United States v. Henry
Opinion
USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
Nos. 96-1775
97-1400
UNITED STATES,
Appellee,
v.
MARK O. HENRY,
Defendant - Appellant.
____________________
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Paul J. Barbadoro, U.S. District Judge] ___________________
____________________
Before
Selya and Boudin, Circuit Judges, ______________
and Dowd, Jr.,* Senior District Judge. _____________________
_____________________
Bjorn Lange, Assistant Federal Public Defender, Federal ___________
Defender Office, for appellant.
Jeffrey C. Dobbins, Attorney, Department of Justice, with ___________________
whom Lois J. Schiffer, Assistant Attorney General, Environment _________________
and Natural Resources Division, Stephen R. Herm, Jeremy F. _________________ __________
Korzenik and David C. Shilton, Attorneys, Department of Justice, ________ ________________
were on brief for appellee.
____________________
February 5, 1998
____________________
AMENDED OPINION
____________________
____________________
* Of the Northern District of Ohio, sitting by designation.
DOWD, Senior District Judge. DOWD, Senior District Judge. _____________________
I. INTRODUCTION I. INTRODUCTION
The defendant-appellant Mark O. Henry (hereafter
"Henry") prosecutes two appeals growing out of his indictment and
conviction for one count of conspiracy to violate 42 U.S.C.
6928(d)(l) which prohibits the transport of hazardous waste to a
facility that does not have a permit to receive such waste, one
count of mail fraud and three counts of wire fraud.
Henry owned and operated Cash Energy, a corporation
with offices in North Andover, Massachusetts. Cash Energy
operated numerous affiliated businesses, including Beede Waste
Oil ("Beede"), located primarily at Kelly Road in Plaistow, New
Hampshire. Henry directed the affairs of both Cash Energy and
Beede. Robert LaFlamme, an indicted co-conspirator who testified
against Henry, managed Beede and oversaw its day-to-day
operations.
Beede applied to the New Hampshire Department of
Environmental Services ("NHDES") in March 1990 for a permit to
recycle virgin petroleum contaminated soil into cold mix asphalt.
Virgin petroleum contaminated soil is soil contaminated with
petroleum or petroleum products, petroleum sludge, and all liquid
petroleum derived hydrocarbons, such as lubricating oil, heating
oil, gasoline, kerosene, and diesel fuel. However, the
definition excludes soil that is determined to be hazardous waste
because it is contaminated with other chemicals or metals. Beede
needed an NHDES permit because the recycling process emits air
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pollutants. The recycling process required the use of a "pug
mill" to mix contaminated soil with gravel and asphalt emulsion.
Beede eventually obtained the permit in July. However, the
permit capped the amount of contaminated soil that could be
stored at the site at 3,000 tons.
Beede entered into recycling contracts with several
entities even before the permit was issued. Although the company
sporadically recycled soil using a leased pug mill, the amount of
contaminated soil stored at the site soon exceeded the permitted
amount. Eventually, the amount of unrecycled soil grew to as
much as 19,000 tons and at no time after May 1990 did Beede ever
have less than 3,000 tons of soil at the site. By April 1991,
Beede's failure to comply with the permit caused the New
Hampshire Air Resources Division to issue an administrative order
prohibiting Beede from accepting any more contaminated soil.
This order was superseded by a new permit issued in June 1991
that allowed Beede to begin receiving new soil only if it first
recycled all of the soil that had accumulated at the site.
Although Beede engaged in a small amount of soil recycling after
the June 1991 permit was issued, it continued to receive new
contaminated soil at the site in violation of the permit terms.
The mail and wire fraud counts charged that Henry
participated in a scheme to defraud several of Beede's customers
of money by falsely representing that Beede could lawfully
receive and recycle the customers' virgin petroleum contaminated
soil. The conspiracy count charged that Henry participated in a
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conspiracy to knowingly cause hazardous waste to be transported
to a facility that was not permitted to receive such waste in
violation of 42 U.S.C. 6928(d)(1). The conspiracy charge
involved three overt acts.1
The grand jury returned a 17 count indictment against
Henry and LaFlamme on March 2, 1995 charging conspiracy, mail
fraud and wire fraud. Later, on January 5, 1996 a superceding
indictment was returned limiting the counts to a single count of
conspiracy, six counts of mail fraud and three counts of wire
fraud. LaFlamme pleaded guilty to one count of mail fraud and
the conspiracy count and subsequently testified for the
government at Henry's trial which was held over an eight day span
in February of 1996.
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USCA1 Opinion
UNITED STATES COURT OF APPEALS
FOR THE FIRST CIRCUIT
____________________
Nos. 96-1775
97-1400
UNITED STATES,
Appellee,
v.
MARK O. HENRY,
Defendant - Appellant.
____________________
APPEALS FROM THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW HAMPSHIRE
[Hon. Paul J. Barbadoro, U.S. District Judge] ___________________
____________________
Before
Selya and Boudin, Circuit Judges, ______________
and Dowd, Jr.,* Senior District Judge. _____________________
_____________________
Bjorn Lange, Assistant Federal Public Defender, Federal ___________
Defender Office, for appellant.
