Criminal, not civil, charges become norm in environmental cases; District Attorney Reiner aims to put offending officers and directors behind bars.

Criminal, not civil, charges become norm in environmental cases

District Attorney Reiner aims to put offending officers and directors behind bars

As environmental issues move to the top of the national agenda, local and state prosecutors have become increasingly aggressive in bringing criminal actions against officers and directors of offending corporations. At the same time the standard of misconduct required to justify criminal sanctions has become watered down, with civil negligence in some cases supporting criminal penalties.

"No matter how substantial a fine is, it is simply a cost of doing business, and if we're going to have any impact, these people will have to do some jail time," said Ira Reiner, district attorney for Los Angeles County.

Most of the violations, of course, involve businesses.

Reiner's office has completed more than 200 prosecutions against environmental violators since he formed an environmental strike force in 1984. Currently the district attorney's office has 137 environmental matters under investigation or pending in the courts, Reiner said.

One recent case completed by his office arose out of the catastrophic fire at the Commerce plant of New York-based Grow Group on Labor Day weekend of 1988. Earlier this month the president and vice president of one of the company's divisions were sentenced to six months custody and fined $50,000 each for criminal disposal and storage of hazardous waste generated form the production of chlorine tablets. Before the fire, the chlorine waste, stored in 400 barrels kept in a warehouse, was "gassing off," or vaporizing, and drifting to neighboring properties.

The court held the principals criminally liable on a negligence theory, based on a provision in the California Hazardous Waste Control Act permitting criminal penalties against those who "should have known" of a violation. This lower standard of conduct dispenses with a knowledge or intent requirement associated with most crimes.

"You can no longer get off the hook by being an ostrich with your head in the sand," said Terry D. Avchen, a partner at Christensen, White, Miller, Fink & Jacobs, a Century City-based law firm.

This may make sense in an area with such dire potential consequences to society at large, but some environmental lawyers suggested the pendulum has swung too far. "We are now moving to an extreme, where what would have once been an infraction became a misdemeanor and then became a felony, without some of the standard guarantees of due process and fairness," said Barry Groveman, a partner at the Universal City law firm of Groveman & Young and an adjunct professor of environmental law at Southwestern Law School.

The push in the Southland to put offending directors and officers behind bars is part of a larger national trend. An Illinois court, for example, recently convicted a corporate officer of murder in the death of an employee from cyanide poisoning, according to Avchen. The court found the officer reckless in ignoring an ongoing problem in the plant.

The trend has occurred at all governmental levels -- federal, state and local -- but the most pronounced change seems centered on the state and local levels.

The watershed case in California is People v. Martin, decided last year. The Court of Appeals for the first time accepted the principle that criminal liability could be based on a violation of ordinary care, which is a civil negligence standard, instead of the normal, more severe criminal negligence standard. In that case the defendant was the president of a chemical company based in Ventura County who directed employees to truck hazardous waste from one facility to another, where the barrels containing the hazardous waste were smashed and their contents spilled to the ground.

A slew of other decisions have followed in the wake of Martin, of which the Grow Group case is only one.

Meanwhile, the South Coast Air Quality Management District has been feeding more matters to the district attorney's office. The agency's authority to bring actions against violators does not extend to the criminal area.

Nonetheless, its prosecutors have, like the district attorney, come to see limitations in civil actions. "My guess is that when you go after an individual in a civil action, the corporation will pick up the tab," said Kurt Wiese, deputy district prosecutor for the environmental watchdog agency.

Officers and directors can afford to be complacent in the civil arena because they are usually protected by indemnification agreements, in which a corporation agrees to reimburse them for court costs, attorney's fees, fines and other costs arising from civil law suits, even if they lose. However, these agreements do not kick in when there are criminal fines, and a prison term can not be passed on to someone else.

Without criminal penalties, corporations may have tended to give environmental laws short shrift. As Reiner said, "When we started bringing cases against environmental violators, the only laws truly taken seriously be corporations involved the IRS and the SEC, because they were the only areas where even if you were the chairman of G.M., you could go to prison." In setting up an environmental strike force, Reiner sought to elevate the whole body of environmental law, he said.

The origin of the current trend toward more severe criminal penalties can be traced a decade ago to a U.S. Supreme Court decision, U.S. v. Park. The case involved the head of a meat packing concern who was held liable for meat contamination even though he did not have knowledge of the offense. The Court held someone who bears a responsible relationship to an activity and who had supervisory power to prevent it could be criminally liable even if he did not know the specific facts.

Underlying the cases following Park, including the Martin line of cases, is the importance attached to the health and welfare of society, justifying a more stringent standard of conduct. To give teeth to an area dominated by regulatory law, the courts relaxed some due process principles and intent requirements, Groveman said. "That was alright when these crimes were slaps on the wrist and did not subject the defendants to ridicule," Groveman said, but he thinks things have now gone overboard.

This increased potential liability has not, as yet, made things tougher for the hapless outside director, at least in the County. Reiner's office has brought no actions against outside directors, although he said he would in an appropriate case.