Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-11-50234/USCOURTS-ca9-11-50234-0/pdf.json

Parties Involved:
United States of America
Appellee
Charles Yi
Appellant

Document Text:

The Honorable Jack Zouhary, District Judge for the U.S. District Court *

for the Northern District of Ohio, sitting by designation.

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

UNITED STATES OF AMERICA,

Plaintiff - Appellee,

v.

CHARLES YI, AKA Jang Ho Yi,

Defendant - Appellant.

No. 11-50234

D.C. No.

2:10-cr-00793-

PA-1

OPINION

Appeal from the United States District Court

for the Central District of California

Percy Anderson, District Judge, Presiding

Argued and Submitted

November 6, 2012–Pasadena, California

Filed January 2, 2013

Before: Alfred T. Goodwin and Diarmuid F. O’Scannlain,

Circuit Judges, and Jack Zouhary, District Judge.*

Opinion by Judge Goodwin

Case: 11-50234 01/02/2013 ID: 8457363 DktEntry: 43-1 Page: 1 of 14
2 UNITED STATES V. YI

 This summary constitutes no part of the opinion of the court. It has

**

been prepared by court staff for the convenience of the reader.

SUMMARY

**

Criminal Law

The panel affirmed a jury conviction and sentence for

conspiracy to violate the Clean Air Act arising from the

defendant’s role as CEO of a real estate development

company that contracted to have condominium ceilings

scraped and refinished without proper asbestos disposal or

notice.

The panel held that the district court did not err in giving

or formulating a deliberate ignorance jury instruction, did not

err in applying a sentence enhancement for an offense

resulting in substantial likelihood of death or serious bodily

injury, and did not err in applying an enhancement for the

defendant’s role as an organizer or leader.

COUNSEL

Marilyn Bednarski, Kaye, McLane & Bednarski LLP,

Pasadena, California, for Defendant-Appellant.

John E. Arbab, United States Department of Justice,

Environmental & Natural Resources Division, Washington,

D.C., for Plaintiff-Appellee.

Case: 11-50234 01/02/2013 ID: 8457363 DktEntry: 43-1 Page: 2 of 14
UNITED STATES V. YI 3

OPINION

GOODWIN, Circuit Judge:

Charles Yi appeals his conviction and sentence, assigning

error to a jury instruction, and to his custodial sentence for

conspiracy to violate the Clean Air Act. The judgment is

affirmed.

I. FACTS

Yi was the CEO of Millennium Pacific Icon Group, a real

estate development company. In April 2004, Millennium

purchased Forest Glen, a 204-unit condominium complex,

after Yi and some of his Millennium associates did a walkthrough of the property.

Joseph Yoon, Millennium’s Forest Glen project manager,

testified that Yi commented during the walk-through that he

was certain the ceilings contained asbestos because of the age

of the building. Yi’s sister, Sheri Yi Hill, was also present at

the walk-through. Hill testified that she discussed the

ceilings with Yi and the two decided not to touch the ceilings

because they assumed the ceilings contained asbestos, which

would be costly to remove.

Yi signed a purchase offer for Forest Glen that included

a due diligence clause allowing time to review environmental

materials and to conduct an environmental review. The seller

provided a due diligence binder that included two Phase I

environmental reports and an “Operations and Maintenance

Plan for Asbestos-Containing Materials” (“The O&M Plan”).

The reports contained test results showing the presence of

asbestos in the ceilings. The O&M Plan incorporated the test

Case: 11-50234 01/02/2013 ID: 8457363 DktEntry: 43-1 Page: 3 of 14
4 UNITED STATES V. YI

results and stated that it was developed to minimize exposure

to the release of asbestos fibers. Yoon testified that he

presented the due diligence binder to Yi and identified its

contents. Yoon also testified that Yi asked another employee

to assess the diligence materials with respect to the building’s

physical condition, including the environmental aspects. The

employee prepared a handwritten summary. Yoon testified

that he typed the summary into a one-page document and

handed it to Yi.

