USA v. Van Loben Sels, 98-10355

• Decision Date: 30 December 1999
• Docket Number: No. 98-10355,98-10355
• Citation: 198 F.3d 1161
• Parties: (9th Cir. 1999) UNITED STATES OF AMERICA, Plaintiff-Appellant, v. WILFRED PAGE VAN LOBEN SELS, Defendant-Appellee
• Court: U.S. Court of Appeals — Ninth Circuit

Page 1161

198 F.3d 1161 (9th Cir. 1999)

UNITED STATES OF AMERICA, Plaintiff-Appellant, v. WILFRED PAGE VAN LOBEN SELS, Defendant-Appellee.

No. 98-10355

U.S. Court of Appeals for the Ninth Circuit

Argued and Submitted October 5, 1999

Filed December 30, 1999

NOTE: SEE AMENDING ORDER OF APRIL 14, 2000 AT 207 F.3d 1192.

COUNSEL: Donald W. Searles, Assistant United States Attorney, Sacramento, California, for the plaintiff-appellant.

Christopher H. Wing, Sacramento, California, for the defendant-appellee.

Appeal from the United States District Court for the Eastern District of California; Oliver W. Wanger, District Judge, Presiding. D.C. No. CR-95-05319-OWW

Before: Joseph T. Sneed and Harry Pregerson, Circuit Judges, and David O. Carter,¹ District Judge.

OPINION

CARTER, District Judge:

The United States appeals the sentence imposed by the district court following Wilfred Page Van Loben Sels' guilty plea to the misdemeanor charge of negligently discharging oily wastewater contaminated with benzene into the Los Angeles sanitary sewer system, in violation of the Clean Water Act ("CWA"), 33 U.S.C. SS 1317(d), 1319(c)(1)(A), and Los Angeles Municipal Code ("LAMC") S 64.30. The Government contends that the district court should have applied a six-level upward adjustment under Sentencing Guideline section 2Q1.2(b)(1)(A) because Van Loben Sels' offense was repetitive and resulted in environmental contamination.

The district court declined to apply section 2Q1.2(b)(1)(A) because the oily wastewater ultimately discharged as effluent into San Pedro Bay was rendered non-toxic after its subsequent treatment at the Terminal Island Treatment Plant ("Terminal Island"). We reverse and remand for resentencing.

FACTS AND PROCEDURAL HISTORY

From 1987 through 1995, Van Loben Sels was the owner and chief executive officer of Gibson Environmental, Inc. ("Gibson"), a hazardous waste treatment, storage and disposal facility. Gibson specialized in the treatment and disposal of used oil and tank bottom wastes, and maintained facilities in Bakersfield and Redwood City, California. Because the storage capacity at the Bakersfield facility was limited to 20,000 barrels of wastewater and quickly reached maximum capacity, the facility was often forced to turn away business.

Van Loben Sels decided to expand Gibson's operations to a facility in the Wilmington neighborhood of Los Angeles. In September 1990, Van Loben Sels entered into an agreement with Wilmington Liquid Bulk Terminal ("WLBT") that allowed Gibson to discharge wastewater at WLBT's facility into the City of Los Angeles' sanitary sewer system, also known as Publicly Owned Treatment Works ("POTW"), under WLBT's sewer permit. The wastewater flowed from WLBT to the POTW at Terminal Island where it was treated and discharged into the San Pedro Bay. WLBT's industrial wastewater permit² provided that all discharges must be in compliance with the terms and provisions of LAMCS 64.30.³ Van Loben Sels admitted that from January 1991 through March 1993, Gibson did not have any treatment system in place that could remove benzene from its wastewater. During this 26-month period, Van Loben Sels was aware of and authorized the transportation of approximately one million gallons of wastewater per month from Gibson's Bakersfield facility to WLBT for discharge into the sewer. Van Loben Sels was aware that the wastewater transported from Gibson's Bakersfield facility contained levels of benzene in excess of that permitted by state and federal law. See 40 C.F.R. S 261.24. By not properly treating the wastewater, Gibson avoided significant treatment costs and might well have secured a significant economic advantage over its competitors in the waste treatment business.

After Gibson's competitors complained, the Los Angeles Bureau of Sanitation began monitoring WLBT's and Gibson's discharges for the presence of benzene and other prohibited volatile organic compounds. Tests conducted on January 11 and January 25, 1993 showed Gibson's discharges contained a benzene concentration of 2.2 ppm and 3.3 ppm -over fourand six times the regulatory limit of 0.5 ppm, respectively.

