USA v. Chemetco
| Decision Date | 17 December 2001 |
| Docket Number | No. 00-3940,00-3940 |
| Citation | 274 F.3d 1154 |
| Parties | (7th Cir. 2001) United States of America, Plaintiff-Appellee, v. Chemetco, Incorporated, Defendant-Appellant |
| Court | U.S. Court of Appeals — Seventh Circuit |
Appeal from the United States District Court for the Southern District of Illinois. No. 99 CR 30048--William D. Stiehl, Judge.
Todd Kim (argued), Dept. of Justice, Enviorment & Natural Resources Div., Washington, DC, for U.S.
Harriet H. Hamilton (argued), Westminster, CO, for Chemetco, Inc.
Before Easterbrook, Manion, and Kanne, Circuit Judges.
Defendant Chemetco, Inc. pleaded guilty to violating the Clean Water Act, 33 U.S.C. sec. 1311(a). Accordingly, the district court sentenced Chemetco to pay a fine that was based on the number of days that it violated the Clean Water Act. Chemetco now appeals its sentence, arguing that the district court misinterpreted the Clean Water Act and that the district court's findings violated the rule set forth in Apprendi v New Jersey, 530 U.S. 466, 120 S. Ct. 2348, 147 L. Ed. 2d 435 (2000).
Section 301 of the Clean Water Act ("CWA") provides that it is unlawful for any person to discharge a pollutant unless in compliance with the CWA. See 33 U.S.C. sec. 1311(a). A person achieves such compliance by obtaining a National Pollutant Discharge Elimination System ("NPDES") permit from the United States Environmental Protection Agency ("U.S. EPA") or from a qualified state agency. See id. at sec. 1342.
Chemetco smelts scrap metal at a foundry located near Hartford, Illinois in order to recover copper and other valuable products. On September 12, 1986, the Illinois Environmental Protection Agency ("Illinois EPA") issued Chemetco a permit allowing construction and operation of a storm- water runoff control system. Later that month, contract laborers hired by Chemetco installed this system, and pursuant to Chemetco's instructions, also installed a secret pipe on Chemetco's property running to an unnamed ditch tributary. The contract laborers then covered exposed sections of this secret pipe with straw. This secret pipe did not appear in any blueprint or drawing kept by Chemetco, and Chemetco did not have a permit allowing it to discharge pollutants via this pipe. Chemetco used this secret pipe to discharge water containing toxic metals such as lead and cadmium until September 18, 1996, when U.S. and Illinois EPA agents witnessed the secret pipe discharging polluted water.
Chemetco and six of its managers were indicted in the United States District Court for the Southern District of Illinois on April 21, 1999. Count I of the indictment charged Chemetco and various managers with conspiring to violate the CWA. Count II charged Chemetco and various managers with knowingly violating Section 301 of the CWA "[f]rom on or about September 1986 to on or about September 18, 1996." Finally, Counts III and IV of the indictment charged Chemetco and various managers with making false statements to government officials.
On January 11, 2000, Chemetco pleaded guilty to Counts I and II and nolo contendere to Counts III and IV. Chemetco also stipulated to the facts underlying the plea and waived its right to a jury trial. In the plea agreement, Chemetcoacknowledged discharging pollutants via the secret pipe during at least some of the time period alleged in the indictment. Chemetco also acknowledged that the government would recommend the imposition of a fine for Count II based on the number of days that the violation occurred. Section 309(c)(2) establishes criminal penalties for knowing violations of Section 301 of the CWA: "Any person who . . . knowingly violates [Section 301] . . . shall be punished by a fine of not less than $5,000 nor more than $50,000 per day of violation, or by imprisonment for not more than 3 years, or by both." 33 U.S.C. sec. 1319(c)(2)(B).1 The district court then referred the matter to the probation office for pre-sentence investigation and asked counsel to prepare sentencing memoranda.
Chemetco filed its sentencing memorandum on February 15, 2000, in which it averred that both parties agreed that under Section 309 of the CWA, Chemetco was liable for a fine of $2,500 to $25,000 per day of violation before February 4, 1987, and for a fine of $5,000 to $50,000 per day of violation thereafter. Chemetco then noted that the only disputed issue was the number of days that the violation occurred, and that the district court would resolve this issue at a hearing on March 13, 2000. Chemetco claimed that at this hearing, the government would have to prove the number of days that the violation occurred by "clear and convincing evidence." Chemetco attached tables showing rainfall statistics and explained that the amount of rainfall would affect the number of days on which the secret pipe discharged polluted water. These tables also calculated possible fine ranges based on the rainfall statistics. The tables indicated that there had been 948 days of rain between September, 1986 and September, 1996. However, Chemetco stated that "[i]t may . . . be impossible to determine [on] how many days an actual discharge occurred."