According to Yoon, Yi subsequently instructed him to

secure a bid for removing the asbestos from the Forest Glen

ceilings. Yoon contacted Sky Blue Environmental in June

2004, and ultimately received a $437,000 proposal for

asbestos abatement. Yoon testified that Yi indicated he

would not pursue the abatement because he felt it was

unnecessary for selling the units. Yoon also testified that Yi

rejected a later bid to install drywall over the ceilings, which

would have cost anywhere from $1,800 to $2,800 per unit.

Millennium employee Timothy Yu testified that Yi said

asbestos abatement would be too expensive.

After Millennium purchased Forest Glen, an agent for

Millennium’s insurance carrier visited the property, observed

ceiling material on the ground, and took a sample to test for

asbestos. The agent later emailed Millennium employee

Andrew Lavaux, stating that the test showed 1% asbestos. Yi

testified that he was told the sample came back “negative,”

but Lavaux testified that he never told Yi the sample was

asbestos-free. Lavaux also testified that he never heard

anyone else tell Yi that the sample was asbestos-free.

In September 2005, unit sales at Forest Glen began to

slow and evidence showed Yi became concerned about the

Case: 11-50234 01/02/2013 ID: 8457363 DktEntry: 43-1 Page: 4 of 14
UNITED STATES V. YI 5

slowdown in November 2005. Yoon testified that Yi

instructed him to draw up a contract to have the condominium

ceilings scraped and refinished, and on January 16, 2006,

Millennium contracted to have the ceilings scraped. The

agreed-upon price broke down to $1,500 per unit for the first

ten—less per unit than either the previously rejected bid for

asbestos abatement or for installing drywall over the ceilings.

The contractor, Rudys Palacios, testified that no one informed

him that the ceilings contained asbestos. Palacios hired four

or five men to do the scraping. They wore no special clothing

to protect against asbestos exposure and only “white masks.”

He also stated that powdery ceiling material was simply

placed into bags and wheelbarrows before being thrown into

dumpsters. 

A state inspector, Larry Israel, testified that the work site

was one of the worst he had ever seen and that ceiling

material was blowing everywhere: public walkways,

sidewalks, driveways, and around the dumpsters.

 Yi testified that he did not remember being shown the

due diligence binder; he never read either environmental

report; and he did not believe Forest Glen’s ceilings

contained asbestos because one of the Millennium managers

had told him that the insurance agent’s asbestos test “came

[back] negative” for asbestos. According to Yi, he was not

shown the actual test results; he simply trusted the manager.

As to the abatement work, Yi testified that he was not

involved in choosing the ceiling-scraping crew, and did not

know who made the choice or how it was made.

Yi also offered testimony about the closing documents,

claiming he did not read the due diligence paragraph and its

reference to environmental review. According to Yi, he read

Case: 11-50234 01/02/2013 ID: 8457363 DktEntry: 43-1 Page: 5 of 14
6 UNITED STATES V. YI

and complied with the “Good Faith Deposit” provision of

KeyBank’s conditional letter of interest, but specifically did

not read the immediately preceding “Environmental”

provision which called for an environmental report. He also

said he did not read any portion of the ultimate loan

agreement with KeyBank despite signing it. Yi then denied

reading an email sent to him containing items needed prior to

closing the loan—specifically denying that he read the

email’s reference to the requirement of a Phase I

environmental report. He also denied reading an email sent

to him the day of closing in which KeyBank stated it needed

the O&M Plan to be in place to close the loan.

II. THE DELIBERATE IGNORANCE INSTRUCTION

Yi argues that the district court erred in giving a jury

instruction on deliberate ignorance, asserting that it was not

warranted because the facts shown at trial did not support a

finding of deliberate ignorance. The district court instructed

the jury using the Ninth Circuit model instruction:

You may find that the defendant acted

knowingly if you find beyond a reasonable

doubt that the defendant:

1. was aware of a high probability that there

was asbestos in the ceilings at Forest Glen

Condominiums, and

2. deliberately avoided learning the truth.

You may not find such knowledge, however,

if you find that the defendant actually

believed that there was no asbestos in the

Case: 11-50234 01/02/2013 ID: 8457363 DktEntry: 43-1 Page: 6 of 14
UNITED STATES V. YI 7

ceilings at the Forest Glen Condominiums, or

if you find that the defendant was simply

careless.

