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United States v. Donaldson Enterprises, Inc.

United States District Court, D. Hawaii.

August 22, 2016

UNITED STATES OF AMERICA, Plaintiff,
v.
DONALDSON ENTERPRISES, INC. (01); CHARLES DONALDSON (02); and CARLTON FINLEY (03), Defendants.

          ORDER DENYING MOTION TO DISMISS BASED ON ALLEGED DUE PROCESS VIOLATIONS

          Susan Oki Mollway United States District Judge

         I. INTRODUCTION.

         This case relates to permitting requirements that the Government says applied to fireworks seized by the Government. On April 8, 2011, there was an explosion at the Waileke bunker where the fireworks were located. Five people were killed. The Superseding Indictment asserts criminal charges against Donaldson Enterprises, Inc., the company allegedly responsible for storing and disposing of the fireworks, and two individuals, Charles Donaldson and Carlton Finley (collectively, “Defendants”).

         All three Defendants are charged in Count 1 of the Superseding Indictment of August 6, 2014, with conspiracy to treat and store hazardous waste without a permit in violation of the Resource Conservation and Recovery Act (“RCRA”), 42 U.S.C. § 6928(d)(2)(A) and 18 U.S.C. § 371. See ECF No. 43. Counts 2 and 5 of the Superseding Indictment charge Defendants with treating hazardous waste without a permit in violation of 42 U.S.C. § 6928(d)(2)(A) and 18 U.S.C. § 2. Count 3 charges Defendants with storing hazardous waste without a permit in violation of 42 U.S.C. § 6928(d)(2)(A) and 18 U.S.C. § 2.[1]

         Defendants move for dismissal of the charges, arguing that their due process rights are being violated. The court denies the motion.

         II. LAWS GOVERNING HAZARDOUS WASTE STORAGE, TREATMENT, AND DISPOSAL.

         This case involves Defendants’ alleged failure to comply with RCRA and Hawaii’s Hazardous Waste Management Plan.

         “RCRA is a comprehensive environmental statute that governs the treatment, storage, and disposal of solid and hazardous waste.” Meghrig v. KFC W., Inc., 516 U.S. 479, 483 (1996). “RCRA’s primary purpose . . . is to reduce the generation of hazardous waste and to ensure the proper treatment, storage, and disposal of that waste which is nonetheless generated, ‘so as to minimize the present and future threat to human health and the environment.’” Id. (quoting 42 U.S.C. § 6902(b)). To that end, 42 U.S.C. § 6925(a) requires that a permit be obtained for the treatment, storage, or disposal of hazardous waste. Criminal penalties are set forth in 42 U.S.C. § 6928(d)(2)(A) for any person who “knowingly treats, stores, or disposes of any hazardous waste identified or listed under this subchapter [42 U.S.C. §§ 6921 to 6939g]--(A) without a permit under this subchapter or pursuant to title I of the Marine Protection, Research, and Sanctuaries Act (86 Stat. 1052) [33 U.S.C. §§ 1411 to 1421].” Defendants are charged with violating 42 U.S.C. § 6928(d)(2)(A).

         As for the elements of a 42 U.S.C. § 6928(d)(2)(A) crime, the Ninth Circuit has held with respect to the mens rea requirement that the Government must prove a defendant’s knowledge only of the treatment, storage, or disposal of hazardous waste, not of the permit status. See United States v. Hoflin, 880 F.2d 1033, 1039 (9th Cir. 1989); see also United States v. Heuer, 4 F.3d 723, 732 (9th Cir. 1993) (“knowledge that the material is waste is also a requirement for conviction under § 6928(d)(2)(A)”). Additionally, the Ninth Circuit has approved of a jury instruction listing as an element that the defendant knew the waste had the potential to be harmful to others or to the environment and was not just an innocuous substance like water, reasoning that this sufficiently described “hazardous” for purposes of the statute. Hoflin, 880 F.2d at 1039. Both the Government and Defendants therefore agree that another element of a § 6928(d)(2)(A) charge is that the defendant knew the waste had the potential to be harmful to others or to the environment. ECF No. 84-1, PageID # 275; ECF No. 89, PageID # 433.