The government also filed its sentencing memorandum on February 15, 2000. The government recommended fining Chemetco for 949 days of violation--948 days when it rained plus one day, September 18, 1996, when although it did not rain, U.S. and Illinois EPA agents witnessed the secret pipe discharging polluted water.
On March 13 and 14, 2000, the district court held a hearing to determine the violation days. The government maintained that the secret pipe discharged polluted water on the 949 days indicated in its sentencing memorandum. Chemetco countered that there were fewer days of violation because the secret pipe did not discharge polluted water on every day that it rained. In support of this contention, Chemetco's expert witness, Kim Fock, presented two alternative methodologies for calculating the number of days that the secret pipe discharged polluted water. Further, Chemetco employees testified that the secret pipe could not have discharged polluted water on every day that it rained because on certain occasions during the ten-year period charged in the indictment, the valve to the secret pipe was closed.
With the district court's leave, Chemetco filed a supplemental sentencing memorandum on March 22, 2000, in which it argued that there were seventy-one days of violation, yielding a fine range of $342,500 to $3,425,000. On May 18, 2000, the probation office issued its pre- sentence report ("PSR"), in which it discounted Chemetco's calculation and concluded that there were 826 days of violation, yielding a fine range of $4,077,500 to $40,775,000. Chemetco filed its first objection to the PSR on June 9, 2000, disputing the methodology that the probation office used to calculate the number of days of violation. The probation office responded by filing an addendum to the PSR on June 28, 2000, in which it concluded that there were 711 days of violation, yielding a fine range of $3,502,500 to $35,025,000.
On August 3, 2000, Chemetco filed a second objection to the PSR. Citing the Supreme Court's recent decision in Apprendi, 530 U.S. at 477, Chemetco claimed that it had to "be charged [in the indictment] with each day of violation" and that the number of days of violation had to "be proven [by the government] beyond a reasonable doubt." In an order dated October 26, 2000, the district court rejected Chemetco's Apprendi objection. The district court found that the indictment, which charged Chemetco with violating the CWA "[f]rom on or about September 1986 to on or about September 18, 1996," was sufficient given that it informed Chemetco of the charges and put Chemetco on notice of the potential maximum penalty--the penalty that the CWA would allow if Chemetco discharged pollutants every day during the period that the indictment identified. Further, the district court found that Apprendi did not apply to this case and, therefore, the number of days of violation under the CWA was a sentencing factor that the court could find by a preponderance of the evidence.
The district court held a sentencing hearing on October 30, 2000. At that hearing, the district court found, by a preponderance of the evidence, that there were 676 days of violation, resulting in a fine range of $3,327,500 to $33,275,000. The district court sentenced Chemetco to a fine of $3,327,500 on Count II, and Chemetco now appeals this sentence.
The issue in this case is whether the number of days that Chemetco violated the CWA is an element of a CWA offense or a sentencing factor. Due process requires that the government prove each element of an offense beyond a reasonable doubt. See Apprendi, 530 U.S. at 477. After the gov ernment has met this burden and an offender is found guilty of a crime, however, courts can apply sentencing fac tors based on a preponderance of the evidence in order to increase the offender's punishment. See Almendarez- Torres v. United States, 523 U.S. 224, 228, 118 S. Ct. 1219, 140 L. Ed. 2d 350 (1998). Thus, whether the number of days that Chemetco violated the CWA is an element of a crime or a sentencing factor is important because if the number of violation days belongs in the former category, then it was reversible error for the district court to calculate it based on a preponderance of the evidence. See Apprendi, 530 U.S. at 490.
The Supreme Court has ruled that, within certain constitutional limits, Congress can identify which factors are elements of a crime and which are sentencing factors. See id. at 485-90, 120 S.Ct. 2348. Therefore, our first inquiry is statutory--whether in drafting the CWA, Congress intended the number of days of violation to be an element of a CWA offense or a sentencing factor. See Almendarez-Torres, 523 U.S. at 228. If we answer that...
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