U.S. v. Laughlin

• Decision Date: 01 December 1993
• Docket Number: No. 200,D,200
• Citation: 10 F.3d 961
• Parties: 24 Envtl. L. Rep. 20,221 UNITED STATES of America, Appellee, v. Kenneth LAUGHLIN and John Donnelly, Defendants, Harris Goldman, Defendant-Appellant. ocket 93-1100.
• Court: U.S. Court of Appeals — Second Circuit

Page 961

10 F.3d 961

24 Envtl. L. Rep. 20,221

UNITED STATES of America, Appellee, v. Kenneth LAUGHLIN and John Donnelly, Defendants Harris Goldman, Defendant-Appellant.

No. 200, Docket 93-1100.

United States Court of Appeals Second Circuit.

Argued Sept. 9, 1993.

Decided Dec. 1, 1993.

Bruce R. Bryan, Syracuse, NY, for defendant-appellant.

Craig A. Benedict, Asst. U.S. Atty., N.D.N.Y., Syracuse, NY (Gary L. Sharpe, U.S. Atty., of counsel), for appellee.

Before: NEWMAN, Chief Judge, PIERCE and MINER, Circuit Judges.

MINER, Circuit Judge:

Defendant-appellant Harris Goldman appeals from a judgment of conviction and sentence entered in the United States District Court for the Northern District of New York (Munson, J.), after a jury trial, convicting him of knowingly disposing of hazardous waste without a permit, in violation of the Resource Conservation and Recovery Act of 1976, 42 U.S.C. Secs. 6901-6992k (West 1983 and Supp.1993) ("RCRA"). The judgment appealed from also convicted Goldman of failing to report the release of a hazardous substance as required by the Comprehensive Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C. Secs. 9601-9675 (West 1983 & Supp.1993) ("CERCLA"), which requires that notification be given to the National Response Center or other appropriate governmental agency upon the release of a hazardous substance. The district court sentenced Goldman to concurrent prison terms of three-and-one-half years for the RCRA violation and three years for the CERCLA violation. He was further ordered to pay restitution to the United States in the amount of $607,868. Goldman primarily contends on appeal that the district court delivered an improper charge to the jury regarding the RCRA and CERCLA violations. For the reasons that follow, we affirm.

BACKGROUND

In 1983, GCL Tie & Treating, Inc. ("GCL") purchased a railroad tie treating business located in Sidney, New York from the Railcon Corporation ("Railcon"). GCL was owned by Goldman and his business partner, Thomas Cuevas.

The tie treatment process consisted of first placing untreated green ties into a large cylinder and then adding creosote. The creosote then was heated to boiling. As water and natural wood alcohols were drawn out by a vacuum process, the creosote penetrated the ties. The water, wood alcohols and some creosote, collectively referred to in the industry as "bolton water," would vaporize in the cylinder, where it was then drawn off and run through condensation coils. This mixture, consisting of twenty-five percent creosote, thereafter was placed in a heated evaporation tank. Once in this tank, the creosote quickly settled to the bottom due to its heavier weight, forming sludge. The water then was boiled off so that the remaining creosote sludge could be suctioned out and placed into storage for re-use in the treatment process.

Subsequent to 1983, GCL began having problems with its treatment process. As a result, excess creosote often became contaminated or spilled from the system. GCL supervisors regularly directed employees to dispose of the contaminated creosote by soaking it up with sawdust and dumping it in remote areas of the GCL property. GCL never had applied for a RCRA "TSD" (treatment, storage or disposal) permit and, therefore, neither the New York State Department of Environmental Conservation ("DEC") nor the United States Environmental Protection Agency ("EPA") was aware that GCL regularly handled, and disposed of, creosote.

On October 30, 1986, a large, accidental creosote spill occurred at GCL. Contrary to Goldman's instructions, this spill was reported to the DEC, which then began making periodic, pre-announced visits. With the exception of the October 30 spill, however, no regulatory agency had any knowledge or information of any other spill or disposal of creosote by GCL.

GCL began experiencing financial difficulties in 1987. Its problems were exacerbated when, early in June, GCL's boiler ceased to function properly. Without a properly functioning boiler, GCL could not recover the creosote sludge left over from the treatment process. GCL quickly began to run out of storage space for the bolton water, and GCL employees were directed to put the excess bolton water into a railroad tanker car that had recently delivered a shipment of new creosote. This tanker car remained on the GCL railroad spur and was used to store the bolton water generated by the treatment process.