Jeffrey C. Dobbins, Attorney, Department of Justice, with ___________________
whom Lois J. Schiffer, Assistant Attorney General, Environment _________________
and Natural Resources Division, Stephen R. Herm, Jeremy F. _________________ __________
Korzenik and David C. Shilton, Attorneys, Department of Justice, ________ ________________
were on brief for appellee.
____________________
February 5, 1998
____________________
AMENDED OPINION
____________________
____________________
* Of the Northern District of Ohio, sitting by designation.
DOWD, Senior District Judge. DOWD, Senior District Judge. _____________________
I. INTRODUCTION I. INTRODUCTION
The defendant-appellant Mark O. Henry (hereafter
"Henry") prosecutes two appeals growing out of his indictment and
conviction for one count of conspiracy to violate 42 U.S.C.
6928(d)(l) which prohibits the transport of hazardous waste to a
facility that does not have a permit to receive such waste, one
count of mail fraud and three counts of wire fraud.
Henry owned and operated Cash Energy, a corporation
with offices in North Andover, Massachusetts. Cash Energy
operated numerous affiliated businesses, including Beede Waste
Oil ("Beede"), located primarily at Kelly Road in Plaistow, New
Hampshire. Henry directed the affairs of both Cash Energy and
Beede. Robert LaFlamme, an indicted co-conspirator who testified
against Henry, managed Beede and oversaw its day-to-day
operations.
Beede applied to the New Hampshire Department of
Environmental Services ("NHDES") in March 1990 for a permit to
recycle virgin petroleum contaminated soil into cold mix asphalt.
Virgin petroleum contaminated soil is soil contaminated with
petroleum or petroleum products, petroleum sludge, and all liquid
petroleum derived hydrocarbons, such as lubricating oil, heating
oil, gasoline, kerosene, and diesel fuel. However, the
definition excludes soil that is determined to be hazardous waste
because it is contaminated with other chemicals or metals. Beede
needed an NHDES permit because the recycling process emits air
-2-
pollutants. The recycling process required the use of a "pug
mill" to mix contaminated soil with gravel and asphalt emulsion.
Beede eventually obtained the permit in July. However, the
permit capped the amount of contaminated soil that could be
stored at the site at 3,000 tons.
Beede entered into recycling contracts with several
entities even before the permit was issued. Although the company
sporadically recycled soil using a leased pug mill, the amount of
contaminated soil stored at the site soon exceeded the permitted
amount. Eventually, the amount of unrecycled soil grew to as
much as 19,000 tons and at no time after May 1990 did Beede ever
have less than 3,000 tons of soil at the site. By April 1991,
Beede's failure to comply with the permit caused the New
Hampshire Air Resources Division to issue an administrative order
prohibiting Beede from accepting any more contaminated soil.
This order was superseded by a new permit issued in June 1991
that allowed Beede to begin receiving new soil only if it first
recycled all of the soil that had accumulated at the site.
Although Beede engaged in a small amount of soil recycling after
the June 1991 permit was issued, it continued to receive new
contaminated soil at the site in violation of the permit terms.
The mail and wire fraud counts charged that Henry
participated in a scheme to defraud several of Beede's customers
of money by falsely representing that Beede could lawfully
receive and recycle the customers' virgin petroleum contaminated
soil. The conspiracy count charged that Henry participated in a
-3-
conspiracy to knowingly cause hazardous waste to be transported
to a facility that was not permitted to receive such waste in
violation of 42 U.S.C. 6928(d)(1). The conspiracy charge
involved three overt acts.1
The grand jury returned a 17 count indictment against
Henry and LaFlamme on March 2, 1995 charging conspiracy, mail
fraud and wire fraud. Later, on January 5, 1996 a superceding
indictment was returned limiting the counts to a single count of
conspiracy, six counts of mail fraud and three counts of wire
fraud. LaFlamme pleaded guilty to one count of mail fraud and
the conspiracy count and subsequently testified for the
government at Henry's trial which was held over an eight day span
in February of 1996.
The first appeal challenges his convictions and the
resulting 37 month sentence; the second appeal contends that the
district court should not have denied his motion for a new trial
based on newly discovered evidence.
For the reasons that follow we affirm the convictions
and sentence and the denial of Henry's motion for a new trial.
II. THE CHALLENGED CONSPIRACY CONVICTION II. THE CHALLENGED CONSPIRACY CONVICTION
A. The Challenged Jury Instructions on the
Conspiracy Count.
____________________
1 Two of the overt acts charged that in the spring of 1991
Henry, after receiving laboratory data showing contamination of
the soils, either by cadmium or iron, caused the soils to be
transported to Beede. One shipment of 243 tons came from a site
in Lawrence, Massachusetts and the other shipment of 250 tons
came from the Portsmouth Naval Shipyard in Kittery, Maine.
