### In the



# United States Court of Appeals

For the Seventh Circuit

____________________

No. 12

‐ 2771

U NITED S TATES OF A MERICA

, Plaintiff

‐ Appellee

,

v.

D UANE L. O’M ALLEY

, aka B UTCH

, Defendant

‐ Appellant

.

____________________

Appeal from the United States District Court for the

Central District of Illinois.

No. 2:10

‐ cr

‐ 20042

‐ MPM

‐ DGB

‐ 2

— Michael P. McCuskey

, Judge

.

____________________

A RGUED N OVEMBER 6, 2013

— D ECIDED J ANUARY 8, 2014

____________________

Before W OOD

, Chief Judge

, and F LAUM and T INDER

, Circuit

Judges

.

T INDER

, Circuit Judge

. Defendant

‐ Appellant Duane

“Butch” O’Malley was convicted of removing, transporting,

and dumping asbestos

‐ containing insulation. A jury was

convinced beyond a reasonable doubt that O’Malley knew

the insulation contained asbestos. O’Malley appeals his

criminal conviction and sentence on two grounds. First, he

argues that the government did not prove the appropriate2 No. 12

‐ 2771

mens rea for the Clean Air Act violations of which he was ac

‐

cused: he argues that the government was required to prove

that O’Malley knew that the asbestos in the building was a

regulated type of asbestos. In the alternative, he asserts that

the district court inappropriately participated in the plea ne

‐ gotiations. We find that the jury was correctly instructed on,

and the government proved, the correct mens rea for the vio

‐

lations in question. We also conclude that the district court

did not improperly participate in plea negotiations. Conse

‐ quently, we affirm the judgment of the district court.

I. BACKGROUND

Because O’Malley asks us to examine both the factual cir

‐

cumstances of his alleged violations, as well as the conduct

by the district court, we provide a brief summary of the facts

relating to each.

a. The Removal of Asbestos

In 2005, Michael Pinski, a real estate developer, pur

‐

chased a building in Kankakee, Illinois. Prior to the purchase

he had an asbestos survey prepared, which showed that the

building contained approximately 2,200 linear feet of asbes

‐

tos

‐ containing insulation material wrapped around pipes. In

2009, Pinski hired Origin Fire Protection, a company run by

O’Malley, to convert the wet sprinkler system to a dry sys

‐

tem.

When touring the building for this project, O’Malley

pointed out the insulation on the pipes in the building and

offered to remove the insulation for an additional payment.

Pinski, reluctant, informed O’Malley that some of the insula

‐

tion

‐ wrapped pipes contained asbestos. O’Malley, however,

convinced Pinski that he would remove the insulation

properly and dispose of it in a proper landfill, and even saveNo. 12

‐ 2771 3

Pinski money in the process. O’Malley insisted on a cash

payment for the $12,000 contract price, and provided no

written contract for the insulation removal work, even

though he gave Pinski a written contract for the installation

of the sprinkler system. O’Malley later confided in an em

‐ ployee that he had requested cash payments from Pinski so

“there wouldn’t [be] a paper trail.” O’Malley and his busi

‐

ness did not hold a license to remove asbestos, and none of

the employees of the company were trained in complying

with federal asbestos regulations.

Almost everyone in the cast of characters recognized the

asbestos for what it was. James Mikrut, one of O’Malley’s

employees, walked through the building with O’Malley pri

‐

or to beginning the removal, and told O’Malley that “[t]his is

probably all asbestos in this building.” When O’Malley of

‐

fered to pay another employee, Virgil Lietz, to help remove

insulation from the building, O’Malley told Lietz that the in

‐

sulation may contain asbestos. Richard Folk, who was also

considered for the insulation removal job, recognized the as

‐

bestos and told O’Malley that a person needed a license to

remove asbestos insulation.

Ultimately, Jeff Franc was hired for the job, and Franc

and three workers he recruited stripped dry asbestos insula

‐

tion off the pipes using a circular saw and other equipment

provided by O’Malley. O’Malley did not hire anyone with

training in asbestos removal, nor did he train Franc and his

workers in the proper way to remove asbestos. He did not

make available to Franc’s crew water or equipment for wet

‐ ting the asbestos. Predictably, the circular saw produced

large amounts of asbestos dust that filled the room. The

workers were equipped only with a few paint suits, simple4 No. 12

‐ 2771

dust masks, and useless respirators with missing filters. The

workers donned the dust masks initially, but they quickly

became clogged and the workers were unable to breathe

through them. Franc’s crew stopped working after a day or

two because they inhaled a large amount of dust, and they

claimed the dust made them sick. O’Malley did not notify

the federal EPA or the Illinois EPA about the asbestos re

‐

moval.

