Opinion ID: 162640
Heading Depth: 3
Heading Rank: 1

Heading: Violation of SDWA.

Text: 33
34 Attaluri's first challenge concerns the allegation that he conspired to inject a nonpermitted liquid waste into a Class II disposal well. He argues that the injection was lawful under the governing regulations issued by the Oklahoma Corporation Commission. We reject the argument because the Oklahoma regulations are no more permissive than the federal law on which the jury was instructed. 35 Before addressing Attaluri's contentions, we review the pertinent provisions of the SDWA. The SDWA established a federally mandated, state-administered regulatory scheme for the protection of natural sources of drinking water. See HRI, Inc. v. E.P.A., 198 F.3d 1224, 1232 (10th Cir. 2000). The Act delegates primary enforcement responsibility to the states. Each state was required to submit for approval by the EPA an underground injection control program designed to assure that underground injection will not endanger drinking water sources. 42 U.S.C. § 300h-1(a)-(b). If the EPA did not approve a program, it was to fashion regulations applicable to the state. 42 U.S.C. § 300h-1(c). 36 All state programs must meet the EPA minimum requirements published in the Code of Federal Regulations. 42 U.S.C. § 300h(a), (b). The EPA regulations divide underground injection wells into five classes, each defined by what may be injected into wells of that class. 40 C.F.R. § 144.6. The regulations establish minimum construction and maintenance standards for each class. 40 C.F.R. pt. 146. This case involves Class II wells, which are [w]ells which inject fluids: 37 (1) Which are brought to the surface in connection with natural gas storage operations, or conventional oil or natural gas production and may be commingled with waste waters from gas plants which are an integral part of production operations, unless those waters are classified as a hazardous waste at the time of injection. 38 (2) For enhanced recovery of oil or natural gas; and 39 (3) For storage of hydrocarbons which are liquid at standard temperature and pressure. 40 40 C.F.R. § 144.6(b). 41 Oklahoma's application for primary enforcement power over Class II wells was approved on December 2, 1981. See 40 C.F.R. § 147.1851. Oklahoma's program delegates regulatory authority over Class II wells to the Oklahoma Corporation Commission (OCC). Id. The OCC regulations divide wells into four categories: (1) enhanced recovery injection wells, (2) disposal wells, (3) storage wells, and (4) simultaneous injection wells. Okla. Admin. Code [OAC] 165:10-5-1. Each category is a type of Class II well. Only the second category, disposal wells, is at issue in this case. A disposal well is a well which injects, for purposes other than enhanced recovery, those fluids brought to the surface in connection with oil or natural gas production. OAC 165:10-5-1(2). 42 The SDWA provides criminal penalties for willful violation of an applicable underground injection control program. 42 U.S.C. § 300h-2(b). The Act defines applicable underground injection control program as the program (or most recent amendment thereof) (1) which has been adopted by the State and which has been approved [by the EPA] under subsection (b) of this section.... 42 U.S.C. § 300h-1(d). 43 Attaluri correctly contends that the Oklahoma regulatory scheme is the applicable underground injection control program in this case. He further contends, however, that the Oklahoma program allows the allegedly unlawful injections by Defendants. In particular, he contends that the injection wells Overholt used were commercial disposal wells, which, in his view, could properly accept the injected chemicals. 44 Attaluri's brief-in-chief asserts (incorrectly, as we shall point out) that the following definition appears in the Oklahoma regulations at OAC 165:10-1-2: 45 Commercial disposal well is one that: (a) is operated primarily for profit from the disposal of saltwater and/or other deleterious substances for a fee; and (b) disposes of saltwater and other deleterious substances transported by truck to the facilities used in conjunction with said disposal well or is a disposal well for which none of its owners is an owner in any of the oil and gas wells which produce the saltwater and/or other deleterious substances which will be disposed into said disposal well. 46 Because the chemicals that a commercial disposal well may accept include deleterious substances, Attaluri infers that such a well can accept all deleterious substances. [D]eleterious substances are defined as [a]ny chemical, salt water, oil field brine, waste oil, waste emulsified oil, basic sediment, mud, or injurious substance produced or used in the drilling, development, production, transportation, refining, and processing of oil, gas and/or brine mining. OAC 165:10-1-2. Attaluri notes that Allied was in the business of recycling used oil, and that the Oklahoma regulations define recycling as the reuse, processing, reclaiming, treating, neutralizing, or refining of materials and by-products into a product of beneficial use which, if discarded, would be deleterious substances. OAC 165:10-1-2 (emphasis added). He concludes that because Allied was an oil recycler, the byproducts of the business were deleterious substances, which, by definition, could be injected into a commercial disposal well. 47 Based on this argument, Attaluri challenges the following jury instruction given at trial: 48 With reference to the conspiracy charged in Count 1, you are instructed that the government claims in Count 1 at page 7 that the defendants ... conspired to violate or cause to be violated Title 42, United States Code, section 300h-2(b)(2), which provides that: 49 Any person who violates any requirement of an applicable underground injection control program ... if such violation is willful, such person ... 