Another Federal Court of Appeals Finds Simple Negligence Sufficient for Criminal Liabilityunder the Clean Water Act

December 2005

White Collar Alert

On November 1, 2005, the U.S. Tenth Circuit Court of Appeals joined the Ninth Circuit in holding that adefendant can be criminally convicted of discharging a pollutant into the navigable waters of the UnitedStates, in violation of the Clean Water Act, upon proof that the defendant was merely negligent.

United Statesv. Ortiz

, No. 04-1228 (10th Cir. Nov. 1, 2005). The opinion is the latest in a trend in the federal courts topremise criminal liability under the environmental laws on simple negligence, rather than on criminalnegligence or knowing and intentional conduct.

The Offending Discharges

Defendant Ortiz was employed by Chemical Specialties, Inc. as the operations manager and sole employeeof a Grand Junction, Colorado facility that distilled propylene glycol, an airplane wing de-icing fluid. Thedistillation process for this chemical generates a significant amount of wastewater, which in most instancesis discharged to a municipal waste water treatment plant consistent with terms and conditions of a NationalPollutant Discharge Elimi-nation System (“NPDES”) permit. Here, however, Chemical Specialties declined toobtain an NPDES permit, informing the city that it would instead ship its wastewater to a nearby business.Investigating complaints of a noxious odor emanating from a storm drain that discharges into the ColoradoRiver, city employees determined that the source of the odor was a substance containing propylene glycolthat had originated at the Chemical Specialties facility.During a subsequent inspection by city officials and the Colorado Department of Public Health andEnvironment, Ortiz denied that the facility had discharged any wastewater into the Colorado River. Theinspection, however, revealed the same noxious odor on the grounds behind the facility, and significantamounts of water on the facility’s bathroom floor, with several pumps and hoses lying nearby. The authoritiesdetermined that the bathroom’s toilet was connected to a storm drain rather than the sanitary sewer lineleading to the wastewater treatment plant, so that pollutants discharged through the toilet ended up in theColorado River. Accordingly, the authorities instructed Ortiz not to dump anything down the toilet or sink. Theyalso instructed him to shut off the bathroom’s water and not use the toilet, with the city itself providing aportable toilet and handwash station in its stead. A few weeks later, federal EPA special agents inspected thefacility and again found puddles of water on the bathroom floor with hoses again laying nearby. Further, thewater supply to the bathroom had been turned on and the toilet was operational.A federal grand jury returned a two-count indictment charging Ortiz with violating the Clean Water Act by (1)negligently discharging chemical pollutants from a storm drain into the Colorado River, based on dischargesthat occurred before Ortiz was instructed to shut off the water and not use the toilet, and (2) knowinglydischarging chemical pollutants from a storm drain into the Colorado River, based on discharges thatoccurred after Ortiz was instructed to shut off the water and not to use the toilet.

Ortiz’s Motion for Acquittal

Following trial, a jury convicted Ortiz on both counts. Ortiz subsequently filed a motion for acquittal on bothcounts. The trial court denied the motion as to the knowing discharge, but granted the motion with respect tothe negligent discharge. The trial court reasoned that Ortiz could not be guilty of negligently dischargingpollutants because there was no evidence he knew that the toilet was connected to a storm drain thatdischarged into navigable waters (

i.e.

the Colorado River), rather than to a pipe going to the wastewater treatment plant. As a result, the trial court also declined to apply sentence enhancements for an “ongoing,continuous, discharge,” and a “discharge without a permit.” Defendant Ortiz received a sentence of 12-month’s imprisonment.

The Government’s Appeal

The government appealed the acquittal and the trial court’srejection of sentencing enhancements. Inreinstating the jury verdict for the negligent discharge of pollutants, the Tenth Circuit Court of Appeals notedthat the Clean Water Act’s unambiguous language does not require an offender act with any particular stateof mind when discharging a pollutant. Rather, the appellate court noted, “an individual violates the [CleanWater Act] by failing to exercise the degree of care that someone of ordinary prudence would have exercisedin the same circumstance, and, in so doing, discharges any pollutant into United States waters without anNPDES permit.” This, of course, is a classic statement of the negligence standard. The court of appealsaccordingly held that a criminal conviction under theClean Water Act does not require proof that a defendantknew that a discharge would enter U.S. waters. The court therefore reversed the acquittal regarding thenegligent discharge count and reinstated the negligent discharge conviction, ruled that the trial court haderred failing to impose the sentence enhancements, and remanded the case to the trial court withinstructions to vacate Ortiz’s sentence and resentence him.

Conclusions and Recommendations

As noted, the Ortiz case continues a trend in the federal courts of imposing criminal liability under the CleanWater Act for simple negligence. Thus an individual need not act knowingly or intentionally in order to violatethe Act. Rather, individuals may face substantial fines and incarceration for conduct that amounts to nothingmore than inadvertence and inattention. It is thus imperative that companies become pro-active by (1)understanding the requirements of environmental laws as applied to their operations, (2) understanding justhow its facilities dispose of chemicals and pollutants, (3) hiring competent environmental complianceofficers, and (4) assuring that all employees handling chemicals and pollutants follow clear and specificguidelines for handling and disposing of waste materials.

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