-4-
The conspiracy count, charged under 18 U.S.C. 371,
alleged that Henry and LaFlamme conspired knowingly to
transport and cause to be transported hazardous waste to a
facility that did not have interim status and a permit to accept
hazardous waste in violation of 42 U.S.C. 6928 (d)(l).2
The indictment defined hazardous waste by reference to
the substances and materials listed or identified in Title 40,
Code of Federal Regulations, Part 261 and further alleged that
under the regulation, "any waste containing concentrations of
lead in excess of 5 parts per million or cadmium in excess of l
part per million using appropriate test methods is a hazardous
waste."
The jury instructions relative to the conspiracy charge
defined the offense of causing hazardous wastes to be transported
to an unpermitted facility as requiring the following elements:
____________________
2 Section 6928(d)(l) provides:
(d) Criminal penalties (d) Criminal penalties
Any person who--
(1) knowingly transports or causes to
be transported any hazardous waste
identified or listed under this
subchapter to a facility which does not
have a permit under this subchapter, . .
.
. . . .
shall, upon conviction, be subject to a
fine of not more than $50,000 for each
day of violation, or imprisonment not to
exceed two years (five years in the case
of a violation of paragraph (1) or (2)),
or both. . . .
-5-
First, that the defendant transported or
caused to be transported hazardous waste to a
facility that was not authorized to receive
such waste; and
Second, that the defendant knew that the
material transported was hazardous and that
the facility that received the waste was not
authorized to receive such waste.
Then, over the defendant's timely objection, the court
defined hazardous waste as follows:
Solid waste qualifies as hazardous waste if __
using the toxicity characteristic leaching _____________________________________________
procedure, TCLP, extract from a __________________
representative sample of the solid waste
contains lead in concentrations greater than
five parts per million or cadmium in
concentrations greater than one part per
million.
(Emphasis added).
The appellant couples the challenge to the definition
of hazardous waste with the claim that the trial court improperly
participated in the direct examination of the government witness
Michael Wimsatt, a regulatory inspector with NHDES in the
hazardous waste program.
First, we observe that the court's definitional
instruction as to what constitutes hazardous waste was correct as
a matter of law. The government bears the burden of establishing
that the defendant knew that the materials transported ____
constituted hazardous waste. The Congress has delegated to the
Administrator of the EPA the responsibility for listing the types
and characteristics of substances considered to be hazardous
wastes. 42 U.S.C. 6921(b). The ensuing regulation, found at
40 C.F.R. 261.3, provides that soil is a hazardous waste if it
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"exhibits any of the characteristics of hazardous waste
identified in Subpart C." Subpart C includes the characteristic
of "toxicity". 40 C.F.R. 261.24 introduces the Toxicity
Characteristic Leaching Procedure (TCLP) as a means of testing
for toxicity and provides that when this testing procedure shows
that the waste contains any of the contaminants listed in table l
at a concentration equal to or greater than the respective value
given in the table, then the waste, by definition, constitutes
hazardous waste. The table located at 40 C.F.R. 261.24(a)
dictates that the regulatory limit for lead is 5 mg/L (or 5 parts
per million) and the corresponding regulatory limit for cadmium
is l mg/L (or l part per million).
In the conference conducted by the district court prior
to finalizing the jury instructions, counsel for the defendant
argued that it should be left for the jury to determine if soils
shipped contained hazardous waste without the benefit of the
challenged definition. Defendant's counsel also disputed the
delegation by the Congress to the EPA Director to promulgate
regulations defining hazardous wastes and argued that because
there had been changes in those regulations as to what
constituted levels of toxicity, that an individual such as the
defendant should not suffer criminal liability in such a setting.
Defendant's argument is grounded in the nondelegation doctrine,
which provides that Congress may not delegate its legislative
power to another branch of the government. See U.S. Const. art. ___
-7-
I, 1 ("All legislative powers herein granted shall be vested in
a Congress of the United States.").
The district court responded to the improper delegation
argument by reliance on Touby v. United States, 500 U.S. 160, 165 _____ _____________
(1991), for the proposition that the delegation of legislative
power to another branch of the government is permissible as long
as Congress sets forth an "intelligible principle" to which the
executive or judicial branch must conform. In Touby, the Supreme _____
Court upheld Congress' delegation of the power to define criminal
conduct to the Attorney General as constitutionally permissible.
The Court held that "Congress does not violate the Constitution
merely because it legislates in broad terms, leaving a certain
degree of discretion to executive or judicial actors. So long as
Congress 'lay[s] down by legislative act an intelligible
principle to which the person or body authorized to [act] is
directed to conform, such legislative action is not a forbidden
delegation of legislative power.'" Touby, supra, at 165, quoting _____ _____
J.W. Hampton, Jr., & Co. v. United States, 276 U.S. 394, 409, 48 ________________________ ______________
S. Ct. 38, 352, 72 L.Ed. 624 (1928).
The Touby Court then upheld the Controlled Substances _____
Act at issue in that case on the ground that Congress had in fact
set forth an "intelligible principle" which meaningfully
constrained the Attorney General's discretion to define criminal
conduct. The Court discussed several factors that rendered the
statute constitutional: (1) requiring the Attorney General to
determine that the expedited procedure is "necessary to avoid an
-8-
imminent hazard to the public safety," (2) specifying the factors
that the Attorney General must consider in making such a
determination; and (3) requiring publication of a 30-day notice
of the proposed scheduling and consideration of any comments from
the Secretary of Health and Human Services. Touby, supra, at 166. _____ _____
We approve the district court's reliance on Touby in _____
the instant case, and hold that the delegation by Congress to the
EPA of the legislative authority to define hazardous waste was
permissible given the fact that there existed several constraints
upon the EPA's exercise of this authority that are similar to the
constraints found to be determinative of constitutionality in
Touby. First of all, we note that the Resource Conservation and _____
Recovery Act sets forth a detailed procedure with which the EPA
must comply before it may exercise this legislative power and
list the types and characteristics of hazardous waste.
