U.S. v. Spain
| Decision Date | 16 December 2008 |
| Docket Number | No. 06 CR 545.,06 CR 545. |
| Citation | 591 F.Supp.2d 970 |
| Parties | UNITED STATES v. James E. SPAIN. |
| Court | U.S. District Court — Northern District of Illinois |
AUSA, Timothy John Chapman, United States Attorney's Office, Chicago, IL, for Plaintiff.
Defendant James Spain has pled guilty to Count One of the indictment, violating 18 U.S.C. §§ 371 and 2 by conspiring to knowingly violate the Clean Water Act ("CWA"), 33 U.S.C. § 1319(c)(2)(A). A sentencing hearing was held on November 3, 2008. This order determines Spain's applicable sentencing range under the Federal Sentencing Guidelines.
For the reasons stated below, Spain is assigned a base-level of six under U.S.S.G. § 2Q1.3, an increase of four under § 2Q1.3(b) (1), an increase of four under § 3B1.1(a), and a decrease of two under § 3E1.1 (a), for an adjusted level of twelve. Pursuant to the Guidelines, the recommended sentencing range of the Guidelines is 10-16 months.
Defendant Spain pled guilty to discharging industrial wastewater or effluent with abnormally high or low pH levels1 into the sewer system. Spain owned and operated Crown Chemical for decades, inheriting a predecessor company from his father. Crown Chemicals produces various cleaning chemicals for both domestic and industrial use. Crown Chemical uses mixing tanks to produce these chemicals. Residue wastewater that was left over in the mixing tanks would be discharged into the sewer system without being treated.2 This practice started no later than 1986, and continued until 2001. On certain occasions, Spain's employees expressed concern to Spain that this activity was illegal, but Spain declined to change this practice.
Spain was charged on several counts related to illegal discharge. He entered into a plea agreement as to Count I of the indictment; both Count I and the plea agreement acknowledge unlawful discharge of materials into the sewer that had a pH of less than 5 and greater than 10. Though not reflected in either the indictment or the plea agreement, covert surveillance by Environmental Protection Agency ("EPA") agents in the sewer system connected to and surrounding Crown Chemicals detected discharges that were below 2.0 pH and above 12.5 pH. Though the plea agreement is silent on this point, both parties agree that there is no evidence that Crown's discharges into the sewer system interfered with the relevant Metropolitan Water Reclamation District ("MWRD") treatment plant, that the discharged material ultimately "passed through" the treatment plant and into the broader environment, or that the discharged material caused any actual environmental harm.
Although district courts are not to apply "any thumb on the scale favoring a [Federal Sentencing Guideline sentence," a court is nevertheless "ordinarily obliged to first consider the presentence report and its calculation of the Guidelines and then consider the respective parties' arguments as to whether the Guidelines sentence should apply." United States v. Allday, 542 F.3d 571, 572-73 (7th Cir.2008) (quotation omitted). The parties disagree with each other and with the Presentence Investigation Report ("PSR") both in terms of what section of the Guidelines is applicable (and therefore what base offense level applies), and also as to the propriety of certain increases and decreases within the selected section.
Both parties agree that the 2007 Guidelines are controlling. The parties disagree over which section of the Sentencing Guidelines is applicable. The crux of this dispute is whether the court should limit its inquiry to the facts set forth in the plea agreement and indictment when deciding which section of the Guidelines is appropriate, or whether it may also consider Spain's relevant conduct, assuming it can be proven by a preponderance of the evidence. This is a rare question, for there is generally a direct correlation between the underlying statute of conviction and the corresponding sections of the Guidelines. Here, however, under the Guidelines either of two sections could apply.
The dispute is between Sections 2Q1.2 and 2Q1.3. Section 2Q1.2 applies to the mishandling of hazardous or toxic substances and has a base level of eight. As application note 3 to Section 2Q1.2 directs, this section applies where the material in question is deemed to be toxic or hazardous, by statute or regulation, at the time of the offense. U.S.S.G. § 2Q1.2 app. note 3. Section 2Q1.3 applies to the mishandling of environmental pollutants and has a base level of six; section 2Q1.3 "parallels § 2Q1.2 but applies to offenses involving substances which are not pesticides and are not designated as hazardous or toxic." § 2Q1.3 background note. The government advocates for § 2Q1.2, under a theory that the material that was actually discharged—with a pH of less than 2.0 and greater than 12.5—is a hazardous waste as defined by the Resource Conservation and Recovery Act ("RCRA"). Spain asserts that § 2Q1.3 is correct. The PSR recommends § 2Q1.3.