The discarded asbestos insulation was packed into more

than 100 large, plastic garbage bags, which were then loaded

into an Origin Fire Protection dump truck. O’Malley di

‐

rected one of his employees, Steven Giles, to transport the

bags to an asbestos

‐ abatement company called Angel

Abatement, but the company refused to accept the load of

asbestos waste. Thereafter, O’Malley asked Franc to take

some of the bags and dispose of them at an abandoned

farmhouse a couple of miles from O’Malley’s property;

O’Malley also enlisted Lietz to dispose of garbage bags,

which Lietz placed in a dumpster near a Hobby Lobby store.

Franc was instructed to dispose of the remaining asbestos

debris. Lastly, O’Malley instructed Mikrut to take the bags of

asbestos in the Origin Fire Protection truck and get rid of

them. Mikrut and Franc drove the truck to a field in Hopkins

Park, Illinois, where they dropped the bags off at the end of

a road, near a vacant house.

In September 2009, Illinois EPA director Joseph Kotas in

‐ spected both the field where the bags of asbestos had been

dumped and the building from which the pipes had been

removed. Kotas observed open and torn bags in the field,

some of the contents spilling out onto the bare ground. EPA

Superfund contractors later spent more than $47,000 toNo. 12

‐ 2771 5

properly remove and dispose of the bags of asbestos and to

clean up the contaminated soil in Hopkins Park.

O’Malley instructed Mikrut that, if Inspector Kotas asked

about the insulation that had been removed, Mikrut should

deny removing the insulation and say all he did was alarm

work. Mikrut indicated that he would comply with this in

‐

struction. When the federal EPA’s criminal investigation di

‐

vision interviewed Mikrut, however, he admitted to the

truth and agreed to make recorded calls to O’Malley. The

calls revealed O’Malley coaching Mikrut to mislead federal

agents if asked further about the asbestos removal and dis

‐ posal. O’Malley also came up with the clever scheme to pin

the illegal asbestos removal on Franc. When confronted by

the agents, O’Malley admitted in a verbal and written state

‐

ment that he had failed to stop the illegal asbestos removal

even after he suspected the material was asbestos.

The material was tested and revealed to be friable asbes

‐

tos containing a regulated type of asbestos at concentrations

ranging from 4% to 48%.

In June 2010, O’Malley was indicted by a grand jury with

five counts of knowingly violating the criminal provisions of

the Clean Air Act. Pinski and Mikrut pleaded guilty, but

O’Malley informed the court that he wanted a jury trial.

b. Matters at Pretrial Conference

The district court scheduled an acceptance of responsibil

‐ ity deadline for O’Malley to plead guilty by August 4, 2011.

On August 4, 2011, O’Malley informed the district court that

he intended to proceed to trial. Before the scheduled final

pretrial conference on September 7, 2011, the government

filed its proposed jury instructions, which included an ele

‐6 No. 12

‐ 2771

ment stating that the United States was required to prove

general intent, specifically that “the defendant knew that as

‐

bestos

‐ containing material was in the building.” The pro

‐ posed instructions also included a standard “ostrich instruc

‐

tion.” See

, e.g.

, United States v. Westerfield

, 714 F.3d 480, 485

(7th Cir. 2013). O’Malley did not object to these instructions

or submit any of his own regarding knowledge. At the jury

instruction conference, O’Malley’s counsel affirmatively

stated that he had “no objection” to the proposed knowledge

instruction. Thereafter, the district court instructed the jury

that, for each of the five counts, the government was re

‐ quired to prove that the defendant knew that asbestos

‐ containing material was in the building.

The government submitted its initial witness list at the

final pretrial conference on September 7, 2011. On September

16, the government identified an additional witness it in

‐

tended to call—Virgil Lietz, an employee that O’Malley had

offered to pay for the asbestos removal. Three days later,

O’Malley moved to exclude the testimony of Lietz, com

‐ plaining that his deadline to “accept responsibility” had al

‐ ready passed. At a hearing prior to jury selection, the district

court stated that he would be willing to extend O’Malley’s

acceptance of responsibility deadline if Lietz’s disclosure

had caused the defendant to want to plead guilty. O’Malley

declined.

c. Trial and Sentencing

The jury returned guilty verdicts for all five counts of the

indictment. O’Malley filed a motion for a new trial, but did

not object to the general intent instructions or argue for a

specific intent instruction. The district court denied the mo

‐

tion and sentenced O’Malley to 120 months of imprison

‐No. 12

‐ 2771 7

ment, three years of supervised release, a $15,000 fine, and

$47,085.70 of restitution to the EPA. The advisory sentencing

guideline range was 121 to 151 months.