50 shall be guilty of an offense against the laws of the United States. 51 The applicable underground injection control program the government claims were violated are: 52 Title 40, Code of Federal Regulations, Part 144.11, which provides: Any underground injection, except into a well authorized by rule or except as authorized by permit ... is prohibited. 53 And, Title 40, Code of Federal Regulations, Part 144.6(b)(1), which provides that Class II injection wells are classified as follows: 54 Wells which inject fluids ... Which are brought to the surface in connection with natural gas storage operations, or conventional oil or natural gas production and may be commingled with waste waters from gas plants which are an integral part of production operations, unless those waters are classified as a hazardous waste at the time of injection. 55 He argues that the instruction improperly refers to federal regulations rather than to Oklahoma law, which he contends was less restrictive, and that the district court should have given the following tendered instruction: 56 The government has alleged that the defendants conspired to commit the crime of Wilful Injection of Liquid Waste Into a Class II Disposal Well without authority. The government must prove as to each defendant that he intended to break this law by agreeing to commit the following four (4) essential elements beyond a reasonable doubt: 57
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60 (4) Without authority from the Oklahoma Corporation Commission The defendant must have wilfully agreed to commit each of the elements of the offense. [emphasis added] 61 Before addressing Attaluri's arguments, we note the standard of review. The argument on appeal was not raised below. Attaluri points to nothing in the record, nor have we found anything, indicating an objection by any defendant to the instruction given by the court. As for the proposed instruction, it does not suggest that the Oklahoma regulations are more permissive than the federal regulations. Nor have we been directed to, or found, any indication in the record that anyone so argued in district court. Therefore, we review for plain error. See United States v. Fabiano, 169 F.3d 1299, 1302-03 (10th Cir.1999) (failure to object to a given instruction, even when the defendant offers his own instruction, does not put the district court clearly on notice as to the asserted inadequacy, and thus plain-error review is appropriate). Following Johnson v. United States, 520 U.S. 461, 466-67, 117 S.Ct. 1544, 137 L.Ed.2d 718 (1997), we have held: 62 Under [the plain-error] standard, [the appellant] must show: (1) an error, (2) that is plain, which means clear or obvious under current law, and (3) that affects substantial rights. If these three requirements are met, then we may exercise discretion to correct the error if it seriously affects the fairness, integrity, or public reputation of judicial proceedings. 63 Id. at 1303 (internal quotation marks, citation, and brackets in original omitted). 64 The district court's instruction defined the applicable underground injection control program as the prohibitions mandated in the EPA regulations, and it specifically incorporated the definition of a Class II well as expressing what could legally be injected into the wells at issue in this case. The given instruction informed the jury that Defendants violated the law if they injected into these wells anything but fluids ... [w]hich are brought to the surface in connection with natural gas storage operations, or conventional oil or natural gas production and may be commingled with wastewaters from gas plants which are an integral part of production operations, unless those waters are classified as a hazardous waste at the time of injection. Although it may have been preferable for the instruction to refer to the Oklahoma regulations, the instruction did not mislead the jury because, as we now explain, the substantive standard set forth in the instruction conforms to the Oklahoma regulations. 65 As previously stated, the Oklahoma regulation defines a disposal well as a well which injects, for purposes other than enhanced recovery, those fluids brought to the surface in connection with oil or natural gas production. OAC 165:10-5-1(2). Comparing this definition to the definition of a Class II well in the jury instruction, it is clear that nothing can be injected into a disposal well that cannot be injected into a Class II well. In fact, Class II is a broader category of wells than disposal wells. 