United States v. Hong ( 2001 )

PUBLISHED
UNITED STATES COURT OF APPEALS
FOR THE FOURTH CIRCUIT
UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.  No. 00-4335
JAMES MING HONG,
Defendant-Appellant.

UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.  No. 00-4462
JAMES MING HONG,
Defendant-Appellant.

UNITED STATES OF AMERICA, 
Plaintiff-Appellee,
v.  No. 00-4502
JAMES MING HONG,
Defendant-Appellant.

Appeals from the United States District Court
for the Eastern District of Virginia, at Richmond.
James R. Spencer, District Judge; David G. Lowe,
Magistrate Judge.
(CR-99-269)
Argued: December 8, 2000
Decided: March 8, 2001
2 UNITED STATES v. HONG
Before WILKINSON, Chief Judge, and WILKINS and
KING, Circuit Judges.
Affirmed in part, vacated in part, and remanded by published opinion.
Judge Wilkins wrote the opinion, in which Chief Judge Wilkinson
and Judge King joined.
COUNSEL
ARGUED: John Fontana Cooney, VENABLE, BAETJER, HOW-
ARD & CIVILETTI, L.L.P., Washington, D.C., for Appellant. John
Staige Davis, V, Assistant United States Attorney, Michael R. Fisher,
Special Assistant United States Attorney, Richmond, Virginia, for
Appellee. ON BRIEF: Joseph G. Block, Gregory S. Braker, VEN-
ABLE, BAETJER, HOWARD & CIVILETTI, L.L.P., Washington,
D.C., for Appellant. Helen F. Fahey, United States Attorney, Rich-
mond, Virginia, for Appellee.
OPINION
WILKINS, Circuit Judge:
James Ming Hong appeals his convictions and sentence for violat-
ing the Federal Water Pollution Control Act, commonly known as the
Clean Water Act (CWA). See 33 U.S.C.A. § 1319(c)(1)(A) (West
Supp. 2000). The Government cross-appeals, arguing that the district
court erred in vacating the fine imposed by the magistrate judge who
convicted and sentenced Hong and instructing the magistrate judge to
impose a fine of no more than $25,000 each for 12 of Hong’s 13 con-
victions. We conclude that Hong’s challenges to his convictions and
term of imprisonment are without merit but that the district court
erred in vacating the fine initially imposed by the magistrate judge.
Accordingly, we affirm in part, vacate in part, and remand for reimpo-
sition of the original fine.
UNITED STATES v. HONG 3
I.
In September 1993, Hong acquired a wastewater treatment facility
at Second and Maury Streets in Richmond, Virginia from Environ-
mental Restoration Company, Inc. Hong initially operated the facility
under the name ERC-USA but subsequently made several changes to
the company name, eventually calling it Avion Environmental Group
(Avion). Hong also moved the company’s operations to a new facility
on Stockton Street in Richmond. Hong avoided any formal associa-
tion with Avion and was not identified as an officer of the company.
Nevertheless, he controlled the company’s finances and played a sub-
stantial role in company operations. For example, Hong negotiated
the lease for the Stockton Street facility,1 participated in the purchase
of a wastewater treatment system (discussed further below), reviewed
marketing reports, urged Avion employees to make the company suc-
cessful through the use of various marketing strategies, and controlled
the payment of Avion’s various expenses. Hong maintained an office
at Avion from which he conducted business.
In late 1995, Hong and Robert Kirk, Avion’s general manager,
began to investigate the possibility of obtaining a carbon-filter treat-
ment system for the Stockton Street facility, which lacked a system
to treat wastewater. Hong and Kirk were specifically advised that the
treatment system they were considering was designed only as a final
step in the process of treating wastewater; it was not intended for use
with completely untreated wastewater. Nevertheless, after purchasing
the system, Avion used it as the sole means of treating wastewater.
