In a stinging 151-page order, a federal district court awarded a former refinery manager and his wife $1,677,000 as the result of a malicious prosecution of an alleged environmental crime investigated by USEPA and the FBI. Vidrine v. United States, Case No. 07-1204 (W.D. La. 9/30/11).
The timeline in the underlying criminal case is remarkable. In September 1996, agents from the FBI, USEPA, U.S. Marshall Service, U.S. Coast Guard, and Louisiana State Police executed a search warrant on Canal Refining Company, for which Mr. Vidrine was the manager. More than three years later, in December 1999, the Government charged Mr. Vidrine with one count of knowingly storing hazardous waste without a permit at the Canal Refining property in violation of RCRA’s criminal provision, 42 U.S.C. § 6928(d)(2). In, September 2003, seven years after the search, four years after the indictment, and one month before trial, the Government filed a motion to voluntarily dismiss the indictment.
In July 2007, Mr. Vidrine filed civil claims against the Government under the Federal Torts Claims Act for malicious prosecution, and Mrs. Vidrine sued for loss of consortium. Because the Government moved to voluntarily dismiss the indictment, it had to overcome a presumption that it lacked probable cause to file charges against Mr. Vidrine.
Like many environmental criminal prosecutions, the case turned on regulatory definitions and defenses. The Government argued that the material at issue constituted hazardous waste, while Mr. Vidrine argued that the material was used oil and thus exempt from RCRA’s regulatory scheme. The Government argued unpersuasively that it believed the material contained chlorinated solvents, i.e., total halogens, in excess of 1000 ppm, thus constituting hazardous waste. The court found no evidence to support the Government’s belief, and in the process discussed the used oil rules as they pertain to mixtures as follows:
“mixtures of used oil and a listed hazardous waste are regulated as a hazardous waste under Part 260; mixtures of used oil and a characteristic hazardous waste are regulated as a hazardous waste only if they continue (subsequent to mixing) to exhibit one or more of the following characteristics: ignitability, corrosivity, reactivity, and/or toxicity-however, mixtures of used oil and a solid waste that exhibit solely the characteristics of ignitability are regulated as used oil, as long as the mixture does not also exhibit the characteristic of ignitability.”
Further, the criminal prosecution required the Government to prove that the mixing was knowing rather than accidental conduct resulting from cross contamination. According to the opinion, USEPA and the Louisiana Department of Environmental Quality debated whether the material constituted hazardous waste or used oil, which the charging agent EPA-CID Phillips ignored.
The opinion is notable in several respects. First, neither the original lead agent for USEPA or his later replacement felt there was sufficient evidence to refer Mr. Vidrine to DOJ for prosecution. However, the third agent Phillips verbally presented the case to the U.S. Attorney’s Office suggesting prosecution within two days after taking over the case without having any new evidence.
Second, the court found that “Agent Phillips, while under oath, testified falsely to the grand jury” likely raising the “specter of perjury not once, but on two separate occasions.” The court concluded:
“Agent Phillips, either deliberately or with reckless disregard for truth, provided false testimony to the grand jury in order to secure an indictment . . . and permeated the entire investigation with omissions, half truths, overstatements, inflammatory language, misstatements, falsehoods, and tortured readings of regulations.”
Third, the court rejected the often used argument by the Government that the defendant’s conduct was motivated by financial motives. Here the Government argued that Mr. Vidrine intended to buy cheap feedstock and sell it at a high price. The court responded: “This in no way shows intent to break the law, rather it shows an aggressive business strategy which, on its face, in no way indicates illegal intent.”
Fourth, plaintiffs argued that Agent Phillips, who was married and lived in Texas, used the Vidrine investigation as a cover, excuse, and opportunity to facilitate his illicit affair with Agent Barnhill, who was single and lived in Louisianna, and to hide the affair from his wife. The court stated: “Regrettably, the Court agrees with plaintiffs: this inappropriate and unprofessional behavior likely was, at least in part (if not in whole) a motivation for Agent Phillips’ continued pursuit of Hubert Vidrine, without probable cause, and certainly with a complete and total reckless disregard of Hubert Vidrine’s rights.”
In the end, the court determined:
“Whether Agent Phillips’ true motives were, as plaintiffs’ hypothesize, to have a cover and vehicle for his illicit sexual affair, whether he had a personal vendetta against Hubert Vidrine, whether as a brand new criminal investigator – giddy with the newly minted power and authority he had previously lacked when serving in a supporting role – or whether a combination of all three, it is patently clear Agent Phillips lacked the innate judgment and experience necessary to counter his overzealousness, which unfortunately can arise when one is granted such awesome power over the lives and liberties of others.”
The court awarded Mr. Vidrine $1,577,000 in damages including, among other things, $127,000 for attorneys’ fees and costs of the underlying criminal defense and $900,000 for lost earning capacity. The court awarded Mrs. Vidrine $200,000 for loss of consortium.