A 92-count superseding indictment issued on September 27, 1996, charged Van Loben Sels and two other individuals with, inter alia, transportation of hazardous waste without a manifest, in violation of 42 U.S.C. S 6982(d)(5); aiding and abetting, in violation of 18 U.S.C. S 2; negligently discharging, and causing to be discharged, wastewater containing hazardous levels of benzene, and other volatile organic compounds, in violation of 33 U.S.C. SS 1319(c)(1)(A), 1317(d), and LAMC S 64.30; and conspiracy, in violation of 18 U.S.C. S 371.⁴ On December 2, 1997, Van Loben Sels pled guilty to one count of negligently discharging oily wastewater contaminated with hazardous levels of benzene into the Los Angeles sewer system, in violation of 33 U.S.C. SS 1319(c)(1)(A), and 1317(d), and LAMC S 64.30.

The district court conducted an evidentiary hearing prior to sentencing.⁵ The district court originally issued a tentative finding that Sentencing Guideline section 2Q1.2(b)(1)(A) would apply because Gibson admitted to violating WLBT's discharge permit and environmental contamination had occurred. The district court also found that the totality of the circumstances allowed for a downward adjustment of two levels, from level six to level four. The district court continued the evidentiary and sentencing hearing in order to receive supplemental briefing and evidence concerning two issues: whether the substance that was released was hazardous or toxic; and whether or not there was a discharge into the environment.

The district court found that: (1) it was undisputed that Van Loben Sels had continuously discharged benzene into the environment; (2) the term "environment" includes the POTW, which includes the City of Los Angeles' sanitary sewer system; (3) the Government failed to prove the total contribution of benzene to Terminal Island on any periodic basis, and the percentage of the total contribution that could be attributed to Gibson; and (4) the periodic tests taken by the City of Los Angeles during the entire period of the offense showed that no benzene had been discharged as effluent from Terminal Island. Accordingly, the district court rejected the government's position, and refused to apply the six-level upward adjustment under section 2Q1.2(b)(1)(A).

The district court thereupon recalculated Van Loben Sels' base offense level at 8, added a 4-level upward adjustment pursuant to section 2Q1.2(b)(4), because the offense involved the disposal of hazardous waste in violation of a permit, and subtracted 2-levels pursuant to section 3E1.1(a), for acceptance of responsibility. These adjustments resulted in a total offense level of 10. The district court, presented with a range of six to twelve months, sentenced Van Loben Sels to onemonth community confinement, five-months home detention, waiver of the $25 fine, and restitution in the amount of $35,000, which became due immediately. The Government timely appeals.

JURISDICTION

The district court exercised original jurisdiction of the case under 18 U.S.C. S 3231. We have jurisdiction of the government's appeal of Van Loben Sels' sentence pursuant to 18 U.S.C. S 3742(b) and 28 U.S.C. S 1291.

DISCUSSION

At issue is whether the district court properly declined to upwardly adjust Van Loben Sels' base offense level pursuant to Sentencing Guideline section 2Q1.1(b)(1)(A). Van Loben Sels did not receive an upward adjustment because the district court assessed the toxicity of the wastewater at the time it left the Terminal Island Treatment Plant, rather than at the point it was initially discharged into the Los Angeles sanitary sewer system at the WLBT.

The district court's interpretation and application of the Sentencing Guidelines is reviewed de novo. See United States v. Merino, 190 F.3d 956, 957 (9th Cir. 1999). We review the district court's findings of fact underlying the sentencing decision for clear error. See United States v. Robinson, 94 F.3d 1325, 1326 (9th Cir. 1996).

Sentencing Guideline section 2Q1.2(b)(1)(A) provides that "[i]f the offense resulted in an ongoing, continuous, or repetitive discharge, release, or emission of a hazardous or toxic substance or pesticide into the environment, increase by 6 levels." Application note 5 to section 2Q1.2 provides further guidance on this point:

Subsection (b)(1) assumes a discharge or emission into the environment resulting in actual environmental contamination. A wide range of conduct, involving the handling of different quantities of materials with widely differing propensities, potentially is covered. Depending upon the harm resulting from the emission, release or discharge, the quantity and nature of the substance or pollutant, the duration of the offense and the risk associated with the violation, a departure of up to two levels in either direction from the offense levels prescribed in these specific offense characteristics may be appropriate.

U.S.S.G. S 2Q1.2 application note 5 (1997).

This Court applies the rules of statutory construction when interpreting the Sentencing Guidelines. See Robinson, 94 F.3d at 1328. If the language of a statute is unambiguous, the plain meaning controls. Id. Correspondingly, commentary in the Sentencing Guidelines that interprets or explains a guideline is binding unless it violates the Constitution or a federal statute, or is inconsistent with that guideline. See id. (citing Stinson v. United States, 508 U.S. 36, 38 (1993)).

The only previously published case from this circuit interpreting and applying section 2Q1.2(b)(1)(A) is United States v. Ferrin, 994 F.2d 658 (9th Cir. 1993). In Ferrin, the defendant was the civilian supervisor of seven hazardous waste handlers at a naval station, and instructed his employees to treat a hazardous substance by mixing the substance with another chemical....