Source: http://caselaw.findlaw.com/us-2nd-circuit/1667982.html
Timestamp: 2014-10-20 08:14:27
Document Index: 22618437

Matched Legal Cases: ['§ 3601', '§ 7401', '§ 7412', '§ 61', '§ 7412', '§ 61', '§ 61', '§ 61', '§ 7413', '§ 2601', '§ 2643', '§ 763', '§ 1926', '§ 655', '§ 654', '§ 1926', '§ 1926', '§ 1926', '§ 1926', '§ 1926', '§ 1926', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 56', '§ 6', '§ 7', '§ 17', '§ 56', '§ 56', '§ 56', '§ 56', '§ 371', '§ 1341', '§ 7413', '§ 2', '§ 1341', '§ 1001']

UNITED STATES v. CERTIFIED ENVIRONMENTAL SERVICES INC - FindLaw
UNITED STATES v. CERTIFIED ENVIRONMENTAL SERVICES INC
UNITED STATES of America, Appellee–Cross–Appellant, v. CERTIFIED ENVIRONMENTAL SERVICES, INC., Nicole Copeland, Elisa Dunn, Defendants–Appellants–Cross–Appellees, Barbara Duchene, Thomas Juliano, Defendants, Sandy Allen, Frank Onoff, Defendants–Appellees.
Docket Nos. 11–4872 LEAD, 11–4974 CON, 11–4969 XAP, 11–4875 CON, 11–4976 CON, 11–4972 XAP, 11–4877 CON, 11–4968 XAP.
Before: RAGGI and CARNEY, Circuit Judges, and RAKOFF, District Judge.1
Gabriel M. Nugent (Daniel J. French, on the brief) Hiscock & Barclay, LLP, Syracuse, NY, for Defendant–Appellant–Cross–Appellee Certified Environmental Services, Inc. Brian J. Fischer, Matthew D. Cipolla, Jenner & Block LLP, New York, N.Y. (Carl N. Wedoff, Jenner & Block LLP, New York, NY; Donald T. Kinsella, Stockli, Greene, Slevin & Peters LLP, Albany, N.Y. on the brief), for Defendant–Appellant–Cross–Appellee Nicole Copeland. Dennis B. Schlenker, Esq., Albany, NY, for Defendant–Appellant–Cross–Appellee Elisa Dunn. Craig A. Benedict, Assistant United States Attorney (Rajit S. Dosanjh, Assistant United States Attorney, on the brief), for Richard S. Hartunian, United States Attorney for the Northern District of New York, Syracuse, NY, for Appellee–Cross–Appellant the United States of America. James R. McGraw, Esq., Syracuse, NY, for Defendant–Appellee Sandy Allen.
Certified Environmental Services, Inc. (“CES”); Nicole Copeland, former CES Technical Services Manager; and Elisa Dunn, former CES air monitor and field supervisor, appeal from their convictions of conspiracy, aiding and abetting violations of the Clean Air Act, mail fraud, and making false statements to federal officials. Seeking a new trial, these defendants contend that the district court improperly excluded evidence that they acted under a good-faith belief that they were complying with state law and that, in any event, their convictions and sentences were irreparably tainted by prosecutorial misconduct. The Government cross-appeals the sentences given to CES, Copeland, and Dunn, and appeals from the sentences given to Sandy Allen, a CES air monitor, and Frank Onoff, a supervisor at a contractor that performed improper asbestos abatement work. The Government argues that the district court erred in determining restitution, erred in calculating loss, misapplied the advisory sentencing guidelines, and imposed sentences that were substantively unreasonable.For the reasons that follow, we vacate the convictions of CES, Copeland, and Dunn, and remand for a new trial. We also vacate the sentences of Allen and Onoff and remand for resentencing.BACKGROUNDI. Regulatory FrameworkCertain technical state and federal regulations governing the removal of asbestos underlie the charges in this case. Asbestos is severely toxic, and “medical science has not established any minimum level of exposure to asbestos fibers which is considered to be safe.” 20 U.S.C. § 3601(a)(3). Its complete removal is therefore required by both federal and state regulations.A. Federal RegulationsUnder the Clean Air Act, 42 U.S.C. §§ 7401–7515, the Environmental Protection Agency (“EPA”) is authorized to adopt what the agency has called “national emission standards for hazardous air pollutants,” including asbestos. See 40 C.F.R. pt. 61; 42 U.S.C. § 7412(c) & (d). The standards for asbestos are enforced in part by work-practice standards that govern covered renovation and demolition activities involving asbestos. See 40 C.F.R. § 61.145; see also 42 U.S.C. § 7412(h). As relevant here, these work-practice standards provide that, when removing regulated asbestos-containing material, the site owner or operator must wet the material to prevent it from escaping into the air and must ensure that the material remains adequately wetted until it is packed and sealed in leak-tight containers. See 40 C.F.R. §§ 61.145(c)(6)(i), 