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United States Supreme Court Makes the Imposition of Fines in Criminal Environmental Cases More Difficult for State and Federal Agencies

July 03, 2012

The recent decision on federal health care legislation is not the only surprise coming from the United States Supreme Court recently. In a 6-3 decision, the U.S. Supreme Court in Southern Union Company vs. USA, ___ S.Ct. ___, 2012 WL 2344465 (June 21, 2012), overturned an $18 million fine entered in a criminal enforcement case for alleged hazardous waste violations lodged against a pipeline operator under the Federal Resource Conservation and Recovery Act (RCRA).

In an interesting alignment of Justices (Justice Sotomayor wrote the opinion and was joined by Chief Justice Roberts as well as Justices Scalia, Thomas, Ginsburg and Kagan), the Court ruled the Sixth Amendment right to a jury trial applies to all facts that apply to the imposition of a fine, as well as to imprisonment. In particular, the Court ruled that the "beyond a reasonable doubt" standard applies to all facts that are necessary predicates to the imposition of fines in a criminal case.

In reaching this conclusion, the Court applied the standard established in Apprendi v. New Jersey, 530 U.S. 466, to the imposition of fines, as well as jail time, in criminal cases. In Apprendi, the Court ruled that the Sixth Amendment requires that any fact that increases the maximum punishment must be proved to a jury beyond a reasonable doubt. In a case of first impression, the Court in Southern Union ruled that the Apprendi doctrine applies to the imposition of fines, and not just to the imposition of jail time, in this RCRA criminal case.

In Southern Union, the trial court jury found that the company's hazardous waste storage practices violated RCRA, but the judge, not the jury, imposed the $18 million fine based upon a judicial finding that the company was in violation of RCRA for 762 days. These facts about the alleged continuing nature of the violation, as well as the fact of violation, are all facts that are the necessary predicates for the imposition of the fine. According to the Court in Southern Union, all of these facts must be found by a jury, and not a judge in a criminal prosecution under RCRA to preserve the Sixth Amendment right to a jury in criminal cases.

While this case was decided under narrow facts arising under the federal hazardous waste laws, the impacts of this decision could be very significant. These impacts could include the following:

  • A higher burden of proof for the federal (and state) government when alleging the total amount of fines that are appropriate in criminal enforcement cases.
  • While this case was decided under RCRA, it is reasonable to assume that the case will have far-reaching impact in the area of criminal enforcement under all of the major federal as well as state environmental laws including, but not limited to, the Clean Water Act, the Clean Air Act, the Toxic Substance Control Act, etc.
  • It could change the way state and federal agencies seek to calculate fines in criminal cases, making it much more difficult to seek significant fines in such cases.
  • It will force the government to grapple with proving the exact number of days that environmental violations continued under a very exacting "beyond a reasonable doubt" standard, rather than the broader discretion previously exercised by trial court judges, in making the amount of fine determinations in such criminal cases.

For more information about the practical implications of the Southern Union case on environmental enforcement, please feel free to contact any member of the Environment & Energy Strategies team at Godfrey & Kahn.

 

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