A district court’s decision to give a particular jury instruction

is reviewed for abuse of discretion. United States v. Heredia,

483 F.3d 913, 921 (9th Cir. 2007) (en banc). An instruction’s

substance is reviewed de novo. Id. An instruction is

appropriate if it is “supported by law and has foundation in

the evidence.” Id. at 922. As such, “the district court must

view the evidence in the light most favorable to the party

requesting it.” Id. If a party requests alternative instructions,

the district court considers them separately to “determine if

the evidence could support a verdict on either ground.” Id.

Willful blindness is inconsistent with actual knowledge,

and thus a deliberate ignorance instruction is appropriate only

where “the jury could rationally find willful blindness even

though it has rejected the government’s evidence of actual

knowledge.” Id. Deliberate ignorance contains two prongs:

(1) a subjective belief that there is a high probability a fact

exists; and (2) deliberate actions taken to avoid learning the

truth. Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct.

2060, 2070 (2011).

Regarding the first Global-Tech prong, testimony from

Hill, Yoon, and Yi himself supports an inference that Yi was

aware of a high probability that the Forest Glen ceilings

contained asbestos. Both Hill and Yoon testified that Yi

commented on the likelihood that the Forest Glen ceilings

contained asbestos during their initial walk-through. Yi’s 16-

year experience in property management bolsters the

evidence that he suspected the ceilings contained asbestos, as

the age of the Forest Glen building and the ceiling’s physical

Case: 11-50234 01/02/2013 ID: 8457363 DktEntry: 43-1 Page: 7 of 14
8 UNITED STATES V. YI

appearance would, according to both Hill and Yi’s own

testimony, have put a person experienced in property

management on notice of the likelihood that it contained

asbestos. While he argues that the insurance company’s

supposedly negative test allayed his suspicions, that inference

need not be drawn when viewing the evidence in the

government’s favor. Thus, there was sufficient evidentiary

support for the first Global-Tech prong.

Turning to the second Global-Tech prong, if the jury

could infer that Yi was aware of a high probability that the

ceilings contained asbestos, it also could infer that Yi

engaged in a deliberate pattern of failing to read documents

that might clarify whether asbestos was in fact present. The

jury would not be required to believe Yi’s argument that he

was very busy, that he trusted all of his subordinates to read

everything for him, or even that he was told the insurance

company’s test had come back “negative” for asbestos. The

evidence regarding Yi’s real estate experience and pattern of

failing to read documents common to real estate transactions

supports a finding that Yi deliberately avoided learning the

truth about whether the Forest Glen ceilings contained

asbestos.

Yi attempts to analogize this case with some that have

found the evidence could not support finding deliberate

ignorance. See, e.g., United States v. Baron, 94 F.3d 1312

(9th Cir. 1996), overruled by Heredia, 483 F.3d 913. But

those cases are factually distinguishable, with records very

different from the record here.

Yi also argues that the instruction itself was legally

flawed. He primarily takes issue with the term “simply

careless.” Yi argues that instructing a jury that it may not find

Case: 11-50234 01/02/2013 ID: 8457363 DktEntry: 43-1 Page: 8 of 14
UNITED STATES V. YI 9

knowledge where a defendant is “simply” careless leaves the

door open for some other level of carelessness. But Heredia

makes clear that the Ninth Circuit model instruction is

appropriate “and there is little reason to suspect that juries

will import [recklessness or negligence] concepts, as to which

they are not instructed, into their deliberations.” 483 F.3d at

924. The district court did not err in giving or formulating

the deliberate ignorance instruction.

III. THE GUIDELINE SENTENCE

We review de novo the district court’s interpretation of

the Sentencing Guidelines. United States v. Holt, 510 F.3d

1007, 1010 (9th Cir. 2007). Factual determinations at

sentencing are reviewed for clear error, and the application of

the Guidelines to the facts is reviewed for abuse of discretion.

Id. “Clear error is not demonstrated by pointing to

conflicting evidence in the record.” United States v. Frank,

956 F.2d 872, 875 (9th Cir. 1991). Instead, “[a] finding of

fact is‘clearly erroneous’ when, although there is evidence to

support it, the reviewing court is left with the definite and

firm conviction that a mistake has been committed.” Harries

v. United States, 350 F.2d 231, 235 (9th Cir. 1965).