61.150. Asbestos-containing material is not adequately wetted “[i]f visible emissions are observed coming from [the] material.” Id. § 61.141. The owner or operator also must ensure that no visible emissions are discharged to the outside air and must deposit the material with an authorized disposal site as soon as practicable. Id. § 61.150(a)-(b). The Clean Air Act provides criminal penalties for any person who knowingly violates these work-practice standards. See 42 U.S.C. § 7413(c)(1).Under the Toxic Substances Control Act (“TSCA”), 15 U.S.C. §§ 2601–2697, the EPA has promulgated additional regulations governing asbestos removal from elementary and secondary school facilities. See 40 C.F.R. pt. 763, subpt. E; see also 15 U.S.C. § 2643. As relevant here, these regulations require that, after any asbestos abatement project is completed, the school must confirm that the area is free of asbestos by, among other things, designating a person to “collect air samples using aggressive sampling.” 40 C.F.R. § 763.90(i)(2)(i). “[A]ggressive sampling” involves taking steps before and during sample collection to dislodge asbestos particles that may have settled on the surfaces in the work area. Beforehand, the “floors, ceiling and walls [must] be swept with the exhaust of a ․ leaf blower,” and during collection, “[s]tationary fans” must be situated, one for each ten thousand cubic feet of worksite, with the “[f]an air ․ directed toward the ceiling.” Id. pt. 763, subpt. E, App. A, III.B.7(d)(iii), (iv).EPA regulations under the TSCA also contain provisions to avoid conflicts of interest. The regulations provide that “[s]ampling operations must be performed by qualified individuals completely independent of the abatement contractor.” Id. II.B.2, III.B.1. Similarly, “[a]ll sample preparation and analysis [must] be performed by a laboratory independent of the abatement contractor.” Id. II.E.1.Asbestos abatement activities are also regulated by the Occupational Safety and Health Administration (“OSHA”) under the Occupational Safety and Health Act. See 29 C.F.R. § 1926.1101; 29 U.S.C. § 655.OSHA regulations impose numerous requirements on employers to ensure the wellbeing of employees who perform abatement work. See 29 U.S.C. § 654(a). For example, the regulations require employers to “provide or require the use of protective clothing, such as coveralls or similar whole-body clothing, head coverings, gloves, and foot coverings.” 29 C.F.R. § 1926.1101(i)(1). Employers must ensure that their employees enter and exit the work area through “[d]econtamination areas” designed to prevent asbestos from escaping into the surrounding environment. Id. § 1926.1101(j)(1)(i). Employers must also provide respirators to employees who work with certain categories of asbestos-containing materials. Id. § 1926.1101(h).In addition, OSHA regulations require employers to “perform monitoring to determine accurately the airborne concentrations of asbestos to which employees may be exposed.” Id. § 1926.1101(f)(1)(i). Employees must wear air sampling devices to collect representative “breathing zone air samples,” id. § 1926.1101(f)(1)(ii), which are then subjected to laboratory analysis to determine each employee's asbestos exposure. Individuals who perform this analysis must receive specialized training. See id. § 1926.1101, App. A.II.3.B. State RegulationsAsbestos abatement activities in New York are also subject to state regulation under New York Industrial Code Rule 56 (the “Code Rule”), 12 N.Y.C.R.R. pt. 56 (1994), enforced by the New York State Department of Labor (“DOL”). The Code Rule at times mirrors federal requirements and at times is stricter. As relevant here, the Code Rule imposes requirements for preparing the work area, for performing abatement work, for cleaning up after the abatement work is complete, and for air monitoring. The Code Rule also contains certain standard variances and exceptions.With respect to pre-abatement procedures, the Code Rule requires contractors to construct containment structures around the work area, known as “isolation barriers.” Id. § 56–8.1(j). These barriers consist of two layers of plastic sheeting (referred to as “poly”), which must be placed over “all openings” in the work area, including windows, doors, skylights, corridors, and ducts (often referred to as “criticals”). Id. In addition to the criticals, contractors also must place two layers of poly over all surfaces in the