ELR Citation: ELR 21504
No(s). s. 92-10105, -10108 (9th Cir. Aug 8, 1994)

The court denies a petition for rehearing, rejects the petition for rehearing en banc, and amends its August 3, 1993, opinion, 23 ELR 21322, affirming the convictions and sentences of the manager and assistant manager of a sewage treatment plant in Hawaii for violating the Federal Water Pollution Control Act (FWPCA) by knowingly discharging waste-activated sludge (WAS) into the ocean in violation of the plant's national pollutant discharge elimination system (NPDES) permit and rendering inaccurate the plant's method for monitoring discharges. The court first holds that the government did not need to prove that the managers knew that their acts violated the plant's permit. FWPCA §309(c)(2) makes it a felony offense to knowingly violate a condition or limitation of a permit issued under §402. The legislative history of the Act's penalty provisions speaks in terms of causing a violation and strongly suggests that criminal sanctions are imposed on individuals who knowingly engage in conduct that results in a permit violation, regardless of whether the polluter is cognizant of the requirements or even the existence of a permit. This conclusion is supported by decisions interpreting analogous public welfare statutes. In amending its opinion, the court specifically addresses 1994 U.S. Supreme Court case law, including Staples v. United States, 114 S. Ct. 1793 (1994), in which the Supreme Court held that the government is required to prove that a defendant charged with possession of a machine gun knew that the weapon he possessed had the characteristics that brought it within the statutory definition of a machine gun. According to the Ninth Circuit, Staples distinguished gun laws from other regulatory regimes, specifically those regulations that govern the handling of obnoxious waste materials, and Staples explicitly contrasted gun possession with public welfare offenses. The Ninth Circuit determined that the knowledge requirement that Staples requires the government to satisfy to convict a defendant of a gun offense is greater than the knowledge the government must demonstrate to convict a defendant of a public welfare offense like the offense for which defendants in this action were convicted—dumping sewage into water. Although defendants in this action did not know that they were violating the plant's permit, they knowingly engaged in conduct that results in a permit violation, and that is sufficient to be convicted for a public welfare offense.

The court next holds that the district court erred in admitting expert testimony on contested legal issues concerning the definition of permit terms rather than instructing the jury, but that the error was harmless. Under a proper interpretation of the permit, the discharges, which the managers admitted making, necessarily violated the permit. The critical terms are either defined in the permit or their meaning is apparent from the U.S. Environmental Protection Agency's (EPA's) commentary on its permitting guidelines. The excess WAS that was separated from the plant's treatment process for storage and eventual disposal clearly falls within the permit's definition of a "removed substance" because it was a sludge removed in the course of treatment or control of wastewaters. As such it could not be discharged into the ocean unless the discharge constituted a permissible bypass of the treatment system. The court holds that the discharges were not permissible bypasses because they were not for essential maintenance to ensure efficient operation.

The court holds that the plant's NPDES permit was not unconstitutionally vague, because the managers were knowledgeable in the wastewater field and can be expected to have understood what the permit meant. Further, the managers had adequate notice of the illegality of their dumping by the considerable pains they took to conceal their activities. The court holds that the district court did not impermissibly exclude a Federal Register excerpt describing a proposed regulation that, if adopted, would have permitted bypass of effluent from a wastewater treatment facility where the resultant effluent complied with permit limitations. The managers claimed that the excerpt and the fact that it was never adopted suggest that EPA did not require them to monitor the discharges, which they characterize as bypasses. The court holds that the excerpt was not relevant to the jury's determination of the facts.

The court affirms the district court's refusal to instruct the jury on the elements of an entrapment by estoppel defense. The managers contended that they were entitled to rely on the plain language of the permit as a comprehensive statement of the law and that official authorization to haul the WAS to another waste treatment facility for primary treatment before discharge implied the acceptability of discharging the WAS from the managers' plant without additional treatment. The managers' first argument begs the question of correct interpretation of the permit, and the acceptability of discharging the WASfrom the other facility without secondary treatment has no bearing on the discharge limitations at the managers' plant. The court holds that the nonexpert testimony of prosecution witnesses and the prosecutor's remarks regarding the health effects of the discharged WAS, although questionably relevant and conveying repugnant images, could not have materially affected the verdict or rendered the trial unfair. A substantial amount of testimony regarding the health risks associated with the WAS came in without objection before the testimony the managers claim was prejudicial. The district court sustained objections and issued prompt, curative instructions for the most exceptional testimony, and the managers made public safety an issue by attempting to portray their discharges of the WAS as a responsible tactic to forestall environmental disaster. Finally, the court holds that the district court's findings in support of the upward adjustment of one manager's offense level due to his perjury were not clearly erroneous and that, based on U.S. Supreme Court precedent, increasing the sentence based on false testimony did not unconstitutionally burden the manager's right to testify.

Five judges dissented from the court's decision to reject the suggestion for rehearing en banc. They would grant the petition for rehearing en banc and hold that to knowingly violate permit limitations on the discharge of pollutants requires that defendants know they are violating permit limitations. To hold otherwise makes felons of a large number of innocent people doing socially valuable work.

Counsel for Plaintiff
Craig H. Nakamura, Ass't U.S. Attorney
U.S. Attorney's Office
300 Ala Moana Blvd., Honolulu HI 96813
(808) 541-2850

Counsel for Defendants
Philip H. Lowenthal
Lowenthal & August
2261 Aupuni St., Wailuku HI 96793
(808) 242-5000

Before Goodwin and Huff,^* JJ.