II. DISCUSSION

On appeal to this court, O’Malley presents two issues for

review. First, he claims that because the relevant federal law

defines “asbestos

‐ containing material” as only six types of

regulated asbestos, the government was required to prove

that O’Malley knew that the asbestos in the building was

one of the six forms of regulated asbestos. He asserts that the

government did not present evidence to demonstrate

O’Malley’s knowledge of the type of asbestos in the build

‐ ing. Second, he argues that the district court improperly par

‐ ticipated in plea negotiations when it offered to extend the

acceptance of responsibility deadline and grant the reduc

‐

tion for acceptance if O’Malley entered a guilty plea.

1. Requisite Scienter for Asbestos Crimes

Though O’Malley labels the argument about the requisite

scienter of asbestos crimes as one about the insufficiency of

the evidence, we agree with the government that O’Malley is

actually challenging the district court’s jury instructions on

the mens rea elements of the Clean Air Act. We first briefly

discuss the relevant regulatory scheme, then turn to the ac

‐

tual instructions given by the district court.

a. Regulation of Asbestos

O’Malley is correct that not all forms of asbestos are sub

‐ ject to regulation. The Clean Air Act authorizes the regula

‐

tion of hazardous air pollutants, one of which is asbestos.

“Because asbestos is not typically emitted through a convey

‐

ance designed and constructed to emit or capture it, such as8 No. 12

‐ 2771

a pipe or smokestack, but rather escapes from more diffuse

sources such as open construction or demolition sites, EPA

adopted a work

‐ practice standard for the handling of asbes

‐

tos in building demolition and renovation.” United States v.

Weintraub

, 273 F.3d 139, 144 (2d Cir. 2001) (internal quota

‐

tion marks and citation omitted). The EPA’s regulations are

the National Emission Standard for Asbestos, 40 C.F.R. §§

61.140

‐ 157. The work practice standard promulgated for the

handling of asbestos applies only to the six types of “regu

‐

lated asbestos

‐ containing material (RACM),” defined as:

(a) Friable asbestos material, (b) Category I

nonfriable ACM that has become friable, (c)

Category I nonfriable ACM that will be or has

been subjected to sanding, grinding, cutting, or

abrading, or (d) Category II nonfriable ACM

that has a high probability of becoming or has

become crumbled, pulverized, or reduced to

powder by the forces expected to act on the

material in the course of demolition or renova

‐

tion operations regulated by this subpart.

40 C.F.R. § 61.141.

“Friable asbestos material” is defined as “any material

containing more than 1 percent asbestos as determined using

... Polarized Light Microscopy, that, when dry, can be crum

‐

bled, pulverized, or reduced to powder by hand pressure.”

Id. Thus, there is no question that the material in question—

which was both friable and contained asbestos at concentra

‐

tions ranging from four percent to forty

‐ eight percent—was

indeed “regulated asbestos

‐ containing material.”No. 12

‐ 2771 9

b. Propriety of Jury Instructions

The Clean Air Act makes it a crime for any person to

“knowingly violate[] any

... requirement or prohibition of

...

section 7412 [of the Act],

... including a requirement of any

rule” promulgated under section 7412 of the Act. 42 U.S.C.

§7413(c)(1). On all five counts, the district court instructed

the jury on the knowledge elements as follows: “The gov

‐

ernment must prove

... the defendant knew that asbestos

‐ containing material was in the building.” Final Jury Instruc

‐

tions to jury as to Duane L O’Malley, ECF No. 66, pp. 23–27.

The district court also gave a definition for “regulated asbes

‐

tos

‐ containing material”, stating that it “includes any mate

‐

rial containing more than one

‐ percent (1%) asbestos as de

‐

termined using polarized light microscopy that, when dry,

can be crumbled, pulverized, or reduced to powder by hand

pressure.” ECF No. 66, p. 30. This definition applied to a

separate element of the charges: for counts 2, 3, 4, and 5—

two charges of illegal asbestos removal, a charge of illegal

asbestos handling, and a charge of illegal asbestos disposal,

respectively—the government was required to prove that

the renovation activity involved “more than 260 linear feet

on pipes or 35 cubic feet of regulated asbestos

‐ containing

material.” The scienter requirement was thus separate from

the requirement that the government prove that the asbestos

in question was of the regulated variety.

