Following an eight-month criminal trial, a jury convicted a cast iron pipe company and four of its managers of various crimes. These included conspiring to commit a host of environmental pollution and worker safety violations, attempting to cover up or impede a federal investigation of those violations, and substantive violations of the Clean Water Act and the Clean Air Act. Although the company and its managers appealed the jury's verdict raising a detailed account of the issues, the District Court affirmed the final judgments of conviction and sentence in this case.
Specifically, the defendants were found to have illegally pumped contaminated water into storm drains and, as a result, into the Delaware River; to have unlawfully burned 50-gallon drums of paint waste in a cupola and emitted the fumes from those activities into the air; and to have attempted to cover up several work-related accidents at its facility, one of which resulted in the death of an employee. The jury also found that the Defendants engaged in a conspiracy to commit these acts — and to impede the resulting federal investigation — in order to maximize productivity and profits at the plant.
Clean Water Act violations
Although the company held a discharge permit that fundamentally allowed the plant to discharge two types of substances — storm water runoff (e.g., rainwater) and "non-contact cooling water" — it was not permitted to discharge wastewater created from the cleaning of equipment, the pipes produced in the plant, or the plant's facilities.
Due to the company's manufacturing processes, however, a significant amount of non-dischargeable wastewater was collected in pits and needed to be drained almost daily. Workers were instructed to pump the wastewater through trenches that ran alongside the casting equipment and into large holding tanks located outside the building, even if the tanks were too full to handle more wastewater. The result of this pumping was that the tanks overflowed, sending "dark, hot, muddy water" flowing down the roadway alongside the plant, and into the nearby storm drains. Night-shift employees were also sometimes instructed to pump the water out of the pit and directly onto the ground outside the plant. The unpermitted discharges from the plant
resulted in at least three separate oil spills on the Delaware River.
Clean Air Act violations
Because the company's manufacturing process involves the smelting of metals in a cupola, it was required to obtain and comply with a New Jersey Department of Environmental Protection-issued emissions permit. Under the relevant permits, the company could use only certain types of fuel, which was usually coke, but was also permitted to use non-hazardous waste paint in limited amounts. At all times relevant to this case, the plant was permitted to burn no more than 55 gallons of non-hazardous waste paint per day. Testimony revealed that an average of four drums of waste paint was burned in the cupola each day.
OSHA incidents
Between 1999 and 2002, several of the company's employees suffered severe injuries at the plant due to unsafe working conditions. The evidence introduced at trial demonstrated that the company's management took steps to conceal the cause of those injuries and to obstruct OSHA investigators' inquiries.
Specifically, the first accident occurred on April 27, 1999 when a forklift driver struck a plant supervisor. Since the injury had not been recorded, as required, in the plant's OSHA 300 logs, no investigation by OSHA was conducted. However, when the same forklift driver ran over and killed an employee on March 24, 2000, management tried to cover up the extent of the injuries incurred by the supervisor and blamed the second incident on a lack of forklift training. Further review by OSHA investigators, which included employee interviews, revealed that the supervisor was threatened by the Human Resources Manager that if he did not lie about his injuries, he would be fired. A more in-depth review of the second incident also showed that several drivers' maintenance checklists for the forklift involved in the incident noted extensive problems, including that the brakes were defective. Moreover, the forklift's repair logs showed no work
performed on the forklift, suggesting that it could not have been in "perfect" condition during or immediately after the accident, which the company attested to.
The other accident occurred on June 25, 1999, and involved an employee that was injured and lost his eye when a piece of a rotating blade from the cut saw he was using broke off from the blade and struck him in the face. Upon investigation two weeks later, the compliance officer visited the accident site and witnessed a worker operating the machine from behind a sliding plexiglass shield with a wooden frame and a wire mesh screen that was designed to protect the worker. The officer observed that the shield appeared to have been newly built, but the Human Resources
Manager assured him that it had existed in that condition for 16 years. Despite these representations, evidence and testimony at trial indicated that no wire mesh safety shield had
been in place on the day of accident. Rather, the plexiglass and wire mesh covering had been built by a carpenter a few days after the injury.
Attempts to conceal deficient safety measures and employee injuries were made again in December 2002, after another employee lost three fingers in a cement mixer accident.
Final ruling
Having carefully considered arguments, the United States Court of Appeals for the Third Circuit, upheld the final convictions, judgments, and sentences of the District Court, which consisted of:
- Plant Manager sentenced to 70 months’ imprisonment,
- Human Resources Manager sentenced to 41 months’ imprisonment,
- Maintenance Superintendent sentenced to 30 months’ imprisonment, and
- Finishing Superintendent sentenced to 6 months’ imprisonment.
As for the Company, the Court opted to apply the Alternative Fines Act (the “AFA”), 18 U.S.C. § 3571(c)(1), rather than the CWA and CAA, in imposing criminal penalties. Applying the AFA, the Court fined the Company the 37 maximum penalty of $500,000 per violation on Count 1 (conspiracy), Counts 8-11 (obstruction), Counts 12-16 (CWA—cement pit discharge), Counts 28-32 (CWA—Number Four Pit discharge), and Count 34 (CAA) for a total fine of $8 million dollars. It also sentenced the Company to 4 years’ probation, with a court-ordered monitor to ensure regulatory compliance going forward.