Here, the district court calculated Yi’s total offense level

as 31 under the Guidelines. In reaching that level, the court

applied, and Yi now challenges, two enhancements: a ninelevel enhancement for committing an environmental offense

that “resulted in a substantial likelihood of death or serious

bodily injury,” § 2Q1.2(b)(2); and a four-level enhancement

for being “an organizer or leader of a criminal activity that

involved five or more participants,” § 3B1.1(a). The

enhancements resulted in a sentencing range of 108–135

months. However, the court granted several downward

Case: 11-50234 01/02/2013 ID: 8457363 DktEntry: 43-1 Page: 9 of 14
10 UNITED STATES V. YI

departures, resulting in a final sentencing range of 51–63

months. Ultimately, the court sentenced Yi to 48 months.

A. Substantial Likelihood of Death or Serious Bodily

Injury

We look to whether the district court’s application of a

nine-level increase for an offense resulting in a substantial

likelihood of death or serious bodily injury was supported by

clear and convincing evidence. See United States v. Staten,

466 F.3d 708, 720 (9th Cir. 2006). Clear and convincing

evidence creates a conviction that the factual contention is

“highly probable.” Colorado v. New Mexico, 467 U.S. 310,

316 (1984).

Evidence presented at trial showed that the work crew

removing the Forest Glen ceilings did not wear proper

respirators, were exposed to dry ceiling material, and that onsite dust far exceeded industry-recommended levels of

asbestos. The evidence at sentencing, aside from the actual

on-site conduct, came primarily from an EPA letter

discussing chrysotile—the form of asbestos present at Forest

Glen. The letter supports finding that chrysotile is

carcinogenic. Contrary to the defense expert’s report, the

EPA letter noted a lack of evidence to support using different

toxicity factors for different types of asbestos. Even if the

evidence did support this approach, it would not disturb the

EPA’s baseline conclusion that chrysotile is a carcinogen.

Moreover, studies cited in the letter support finding increased

risk of lung cancer, mesothelioma, asbestosis, and cancer of

the pleura from exposure to the chrysotile form of asbestos.

Case: 11-50234 01/02/2013 ID: 8457363 DktEntry: 43-1 Page: 10 of 14
UNITED STATES V. YI 11

In addition to the EPA letter, the district court also

appeared to rely on United States v. Pearson, 274 F.3d 1225

(9th Cir. 2001), where this court wrote:

The federal government has recognized

asbestos as a health hazard and it is generally

accepted that exposure to asbestos can cause

mesothelioma, asbestosis, lung cancer; and

cancers of the esophagus, stomach, colon, and

rectum. Pearson’s noncompliance with the

work practice standards created a substantial

likelihood that workers would be exposed to

life-threatening asbestos fibers.

Id. at 1235 (citation omitted). Yi argues that Pearson

involved a different type of asbestos and is therefore

inapplicable. However, the opinion makes no such legal

distinction. In sum, the combined evidence of the removal

crew’s on-site conduct and the potential harm from inhaling

any form of asbestos places the district court’s finding outside

the realm of clear error.

Yi’s arguments to the contrary are unpersuasive. First, he

contends the government failed to provide an expert to

establish the foundation for the enhancement. But there is no

such requirement. Second, Yi contends the district court

improperly rejected his own expert’s testimony. But the

district court both considered and permissibly gave little or no

weight to the defense expert’s opinion. Yi attempts to

compare this case to United States v. Altman, 901 F.2d 1161,

1165 (9th Cir. 1990), but there the district court refused to

hear the proffered expert testimony. The record here clearly

reflects that the district court considered the expert report.

Case: 11-50234 01/02/2013 ID: 8457363 DktEntry: 43-1 Page: 11 of 14
12 UNITED STATES V. YI

Yi’s more forceful contention is that the district court

should have given his expert’s opinion more weight.

