Should responsible members of the regulated community be criminally prosecuted for environmental violations merely because the tools are available for achieving significant enforcement penalties? On May 14th, a Congressional Subcommittee on Coast Guard and Maritime Transportation held a hearing examining just this question under the Clean Water Act (CWA). The focus of the hearing was concern that responsible members of the regulated community are being prosecuted even though their (1) compliance programs (prior to the accidental spill/discharge) meet legal standards, and (2) spill response efforts are timely and effective. The interest in this topic goes beyond just the maritime community, because it stems from concern over the standard of intent required to establish a criminal violation of the Clean Water Act.
Representatives of the maritime industry noted two specific things that enable prosecutions despite effective compliance programs and spill response efforts. First, some "ancillary statutes" that were never intended to be used in prosecuting water discharges — e.g., the Migratory Bird Treaty Act and the Ports and Waterways Safety Act — establish strict liability standards for imposing criminal penalties. In other words, DOJ prosecutors can use such statutes to do an end-run on the already diluted standards of criminal intent set out under the Clean Water Act. While these novel theories have yet to be thoroughly tested in the courts, the mere specter of such ominous enforcement tools provides prosecutors with a significant, and according to many, unfair advantage in forcing companies to plead to charges which they might otherwise challenge.
Second, the Clean Water Act itself allows for criminal prosecution of discharges upon a showing of mere negligence. Because even the most responsible corporate citizens are significantly exposed under this standard of criminal intent and because jail time is virtually mandatory even for misdemeanor offenses (i.e., CWA negligence) under the United States Sentencing Guidelines, few defendants can afford the risk of foregoing onerous plea arrangements in favor of challenging unreasonable charges by prosecutors.
While prosecutors across the United States continue to tap novel theories (such as the Migratory Bird Treaty Act and the Ports and Waterways Safety Act) and to prosecute vigorously under the negligence standard under the Clean Water Act, other disconcerting prosecutorial practices and policies are emerging as of late as well — all of which appear to indicate that the Department of Justice is prosecuting environmental violations more aggressively than ever.
For one thing, many prosecutors continue to interpret the Alternative Fines Act (and related provisions under the United States Sentencing Guidelines) in the broadest sense possible. The Act allows the government to criminally penalize any company in an amount up to "twice the gross gain or loss realized" as a result of the illegal activity. While the intent of the sentencing statute is to determine actual economic gain realized or harm caused by the violation, prosecutors routinely threaten to seek companies' gross revenues realized during the period of violation as a basis for calculating the potential fine to be imposed. Carried to its logical end point, such a theory would virtually bankrupt many a business, since most companies at one time or another are in violation of environmental laws, despite their best efforts, and since companies can potentially be divested of twice their gross revenues from the time of initial violation until the situation is corrected, based upon the government's interpretation of the Alternative Fines Act.
In addition, while wielding potentially devastating penalties and a minimal standard of proof in an effort to force companies into hefty settlements, prosecutors are now routinely demanding that, as a prerequisite to reaching such plea arrangements, companies must turn over privileged information and materials to the government without any assurances that individuals will not be prosecuted. While this policy may make the government's job easier in building cases against individuals, it does not necessarily serve the ends of justice. Furthermore, such an enforcement policy will inevitably destroy relations between companies and their employees to the degree that effective internal audits and investigations might become a thing of the past.
Representatives of the maritime industry noted two specific things that enable prosecutions despite effective compliance programs and spill response efforts. First, some "ancillary statutes" that were never intended to be used in prosecuting water discharges — e.g., the Migratory Bird Treaty Act and the Ports and Waterways Safety Act — establish strict liability standards for imposing criminal penalties. In other words, DOJ prosecutors can use such statutes to do an end-run on the already diluted standards of criminal intent set out under the Clean Water Act. While these novel theories have yet to be thoroughly tested in the courts, the mere specter of such ominous enforcement tools provides prosecutors with a significant, and according to many, unfair advantage in forcing companies to plead to charges which they might otherwise challenge.
Second, the Clean Water Act itself allows for criminal prosecution of discharges upon a showing of mere negligence. Because even the most responsible corporate citizens are significantly exposed under this standard of criminal intent and because jail time is virtually mandatory even for misdemeanor offenses (i.e., CWA negligence) under the United States Sentencing Guidelines, few defendants can afford the risk of foregoing onerous plea arrangements in favor of challenging unreasonable charges by prosecutors.
While prosecutors across the United States continue to tap novel theories (such as the Migratory Bird Treaty Act and the Ports and Waterways Safety Act) and to prosecute vigorously under the negligence standard under the Clean Water Act, other disconcerting prosecutorial practices and policies are emerging as of late as well — all of which appear to indicate that the Department of Justice is prosecuting environmental violations more aggressively than ever.
For one thing, many prosecutors continue to interpret the Alternative Fines Act (and related provisions under the United States Sentencing Guidelines) in the broadest sense possible. The Act allows the government to criminally penalize any company in an amount up to "twice the gross gain or loss realized" as a result of the illegal activity. While the intent of the sentencing statute is to determine actual economic gain realized or harm caused by the violation, prosecutors routinely threaten to seek companies' gross revenues realized during the period of violation as a basis for calculating the potential fine to be imposed. Carried to its logical end point, such a theory would virtually bankrupt many a business, since most companies at one time or another are in violation of environmental laws, despite their best efforts, and since companies can potentially be divested of twice their gross revenues from the time of initial violation until the situation is corrected, based upon the government's interpretation of the Alternative Fines Act.
In addition, while wielding potentially devastating penalties and a minimal standard of proof in an effort to force companies into hefty settlements, prosecutors are now routinely demanding that, as a prerequisite to reaching such plea arrangements, companies must turn over privileged information and materials to the government without any assurances that individuals will not be prosecuted. While this policy may make the government's job easier in building cases against individuals, it does not necessarily serve the ends of justice. Furthermore, such an enforcement policy will inevitably destroy relations between companies and their employees to the degree that effective internal audits and investigations might become a thing of the past.