Question Circuit Judge Kravitch

Question Circuit Judge KravitchUnited States of America v. Hayes International Corp. and Louis H. Beasley
786 F.2d 1499 (11th Cir. 1986)OPINION: Circuit Judge KravitchThe degree of knowledge necessary for a conviction under 42 U.S.C. 6928(d)(1), unlawful
transportation of hazardous waste, is the principal issue in this appeal. The district court
granted judgments of acquittal notwithstanding the jury verdicts. The court held that the
government had not presented sufficient evidence of knowledge to support convictions of Hayes
International Corp. and L. H. Beasley. A decision of the district court setting aside a jury verdict
of guilty is entitled to no deference, … and we have conducted our own review of the evidence
and find it sufficient. Accordingly, we reverse.
I. BACKGROUND
Hayes International Corp. (Hayes) operates an airplane refurbishing plant in Birmingham,
Alabama. In the course of its business, Hayes generates certain waste products, two of which
are relevant to this case. First, Hayes must drain fuel tanks of the planes on which it works.
Second, Hayes paints the aircraft with spray guns and uses solvents to clean the paint guns and
lines, thereby generating a mix of paint and solvents.
L. H. Beasley was the employee of Hayes responsible for disposal of hazardous wastes. In
early 1981, Beasley orally agreed with Jack Hurt, an employee of Performance Advantage, Inc.,
to dispose of certain wastes. Under the agreement, Performance Advantage would obtain from
Hayes the valuable jet fuel drained from the planes; Performance Advantage would pay twenty
cents per gallon for the jet fuel, and, at no charge, would remove other wastes from the Hayes
plant including the mixture of paint and solvents. Performance Advantage was a recycler, and
used the jet fuel to make marketable fuel. Wastes were transported from Hayes to Performance
Advantage on eight occasions between January 1981 and March 1982.
Beginning in August 1982, government officials discovered drums of waste generated by Hayes
and illegally disposed of by Performance Advantage. Approximately six hundred drums of
waste were found, deposited among seven illegal disposal sites in Georgia and Alabama. The
waste was the paint and solvent which Performance Advantage had removed from Hayes.
Some of the drums were simply dumped in yards, while others were buried.
The prosecutions in this case were brought under the Resource Conservation and Recovery
Act. The Act creates a cradle to grave regulatory scheme to ensure that hazardous wastes are
properly disposed of. Generators of waste are required to identify hazardous waste, and use a
manifest system to ensure that wastes are disposed of only in facilities possessing a permit.
The regulatory scheme sets forth two different methods of identifying a hazardous waste. A
waste is hazardous if it appears on a list of wastes adopted by the Environmental Protection
Agency. The list appears at 40 C.F.R., Subpart D. A waste is also hazardous if it possesses
certain characteristics. These characteristics are set forth in 40 C.F.R., Subpart C. The mixture
of paint waste and solvent in this case was a characteristic waste based on its ignitability.
1Beasley and Hayes each were convicted of eight counts of violating 42 U.S.C. § 6928(d)(1),
which provides criminal sanctions for
Any person who (1) knowingly transports any hazardous waste identified or listed under
this subchapter to a facility which does not have a permit under section 6925 of this title.
Hayes’ liability is based on the actions of Beasley. It is undisputed that Performance Advantage
did not have a permit.
In their motion for judgment notwithstanding the verdict and on appeal, the appellees raise three
basic theories of defense, and argue that the government’s evidence was insufficient to refute
any of them. First they contend that they did not commit any “knowing” violation because they
misunderstood the regulations. Second, they contend that they did not “know” that Performance
Advantage did not have a permit. Third, they contend that they did not commit a knowing
violation because they believed that Performance Advantage was recycling the waste. Under
the regulations in force at the time, characteristic hazardous waste was not regulated if it was
“beneficially used or re-used [sic] or legitimately recycled or reclaimed.” . . .
