United States v. Certified Envtl. Servs., Inc.

• Decision Date: 28 May 2014
• Docket Number: Docket No. 11–4972 XAP.,Docket No. 11–4968 XAP.,Docket No. 11–4974 CON.,Docket No. 11–4872 LEAD.,Docket No. 11–4969 XAP.,Docket No. 11–4877 CON.,Docket No. 11–4875 CON.,Docket No. 11–4976 CON.
• Citation: 753 F.3d 72
• Parties: UNITED STATES of America, Appellee–Cross–Appellant, v. CERTIFIED ENVIRONMENTAL SERVICES, INC., Nicole Copeland, Elisa Dunn, Defendants–Appellants–Cross–Appellees, Barbara Duchene, Thomas Juliano, Defendants, Sandy Allen, Frank Onoff, Defendants–Appellees.
• Court: U.S. Court of Appeals — Second Circuit

753 F.3d 72

UNITED STATES of America, Appellee–Cross–Appellant,

v. CERTIFIED ENVIRONMENTAL SERVICES, INC., Nicole Copeland, Elisa Dunn, Defendants–Appellants–Cross–Appellees,Barbara Duchene, Thomas Juliano, Defendants,Sandy Allen, Frank Onoff, Defendants–Appellees.

Docket Nos. 11–4872 LEAD, 11–4974 CON, 11–4969 XAP, 11–4875 CON, 11–4976 CON, 11–4972 XAP, 11–4877 CON, 11–4968 XAP.

United States Court of Appeals, Second Circuit.

Argued: June 14, 2013.

Decided: May 28, 2014.

Gabriel M. Nugent (Daniel J. French, on the brief) Hiscock & Barclay, LLP, Syracuse, NY, for Defendant–Appellant–Cross–Appellee Certified Environmental Services, Inc.

Brian J. Fischer, Matthew D. Cipolla, Jenner & Block LLP, New York, NY (Carl N. Wedoff, Jenner & Block LLP, New York, NY; Donald T. Kinsella, Stockli, Greene, Slevin & Peters LLP, Albany, NY on the brief), for Defendant–Appellant–Cross–Appellee Nicole Copeland.

Dennis B. Schlenker, Esq., Albany, NY, for Defendant–Appellant–Cross–Appellee Elisa Dunn.

Craig A. Benedict, Assistant United States Attorney (Rajit S. Dosanjh, Assistant United States Attorney, on the brief), for Richard S. Hartunian, United States Attorney for the Northern District of New York, Syracuse, NY, for Appellee–Cross–Appellant the United States of America.

James R. McGraw, Esq., Syracuse, NY, for Defendant–Appellee Sandy Allen.

Before: RAGGI and CARNEY, Circuit Judges, and RAKOFF, District Judge.¹

RAKOFF, District Judge:

Certified Environmental Services, Inc. (“CES”); Nicole Copeland, former CES Technical Services Manager; and Elisa Dunn, former CES air monitor and field supervisor, appeal from their convictions of conspiracy, aiding and abetting violations of the Clean Air Act, mail fraud, and making false statements to federal officials. Seeking a new trial, these defendants contend that the district court improperly excluded evidence that they acted under a good-faith belief that they were complying with state law and that, in any event, their convictions and sentences were irreparably tainted by prosecutorial misconduct. The Government cross-appeals the sentences given to CES, Copeland, and Dunn, and appeals from the sentences given to Sandy Allen, a CES air monitor, and Frank Onoff, a supervisor at a contractor that performed improper asbestos abatement work. The Government argues that the district court erred in determining restitution, erred in calculating loss, misapplied the advisory sentencing guidelines, and imposed sentences that were substantively unreasonable.

For the reasons that follow, we vacate the convictions of CES, Copeland, and Dunn, and remand for a new trial. We also vacate the sentences of Allen and Onoff and remand for resentencing.

BACKGROUND

I. Regulatory Framework

Certain technical state and federal regulations governing the removal of asbestos underlie the charges in this case. Asbestos is severely toxic, and “medical science has not established any minimum level of exposure to asbestos fibers which is considered to be safe.” 20 U.S.C. § 3601(a)(3). Its complete removal is therefore required by both federal and state regulations.

A. Federal Regulations

Under the Clean Air Act, 42 U.S.C. §§ 7401–7515, the Environmental Protection Agency (“EPA”) is authorized to adopt what the agency has called “national emission standards for hazardous air pollutants,” including asbestos. See 40 C.F.R. pt. 61; 42 U.S.C. § 7412(c) & (d). The standards for asbestos are enforced in part by work-practice standards that govern covered renovation and demolition activities involving asbestos. See40 C.F.R. § 61.145; see also42 U.S.C. § 7412(h). As relevant here, these work-practice standards provide that, when removing regulated asbestos-containing material, the site owner or operator must wet the material to prevent it from escaping into the air and must ensure that the material remains adequately wetted until it is packed and sealed in leak-tight containers. See40 C.F.R. §§ 61.145(c)(6)(i), 61.150. Asbestos-containing material is not adequately wetted “[i]f visible emissions are observed coming from [the] material.” Id. § 61.141. The owner or operator also must ensure that no visible emissions are discharged to the outside air and must deposit the material with an authorized disposal site as soon as practicable. Id. § 61.150(a)-(b). The Clean Air Act provides criminal penalties for any person who knowingly violates these work-practice standards. See42 U.S.C. § 7413(c)(1).