work area, including floors, walls, and ceilings, exposing only the asbestos to be removed. Id. § 56–8.1(k)(5). All seams in the poly must be staggered from one another and sealed with tape. Id.Like the OSHA regulations, the Code Rule also requires contractors to construct decontamination areas, which must be separated from the work area by “airlocks” to ensure that asbestos does not escape into the surrounding environment. Id. §§ 56–9.1–56–10.1. To the same end, the Code Rule also requires contractors to establish negative air pressure in the work area relative to the areas outside, “to ensure that contaminated air in the work area does not filter back to an uncontaminated area.” Id . § 56–6.1(c). Once the isolation barriers have been erected and negative pressure is established, the contractor must wait twelve hours before beginning abatement work to ensure that the barriers remain secure and intact. Id. § 56–11.1(b). The contractor then must maintain negative air pressure “continuously, 24 hours a day, from the start of the abatement work through the cleanup operations and clearance air monitoring.” Id. § 56–6.1(b).With respect to the abatement itself, the Code Rule makes plain that “[n]o dry removal or disturbance of asbestos material shall be permitted.” Id. § 56.12.1(a). Rather, “[t]he asbestos material shall be wetted frequently,” id. § 56–12.1(b), and must be either bagged immediately once removed or dropped into a flexible catch basin, id. § 56–12.1(c). All abatement workers, including air monitors, must enter and exit the work area through the decontamination area, and must sign a log each time they do so. Id. § 56–4.1(a)–(b). Workers exiting the work area must decontaminate themselves, their equipment, and the bags containing asbestos waste before leaving. Id. § 56–5.1(a)–(f).Once asbestos material has been removed from the work area, the Code Rule imposes detailed requirements for cleanup activities. First, the contractor must place all asbestos waste in proper containers. Id. § 56–15.2(a). Then the contractor must “wet-clean[ ]” the work area, id. § 56–15.2(b)—in other words, the contractor must “eliminat[e] asbestos contamination from surfaces, equipment or other objects by using cloths, mops, or other cleaning tools which have been dampened with amended water,” id. § 56–1.4(bz). After the first wet-cleaning, the contractor can remove the first layer of poly from the surfaces of the work area, leaving the criticals in place. Id. § 56–15.2(c). The contractor must then observe a twelve-hour waiting period to allow agitated asbestos fibers to settle. After the waiting period, the contractor performs a second wet-cleaning, after which the second layer of poly can be removed from the surfaces in the work area. Id. § 56–15.2(d). After a second twelve-hour waiting period, the contractor performs a third wet-cleaning, after which all tools, equipment, and containers of asbestos waste are decontaminated and removed. Id. § 56–15.2(e)–(g). It is at this point that an air monitor like Defendant CES performs “[c]learance air monitoring.” Id. § 56–15.2(h). Only after clearance air monitoring yields passing results can the contractor finally remove the criticals and eliminate negative air pressure. Id. § 56–15.2(i).With respect to air monitoring, the Code Rule prescribes several different kinds of monitoring. For most abatement projects, the Code Rule requires “background” air sampling to determine asbestos concentrations both inside and outside before the project commences, as well as “[p]re-abatement” air sampling while the work area is being set up. See id. § 56–17.1 tbl. 1. For non-minor abatement projects, the Code Rule also requires air sampling during the course of the project. Id. Most important, the Cod Rule, with minor exceptions not here relevant, requires “clearance air monitoring” on all abatement projects. Id. Clearance air monitoring consists of “[t]he collection of a volume of air using aggressive sampling techniques,” which is then “analyzed to determine the airborne concentration of fibers upon conclusion of an asbestos abatement project.” Id. § 56–1.4(x).Because clearance air monitoring serves to confirm that all prior abatement work has been successful and that the work area is safe, the Code Rule carefully restricts how it is conducted. To begin with, the Code Rule, with minor exceptions not here relevant, provides that “[a]ir sampling and analysis shall not be