Specifically, 42 U.S.C. 6921(a) requires the EPA to first
provide notice and the opportunity for public hearing on the
issue of what precisely are the characteristics of "hazardous
waste," and further requires the EPA to consult with "appropriate
Federal and State agencies" on this definitional issue. See ___
Touby, supra, at 166 (delegation of legislative power to _____ _____
executive constitutional in part due to requirement that
executive consider comments from other authorities).
Secondly, in addition to requiring the EPA to comply
with these procedural steps, the statute specifies certain
factors that the EPA must consider in developing the criteria:
-9-
"the Administrator shall. . . develop and promulgate criteria for
identifying the characteristics of hazardous waste, . . . taking
into account toxicity, persistence, and degradability in nature,
potential for accumulation in tissue, and other related factors
such as flammability, corrosiveness, and other hazardous
characteristics." 42 U.S.C. 6921(a). See Touby, supra, at 166 ___ _____ _____
(holding specification of three factors that the executive is
"required to consider" constrains executive's legislative power
and renders delegation constitutional).
Furthermore, besides this detailed process for
establishing the criteria to be used in identifying hazardous
waste, the statute also constrains the EPA's discretion by
listing specific characteristics which the statute directs "shall
be subject to the provisions of this subchapter solely because of
the presence in such wastes of certain constituents (such as
identified carcinogens, mutagens, or teratagens) at levels in
excess of levels which endanger human health." 42 U.S.C.
6921(b)(1).
In sum, we find no fault with the challenged
definition. In fact, the district court in this case was
sensitive to the knowledge component of the government's proof
and the defendant's contention that he believed the soils in
question did not constitute hazardous waste, and therefore
instructed the jury on a good faith defense.3
____________________
3 The jury was instructed as to the defense of good faith with
respect to the conspiracy count as follows:
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B. The Questioning of Wimsatt by the District Court.
The defendant combined his objection to the definition
with an objection to the court's questioning of Michael Wimsatt,
a regulatory inspector with the NHDES in its hazardous waste
program. The court engaged in the following colloquy with
Wimsatt that featured the toxicity characteristic leaching
procedure:
THE COURT: And the TCLP test uses water as
the [leachate], right?
WIMSATT: It's a water solution. It has
some acid in it, obviously, and
it has whatever contaminants, but
it's still relatively dilute and
it's essentially a water
solution, that's right.
THE COURT: Is it fair to say, then, with a
TCLP test, something expressed as
five milligrams per liter, could
also be expressed as five parts
per million?
WIMSATT: Yes, that's correct, that's
right. So we have a limit set
under TCLP that says when you get
an extract from our sample, it
can't have more than five parts
per million of lead in it, and if
it does, it's going to be
considered a hazardous waste.
____________________
If the defendant had a good faith belief
that Beede was authorized to transport the
waste to its facility, he is not guilty of
the crime of conspiracy even if it turns out
that that belief was wrong.
The burden of proving good faith does not
rest with the defendant because the defendant
does not have an obligation to prove anything
in this case. It is the government's burden
to prove beyond a reasonable doubt that the
defendant is guilty of conspiracy.
-11-
The defendant's counsel first objected to the above
questioning of Wimsatt during the jury charge conference, and
when asked by the court what remedy did counsel propose, the
response was to delete the hazardous waste definitional paragraph
from the jury charge. The district judge declined, properly we
hold, and observed that he had the authority pursuant to Evidence
Rule 614 (b)4 to question witnesses and had done so to assist the
jurors. Specifically, the district court opined:
THE COURT: All right. I decline to do
that for the reasons that I've outlined. Let
me just note I think this issue of
questioning of witnesses by the Court is a
very important and - important matter that
has to be handled carefully by the Court.
Clearly, Rule 614(b) allows the Court to
question witnesses. In a trial like this
where I think much of the evidence has been
confusing and concerns technical matters,
terms that involve jargon, I think it is
important where counsel does not ask
questions clearly for the Court to clarify
undefined terms, and therefore I have asked
questions during the trial to that end.
I think it's also important for me since -
in order to protect the defendant's rights,
that I understand the import of something
that is being testified to. The jury has to
make findings of fact here ultimately in
deciding the defendant's guilt or innocence,
but I have to pass on motions that deal with
evidentiary sufficiency; such as, Rule 29
motions.
If I don't understand a particular point of
testimony, I can't do my job with respect to
a Rule 29 motion. So I feel it's important
for me to ask questions when I don't
understand some testimony and when the jury
may potentially not understand testimony. I
____________________
4 This rule states that "[t]he court may interrogate witnesses,
whether called by itself or by a party." Fed. R. Evid. 614(b).