Generally, the trier of fact is entrusted with discretion in

weighing evidence. See In re Rains, 428 F.3d 893, 902 (9th

Cir. 2005). There is no reason to believe the district court

abused its discretion, even assuming it largely discounted the

expert opinion. The expert report can be summed up as

stating: (1) chrysotile is different in form from other types of

asbestos; (2) chrysotile is less “toxic”; (3) the Forest Glen

work crew wetted down ceiling materials while working; (4)

the work crew wore respirators; (5) the ceilings contained less

than 10% chrysotile; and (6) the work crew’s low level of

exposure combined with the supposed lower toxicity of

chrysotile resulted in an insufficient likelihood of death or

serious bodily injury. However, the contrary evidence

detailed above entitled the district court to weigh all the facts

and reject the expert’s opinion.

Yi also complains that the district court improperly

discounted the report based upon the expert’s lack of medical

or molecular biology training. But the district court’s inquiry

into training merely created a basis for discounting the

expert’s medical opinions as to toxicity and likelihood of

harm. This was well within the district court’s discretion.

The only seemingly uncontroverted statement in the expert

report, that chrysotile is different in form from other types of

asbestos, did not require the district court to adopt the

expert’s opinion as to likelihood of harm. The district court’s

failure to give the expert opinion more weight was not an

abuse of discretion and the ultimate finding was not clear

error.

Case: 11-50234 01/02/2013 ID: 8457363 DktEntry: 43-1 Page: 12 of 14
UNITED STATES V. YI 13

 Even if the jury only found Yi guilty under a deliberate ignorance 1

theory, that finding is legally equivalent to knowledge. United States v.

Jewell, 532 F.2d 697, 702–03 (9th Cir. 1976).

B. Organizer or Leader Role

The district court also found that Yi fit the role of an

organizer or leader calling for a four-level increase. That

finding requires evidence “that the defendant exercised some

control over othersinvolved in the commission of the offense

or was responsible for organizing others for the purpose of

carrying out the crime.” United States v. Ingham, 486 F.3d

1068, 1074 (9th Cir. 2007) (emphasis omitted) (citing United

States v. Avila, 95 F.3d 887, 889 (9th Cir. 1996)). It must be

supported by a preponderance of the evidence. Avila, 95 F.3d

at 889. This finding is also reviewed for clear error. United

States v. Ponce, 51 F.3d 820, 826 (9th Cir. 1995).

Numerous facts support the role enhancement. Yi’s

conviction plus substantial evidence at trial support the

conclusion that he knew the ceilings contained asbestos.

1

Testimony showed that Yi was heavily involved in decisionmaking with regard to Forest Glen, particularly given the

inexperience of Millennium project managers and Yoon in

particular. Evidence showed: Yi earlier instructed Yoon to

seek bids for asbestos abatement; Yi rejected abatement bids;

Millennium employees awaited Yi’s ultimate approval prior

to removal; and Yi instructed Yoon to draw up the contract

for ceiling scraping. These facts support a permissible

inference that Yi directed the ceilings be scraped, approving

both the expenditure and the work itself, rather than simply

placing his signature on a check made out to the contractor.

The district court did not clearly err in finding by a

Case: 11-50234 01/02/2013 ID: 8457363 DktEntry: 43-1 Page: 13 of 14
14 UNITED STATES V. YI

preponderance of the evidence that Yi was an organizer or

leader.

Yi paints the district court’s finding as the result of an

improper “but for” test. It would be improper to find that Yi

organized or led a criminal activity merely because the

activity could not have been completed but for his knowledge

and participation. United States v. Lopez-Sandoval, 146 F.3d

712, 717 (9th Cir. 1998); United States v. Harper, 33 F.3d

1143, 1151 (9th Cir. 1994). At the sentencing hearing,

defense counsel explained that Yi was required to approve

expenditures over a few thousand dollars, at which point the

district judge asked, “[m]y question is if [Yi] doesn’t okay it,

we’re [not] here today. There’s nobody else that made this

decision. He was the final arbiter; correct?” Defense counsel

agreed.

This colloquy shows the enhancement was not based on

on the necessity of Yi’s involvement as the check signer, but

rather on Yi’s direction or control. The district court did not

apply an incorrect legal test, and the application of the role

enhancement was proper.

AFFIRMED.

Case: 11-50234 01/02/2013 ID: 8457363 DktEntry: 43-1 Page: 14 of 14