… [T]o properly evaluate the appellees’ contentions we must first consider the nature of the
criminal offense involved.
II. THE ELEMENTS OF A SECTION 6928(d) OFFENSE
Congress did not provide any guidance, either in the statute or the legislative history,
concerning the meaning of “knowing” in section 6928(d). Indeed, Congress stated that it had
“not sought to define ‘knowing’ for offenses under subsection (d); that process has been left to
the courts under general principles.” In discerning the relevant general principles, we turn to a
few examples from a long line of Supreme Court cases discussing the necessary elements of
regulatory offenses.
Whether Knowledge of the Regulations is Required
In certain cases, the Court has held that an offense requires no mental element, but simply
requisite actions. In United States v. Freed, . . ., the defendant was charged with violating a
statute making it unlawful “to receive or possess a firearm which is not registered to him.” . . .
The Court held that no element of scienter was necessary for conviction; a person need not
even have known that the grenades were unregistered. The Court reasoned that the statute
itself set forth no mental element, and that the statute was
a regulatory measure in the interest of the public safety, which may well be premised on
the theory that one would hardly be surprised to learn that possession of hand grenades
is not an innocent act.
***
The Court has had greater difficulty with statutes in which Congress has created an offense of
“knowingly violating a regulation.” In United States v. International Minerals & Chemical Corp.
… the defendant was charged with “knowingly” violating an I.C.C. regulation. The regulation
prohibited shipping hazardous materials without showing them on the shipping papers. The
Court held that knowledge of the regulation was not an element of the offense; the use of
“knowingly” in the statute referred only to the defendant’s knowledge that the materials being
2shipped were dangerous. The Court noted the general maxim that ignorance of the law is no
excuse, but also reasoned that where
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.
…[S]ection 6928(d)(1) is undeniably a public welfare statute, involving a heavily regulated area
with great ramifications for the public health and safety. As the Supreme Court has explained, it
is completely fair and reasonable to charge those who choose to operate in such areas with
knowledge of the regulatory provisions. Indeed, the reasonableness is borne out in this case,
for the evidence at trial belied the appellees’ profession of ignorance. Accordingly, in a
prosecution under 42 U.S.C. § 6928(d)(1) it would be no defense to claim no knowledge that the
paint waste was a hazardous waste within the meaning of the regulations; nor would it be a
defense to argue ignorance of the permit requirement.
Whether Knowledge of the Permit Status is Required
The government argues that the statute does not require knowledge of the permit status of the
facility to which the wastes are transported. The Supreme Court has noted that statutes
similarly drafted in the manner of section 6928(d) are linguistically ambiguous: it is impossible
to tell how far down the sentence “knowingly” travels. …
In this case, the congressional purpose indicates knowledge of the permit status is required.
The precise wrong Congress intended to combat through section 6928(d) was transportation to
an unlicensed facility. Removing the knowing requirement from this element would criminalize
innocent conduct; for example, if the defendant reasonably believed that the site had a permit,
but in fact had been misled by the people at the site. … The government does not face an
unacceptable burden of proof in proving that the defendant acted with knowledge of the permit
status. Knowledge does not require certainty; a defendant acts knowingly if he is aware “‘that
that result is practically certain to follow from his conduct, whatever his desire may be as to that
result.’” . . . Moreover, in this regulatory context a defendant acts knowingly if he willfully fails to
determine the permit status of the facility. . . .
Moreover, the government may prove guilty knowledge with circumstantial evidence. . . . In the
context of the hazardous waste statutes, proving knowledge should not be difficult. The statute
at issue here sets forth certain procedures transporters must follow to ensure that wastes are
sent only to permit facilities. Transporters of waste presumably are aware of these procedures,
and if a transporter does not follow the procedures, a juror may draw certain inferences. Where
there is no evidence that those who took the waste asserted that they were properly licensed,
the jurors may draw additional inferences. Jurors may also consider the circumstances and
terms of the transaction. It is common knowledge that properly disposing of wastes is an
expensive task, and if someone is willing to take away wastes at an unusual price or under
unusual circumstances, then a juror can infer that the transporter knows the wastes are not
being taken to a permit facility.