66 We are not persuaded by Attaluri's claim that a different result must follow because the wells here are  commercial disposal wells. Attaluri fails to recognize that commercial disposal wells are a subclass of disposal wells. The actual definition of commercial disposal wells in the Oklahoma regulations (not the misquote in Attaluri's brief-in-chief) is: 67 Commercial disposal well means a disposal well which: (A) Is operated primarily for profit from the disposal of salt water and/or other deleterious substances for a fee; and (B) Disposes of salt water and/or other deleterious substances transported by truck to the facilities used in conjunction with said disposal well or is a disposal well for which none of its owners is an owner in any of the oil and gas wells which produce the salt water and/or other deleterious substances which will be disposed into said disposal well. 68 OAC 165:10-1-2 (emphasis added). (Attaluri's misquote replaced a disposal well by one, an alteration that could lead to the misconstruction that a commercial disposal well is not necessarily a disposal well.) 69 The reference to deleterious substances in the definition of commercial disposal well does not imply that such a well can accept all deleterious substances. Because the well is a disposal well, it can accept only those deleterious substances that can be accepted by disposal wells. A disposal well can accept fluids brought to the surface in connection with oil or natural gas production.... OAC 165:10-5-1(2). These fluids may well contain deleterious substances, as recognized by subpart (B) of the definition of commercial disposal well, which speaks of a disposal well for which none of its owners is an owner in any of the oil and gas wells which produce the salt water and/or other deleterious substances which will be disposed into said disposal well. OAC 165:10-1-2 (emphasis added). But only deleterious substances from oil or gas production are permitted to be injected. 70 Our construction of the Oklahoma regulations is based on the natural reading of the language. Moreover, we would be loath to adopt an interpretation of the Oklahoma regulations that, as with Attaluri's interpretation, would make them more permissive than the minimum requirements set by the EPA, which all state programs are obliged to satisfy. Thus, we find no plain error in the jury instruction setting forth what substances could be injected into the wells at issue. 71 Finally, we note that Attaluri devotes several pages of his brief-in-chief to a discussion of United States v. Lewis, No. CR-99-50-B, a case from the United States District Court for the Eastern District of Oklahoma. The defendant in Lewis was also prosecuted on a charge of improperly disposing of fluids down a commercial disposal well. The district court in that case dismissed the charge, apparently adopting the view Attaluri urges here regarding what substances are permitted to be injected into such wells in Oklahoma. Because this court is not bound by that decision, see Abeyta ex rel. Martinez v. Chama Valley Indep. Sch. Dist., No. 19, 77 F.3d 1253, 1257 (10th Cir.1996), we have not reviewed the transcript of that trial (attached as part of the appendix to Attaluri's brief-in-chief) to determine whether the facts distinguish that case from this one. See also Boone v. Carlsbad Bancorporation, Inc., 972 F.2d 1545, 1549 n. 1 (10th Cir.1992) (court of appeals will not review documents not before the district court). To the extent that the reasoning of that court is persuasive, Attaluri was, of course, free to present that reasoning on this appeal. Otherwise, that decision has no bearing here. 72
73 In defining the alleged conspiratorial object of violating the SDWA, the district court's instruction to the jury stated: 74 Any person who violates any requirement of an applicable underground injection control program ... if such violation is willful, such person ... shall be guilty of an offense against the laws of the United States. 75 (emphasis added). Attaluri claims that the district court improperly instructed the jury on the meaning of willful. 76 The jury instruction given at trial states that an act was committed willfully if it was committed voluntarily and purposefully, with the specific intent to do something the law forbids; that is with bad purpose either to disobey or disregard the law. Attaluri submitted an instruction that reads: To commit a crime willfully requires knowledge of the reporting or permit requirement and a specific intent to commit the crime, i.e., a purpose to disobey the law. In other words, Attaluri would require that the government prove not only that he acted with bad purpose either to disobey the law or disregard the law, but also that he knew the specific provision of the law he violated. 77 The Supreme Court's jurisprudence concerning the state of mind required for a criminal offense does not provide the clearest of guidance in construing criminal statutes. See generally Note, Mens Rea in Federal Criminal Law, 111 Harv. L.Rev. 2402 (1998). In particular, the word willfully has been interpreted to have different meanings in different statutes. See Spies v. United States, 317 U.S. 492, 497, 63 S.Ct. 364, 87 L.Ed. 418 (1943) (willful... is a word of many meanings). 