O’Malley argues that the knowledge element instruction

should have required the government to prove that the de

‐

fendant knew that regulated asbestos

‐ containing material,

not simply asbestos

‐ containing material, was in the building.

But this cannot be correct. As a general rule, “unless the text

of the statute dictates a different result, the term ‘knowingly’10 No. 12

‐ 2771

merely requires proof of knowledge of the facts that consti

‐

tute the offense.” Bryan v. United States

, 524 U.S. 184, 193

(1998) (footnote omitted). The Supreme Court, in United

States v. International Minerals & Chemical Corp.

, held that the

phrase “knowingly violates” does not “carv[e] out an excep

‐

tion to the general rule that ignorance of the law is no ex

‐

cuse.” 402 U.S. 558, 563 (1971). The mens rea required by the

phrase is one that is higher than strict liability, such that “[a]

person thinking in good faith that he was shipping distilled

water when in fact he was shipping some dangerous acid

would not be covered.” Id. at 563–64. But it is certainly much

lower than specific intent, especially when, as here, “dan

‐

gerous or deleterious devices or products or obnoxious

waste materials are involved,” because “the probability of

regulation is so great that anyone who is aware that he is in

possession of them or dealing with them must be presumed

to be aware of the regulation.” Id. at 565. The very fact that

O’Malley was knowingly working with asbestos

‐ containing

material met the mens rea requirement outlined in Interna

‐

tional Minerals

, as asbestos is certainly a dangerous material

of a type where “the probability of regulation is so great that

anyone who is aware that he is in possession of [it]

... must

be presumed to be aware of the regulation.” Id.

The application of International Minerals to the asbestos

context is a natural one; it is not a novel construction of law.

See, e.g.

, United States v. Ho

, 311 F.3d 589, 605–06 (5th Cir.

2002) (holding that the scienter required by the Clean Air

Act in the asbestos context is mere knowledge of the pres

‐

ence of asbestos); Weintraub

, 273 F.3d at 147 (holding that in

the context of asbestos regulations under the Clean Air Act,

“the phrase ‘knowingly violates’ requires knowledge of facts

and attendant circumstances that comprise a violation of theNo. 12

‐ 2771 11

statute, not specific knowledge that one’s conduct is ille

‐ gal”); United States v. Buckley, 934 F.3d 84, 99 (6th Cir. 1991)

(holding that the statutory language of the Clean Air Act re

‐ quires only general intent, especially in the context of asbes

‐

tos).

But it turns out we need not even undertake such a level

of analysis to dismiss O’Malley’s claim. O’Malley did not

challenge the district court’s jury instructions prior to filing

his appellate brief. Indeed, his counsel affirmatively stated

that he had no objection to the government’s proposed jury

instructions at the pretrial conference about the instructions.

“Counsel’s affirmative statement that he had no objection to

the proposed instruction constitutes waiver of the ability to

raise this claim on appeal.” United States v. Kirklin

, 727 F.3d

711, 716 (7th Cir. 2013) (quoting United States v. Griffin, 493

F.3d 856, 864 (7th Cir. 2007)) (internal quotation marks omit

‐ ted); see also United States v. Natale

, 719 F.3d 719, 729 (7th Cir.

2013) (“Although passive silence with regard to a jury in

‐

struction permits plain error review,

... a defendant’s af

‐

firmative approval of a proposed instruction results in waiv

‐ er.”) (citations omitted). Because O’Malley failed to object to

the jury instructions in question in the district court, we need

not even reach the plain error review to which the district

court’s instructions would otherwise be subject: review that

would nonetheless lead to the conclusion that the district

court’s instructions on scienter were proper.

2. Propriety of the District Court’s Conduct at the Witness

Exclusion Hearing

O’Malley’s second argument is that the district court par

‐ ticipated in plea negotiations, violating Rule 11 of the Feder

‐

al Rules of Criminal Procedure. O’Malley’s counsel conced

‐12 No. 12

‐ 2771

ed at oral argument that O’Malley did not object on this

ground in the district court. He did not seek a writ of man

‐

damus, seek to have the judge recused or removed, or seek

any other remedy in response to the judge’s alleged unfair

‐

ness. Because this issue was not preserved before the district

court, we apply a plain error standard in reviewing the

claim. See United States v. Vonn

, 535 U.S. 55, 58 (2002) (“A de

‐

fendant who failed to object to trial error may nonetheless

obtain reversal of a conviction by carrying the converse bur

‐

den, showing among other things that plain error did affect

his substantial rights.”); see also United States v. Covington

,

681 F.3d 908, 910 (7th Cir. 2012) (holding that an argument

raised for the first time on appeal is reviewed only for plain

error). We find that there has been a plain error if we deter

‐

mine “(1) that the district court erred; (2) that the error was

plain; and (3) that the error affected [O’Malley’s] substantial

rights.” Covington, 681 F.3d at 910 (citing United States v.