In sum, to convict under section 6928(d)(1), the jurors must find that the defendant knew what
the waste was (here, a mixture of paint and solvent), and that the defendant knew the disposal
site had no permit. Knowledge does not require certainty, and the jurors may draw inferences
from all of the circumstances, including the existence of the regulatory scheme.
3III. ANALYSIS
We now turn to the three defenses appellees rely upon. The first is simply a mistake of law
defense. They contend that they held a good faith belief that any waste sent to a recycler was
exempt from the regulations, regardless of whether the waste was actually recycled. The
discussion set forth above indicates that ignorance of the regulatory status is no excuse. There
is no dispute that the appellees knew that the waste was a combination of paint and solvents;
nor is there any dispute that the mixture was a hazardous waste. Accordingly, the evidence
was sufficient for the jury to find the appellees knowingly transported hazardous waste.
The appellees’ second defense is that the evidence was insufficient to show they knew that
Performance Advantage did not have a permit. In considering the evidence, we view it in the
light most favorable to the government, with all reasonable inferences drawn in favor of the
jury’s verdict. … The evidence shows that Hayes was not following the regulatory procedure
for manifesting waste sent to a permit site, from which the jury could have inferred that the
appellees did not believe Performance Advantage had a permit. This inference is strengthened
by Hayes’ own documents, which set forth this requirement. Performance Advantage also was
not charging to haul away the waste (although obviously they found the overall deal
advantageous), and Beasley thought he had made a good deal; accordingly the terms were
such as to raise suspicion.
The appellees rely on Hurt’s testimony that he had had an EPA “number,” and that he could not
recall whether he had given it to Beasley. Drawing all reasonable inferences in favor of the
government, the jury could have found that Hurt did not give the EPA “number” to Beasley. In
addition, the “number” was not a permit, and the jury could have inferred that Beasley did not
believe the number evidenced an actual permit. Accordingly, the jury could have found that
there was no evidence that Performance Advantage professed to be a permit facility. Based on
all the above, the jury could have found beyond a reasonable doubt that appellees knew
Performance Advantage did not have a permit.
Appellees’ third defense is that they believed that Performance Advantage was recycling the
waste. At the outset, we accept the theory of this mistake of fact defense. As the Supreme
Court stated in United States v. International Minerals, … a case involving “knowing” shipment
of dangerous chemicals, a person who believed “in good faith that he was shipping distilled
water when in fact he was shipping some dangerous acid would not be covered.” In this case,
had the wastes been recycled, then no violation of the statute would have occurred.
Accordingly, a good faith belief that the materials were being recycled is analogous to the good
faith belief in International Minerals that the acid was actually water.
We believe, however, that there is sufficient evidence for the jury to have rejected the defense
of mistake of fact. First, we note that the exemption only applies if the waste was actually
recycled…. Accordingly, the defense requires a good faith belief that the waste was actually
being recycled. Moreover, the government was not required to disprove the appellees’ mistake
of fact defense. The government need not disprove every reasonable hypothesis of innocence;
rather the government must simply prove guilt beyond a reasonable doubt…. In this case, three
areas of the evidence could have led the jury to reject the mistake of fact defense.