The system quickly became clogged. Hong was advised of the prob-
lem by Avion employees and inspected the treatment system himself
on at least one occasion. Additionally, Bruce Stakeman, who sold the
filtration media necessary for the system, advised Hong that the treat-
ment system would not function properly unless it was preceded by
an additional filtration mechanism. No additional filtration media
were purchased, nor was an additional filtration system installed.
In May 1996, Avion employees began discharging untreated waste-
water directly into the Richmond sewer system in violation of
1
Hong signed the lease for the Stockton Street facility as Avion’s pres-
ident.
4 UNITED STATES v. HONG
Avion’s discharge permit. Untreated wastewater was discharged
numerous other times during the remainder of 1996. Based on these
activities, Hong subsequently was charged by information with 13
counts of negligently violating pretreatment requirements under the
CWA. See 33 U.S.C.A. § 1319(c)(1)(A). More specifically, Hong was
charged with one count of failing to properly maintain and operate a
treatment system and with 12 counts of discharging untreated waste-
water. Each count of the information alleged that Hong committed the
violations "as a responsible corporate officer." E.g., J.A. 19.
The case was tried before a magistrate judge, who found Hong
guilty on all counts. The magistrate judge imposed a fine of $1.3
million—$100,000 for each count of conviction—and sentenced
Hong to 36 months imprisonment. In calculating the appropriate term
of incarceration, the magistrate judge first determined that Hong was
subject to a sentencing range of 51-63 months pursuant to the sen-
tencing guidelines. After departing downward four levels to a guide-
line range of 33-41 months, the magistrate judge concluded that the
appropriate sentence under the guidelines was 36 months imprison-
ment. Because each of Hong’s misdemeanor convictions provided a
maximum penalty of one year, the magistrate judge imposed sen-
tences of 12 months on Counts One, Two, and Three to be served
consecutively to each other, and sentences of 12 months on the
remaining counts to be served concurrently with each other and with
the sentences for Counts One, Two, and Three. See United States Sen-
tencing Guidelines Manual § 5G1.2(d) (1998).
Hong appealed to the district court, which affirmed his convictions
and term of imprisonment but, based upon its conclusion that the
maximum fine for each of Counts Two through Thirteen was $25,000,
vacated the fine and remanded for imposition of a fine of no more
than $300,000 on those counts. Hong now appeals his convictions and
term of imprisonment, and the Government cross-appeals the reduc-
tion of the fine.
II.
The provision of the CWA under which Hong was convicted
applies to "[a]ny person who" negligently violates pretreatment
requirements. 33 U.S.C.A. § 1319(c)(1)(A). The CWA defines "per-
UNITED STATES v. HONG 5
son" generally as "an individual, corporation, partnership, association,
State, municipality, commission, or political subdivision of a State, or
any interstate body." 33 U.S.C.A. § 1362(5) (West 1986). For pur-
poses of § 1319(c), "person" is further defined to include "any respon-
sible corporate officer." 33 U.S.C.A. § 1319(c)(6) (West Supp. 2000).
As noted previously, the information charged Hong with negligently
violating pretreatment requirements "as a responsible corporate offi-
cer." E.g., J.A. 19. Hong argues that the Government failed to prove
that he was a responsible corporate officer. Specifically, he maintains
that the Government failed to prove that he was a formally designated
corporate officer of Avion and that, even if such proof was not
required, the Government failed to prove that he exerted sufficient
control over the operations of Avion to be held responsible for the
improper discharges. We disagree with both contentions.
The "responsible corporate officer" doctrine was first articulated by
the Supreme Court in United States v. Dotterweich, 320 U.S. 277(1943). See United States v. Iverson, 162 F.3d 1015, 1023 (9th Cir.
1998). In Dotterweich, the president and general manager of a drug
company argued that he could not be held criminally liable for the
company’s violations of the Federal Food, Drug, and Cosmetic Act.
See Dotterweich, 320 U.S. at 279. The Supreme Court rejected this
contention, holding that all who had "a responsible share" in the crim-
inal conduct could be held accountable for corporate violations of the
law. Id. at 284; see id. (explaining that "a corporation may commit an
offense and all persons who aid and abet its commission are equally
guilty").