performed by any party involved with the asbestos project.” Id. § 56–17.4(a). In addition, the individual who conducts air sampling must have “been trained in the selected methodology of sampling and analysis of asbestos,” and must possess a state-issued technician's certificate. Id. § 56–17.4(b). Clearance air sampling may not commence until “no visible pools of liquid or condensation remain,” at least twelve hours after the third wet cleaning. Id. § 56–17.2(a). At that point, the technician collects an air sample by using a pump to draw air through a filter cassette that captures airborne asbestos fibers. Id. § 56–17.5(a). The Code Rule specifies the rate at which air is drawn through the cassette by the pump, which the technician must calibrate before and after each use. Id. § 56–17.5(b).The Code Rule also requires the use of “aggressive sampling techniques,” similar to those mandated under the EPA's TSCA regulations, to dislodge asbestos fibers that have settled out of the air. Before sampling begins, “the exhaust of forced-air equipment shall be directed against all walls, ceilings, floors, ledges and other surfaces in the rooms” for a minimum of “five minutes per 1,000 square feet of floor.” Id. § 56–17.2(f)(1). During sampling, a minimum 20–inch diameter fan “shall be placed in the center of each room,” with one fan per ten thousand cubic feet of work area. Id. § 56–17.2(f)(2). The fans must be “operated on slow speed and pointed toward the ceiling.” Id. Clearance air monitoring results are considered satisfactory when every sample taken shows an airborne asbestos concentration of less than 0.01 fibers per cubic centimeter, or the background level measured before the project commenced, whichever is greater. Id. § 56–17.8(a).While the foregoing regulations generally apply to all asbestos abatement projects in New York, New York law recognizes two types of exceptions from these general rules. First, before 2006, the DOL recognized certain “applicable variances,” which set forth standard ways in which the Code Rule's requirements could be modified.2 Most important for present purposes, these applicable variances included AV–120, which applied to projects for “the abatement of asbestos floor covering and mastic.” AV–120, pmbl. As relevant here, AV–120 allows the abatement contractor not to fully cover the walls of the work area with poly. See id. § 6. But the contractor still must maintain “negative air [pressure] ․ within the abatement work areas.” Id. § 7. And, except as otherwise provided, “[a]ll other applicable provisions” of the Code Rule, including those requiring aggressive sampling techniques, continue to apply. Id. § 17.The Code Rule also contains a set of exceptions for so-called “[i]n-plant operations.” Code Rule § 56–3.1(a). These operations are defined narrowly to include (1) projects that involve small amounts of asbestos material and are performed by the employees of the facility in question rather than by an outside contractor, and (2) projects involving the removal of specified types of asbestos material. Id. These exceptional materials do not include the floor coverings and mastics whose removal is governed by AV–120. As relevant here, in-plant operations are exempt from the Code Rule's general requirements to erect isolation barriers around the work area and to maintain negative air pressure, so long as “the project is performed in a manner which will not expose the public to fiber concentrations exceeding background levels or .01 fibers per cubic centimeter, whichever is greater.” Id. § 56–3.1(b)(4). The Code Rule repeatedly provides, however, that in-plant operations are not exempt from the Code Rule's general air monitoring requirements, including those requiring aggressive sampling techniques. See id. § 56–3.1(b)(2), (f); id. § 56–1.4(as)(2).II. Proceedings BelowOn June 10, 2010, a federal grand jury in the Northern District of New York returned a fifteen-count superseding indictment against CES, Copeland, Dunn, and Allen, as well as co-defendants Barbara Duchene and Thomas Juliano. Count One charged all of the defendants with conspiring in violation of 18 U.S.C. § 371 to defraud the United States by impeding the regulatory functions of the EPA and OSHA and to violate the Clean Air Act, the TSCA, and the mail fraud statute, 18 U.S.C. § 1341. As overt acts, the indictment charged the defendants with performing unlawful and fraudulent air monitoring on dozens of