-12-
try to do it as little as possible, and I try
my best not in any way to indicate in any
sense that I'm taking sides.
I also have in my jury instructions an
instruction to the jury that they should not
give any greater weight to the testimony of a
witness in answer to my questions simply
because the questions have come from me, and
I have reiterated for the jury the fact that
I am neutral, impartial and doesn't - don't
have a stake in this case, and I don't
believe that I've in any way adversely
affected the defendant's right to a fair
trial here by my questions.
So I think the premise of your request is
flawed, and I decline to grant the
instruction that you propose.
Transcript of Day 8 at p. 41.
We agree with the district court that his questioning
in this case was permissible. Initially, we note that the First
Circuit recognizes the "well-settled" rule that the trial judge
has a "perfect right" to participate in the trial and to question
witnesses. United States v. Gonz lez-Soberal, 109 F.2d 64, 72 _____________ ________________
(1st Cir. 1997). The limitations placed on this right are that
the judge's questioning "must be balanced; he cannot become an
advocate or otherwise use his judicial powers to advantage or
disadvantage a party unfairly." Logue v. Dore, 103 F.3d 1040, _____ ____
1045 (1st Cir. 1997). "An inquiry into the judge's conduct of
the trial necessarily turns on the question of whether the
complaining party can show serious prejudice." Id. ___
In the instant case, our review of the transcript
reveals that the judge's questioning of Wimsatt was nothing more
that the sort of occasional "efforts to clarify testimony" that
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falls squarely within the scope of the district judge's right and
responsibility to manage the progress of the trial. See Logue, ___ _____
supra, at 1045. Furthermore, we hold that any possible risk of _____
prejudice to Henry as a result of the judge's questions was
abated by the clear instruction to the jury that it should ignore
any impression that his questions might have made on them.
In conclusion, the trial transcript clearly
demonstrates that the key issue on the conspiracy count was
whether the defendant knew the soils constituted hazardous waste
and his good faith defense was anchored in his assertion that he
did not believe the soils constituted hazardous waste. We
further hold that the district court's decision to define
hazardous waste in the context of the indictment and the C.F.R.
regulations, rather than offer no assistance to the jury on the
question of what constitutes hazardous waste, as suggested by
defendant's counsel, was proper, and in any event, in the setting
of this case, clearly not prejudicial to the defendant.
III. THE SENTENCING ISSUES III. THE SENTENCING ISSUES
Two primary issues are raised. The court chose
U.S.S.G. 2F1.1 as the guideline to be followed, but the
defendant argued that U.S.S.G. 2Q1.2 was the better choice.5
The latter guideline governs such environmental offenses as the
____________________
5 Because the adjusted offense level for the conspiracy
conviction was determined to be nine levels less serious than the
level for the grouped fraud count, pursuant to U.S.S.G.
3D1.4(c) the conspiracy conviction did not increase the total
offense level of 22 as computed under the mail and wire fraud
counts.
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unlawful transportation of hazardous materials and the
mishandling of hazardous or toxic substances. U.S.S.G. 2F1.1
deals with fraud and deceit, and the use of this guideline
resulted in a higher offense level calculation. A specific
offense characteristic under 2F1.1 requires a judicial
calculation of the loss caused by the fraud and deceit. Henry
challenges the court's calculation even though it was reduced one
level by the court from the pre-sentence recommendation.
The judge departed downward one offense level after he
concluded that the application of the Guidelines did not
"correctly capture [] the true value of the loss in this case."
The defendant was then sentenced to 37 months imprisonment, which
is the low end of the applicable range based on the defendant's
Criminal History of I.
A. Should the defendant have been sentenced under
Guideline 2Q1.2 rather than 2F1.1?
Appendix A to the Sentencing Guidelines Manual provides
a statutory index keyed to the applicable guideline. In the
introduction to Appendix A, the statement is made that "if, in an
atypical case, the Guideline section indicated for the statute of
conviction is inappropriate because of the particular conduct
involved, use the Guideline section most applicable to the Nature
of the Offense conduct charged in the count of which the
defendant was convicted." The reader is then referred to 1B1.2
of the Guidelines which states in Application Note 1 that "when a
particular statute proscribes a variety of conduct that might
constitute the subject of different offense guidelines, the court
-15-
will determine which Guideline section applies based upon the
nature of the offense conduct charged in the count of which the
defendant was convicted." Building on the atypical case
reference and Application Note 1 to 1B1.2, Henry contends that
his convictions represent an atypical fraud prosecution because
the gravamen of the convicted counts, including the conspiracy,
was that the defendant violated environmental rules and
regulations by transporting and storing contaminated soil which
exceeded permitted levels in quantity and composition at the
Beede Waste Oil facility in New Hampshire.
