Last week, the U.S. District Court for the District of New Jersey issued significant prison sentences and a stiff criminal fine in United States v. Atlantic States Cast Iron Pipe Company et. al., the longestrunning environmental crime trial in U.S. history.
In April 2006, a jury convicted New Jersey pipe-manufacturing company Atlantic States and four of its managers for violations of the Clean Water Act and Clean Air Act, and for obstructing an investigation by the Occupational Safety and Health Administration (OSHA). Prosecutors showed that the accused had: engaged in a conspiracy to illegally dispose of pollutants into the Delaware River and air around the Phillipsburg, New Jersey, plant; created an unsafe work place; and interfered with OSHA investigations.
The seven-month trial made history as the longest-running environmental crimes case in the United States. The resulting sentences include an $8 million fine to McWane, Inc., the parent company of Atlantic States. The former plant manager facility was sentenced to 70 months in prison for one count each of violating the Clean Water Act and Clean Air Act and three counts of obstructing an OSHA investigation. The former human resources manager was sentenced to 41 months for one count of making false statements to OSHA and two counts of obstructing an OSHA investigation. A former maintenance supervisor at the plant was sentenced to 30 months in prison for one count of false statements to the New Jersey Department of Law and Public Safety and the FBI, one count of obstructing an OSHA investigation and seven counts of violating the Clean Water Act. Lastly, a former finishing superintendent received a six-month sentence.
The jury found the company guilty of conspiracy, 22 counts of Clean Water Act violations, one count of violation of the Clean Water Act, five counts of false statements to state and federal environmental agencies and OSHA, and four counts of interfering with OSHA investigations. In addition to the company’s hefty monetary penalty, it must serve four years of probation, during which time it will be overseen by a court-appointed monitor. The court also added a somewhat unusual aspect to the company’s sentence by ordering several top managers at the New Jersey plant and at McWane’s Alabama corporate headquarters to read the court’s transcripts of the sentencing of the four former managers and the company.
The Worker Endangerment Initiative
The Atlantic States prosecution is one of the first to emerge from the government’s worker endangerment initiative. The initiative represents the joint efforts of the OSHA, the Environmental Protection Agency (EPA) and the Department of Justice (DOJ) to combat criminal violations of the OSH Act and environmental laws. First announced in 2005, the worker endangerment initiative was created on the premise that facilities that cut corners on worker safety standards are also likely to cut corners on environmental protection. The initiative provides the agencies with a more formal mechanism for sharing information about violators of both worker safety and environmental laws. Each agency has something to gain from participation.
For EPA, the big benefit is additional resources. The OSHA inspectors represent an extra set of eyes that can greatly enhance the government’s ability to detect environmental violations. DOJ and EPA have undertaken an extensive effort to train OSHA inspectors to spot environmental offenses. The idea is not to make the OSHA inspectors into environmental cops, but to sensitize them to environmental violations, so that if they happen to see one, they can report it to EPA for further action.
For OSHA, the initiative allows the potential for greater penalties when both environmental and safety violations are uncovered. The OSH Act’s most serious punishment for criminal offenses, a willful violation causing death to an employee, is a misdemeanor punishable by six months’ imprisonment and a $500,000 fine. See 26 U.S.C. S. 666(e). Environmental violations, however, routinely are treated as felonies and result in prison sentences and fines in the millions of dollars. Defendants that are charged with both will be subject to greater penalties. Ultimately, this may cause repeat OSH Act offenders to take inspections more seriously. For DOJ, the combination of OSHA and EPA violations provides a one-two punch that is hard to beat in terms of jury appeal, as evidenced by the Atlantic States verdicts and sentences.
The prosecutions of McWane, Inc., as well as other criminal prosecutions of environmental and OSH Act violations, suggests that the government is continuing to pool resources and aggressively pursue violations that result in both worker and environmental endangerment.