Luepke

, 495 F.3d 443, 448 (7th Cir. 2007)).

The context of the exchange that O’Malley characterizes

as judicial impropriety is as follows. On September 21, 2011,

prior to jury selection, the district court considered

O’Malley’s objection to the government’s disclosure on Sep

‐

tember 16 that it would be calling Virgil Lietz. The deadline

for disclosing witnesses was unclear: the district court did

not set a deadline requiring parties to file witness lists, and

the government filed its initial witness list on September 7,

2011, prior to the scheduled final pretrial conference date.

But the government supplemented its list on September 16,

after it learned of Lietz’s last name in witness preparation. It

appears Lietz had been a person of interest during the gov

‐

ernment’s investigation—when known only by his first

name—and that knowledge of his last name led to finallyNo. 12

‐ 2771 13

finding and interviewing him. As soon as the government

decided to call Lietz, the government notified defense coun

‐

sel and supplemented the witness list. O’Malley promptly

moved to exclude Lietz’s testimony, asserting in a written

motion that one reason for excluding Lietz was that “[t]he

deadline for the Defendant to ‘accept responsibility’ in this

case has passed.” Def.’s Mot. to Exclude Test., United States

v. O’Malley

, No. 10

‐ CR

‐ 20042 (C.D. Ill. Sep. 19, 2011), ECF

No. 63.

On September 21, the district court heard argument from

both sides about the inclusion of Lietz. The judge asked

O’Malley’s counsel why O’Malley would be prejudiced by

Lietz’s inclusion, when the name was not a surprise to

O’Malley. Counsel responded that O’Malley’s decision to go

to a jury trial or not was made “with the witness list and ex

‐

hibit list that the government had tendered by the deadline

and not the current witness list.” The district court expressed

some skepticism at this remark, noting that the acceptance of

responsibility date had in fact passed before the government

had filed its witness list and expressing that O’Malley’s deci

‐

sion to change his plea could not have been based on the

witness list. In expressing his incredulity, the district judge

stated,

So, really, Mr. O’Malley’s decision as to

whether he wanted to change his plea came be

‐

fore the filing of the witness list and the final

pretrial; but if somehow this is the witness

that’s the tipping point, the witness that if it

had—if we knew he was going to testify, we

would have accepted responsibility long ago

and we never thought he was going to testify,14 No. 12

‐ 2771

I’d extend the acceptance of responsibility right

now. I’d take an open plea right now, if that’s

what the defendant wishes to do, and give him

acceptance instead of, in effect, sanctioning the

government by striking the witness.

Tr. of Oral Arg. on Mot. to Exclude Gov’t Witness at 10–11,

United States v. O’Malley

, No. 10

‐ CR

‐ 20042 (C.D. Ill. Sep. 21,

2011), ECF No. 84.

Reading the statement in context, it is clear to us that it

was O’Malley, not the district court, who first raised the is

‐

sue of the acceptance of responsibility deadline: in the writ

‐

ten motion submitted to the court, then again at the hearing.

The court was merely responding to the alleged prejudice—

O’Malley’s ability to choose whether to go to trial—and at

‐ tempting to cure it. We can see how the phrasing of the

judge’s statement can appear ambiguous; the statement

could be interpreted as an offer to extend the deadline.

However, on careful reading, it appears the judge was using

the subjunctive. He indicated that in the improbable case

that O’Malley believed his chances at trial were doomed by

the introduction of Lietz, the judge would extend the dead

‐

line for acceptance of responsibility to ensure O’Malley had

the opportunity to enter a plea instead of moving forward

with trial. He was, with this hypothetical, calling O’Malley’s

bluff. While we would not present the district court’s state

‐

ment as a model of clarity, we believe it is clear that the

judge had no animus against the defendant or an improper

motive in stating that were O’Malley’s concerns real, the

judge would be willing to address them. The statement was

far from an actual, impermissible intervention in plea nego

‐

tiations.No. 12

‐ 2771 15

We conclude that the district court’s conduct at the wit

‐

ness exclusion hearing passes plain error review because

there is no evidence that the district judge’s statement affect

‐

ed O’Malley’s substantial rights.

III. CONCLUSION

For the foregoing reasons, we A FFIRM the district court’s

judgment.