The Court revisited the responsible corporate officer doctrine in
United States v. Park, 421 U.S. 658 (1975). In elaborating on the con-
cept of a "responsible share" in a violation that the defendant did not
personally commit, the Court stated that the Government may satisfy
its burden of proof by introducing "evidence sufficient to warrant a
finding by the trier of the facts that the defendant had, by reason of
his position in the corporation, responsibility and authority either to
prevent in the first instance, or promptly to correct, the violation com-
plained of, and that he failed to do so." Park, 421 U.S. at 673-74. The
Court explicitly rejected the argument that the defendant must have
brought the violation about through some "wrongful action." Id. at
673 (internal quotation marks omitted); see Iverson, 162 F.3d at 1025
6 UNITED STATES v. HONG
("Under the CWA, a person is a ‘responsible corporate officer’ if the
person has authority to exercise control over the corporation’s activity
that is causing the discharges. There is no requirement that the officer
in fact exercise such authority or that the corporation expressly vest
a duty in the officer to oversee the activity.").
It is evident from these principles that the Government was not
required to prove that Hong was a formally designated corporate offi-
cer of Avion. The gravamen of liability as a responsible corporate
officer is not one’s corporate title or lack thereof; rather, the pertinent
question is whether the defendant bore such a relationship to the cor-
poration that it is appropriate to hold him criminally liable for failing
to prevent the charged violations of the CWA.2
Regarding that question, Hong contends that the Government failed
to prove that his relationship to Avion was such that he possessed
authority to prevent the illegal discharges. Ample evidence supports
the magistrate judge’s finding of guilt, however. The evidence indi-
cated that although Hong went to great lengths to avoid being for-
mally associated with Avion, in fact he substantially controlled
corporate operations. Furthermore, Hong was involved in the pur-
chase of the filtration system and was aware, in advance, that the fil-
tration media would quickly be depleted if used as Hong intended.
And, the evidence supported a finding that Hong was in control of
Avion’s finances and refused to authorize payment for additional fil-
tration media. Finally, Hong was regularly present at the Avion site,
and discharges occurred openly while Hong was present. Accord-
ingly, we affirm Hong’s convictions.
2
This rationale is fatal to Hong’s claim that the magistrate judge con-
structively amended the information by convicting Hong as an owner of
Avion rather than as a responsible corporate officer. While the magistrate
judge did conclude that Hong was the de facto owner of Avion, the find-
ing of guilt was based on the magistrate judge’s determination that the
evidence regarding Hong’s relationship to Avion demonstrated his
responsibility for the discharges.
UNITED STATES v. HONG 7
III.
Hong next challenges his sentence, maintaining that the three-year
term of imprisonment imposed by the magistrate judge violates the
Eighth Amendment prohibition against "cruel and unusual punish-
ments," U.S. Const. amend. VIII, because it is grossly disproportion-
ate to the crime committed, see Solem v. Helm, 463 U.S. 277, 284
(1983) (observing that the cruel and unusual punishments clause "pro-
hibits not only barbaric punishments, but also sentences that are dis-
proportionate to the crime committed"). Because Hong failed to
challenge his sentence on this basis before the magistrate judge or the
district court, our review is for plain error. See United States v. Olano,
507 U.S. 725, 731-32 (1993).
This court has held that proportionality review is not available for
any sentence less than life imprisonment without the possibility of
parole. See United States v. Polk, 905 F.2d 54, 55 (4th Cir. 1990).3
Even if we were to review Hong’s claim, however, we would con-
clude that his sentence was not disproportionate and thus that no error
occurred. Hong argues, essentially, that his sentence of three years is
disproportionate because the criminal conduct consisted of the "negli-
gent breach of a single duty of care." Brief of Appellant at 56. Hong’s
argument glosses over the fact that he was convicted of violating his
duty of care not once, but thirteen times. The imposition of consecu-
tive one-year terms of imprisonment for three of those convictions is
not disproportionate. See Hawkins v. Hargett, 200 F.3d 1279, 1285
n.5 (10th Cir. 1999) (explaining that "[t]he Eighth Amendment analy-
sis focuses on the sentence imposed for each specific crime, not on
the cumulative sentence for multiple crimes"), cert. denied, 121 S. Ct.