The defendant suggests that the apparent dearth of
cases involving simultaneous federal prosecution of both
environmental offenses and wire and fraud counts suggests the
claimed atypicality and argues that the commentary in application
note 13 to U.S.S.G 2F1.1, which directs that "where the
indictment...establishes an offense more aptly covered by another
guideline, apply that guideline rather than 2F1.1," requires
that U.S.S.G. 2Q1.2 should have been followed by the district
court. The district court conducted a four hour sentencing
hearing and rejected the defendant's 2Q1.2 argument, holding
that the case was not about environmental crime, but rather "an
effort by Mr. Henry to generate income." We review de novo the __ ____
trial court's determinations on the issue of whether to apply
2F1.1 rather than 2Q1.2. United States v. Ruiz, l05 F.3d 1492, _____________ ____
l504 (1st Cir. 1997).
-16-
The defendant's reliance on United States v. Fulbright, _____________ _________
105 F.3d 443 (9th Cir. 1996) is misplaced. In Fulbright, the _________
defendant was convicted of conspiracy to impede federal officers
in violation of 18 U.S.C. 372 and for obstruction of justice
under 18 U.S.C. 1503. The district court there used the only
guideline listed for 18 U.S.C. in the Statutory Index to the
Guidelines Manual. Citing the atypicality language in Appendix
A,6 the Ninth Circuit then remanded for resentencing under
U.S.S.G 2A2.4 which is captioned "Obstructing or Impeding
Officers," because the defendant's conduct was determined to be
more analogous to impeding a federal officer than to obstruction
of justice. Id. at 453. ___
In this case, in contrast to Fulbright, and as _________
recognized by the district court below, the defendant's conduct
involved two classes of victims. With respect to the fraud
counts, the victims were the companies to which Henry made
promises that he never kept in exchange for the monies he
extracted, while the conspiracy conviction victimized society as
a whole. The decision in United States v. Rubin, 999 F.2d 194 ______________ _____
(7th Cir. 1993), tracks the single victim analysis as the victims
in connection with the mail fraud and price-fixing were the
same. Accepting the separate victim analysis and applying the
____________________
6 "If, in an atypical case, the guideline section indicated for
the statute of conviction is inappropriate because of the
particular conduct involved, [the court should] use the guideline
section most applicable to the nature of the offense conduct
charged in the count of which the defendant was convicted."
U.S.S.G. Appendix A. See also U.S.S.G. 1B1.2, comment (n.1). ________
-17-
appropriate standard of review, we find no error in the
determination that the principal crime came under the fraud
analysis of U.S.S.G. 2F1.1. We find no fault in the district
court's analysis that the main motivation for the criminal
conduct was to obtain money. There is no indication that the
defendant was embarked on a crusade to engage in committing
environmental crimes. Rather, it is clear that his objective was
to make money, and in the process he engaged in an environmental
crime, which conduct was an incidental by-product of his
fraudulent conduct. We therefore find no error in the
application of the guidelines under the aegis of 2F1.1.
B. The Loss Calculation under U.S.S.G. 2F1.1.
The computation of the Offense Level under 2F1.1
requires a determination of the loss. A sliding scale has been
adopted in 2F1.1(b)(1). The presentence report fixed the loss
at $1,282,718, which required an addition of eleven levels. The
court refused to consider the Mobil Oil soil transactions, which
were the subject of count one, and deducted $740,642 from the
loss figure with a resulting total loss figure of $542,076. That
final calculation of the loss added ten levels to the loss.
Henry suggested that the remediation costs, while exceeding
$200,000 were less than the next dollar figure of $350,000 on the
sliding scale, and inferentially argued that the loss addition
should be computed at an increase of eight levels, rather than
the ten levels fixed by the court. United States v. Kelley, 76 _____________ ______
F.3d 436, 439 (1st Cir. 1996), teaches that a sentencing court's
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valuation of loss is subject to the clearly erroneous standard.
Given the reality that some of the Beede customers may face
additional costs in the remediation context, the "benefit" to the
defrauded customers arising from the transportation of the soils
from their sites is at best speculative. We find no fault in the
ignoring of that possible benefit in the calculation.
Application Note 8 to 2F1.1 teaches that the (b)(1) loss need
not be determined with precision, but rather that the court need
only make a reasonable estimate of the loss given the available
information. Finally, we note that the district court departed
downward one level due to its uncertainty as to whether the loss
had been properly determined. We find no prejudicial error in
ignoring the "benefit."
The defendant also complains that the district court
improperly shifted the burden of demonstrating the value of the
services provided to the Beede customers to the defendant. In
view of the fact that the district court departed one level to
accommodate the "loss" issue,7 it is not necessary to address the
____________________
7 The district court, in granting the one-level downward
departure, explained that had he accepted Henry's argument that
the loss level should be reduced by the "benefit" claimed by
Henry, the resulting enhancement required by U.S.S.G.
2F1.1(b)(1) would have been eight rather than ten levels. The
district court further explained that had the loss level been
calculated at eight levels, then the grouping rules for multiple
counts, U.S.S.G. 3D1.1, et. seq., would have come into play
with the consequence that the total offense level would have been
reduced only one level, i.e., from 22 to 21. In recognition of
the controversy over the calculation of the loss, the court then
departed downward one level from the total offense level of 22
that included ten levels for the loss to a total offense level of
21. See transcript of sentencing hearing at 153-156. ___
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final sentencing issue raised by Henry challenging the district
court's holding that the defendant had the burden of proof as to
the benefit provided the defrauded victims. In any event, we see
no error on these facts.