First, are the negotiations that led to the arrangement. Jack Hurt, who negotiated the deal for
Performance Advantage testified at trial. He contacted Beasley in late 1980 or early 1981 about
purchasing jet fuel from Hayes. After Hurt asked “what it would take” to obtain the right to
purchase the jet fuel, the parties agreed that Performance Advantage would take away a load of
4the paint wastes, at no charge, and attempt to run them through their system to make fuel. The
proposed deal was that Performance Advantage would obtain the jet fuel for twenty cents per
gallon if it would also haul away the paint waste. Thirty drums of the paint waste were then
shipped to the Performance Advantage plant. Hurt was not responsible for the test run at the
plant, but his supervisor, Lyn Bolton, instructed him to find out if Performance Advantage could
obtain the jet fuel without the paint waste. Hurt then told Beasley that Bolton did not want the
paint waste, but Beasley replied that “he liked the deal the way it was; to take it all.” Bolton then
decided to take the paint waste as well as the jet fuel. The inferences that the jury could have
drawn from the above testimony are clear. Beasley knew that Performance Advantage had
tested the paint sludge in its recycling system, and that after this test Performance Advantage
did not want the paint sludge, even for free. If Performance Advantage found it desirable to run
the waste through its system, it would not have objected to a deal in which it obtained the waste
at no cost. Accordingly, the jury could infer from this exchange that Beasley knew that
Performance Advantage did not intend to recycle the paint waste.
The second type of evidence showing appellees’ knowledge consisted of internal documents
from Hayes. For example, one document, a compliance memorandum from Hayes official
Charles Reymann to Beasley, stated:
Hazardous waste with no resale value, which must be disposed of, shall be hauled to an
EPA-approved disposal site. The hauler and the disposal site must both have an EPA
interim permit number. A manifest must be used to identify the materials hauled, the
hauler, and the disposal site. A copy of the manifest must be returned to Hayes by the
disposal site operator.
… The evidence showed that Performance Advantage did not want the paint waste, even at no
charge, and Beasley therefore knew it had no resale value. The memorandum directed that
wastes with no resale value be sent to EPA approved sites, and that manifests must be used to
confirm disposition of the wastes. The jury could infer from Beasley’s violation of company
procedures that he knew the disposition of the waste was improper. The documentary evidence
also showed that proper disposition of the waste was Beasley’s responsibility; the jury could
infer from the fact that it was Beasley’s business to know what happened to the waste, that
indeed he did know.
Third, subsequent conversations between Hurt and Beasley removed any doubt whether
Beasley thought the wastes were being recycled. Six months after the first shipment, around
August 1, 1981, Beasley and Hurt discussed the agreement, and Beasley stated that “It was a
good business deal for them; that they liked it; that he had saved the company some money.”
Hurt related an even more damaging conversation:
Q: Now, during the time that you were handling this waste and taking it from Hayes
to Performance Advantage did Mr. Beasley ask what was being done with the
waste?
A: Yes, sir.
Q: Did he ask on one occasion or more than one occasion?
A: Probably more than one.
Q: What did you tell him?
A: I told him that it went to the plant, what they did with it down there wasn’t my worry,
that it could be in that lake or pond or buried anywhere out there on a thousand
acres that might be there. Performance Advantage, one of the stockholders owned
approximately a thousand acres, and it could be down there anywhere. I didn’t know.
5These conversations show knowledge on the part of Beasley. Beasley’s belief that having
Performance Advantage take the waste at no charge was a good deal shows that he knew that
it would cost Hayes money to have the waste properly disposed of, and that he knew the waste
was not valuable for purposes of recycling. In the second conversation, Hurt mentioned
numerous possible dispositions of the waste, notably excluding recycling. The jury could infer
from these conversations that Beasley did not believe the waste was being recycled.
The appellees argue that any inferences the jury could draw from this conversation would relate
only to the counts for shipments which occurred after the conversation. We disagree. Beasley
was directly told that the waste was being disposed of rather than recycled, and he nevertheless
continued to ship waste to Performance Advantage; this indicates that the agreement was never
premised on recycling of the waste. Accordingly, we conclude that the inferences would support
conviction for shipments both before and after the conversation.
The judgments of acquittal notwithstanding the verdict as to both defendants are vacated. The
case is remanded to the district court to enter judgment in accordance with the jury verdicts of
guilty