78 Attaluri would have us apply the definition of the term adopted in Ratzlaf v. United States, 510 U.S. 135, 114 S.Ct. 655, 126 L.Ed.2d 615 (1994). In that case, Ratzlaf needed to pay a $160,000 gambling debt to a Nevada casino. Id. at 137, 114 S.Ct. 655. He planned to make a $100,000 cash payment, but a casino official informed him that federal and state law would require the casino to report any cash payment exceeding $10,000. Id. The official and others suggested that Ratzlaf could pay the debt without triggering the reporting requirements if he used his cash to obtain cashiers checks of $10,000 or less from a variety of banks. Id. Ratzlaf did so, after the casino supplied a limousine to take him to the banks. Id. 79 Ratzlaf was charged under 31 U.S.C. §§ 5322(a) and 5324(3) for violating the Currency and Foreign Transactions Reporting Act by willfully structuring a transaction to evade the Act's reporting requirements. Id. The Supreme Court held that the statutory requirement of willfulness required proof that the defendant knew that his conduct was unlawful. Id. at 145-49, 114 S.Ct. 655. It was not enough to know the reporting requirement and intend to circumvent it by structuring the transaction into sub-$10,000 transactions; the defendant must also have known that the law prohibited such structuring. Id. 80 Attaluri states: The opinion in Ratzlaf expressed concern that persons engaged in `small businesses' conducting activities `not inevitably nefarious' could unintentionally become criminally liable for violating `the complex of provisions' in which currency structuring laws `are embedded.' This rationale applies to this case. Reply Br. at 13-14 (citation and miscitation omitted). He proceeds to argue that environmental regulations are now more complex than the tax laws and that the government's interpretation of willfulness would impose an improper risk on all people — from truckers to warehousemen to clerks — who have anything to do with environmental related activities. Id. at 15. 81 We reject Attaluri's argument. He reads too much into Ratzlaf and fails to distinguish contrary authority. First, Ratzlaf must be understood in light of the specific statutory language involved. Two statutory provisions had to be construed together. Section 5324, which at the time contained no criminal penalty, made it unlawful to structure a transaction for the purpose of evading a financial institution's reporting requirement. Ratzlaf, 510 U.S. at 136, 114 S.Ct. 655. Section 5322 made it a crime to willfully violat[e] § 5324 and several other statutory provisions. The Supreme Court stated that the willfulness requirement of § 5322 would be rendered mere surplusage if the only required intent were an intent to evade the reporting requirements, because that intent was already required in § 5324. Id. at 140-41, 114 S.Ct. 655. The Court pointed out that the willfulness requirement of § 5322 had been given content by lower courts with respect to violations of other sections referenced in § 5322, id. at 141-42, 114 S.Ct. 655, and noted the general rule that [a] term appearing in several places in a statutory text is generally read the same way each time it appears. Id. at 143, 114 S.Ct. 655. 82 It was in this context that the Court said that it view[ed] §§ 5322(a) and 5324(3) mindful of the complex of provisions in which they are embedded. Id. at 141, 114 S.Ct. 655. The Court's reference to the complex of provisions was not, as presented in Attaluri's brief, a suggestion that it was imposing the strict mens rea requirement because the law governing reporting financial transactions was complex. 83 To be sure, later in the opinion the Ratzlaf Court supported its interpretation of willfully by noting that currency structuring is not inevitably nefarious. Id. at 144, 114 S.Ct. 655. But that discussion does not assist Attaluri, because his jury (unlike Ratzlaf's, see United States v. Ratzlaf, 976 F.2d 1280, 1282 (9th Cir.1992)) was instructed that he was required to act with bad purpose either to disobey the law or disregard the law — which makes the conduct nefarious. 84 Rather than following Ratzlaf, we look to the Supreme Court's most recent opinion addressing the meaning of willful. In Bryan v. United States, 524 U.S. 184, 118 S.Ct. 1939, 141 L.Ed.2d 197 (1998), the defendant was convicted of willfully dealing in firearms without a federal license and conspiring to do so. Id. at 189, 118 S.Ct. 1939. The jury was instructed: 85 A person acts willfully if he acts intentionally and purposely and with the intent to do something the law forbids, that is, with the bad purpose to disobey or to disregard the law. Now, the person need not be aware of the specific law or rule that his conduct may be violating. But he must act with the intent to do something that the law forbids. 86 Id. at 190, 118 S.Ct. 1939. The Supreme Court endorsed the instruction. It acknowledged Ratzlaf, as well as several tax-evasion cases, such as Cheek v. United States, 498 U.S. 192, 111 S.Ct. 604, 112 L.Ed.2d 617 (1991), which required the jury to find that the defendant was aware of the specific provision of the tax code that he was charged with violating. 