- well, I had told them, I said, check the OSHA log, it should be there. And they said, we did check it, and it's not there. And Joe said, I forgot to enter it.
Q: Was it your job to enter it on the log?
Q: Did Joe say he forgot to enter it?
Q: Did you ever say that he didn't put it in there because he did not break his leg? A No, but they said, later in that conversation, they said, well, you told us he broke his leg.
A: I don't remember saying that. And I said, and he didn't break his leg.....
Q: Were you talking about the incident or the article?
A: The initial conversation was about the article, which said he broke his leg. I had read the article, I acknowledged I read the article. Later on, they were insistent that he broke his leg.
Q: And so, in that indictment, when it says, "When in truth and in fact, Scott Faubert then well knew and believed that Employee A," that's Marchan, "sustained a fractured bone in his leg," that wasn't true, was it?
A: He didn't break his leg, no.
Q: Did you lie to them, sir?
Q: Did Mr. Marchan break his leg in (indisc.)?
Q: Did you ever intend to lie to them?
Q: Did you mislead them in any way?
Q: Do you think you're guilty of that offense, sir?
Q: What did you do, if I may jump back to April 27th of '99, when you came upon the scene of Marchan lying on the ground by the forklift?
A: I called an ambulance.
Q: Where did you send Marchan?
Q: Did you sent him to Redi Care?
Q: Why did you send him to Warren Hospital?
A: Because it was about 6 o'clock in the morning, and Redi Care didn't open until eight.
Q: Did you think he was seriously hurt?
A: He was in a lot of pain, so I was not going to take chances. Q Did you knew that he had been run over by a forklift, or at least he said [he] was?
Q: What did you find out?
A: I found out that he walked up to the forklift operator and --Q No, I'm talking about what happened to his treatment.
A: Joe took care of that follow up.
Q: Did you see Mr. Marchan after that?
Q: Did you find out what happened to his foot?
A: Yeah, I found out he had a broken bone.
Q: Did you know it was in his foot?
Q: Did you ever believe that he broke his leg?
Q: A year later, when you talked to OSHA, did you try to mislead them into believing that there was no break in his foot?
A: They were insistent he had a broken leg, it was, that's how -- it's out of context.
Q: What did you tell them?
A: They were insistent that he broke his leg, and I said, he did not break his leg.
Q: Did you tell them what he did break?
Q: Were the medical records, long since available, and closed, as far as this case was concerned?
A: Absolutely. (Tr. 501 at 217-229.)
Q: Overt Act number 55 is Count 7 all over again. It's the same language. I just want to read it, and we've already talked about it. It says that you falsely told OSHA inspectors that the reason there was no entry on the OSHA logs for April 27th, 1999, that's the Marchan foot, is because the employee's leg had not been broken. Did you tell them that's the reason it wasn't on the log?
Q: Did you tell them the reason it wasn't on the log?
A: I told them it was on the log.
Q: Do you know why it wasn't on the log?
A: Because Joe forgot to put it on the log.
Q: Did you tell him the reason it wasn't there was because Marchan had not broken his leg?
Q: Did OSHA ask you if that was on the log?
A: They were asking me about the accident, and then they were asking me about the log. And I said, "Check the log. It's there." And Mr. Silva, at that point, said, "We've already checked the log, and no, it's not."
Q: Did you intentionally mislead him, sir?