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IV. ALLEGED ERRORS IN THE CONDUCT OF THE TRIAL IV. ALLEGED ERRORS IN THE CONDUCT OF THE TRIAL
A. Questioning of Witnesses by the District Court.
The defendant objects to the questioning by the court
of the co-defendant LaFlamme and Michael Wimsatt.8 The defendant
points to the fact that the district court questioned LaFlamme
about the presence and use of the pug mill on the site, the fact
that soil had not been recycled even though Beede had produced
manifests to the contrary and the role of Beede in the production
and mailing of manifests. The fact questions in this case were
not within the every day experience of jurors such as they are in
the case of an automobile accident nor did it involve a subject
such as homicide, rape or robbery that are unfortunately
commonplace in our society. Against that background, it is
appropriate to again emphasize the previously discussed "well
settled" rule that a trial judge has a "perfect right" to
participate in the trial and to question witnesses. United ______
States v. Gonz lez-Soberal, 109 F.3d 64, 72 (1st Cir. 1997). We ______ ________________
therefore view the district court's questioning of LaFlamme, in
the context of this case, as a judicial effort to assist the jury
in a comprehensive and balanced understanding of relevant facts
in a complicated setting and within the permission acknowledged
by Fed. R. Evid. 614(b). We find no error.
____________________
8 The challenged questioning of Wimsatt has been addressed
previously and we see no need to revisit the issue. See supra ___ _____
discussion at 11-14.
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B. The Refusal of the District Court to Exclude the
Testimony of Matthew Kelly.
The court issued a sequestration order as to the
witnesses and despite that order, the government witness, Matthew
Kelly was present for approximately 15 minutes of the testimony
of the co-defendant and cooperating witness, Robert LaFlamme.
Before allowing Kelly to testify, the trial court engaged in a
voir dire of Kelly and then concluded that Kelly could testify. _________
We find neither an abuse of discretion nor prejudice to the
defendant in that the defendant was acquitted on the count to
which LaFlamme's testimony was directed while Kelly was present.
See United States v. Sep lveda, 15 F.3d 1161, 1177 (1st Cir. ___ _____________ _________
1993) and United States v. Blasco, 702 F.2d 1315, 1327 (11th Cir. _____________ ______
1983).
V. ISSUES RAISED BY THE DEFENDANT IN HIS PRO SE BRIEF V. ISSUES RAISED BY THE DEFENDANT IN HIS PRO SE BRIEF ______
A. Was the defendant impermissibly convicted?
The defendant filed a separate brief with this court
and argues that the United States Code is not "real" law, and
also that he was impermissibly convicted of a violation of the
wire fraud statute, 18 U.S.C. 1343 because the legislative
history does not explicitly anticipate that telephones and
facsimile machines could serve as a basis for a violation of the
statute. We find no merit in either argument.
VI. THE DENIAL OF THE DEFENDANT'S MOTION FOR A NEW VI. THE DENIAL OF THE DEFENDANT'S MOTION FOR A NEW
TRIAL BASED ON NEWLY DISCOVERED EVIDENCE TRIAL BASED ON NEWLY DISCOVERED EVIDENCE
The defendant filed a motion for a new trial two weeks
before his sentencing. The court went forward with the
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sentencing on June 25, 1996, and then heard the motion on July
24, 1996 and overruled the motion on March 13, 1997. The
defendant then appealed the denial. This court then combined the
two appeals for a single appellate argument.
Recognizing that the standard of review is a "manifest
abuse of discretion" as set forth in United States v. Montilla- ______________ _________
Rivera, 115 F.3d 1060, 1064 (1st Cir. 1982), citing United States ______ _____________
v. Andrade, 94 F.3d 9, 14 (1st Cir. 1996), the defendant argues _______
that the denial of the motion based on newly discovered evidence
was such an abuse of discretion.
The motion for a new trial based on newly discovered
evidence was accompanied by a number of exhibits and affidavits
in support of the motion. The main thrust of the materials was
anchored in the proposition that had the evidence been presented
to the jury, the jury would more likely have believed the defense
that Henry did not believe the soils constituted hazardous waste
and that he did intend to remediate the soils. The judge
conducted a lengthy hearing in which he invited discussion on
each of the exhibits and affidavits from counsel and then denied
the motion in a carefully crafted 26 page order.
A motion for a new trial based on newly discovered
evidence, to be successful, faces a difficult test. The defendant
must demonstrate that the evidence was unknown or unavailable at
the time of trial despite due diligence and that the evidence was
material and likely to result in an acquittal upon retrial.
United States v. Tibolt, 72 F.3d 965, 971 (1st Cir. 1995). _____________ ______
-23-
The district court found that much of the evidence
could have been discovered with due diligence. In that context,
we note that the initial indictment was returned on March 2, 1995
and the superceding indictment was filed on January 5, 1996. The
trial began on February 6, 1996. Henry and his counsel, whose
defense of Henry appears to have been thorough and intense, had
nearly a year to prepare for the trial.9 We see no basis to
disturb the district court's denial of the motion as it related
to the evidence that could have been discovered prior to trial in
light of our teachings that an order denying a motion for a new
trial will not be reversed except where we find a "manifest abuse
of discretion." United States v. Montilla-Rivera, 115 F.3d 1060, _____________ _______________
1064 (1st Cir. 1997).