During the time that the bolton water was being stored in the tanker car, Goldman became concerned over GCL's daily accrual of "demurrage" or rental charges for keeping the tanker car beyond its normal return date. After two weeks had passed with no resolution of the boiler problems, Goldman met with GCL Vice President of Operations and Plant Manager Ken Laughlin and a company consultant, Jack Thomas. The three discussed several methods of disposing of the bolton water, including: (1) returning the tanker car full of bolton water (approximately 22,000 gallons) to the creosote manufacturer, which would have proper disposal facilities available to it; (2) hiring a hazardous waste remover to cart away and properly dispose of the bolton water; and (3) pumping the bolton water into a truck and disposing of it by spraying it out of the back of the truck while it drove along dirt roads in Sidney. Goldman rejected the first two proposals as being too costly. He then proposed the spray truck scheme to Laughlin and Thomas, who both objected and informed Goldman that such a scheme would be illegal.

Shortly thereafter, Goldman began to demand repeatedly that Laughlin release the contents of the tanker car onto the ground. After Laughlin refused, Goldman informed him that he was going to release the creosote sludge himself. After one unsuccessful nocturnal attempt to release the creosote sludge, Goldman returned a second time, at approximately three o'clock in the morning, and successfully released the entire contents of the tanker car directly onto the ground.

The next morning, in the presence of GCL employees, Goldman admitted to Laughlin that he had dumped the creosote sludge, but told those present that they would be fired if the release was reported to the Government. Goldman then instructed Laughlin to hire an outside contractor to cover the contaminated soil with rock and gravel. This was done, no report was made to either the DEC or the EPA, and the spill was never mentioned during subsequent inspections.

Financial conditions at GCL continued to deteriorate, and on August 6, 1987, Railcon exercised its rights under a note it held from the 1983 sale ¹ and removed Goldman from operational control of GCL. Although Goldman remained an equity owner, he and the entire GCL board were removed as directors in August of 1987. GCL then filed for chapter 11 bankruptcy sometime in the autumn of 1987.

In December of 1987, Railcon President George Petti, informed by Laughlin of the June dumping, directed Laughlin to arrange for the contaminated soil to be excavated and removed. Approximately five hundred and twenty cubic yards of soil were recovered from the site where Goldman had released the creosote sludge. ² This soil was added to the pile of soil that was excavated after the spill in October of 1986.

GCL continued its financial slide and, by May of 1988, the entire facility was abandoned. Nothing was done to dispose of or safeguard either the tens of thousands of gallons of creosote left behind or the fifty-five gallon drums of hydrochloric acid and other hazardous chemicals that were abandoned. By the summer of 1988, the DEC learned that the site had been deserted and began piecing together details of its true condition. A criminal investigation ensued and, after detailed inspections were conducted, the facility was declared a federal Superfund site. On January 17, 1991, Goldman was arrested, pursuant to a warrant, in the Eastern District of New York. On December 11, 1991, Goldman was indicted for illegal disposal of hazardous waste, in violation of RCRA, 42 U.S.C. Sec. 6928(d)(2)(A), and failure to report the release of a hazardous substance, in violation of CERCLA, 42 U.S.C. Secs. 9603(a) and (b).

During trial, Goldman testified on his own behalf and admitted that he knew GCL did not have a permit to dispose of hazardous waste; he knew that creosote sludge was a hazardous waste; he knew of the requirement to report the release of such material to the Government; he never reported any such release; and he knew that it was illegal to dump creosote sludge onto the ground. On September 4, 1992, a jury convicted Goldman on both counts. The district court sentenced Goldman to a prison term of forty-two months for the RCRA violation and a prison term of thirty-six months for the CERCLA violation, both terms to run concurrently. Goldman also was ordered to pay restitution to the United States in the amount of $607,868.

DISCUSSION

Goldman argues that (1) the district court erred when instructing the jury regarding the elements of the RCRA and CERCLA violations; (2) there was insufficient evidence to support the jury's verdict; (3) the district court erred by not suppressing statements made by Goldman during a January 24, 1991 meeting with Assistant United States Attorney Craig Benedict; and (4) his sentence was inappropriate. We are unpersuaded by any of Goldman's arguments and, therefore, uphold his conviction.

1. RCRA

Goldman argues that the district court improperly instructed the jury regarding the elements of the RCRA violation. He claims that the Government was required to prove, as essential elements of the violation, that he was aware of the RCRA regulations applicable to creosote sludge and knew GCL had not obtained a permit to dispose of the creosote sludge and that the district court's failure to so instruct the jury was error. It is axiomatic that in a criminal prosecution the Government must satisfy its burden of...