524 U.S. at 194, 118 S.Ct. 1939. But it distinguished those cases because they involved highly technical statutes that presented the danger of ensnaring individuals engaged in apparently innocent conduct. Id. As a result, the Court continued, we held that these statutes `carv[e] out an exception to the traditional rule' that ignorance of the law is no excuse and require that the defendant have knowledge of the law. Id. at 194-95, 118 S.Ct. 1939 (quoting Cheek, 498 U.S. at 200, 111 S.Ct. 604). Then, in a sentence that applies equally to this case, the Court said, The danger of convicting individuals engaged in apparently innocent activity that motivated our decisions in the tax cases and Ratzlaf is not present here because the jury found that this petitioner knew that his conduct was unlawful. Id. at 195, 111 S.Ct. 604. 87 In our view, the charge against Attaluri does not belong within the exception to the rule that ignorance of the law is no excuse. First, as in Bryan itself, the willfulness instruction here eliminated [t]he danger of convicting individuals engaged in apparently innocent activity ... because the jury found that [Attaluri] knew that his conduct was unlawful. Id. at 195, 118 S.Ct. 1939. 88 Moreover, when addressing laws like the SDWA, the Supreme Court has been particularly resistant to requiring proof of knowledge of the law. In United States v. Int'l Minerals & Chem. Corp., 402 U.S. 558, 91 S.Ct. 1697, 29 L.Ed.2d 178 (1971), the charge was that the defendant had shipped sulfuric and hydrofluosilicic acid in interstate commerce but knowingly failed to describe the acids properly on the shipping papers. The Court rejected the argument that the government must prove that the defendant knew the regulation it was accused of violating. The opinion concluded, [W]here ... dangerous or deleterious devices or products or obnoxious waste materials are involved, 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, 91 S.Ct. 1697. 89 We assume that Attaluri is correct when he asserts that environmental regulations are now the most complex of federal regulations, exceeding even tax regulations. But we strongly doubt that as the federal government has sought to protect the environment by imposing more and more restrictions on those handling dangerous chemicals, Congress has intended to reduce the burden on such persons to inform themselves of what the law requires. 90 In short, we have no reason to believe that the word willful in 42 U.S.C. § 300h-2(b)(2) requires proof of knowledge of the regulation allegedly violated. We have no occasion to consider whether less is required than was set forth by the jury instruction in this case. 91
92 Attaluri requested a mistake of law or good faith instruction with respect to all objects of the alleged conspiracy. The district court gave a good faith instruction with respect to the allegations of fraud but otherwise refused the request. On appeal Attaluri challenges the failure to instruct on the defense that he in good faith misunderstood the law regarding what liquid waste could be injected into Oklahoma disposal wells. 93 A defendant is entitled to a good faith instruction when he has interposed the defense of good faith, has requested the instruction, and when there is sufficient evidence to support it. United States v. Janusz, 135 F.3d 1319, 1322 (10th Cir.1998). We have held that when those conditions are met, a good faith instruction is required, even if an instruction on willfulness has been given. United States v. Hopkins, 744 F.2d 716, 718 (10th Cir.1984) (en banc). On this issue we are an outlier. See United States v. Sirang, 70 F.3d 588, 594 (11th Cir.1995) (comparing the 1st, 4th, 5th, 8th, and 11th Circuits, which do not require a good faith instruction for specific intent crimes, with the 10th Circuit, which does); see also Green v. United States, 474 U.S. 925, 106 S.Ct. 259, 88 L.Ed.2d 266 (1985) (White, J., dissenting from denial of certiorari and noting the circuit split on the issue). We therefore assume that such an instruction would be required here if the factual predicates were present. 94 Attaluri relies on the testimony of several witnesses to support his claim. The evidence, however, establishes only the witnesses' opinions regarding the law, not Attaluri's. Three of these witnesses described conversations that occurred during the investigation of Overholt's hillside dump, yet nothing in the record suggests Attaluri ever knew about any of the conversations. Another witness was a former owner of a Class II well who testified that he generally understood that such wells could accept refined petroleum products, but, contrary to an assertion in Attaluri's brief, there was no evidence that he communicated his belief to Attaluri. A fifth witness was an Allied employee who stated that she signed bills of lading directing refined petroleum products to be delivered to disposal wells because she thought there was nothing wrong with such disposal. Finally, when Attaluri cites to testimony by an OCC employee who opined that it was difficult to know what could legally be put into a disposal well, he fails to note that the testimony was in a different trial. Absent from Attaluri's discussion is any evidence that he personally believed that the unlawful injection of chemical wastes into the Oklahoma disposal wells was actually lawful. Thus, he failed to satisfy the final element of the Janusz test and the district court was not required to give a mistake-of-law/good-faith-defense instruction. See Janusz, 135 F.3d at 1322-23. 95