I recently came across a news article about a Federal Judge in Rhode Island publishing some scathing words about a recent Supreme Court decision that severely limited a fine he had previously placed on a company for violating an environmental statute. The article also played up the conclusion in this memorandum by US District Court Judge William E. Smith that asks the “greater environmental community,” in addition to the parties in the case, for suggestions for community service obligations to impose on the liable party.
At issue in the case is what sentence should be imposed on Southern Union Company, which was convicted of violating the Resource Conservation and Recovery Act (RCRA). A jury found that the company knowingly stored waste in violation of the statute from “on or about September 19, 2002 to October 19, 2004.”
The RCRA statute imposes a maximum penalty of $50,000 for each day the statute is violated. In this case, the trial court originally concluded that Southern Union violated the statute for 762 days, and court’s probation office then calculated a maximum fine of $38.1 million. The company didn’t like that.
After appeals that went all the way to the Supreme Court, the case is back at the original trial court for sentencing, a sentencing that is restrained by appellate decisions that found that Southern Union can only be held liable for violating the statute for one day because of an insufficiency in the jury instruction. That means that under RCRA, the company couldn’t be forced to pay any more than $50,000, but Judge Smith found that another statute, the Corporate Fine Statute, will support a penalty of up to $500,000. That’s a long way from $38.1 million. Judge Smith doesn’t like that.
Judge Smith explains his displeasure:
While the Court believes that the result reached in this Memorandum is called for by the law, this result is manifestly unsatisfactory and even unjust. Southern Union was found guilty by a jury of a crime that Congress has determined to be serious enough to carry a penalty of $50,000 per day of violation. Southern Union committed this crime for the bulk of a 762 day period, yet could escape with a penalty of only $500,000. For a company with over $9.9 billion in total assets … such a penalty would serve none of the statutory goals of sentencing criminal defendants – it is not an adequate penalty to punish Southern Union for its conduct, nor will it deter Southern Union or other similarly situated companies from similar actions in the future.
United States v. S. Union Co., CR. No. 07-134 S, at 18-19 (D.R.I. April 25, 2013).
The Judge finishes up by explaining that he thinks a sentence comprised mainly of community service would be the most appropriate in this bad situation, as he describes it (bad because the penalty cannot exceed $500,000). He writes:
I am inviting the parties, and the greater environmental community, to suggest community service obligations that I could impose upon Southern Union which would have the broadest possible impact.
Id., at 20. Maybe he’ll make the executives go out and get their hands dirty.
The news article that led me to this memorandum made me think Judge Smith had delivered harsher words towards the higher courts than he actually did. Instead, I read a well-tempered judgment that seeks to uphold the spirit of the law.