         Thus, to prove a violation of § 6928(d)(2)(A), the Government must prove beyond a reasonable doubt that: 1) a defendant knowingly treated, stored, or disposed of hazardous waste; 2) the defendant knew the material had the potential to be harmful to others or to the environment; 3) the material was identified or listed by the United States Environmental Protection Agency as hazardous waste pursuant to RCRA; and 4) the defendant acted without a permit.

         Under 42 U.S.C. § 6912, the Administrator of the Environmental Protection Agency is authorized to prescribe regulations to implement RCRA, and also has the job of identifying and listing hazardous wastes. The Environmental Protection Agency has accordingly issued regulations set forth in Title 40, Part 261 of the Code of Federal Regulations.

         The federal Government may authorize a state to administer and enforce RCRA through the state’s hazardous waste program. See 42 U.S.C. § 6926. Hawaii received federal approval to administer and enforce the state’s hazardous waste management plan on November 1, 2001. See 66 Fed. Reg. 55115-01, 2001 WL 1337427. The regulations for Hawaii’s hazardous waste management plan are set forth in Title 11 of the Hawaii Administrative Rules, Chapters 260 to 280.

         One of the main issues in this case is whether the seized fireworks qualify as “hazardous waste” for purposes of RCRA, which defines “hazardous waste” as:

a solid waste, or combination of solid wastes, which because of its quantity, concentration, or physical, chemical, or infectious characteristics may--
(A) cause, or significantly contribute to an increase in mortality or an increase in serious irreversible, or incapacitating reversible, illness; or
(B) pose a substantial present or potential hazard to human health or the environment when improperly treated, stored, transported, or disposed of, or otherwise managed.

42 U.S.C.A. § 6903(5).

         The term “solid waste” is further defined by RCRA as follows:

“[S]olid waste” means any garbage, refuse, sludge from a waste treatment plant, water supply treatment plant, or air pollution control facility and other discarded material, including solid, liquid, semisolid, or contained gaseous material resulting from industrial, commercial, mining, and agricultural operations, and from community activities, but does not include solid or dissolved material in domestic sewage, or solid or dissolved materials in irrigation return flows or industrial discharges which are point sources subject to permits under section 1342 of Title 33, or source, special nuclear, or byproduct material as defined by the Atomic Energy Act of 1954, as amended (68 Stat. 923) [42 U.S.C.A. § 2011 et seq.].

42 U.S.C.A. § 6903(27)

         In addition to the above statutory language, the Environmental Protection Agency’s regulations define “solid waste” as any “discarded material” that is not excluded by other provisions, including any material:

(A) Abandoned, as explained in paragraph (b) of this section; or
(B) Recycled, as explained in paragraph (c) of this section; or
(C) Considered inherently waste-like, as explained in paragraph (d) of this section; or
(D) A military munition identified as a solid waste in § 266.202.

40 C.F.R. § 261.2. Hawaii’s Administrative Rules define “solid waste” similarly. See Haw. Admin. R. 11-261-2.

         In 40 C.F.R. § 261.20 of the RCRA regulations, a “solid waste” (as defined in 40 C.F.R. § 261.2) is a “hazardous waste” when it is not excluded by the regulations and exhibits any of the following characteristics: 1) ignitability (40 C.F.R. § 261.21); 2) corrosivity (40 C.F.R. § 261.22); 3) reactivity (40 C.F.R. § 261.23); or toxicity (40 C.F.R. § 261.24). Hawaii’s Administrative Rules define when a “solid waste” is a “hazardous waste” similarly. See Haw. Admin. R. 11-261-3.

         The parties have focused on the characteristic of reactivity. A “solid waste” demonstrates reactivity when “[i]t is capable of detonation or explosive reaction if it is subjected to a strong initiating source or if heated under confinement, ” or “[i]t is readily capable of detonation or explosive decomposition or reaction at standard temperature and pressure.” 40 C.F.R. § 261.23(a)(6) and (7). Hawaii’s administrative rules define “reactivity” similarly, stating that a solid waste exhibits the characteristic of reactivity when “[i]t is capable of detonation or explosive reaction if it is subjected to a strong initiating source or if heated under confinement, ” or “[i]t is readily capable of detonation or explosive decomposition or reaction at standard temperature and pressure.” Hawaii Administrative Rule § 11-261-23.

