ELR Citation: ELR 21357
No(s). s. 92-10545, -10546 (9th Cir. Aug 31, 1993)

The court upholds the convictions of two managers of a propellant manufacturer under §3008(d)(2)(A) of the Resource Conservation and Recovery Act (RCRA) and 18 U.S.C. §1001, and overturns the conviction of one manager under RCRA §3008(d)(2)(B) because a condition in a RCRA permit must be clear on the permit's face. The manufacturer transported waste propellant, a hazardous substance, from its closed facility in California to a new facility in Nevada, where it stored and later disposed of the waste. First, the court holds that one manager was properly convicted under RCRA §3008(d)(2)(A) for knowingly storing a hazardous waste without a permit or interim authorization. The facility did not have interim status authorization, because interim status applies only to facilities that were in operation by November 1980, and the Nevada facility was built in 1987. Moreover, interim status could not be implied either from a letter from the Nevada Department of Environmental Protection (NDEP) that indicated that the NDEP would review the manufacturer's revised permit application in light of proposed regulations, or from the NDEP's failure to note a storage violation when it inspected the facility. A temporary permit authorizing the manufacturer to dispose of hazardous waste stored at the Nevada facility also does not indicate that the manufacturer was authorized to store materials shipped from the California facility.

Next, the court holds that the same manager was improperly convicted under RCRA §3008(d)(2)(B) for the disposal of hazardous waste in knowing violation of a material condition or requirement of a RCRA permit. The court holds that a condition, express or implied, must be clear on the face of a permit. The manufacturer's permit to open-burn waste propellant at its Nevada facility was ambiguous as to the source of the waste, and, thus, contained no condition, express or implied, which forbade the burning of waste shipped from the California facility. The fact that the defendant knew from past dealings that the permit did not cover waste from the California facility is an improper basis, standing alone, for establishing a criminal violation of an ambiguous permit. The court holds that sufficient evidence supports a jury finding that, although the shipped material was labelled "sample," the managers knew it was actually waste propellant that was intended for disposal.

The court holds that the managers were properly convicted under 18 U.S.C. §1001 of knowingly making a false material statement within the jurisdiction of a federal agency when they called the waste propellant a sample on the bill of lading and shipping papers, which they prepared after the NDEP raised questions about the stored material. There was ample evidence that both managers knew the material was waste and not a sample. Inconsistent jury verdicts regarding the false statement charge and a charge of knowingly transporting a shipment of hazardous waste without a manifest does not warrant reversal of the convictions because the court's review is limited to a determination of whether the evidence was sufficient to support the challenged convictions. The court holds that the falsified date on the bill of lading is a material statement. The court next holds that the district court did not abuse its discretion by denying one manager's pretrial motion to sever. The manager did not identify any specific trial right that was abrogated by the denial of the motion. Moreover, he waived his right to appeal the denial by failing to renew the motion at trial or request a limiting instruction. Finally, the court holds that, under case law, knowledge of the U.S. Environmental Protection Agency's jurisdiction is not required to establish a §1001 violation.

A concurring judge writes separately to emphasize that the court does not decide that a RCRA permit can ever have an implied condition.

Counsel for Plaintiff
John A. Bryson
Environmental and Natural Resources Division
U.S. Department of Justice, Washington DC 20530
(202) 514-2000

Counsel for Defendant
N. Patrick Flanagan III
Beckley, Singleton, De Lanoy, Jemison & List
100 W. Liberty St., Ste. 700, Reno NV 89501
(702) 323-8866

Before Reinhardt and Trott, JJ.