Henry did offer a March 28, 1996 report that was
clearly new evidence in that the report was not available prior
to that time. Sanborn, Head & Associates, a consultant for the
State of New Hampshire, released a report assessing various
remedial alternatives for the contaminated soil remaining at the
Beede site. That report, in an appendix, contained copies of
test results conducted by Beede's laboratory that used the 3040
test method. Henry contends that the SHA report was important
new evidence as it demonstrated reliance by the State's
environment consultant on the same 3040 test method that Henry
claimed he had relied on in concluding that the soil removed from
____________________
9 Henry was represented by Bjorn R. Lange, an Assistant Federal
Defender, who was appointed on March 9, 1995 and remained as
Henry's counsel throughout the trial and on appeal.
-24-
the Stoneham Laundry site was nonhazardous. The judge
acknowledged that the report was new evidence, but concluded it
was impeaching and cumulative and not sufficiently probative to
warrant a new trial. In reaching that conclusion, the district
court opined:
Henry has submitted no direct evidence to
support his claim that either NHDES [New
Hampshire Department of Environmental Safety]
or SHA [Sanborn, Head & Associates] relied on
the 3040 test results included in the SHA
report. Thus, I am asked to infer this
reliance from the bare inclusion of the
documents in the appendix of the SHA report.
The SHA report itself sheds little light on
the extent of SHA's reliance on the 3040 test
results. These test results were all
produced by Beede's own laboratory. SHA
included these analyticals in Appendix C of
its report. Appendix C is referenced on
pages 3-4 of the SHA report under the heading
"Soil Pile Descriptions" which states:
"Analytical results provided by NHDES for
soil collected from piles Nos. 5A, 53, 8 and
10 are included in Appendix C." Appendix C
itself consists mainly of numerous test
results from Chem Test Lab, apparently
ordered by NHDES. In addition to the Chem
Test results, there are four test results
produced by Beede's laboratory which analyze
halogens using the 9020 method, TPH using the
GCFID method, and metals levels using the
3040 method. Although these test reports are
included in Appendix C, it is unclear to what
extent, if any, they were relied upon by SHA.
Henry's contention, therefore, that the state
relied on his 3040 test analyticals in its
assessment of the Beede site's contamination
is, at best, uncertain.
Even assuming Henry could show that the
state relied on Beede's 3040 test analyticals
through the SHA report, Henry cannot show
that this new evidence is material. Henry
bases his argument that the SHA report
justifies a new trial mainly on the grounds
that it would have assisted him in his
-25-
impeachment of the testimony of Michael
Wimsatt. This new impeachment evidence is
not probative enough to suffice as grounds
for a new trial. See Pelegrina v. United ___ _________ ______
States, 601 F.2d 18, 21 (1st Cir. 1979) ______
("impeaching evidence is generally treated as
immaterial" on motion for new trial).
Finally, even if the SHA report
demonstrated that the state relied on the
3040 test and that Henry may also have been
justified in relying upon it himself, I
cannot conclude that the jury would likely
have acquitted Henry if it had been presented
with this new evidence. At trial, the
government's evidence was not just that Henry
mistakenly used the 3040 test as opposed to
the TCLP test, but that Henry was provided
with TCLP test results showing the soil he
was about to transport was hazardous. The
likely inference from these facts is that
Henry used the 3040 test to convince his
customers that the soil was not hazardous and
could be accepted at the Beede facility. All
these machinations were performed as a part
of a scheme whereby Henry agreed to transport
soil from New Jersey to a hazardous waste
facility in Michigan, but actually had no
intention of doing so. Instead, he
transported the soil to the Beede facility,
dumped it there and then performed the 3040 ____
tests. Henry showed these new test results
to his customer in an attempt to convince it
that the soil was acceptable for recycling at
the Beede facility. Henry's effort to show
that he might have reasonably relied on the
3040 test results is unlikely to overcome
this evidence of willful deceit.
Appendix at pp. 18-21.
Our standard of review is anchored in an acknowledgment
that the judge who tried the case is best equipped to examine the
issue of whether the new evidence would likely result in an
acquittal. In our view, the district court, consistent with his
deliberate and thoughtful management of this case, carefully
-26-
analyzed the impact of the Sanborn, Head & Associates report and
we see no basis for disturbing his findings.
For the reasons discussed, we affirm the defendant's
conviction and sentence, and we also affirm the district court's
denial of the defendant's post-trial motion for a new trial.
AFFIRMED. AFFIRMED
-27-
United States v. Henry, (1st Cir. 1998).
United States v. Henry (United States v. Henry) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.
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§ 261.3 — Definition of hazardous waste.
40 C.F.R. § 261.3
§ 261.24 — Toxicity characteristic.
40 C.F.R. § 261.24