asbestos abatement projects in and around Syracuse, New York. Counts Two through Seven charged CES and Copeland with aiding and abetting Clean Air Act violations related to six abatement projects, in violation of 42 U.S.C. § 7413(c)(1), (2) and 18 U.S.C. § 2. Allen, Dunn, and Juliano were also charged in three of the aiding and abetting counts. Counts Eight through Thirteen charged CES and various defendants with substantive acts of mail fraud for mailing false clearance air monitoring reports, logs, and invoices in connection with six abatement projects, in violation of 18 U.S.C. §§ 1341 and 2. Copeland was charged with five counts of mail fraud, Allen with two, and Dunn and Juliano with one each. Finally, Counts Fourteen and Fifteen charged CES and Dunn with making false written statements to the EPA and OSHA regarding Dunn's visual inspection of two project work areas, in violation of 18 U.S.C. § 1001.As for Onoff, the original indictment, filed on May 28, 2009, charged Onoff with conspiracy, two counts of aiding and abetting Clean Air Act violations, three counts of aiding and abetting mail fraud, and one count of making false statements. On November 12, 2009, before the superseding indictment was returned, Onoff pled guilty to the conspiracy count pursuant to a plea agreement, and the remaining charges against him were dismissed.A four-week trial against CES, Copeland, Dunn, Allen, and Juliano commenced on September 13, 2010.3 With respect to the conspiracy count, the Government presented evidence that the defendants conspired to aid two asbestos abatement companies, AAPEX Environmental Services, Inc. (“AAPEX”) and Paragon Environmental Services, Inc. (“Paragon”), in performing numerous illegal asbestos removals. These abatement companies engaged in what is known as “rip-and-run” removals, in which asbestos is stripped and removed dry, often without the safeguards needed to ensure that the surrounding area is not contaminated. Because they are cheaper to perform than proper removals, rip-and-runs can be lucrative, but can only go undetected if the abatement contractor can obtain passing final clearance air monitoring results from a company like CES.To show an unlawful agreement among the alleged conspirators, the Government presented testimony from the owner and employees of AAPEX, who testified that the company had performed “at least two hundred” rip-and-run projects and used CES to perform air monitoring for the “majority” of them. G.A. 454, 483. The witness explained that AAPEX “used CES because we knew that we would get our final airs passed regardless of the methods used to take the asbestos down.” G.A. 454. With respect to another contractor, Paragon Environmental Services, Inc., a CES air monitor testified that Copeland told her that CES “had a close [working] relationship with” Paragon, G.A. 717, and as a result, the monitor did not even need to enter Paragon's work areas to collect air samples. The monitor testified that, accordingly, she would instead hand blank air filter cassettes to Onoff (a Paragon supervisor) or a subordinate, whom the monitor would then trust to run the samples while she waited outside.The Government also presented testimony from CES air monitors about the company's air monitoring practices. The monitors testified that, following instructions from Copeland, CES air monitors routinely (1) began clearance air sampling without observing the required waiting periods and despite the visible presence of asbestos contamination and condensation throughout the work area; (2) failed to use aggressive air sampling techniques as required by the TSCA and the Code Rule; (3) falsified entries in sampling logs to conceal shoddy monitoring; and (4) failed to wear protective equipment, to decontaminate themselves and their equipment when exiting work areas, and to sign in and out of work areas.The Government also presented testimony from a former CES lab technician. He testified (1) that, at Duchene's direction, CES lab technicians analyzed thousands of samples without having received required training; (2) that Copeland, who also had not received training, improperly directed technicians not to count certain asbestos fibers; and (3) that the lab's logbook, used to maintain quality control, was habitually out of date because of the lab's high workload.With respect to the Clean Air Act charges, the Government presented evidence that CES, Copeland, Dunn, and Allen