Under the Toxic Substances Control Act (“TSCA”), 15 U.S.C. §§ 2601–2697, the EPA has promulgated additional regulations governing asbestos removal from elementary and secondary school facilities. See 40 C.F.R. pt. 763, subpt. E; see also15 U.S.C. § 2643. As relevant here, these regulations require that, after any asbestos abatement project is completed, the school must confirm that the area is free of asbestos by, among other things, designating a person to “collect air samples using aggressive sampling.” 40 C.F.R. § 763.90(i)(2)(i). “[A]ggressive sampling” involves taking steps before and during sample collection to dislodge asbestos particles that may have settled on the surfaces in the work area. Beforehand, the “floors, ceiling and walls [must] be swept with the exhaust of a ... leaf blower,” and during collection, “[s]tationary fans” must be situated, one for each ten thousand cubic feet of worksite, with the “[f]an air ... directed toward the ceiling.” Id. pt. 763, subpt. E, App. A, III.B.7(d)(iii), (iv).

EPA regulations under the TSCA also contain provisions to avoid conflicts of interest. The regulations provide that “[s]ampling operations must be performed by qualified individuals completely independent of the abatement contractor.” Id. II.B.2, III.B.1. Similarly, “[a]ll sample preparation and analysis [must] be performed by a laboratory independent of the abatement contractor.” Id. II.E.1.

Asbestos abatement activities are also regulated by the Occupational Safety and Health Administration (“OSHA”) under the Occupational Safety and Health Act. See29 C.F.R. § 1926.1101; 29 U.S.C. § 655. OSHA regulations impose numerous requirements on employers to ensure the wellbeing of employees who perform abatement work. See29 U.S.C. § 654(a). For example, the regulations require employers to “provide or require the use of protective clothing, such as coveralls or similar whole-body clothing, head coverings, gloves, and foot coverings.” 29 C.F.R. § 1926.1101(i)(1). Employers must ensure that their employees enter and exit the work area through “[d]econtamination areas” designed to prevent asbestos from escaping into the surrounding environment. Id. § 1926.1101(j)(1)(i). Employers must also provide respirators to employees who work with certain categories of asbestos-containing materials. Id. § 1926.1101(h).

In addition, OSHA regulations require employers to “perform monitoring to determine accurately the airborne concentrations of asbestos to which employees may be exposed.” Id. § 1926.1101(f)(1)(i). Employees must wear air sampling devices to collect representative “breathing zone air samples,” id. § 1926.1101(f)(1)(ii), which are then subjected to laboratory analysis to determine each employee's asbestos exposure. Individuals who perform this analysis must receive specialized training. See id. § 1926.1101, App. A.II.3.

B. State Regulations

Asbestos abatement activities in New York are also subject to state regulation under New York Industrial Code Rule 56 (the “Code Rule”), 12 N.Y.C.R.R. pt. 56 (1994), enforced by the New York State Department of Labor (“DOL”). The Code Rule at times mirrors federal requirements and at times is stricter. As relevant here, the Code Rule imposes requirements for preparing the work area, for performing abatement work, for cleaning up after the abatement work is complete, and for air monitoring. The Code Rule also contains certain standard variances and exceptions.

With respect to pre-abatement procedures, the Code Rule requires contractors to construct containment structures around the work area, known as “isolation barriers.” Id. § 56–8.1(j). These barriers consist of two layers of plastic sheeting (referred to as “poly”), which must be placed over “all openings” in the work area, including windows, doors, skylights, corridors, and ducts (often referred to as “criticals”). Id. In addition to the criticals, contractors also must place two layers of poly over all surfaces in the work area, including floors, walls, and ceilings, exposing only the asbestos to be removed. Id. § 56–8.1(k)(5). All seams in the poly must be staggered from one another and sealed with tape. Id.

Like the OSHA regulations, the Code Rule also requires contractors to construct decontamination areas, which must be separated from the work area by “airlocks” to ensure that asbestos does not escape into the surrounding environment. Id. §§ 56–9.1–56–10.1. To the same end, the Code Rule also requires contractors to establish negative air pressure in the work area relative to the areas outside, “to ensure that contaminated air in the work area does not filter back to an uncontaminated area.” Id. § 56–6.1(c). Once the isolation barriers have been erected and negative pressure is established, the contractor must wait twelve hours before beginning abatement work to ensure that the barriers remain secure and intact. Id. § 56–11.1(b). The contractor then must maintain negative air pressure “continuously, 24 hours a day, from the start of the abatement work through the cleanup operations and clearance air monitoring.” Id. § 56–6.1(b).

With respect to the abatement itself, the Code Rule makes plain that “[n]o dry removal or disturbance of asbestos material shall be permitted.” Id. § 56.12.1(a). Rather, “[t]he asbestos material shall be wetted frequently,” id. § 56–12.1(b), and must be either bagged immediately once removed or dropped into a flexible catch basin, id. § 56–12.1(c). All abatement workers, including air monitors, must enter...