         Hawaii’s Hazardous Waste Permit Program is managed by the Department of Health, Solid & Hazardous Waste Branch, and is set forth in Chapter 270 of the Hawaii Administrative Rules. See Declaration of Gracelda M. Simmons ¶ 2, ECF No. 128-1, PageID # 1447. Section 11-270-1(b) of the Hawaii Administrative Rules states, “Treatment, storage, or disposal of hazardous waste by any person who has not applied for or received a hazardous waste management permit is prohibited.”

         There is an exclusion from Hawaii’s permitting requirements when there is

[a]n immediate threat to human health, public safety, property, or the environment from the known or suspected presence of military munitions, other explosive material, or an explosive device, as determined by an explosive[s] or munitions emergency response specialist as defined in section 11-260-10.

Haw. Admin. R. § 11-270-1(c)(3)(i)(D). Section 11-260-10 defines “explosives or munitions emergency response specialist” as

an individual trained in chemical or conventional munitions or explosives handling, transportation, render-safe procedures, or destruction techniques. Explosives or munitions emergency response specialist include U.S. Department of Defense (DOD) emergency explosive ordnance disposal (EOD), technical escort unit (TEU), and DOD-certified civilian or contractor personnel, and other federal, state, or local government, or civilian personnel similarly trained in explosives or munitions emergency responses.

         When no “explosives or munitions emergency response specialist” determines that explosive material poses an immediate threat to human health, public safety, property, or the environment, the Hawaii Administrative Rules do not automatically require a regular Hazardous Waste Permit. Instead, an Emergency Hazardous Waste Permit (sometimes called a “Temporary Emergency Permit”) is available under section 11-270-61 of the Hawaii Administrative Rules when there is “an imminent and substantial endangerment to human health or the environment.”

         III. FACTUAL BACKGROUND.

         On December 10, 2007, U.S. Customs and Border Protection, an agency within the Department of Homeland Security, seized 11 pallets of fireworks (the “Lindsey Fireworks”). See Superseding Indictment ¶ 11, ECF No. 43, PageID # 142. On January 13, 2010, Homeland Security Investigations seized 17 pallets of other fireworks (the “Chang Fireworks”). See id.; ECF No. 131-2, PageID # 1517 (Custody Receipt for Seized Property). The Chang Fireworks had been originally detained on December 18, 2009, by U.S. Customs and Border Protection. See ECF No. 131-1, PageID # 1515; ¶ 1, ECF No. 131-11, PageID # 1594. The Chang Fireworks were assigned seizure number 2010-3205-000012-01. Decl. of Lisa Leung ¶ 4, ECF No. 131-11, PageID # 1594. Defendant Donaldson Enterprises, Inc. (“DEI”), sometimes incorrectly identified the Chang Fireworks as 2010-3205-000013-01. See E-mail from Carlton Finley to Darin Yamamoto (Dec. 13, 2010) (stating that the number was wrong and should be corrected).

         VSE, Inc., had a nationwide contract with the U.S. Government to transport, store, and dispose of materials seized by the Department of Homeland Security. See Superseding Indictment ¶ 11, ECF No. 43, PageID # 141-42. On January 13, 2010, through Lisa Leung, a Fines, Penalties, and Forfeitures Officer with U.S. Customs and Border Protection, issued a Disposition Order to “consign the seized fireworks to the VSE contractor.” ECF No. 131-3, PageID # 1519; Leung Decl. ¶ 5, ECF No. 131-11, PageID # 1594. According to Leung, her job includes tracking seized property through forfeiture proceedings, issuing notices of seizures to interested parties, and managing and directing the process of handling seized property. See Leung Decl. ¶ 2, PageID # 1594.

         DEI is a Hawaii corporation that provides unexploded ordnance disposal and environmental services. See Superseding Indictment ¶ 12, ECF No. 43, PageID # 142. Its director of operations is Defendant Charles Donaldson. Id. ¶ 13. Defendant Carlton Finley is DEI’s project manager responsible for DEI’s obligations under VSE’s contract with DEI. See Superseding Indictment ¶ 14.

         On March 18, 2010, DEI contracted with VSE to transport, store, and dispose of the Lindsey Fireworks and the Chang Fireworks. See Superseding Indictment ¶ 15, ECF No. 43, PageID # 142; ECF No. 131-4 (copy of contract). As accepted by Michelle Eugenio, DEI’s treasurer, the ...


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