aided and abetted rip-and-run asbestos removals at six worksites. The Government presented testimony that CES monitors failed to conduct visual inspections, collected air samples despite visible asbestos debris, failed to use aggressive air sampling techniques, and certified clearance air monitoring samples that should not have passed. In one instance, an employee of an abatement contractor testified that Dunn, a CES air monitor and supervisor, had helped him to reclean a dusty work area, in violation of the Code Rule's conflict of interest regulations.With respect to the mail fraud charges, the Government presented evidence that CES, Copeland, Allen, and Dunn prepared and mailed air monitoring reports, invoices, and logs representing that CES had conducted air monitoring in accordance with legal, regulatory, and industry standards. In actuality, according to the Government's evidence, CES had done no such thing.Finally, with respect to the false statement charges, the Government presented evidence that Dunn completed two “Visual Inspection/Clearance Air Sampling” certifications in connection with a particular abatement project. In these certifications, Dunn stated that she had “visually inspected the basement work area and found [that] the abatement appears to meet the scope of work provided” and “no visible debris” or “dust” was “apparent.” G.A. 1078–79. An employee of the contractor, however, testified that Dunn had in fact helped him try to clean up visible debris. And an EPA agent testified that when confronted with photographs showing the condition of the work area, Dunn admitted that the area “should never have passed final air clearances.” G.A. 777.For the defendants' part, they argued both that the Government's evidence was unreliable and that, in any event, they had acted in the good-faith belief that their conduct was consistent with relevant legal requirements.4 The defendants attacked the credibility of all of the Government's key witnesses, noting that many witnesses had motives to lie and were testifying about events that had allegedly occurred many years earlier. The defendants also noted that several witnesses left CES before any of the charged projects commenced. The defendants similarly attacked the accuracy and relevance of the Government's documentary and photographic evidence. For example, the defendants noted that photographs of the worksites were not contemporaneous with the events in issue and that debris could have been concealed from CES air monitors behind the containment barriers. Similarly, the defendants noted that the documents like sample logs and lab reports did not show whether proper air sampling or analysis techniques were used.The defendants also presented their own evidence to rebut the Government's case. For example, the defendants presented evidence that CES frequently gave failing grades to clearance air samples collected from AAPEX projects—including two of the projects alleged in the indictment. The defendants also maintained that they had little financial incentive to engage in the charged misconduct, as CES in fact was turning down work from other contractors during the relevant period. In addition, CES worked on more than a third of the charged projects under a lucrative long-term contract with Syracuse University, which would have been jeopardized by substandard work. Copeland and another CES supervisor, Dan Hoosock, also testified that Copeland actually reported AAPEX to the DOL in 2005, after AAPEX's owner attempted to direct a CES air monitor to conduct air sampling improperly.More broadly, Copeland and Hoosock testified that CES had conducted air sampling in accordance with a good-faith interpretation of the Code Rule, whereby aggressive sampling was not required unless the work area had containment barriers erected over all critical openings and all floors, walls, and ceilings. The defendants contended that any other interpretation would require agitating contaminated air in ways that would risk dispersing asbestos-containing material from work areas into the surrounding environment. The defendants also noted that under any reading of the Code Rule, aggressive sampling is not required in all cases, and presented evidence that there was long-running discussion within the industry about when aggressive sampling should be conducted.On October 12, 2010, the jury found CES, Copeland, Dunn, and Allen guilty of all counts against them, and