The first step in applying the Guidelines is to select the appropriate offense guideline section. U.S.S.G. § 1B1.1 ( ) Section 1B1.2 states as follows:
(a) Determine the offense guideline section in Chapter Two (Offense Conduct) 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). However, in the case of a plea agreement (written or made orally on the record) containing a stipulation that specifically establishes a more serious offense than the offense of conviction, determine the offense guideline section in Chapter Two applicable to the stipulated offense.
Refer to the Statutory Index (Appendix A) to determine the Chapter Two offense guideline, referenced in the Statutory Index for the offense of conviction. If the offense involved a conspiracy, attempt, or solicitation, refer to § 2X1.1 (Attempt, Solicitation, or Conspiracy) as well as the guideline referenced in the Statutory Index for the substantive offense .....
U.S.S.G. § 1B1.2(a). Spain pled to and was indicted for conspiracy. Section 2X1.1(a) directs that the base offense level for a conspiracy should be "[t]he base offense level from the guideline for the substantive offense, plus any adjustments from such guideline for any intended offense conduct that can be established with reasonable certainty." § 2X1.1(a). The "substantive offense" in this case was 33 U.S.C. § 1319(c)(2)(A). The statutory index directs that either of two offense guideline sections, U.S.S.G. §§ 2Q1.2 or 2Q1.3, may be applicable to a violation of § 1319(c)(2)(A).
Returning to Section 1B1.2(a), the text states that the base offense level is to be determined specifically with reference 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)." § 1B1.2(a). This is the general rule: the relevant offense guideline section is generally determined by looking at the offense charged in the indictment. Section 1B1.2(a) then goes on to state an exception to this general rule: "However, in the case of a plea agreement (written or made orally on the record) containing a stipulation that specifically establishes a more serious offense than the offense of conviction, determine the offense guideline section in Chapter Two applicable to the stipulated offense." Id. Therefore, any fact that has been stipulated to in a plea agreement may also be considered. The Seventh Circuit has interpreted the term "stipulation" broadly to include even a prosecutor's oral recitation of the factual basis, so long as the defendant orally agrees to the prosecutor's version of events and admits guilt. United States v. Loos, 165 F.3d 504, 506-08 (7th Cir.1998).
However, neither the Loos exception nor anything within the Guidelines suggests that a court may consider non-stipulated but relevant conduct when determining an appropriate offense guideline section. As Loos observes, "the Sentencing Guidelines establish a charge-offense system." Id. at 507. Facts found within stipulations may require a different section to be used, but this is a limited exception to the general rule and says nothing about relevant conduct found by the court but not stipulated to by the defendant. See United States v. Goldfaden, 959 F.2d 1324, 1329 (5th Cir. 1992) ().
Finally, there is no dispute that the court may consider "relevant conduct" when determining the applicable guideline range found within the applicable offense guideline section. Section 1B1.3(a) is labeled "Relevant Conduct (Factors that Determine the Guideline Range)," and states explicitly that such conduct may be considered when calculating a defendant's guideline range:
Unless otherwise specified, (i) the base offense level where the guideline specifies more than one base offense level, (ii) specific offense characteristics and (iii) cross references in Chapter Two, and (iv) adjustments in Chapter Three, shall be determined on the basis of the following:
(1) (A) all acts and omissions committed, aided, abetted, counseled, commanded, induced, procured, or willfully caused by the defendant,
....
U.S.S.G. § 1B1.3(a); see also § 2X1.1(a) () (emphasis added). These examples, where the Guidelines explicitly state when...
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United States v. Tonawanda Coke Corp., 10–CR–219S.
...system clearly erroneous despite fact that city sewer system ultimately contained hazardous levels of same); United States v. Spain, 591 F.Supp.2d 970, 975 (N.D.Ill.2008) (neither the volume of the discharge nor the amount, if any, of environmental harm precludes an upward adjustment for an......