83 (2000).
3
In arguing that his three-year sentence is disproportionate, Hong relies
on two decisions of this court that left open the question of whether pro-
portionality review is appropriate for sentences of less than life without
the possibility of parole. See Sutton v. Maryland, 886 F.2d 708, 712 (4th
Cir. 1989); United States v. Rhodes, 779 F.2d 1019, 1027-28 (4th Cir.
1985). Polk answered the question left open in Sutton and Rhodes.
8 UNITED STATES v. HONG
IV.
On cross-appeal, the Government challenges the fine of $25,000
imposed on each of Counts Two through Thirteen,4 maintaining that
the district court erred in determining that the guidelines precluded
application of the alternative fine statute, 18 U.S.C.A. § 3571 (West
2000). The Government’s cross-appeal presents a question of guide-
lines interpretation, which we review de novo. See United States v.
Dawkins, 202 F.3d 711, 714 (4th Cir.), cert. denied, 120 S. Ct. 1989(2000).
The sentencing guidelines provide that a fine shall be imposed in
all cases unless the defendant is unable to pay. See U.S.S.G.
§ 5E1.2(a). Generally, the amount of the fine is determined by refer-
ence to a table that specifies a minimum and maximum fine for each
offense level. See id. § 5E1.2(c)(3). However, the guidelines also pro-
vide that the maximum fine set forth in the fine table "does not apply
if the defendant is convicted under a statute authorizing . . . (B) a fine
for each day of violation. In such cases, the court may impose a fine
up to the maximum authorized by the statute." Id. § 5E1.2(c)(4)
(emphasis added).
The parties agree that because the statute of conviction, 33
U.S.C.A. § 1319(c)(1), authorizes a fine for each day of violation,
Hong is subject to a fine "up to the maximum authorized by the stat-
ute" pursuant to § 5E1.2(c)(4). Hong maintains, however, that the
guideline language referring to "the maximum [fine] authorized by
the statute" limits the potential fine to the maximum specified in the
statute of conviction. Under this interpretation, the maximum fine for
each of Counts Two through Thirteen is $25,000, as set forth in 33
U.S.C.A. § 1319(c)(1). The Government, in contrast, argues that
§ 5E1.2(c)(4) is properly understood as a directive that the guidelines
do not provide any maximum fine when the statute of conviction
authorizes a fine per day of violation. Under the Government’s inter-
pretation, the maximum fine for each of Counts Two through Thirteen
is $100,000, as set forth in 18 U.S.C.A. § 3571.5 The magistrate
4
The magistrate judge also imposed a fine of $100,000 on Count One.
That fine is not challenged by either party.
5
The alternative fine statute, 18 U.S.C.A. § 3571, provides in pertinent
part:
UNITED STATES v. HONG 9
judge, believing the Government’s position to be correct, imposed a
total fine of $1.2 million on Counts Two through Thirteen. On appeal,
the district court agreed with Hong that the maximum fine on each
count was $25,000; accordingly, it vacated the fine imposed by the
magistrate judge and remanded for imposition of a total fine on
Counts Two through Thirteen no greater than $300,000.
We conclude that the interpretation of § 5E1.2(c)(4) by the district
court was incorrect. In determining the meaning of the guideline, we
are guided by the commentary to § 5E1.2, which specifically provides
that "the guidelines do not limit maximum fines" when § 5E1.2(c)(4)
applies. U.S.S.G. § 5E1.2, comment. (n.5); cf. id. comment. (n.2) (cit-
ing the alternative fine provision for the proposition that "[i]n general,
the maximum fine permitted by law as to each count of conviction is
. . . $100,000 for a Class A misdemeanor"). It is settled law that
(b) Fines for individuals.—Except as provided in subsection
(e) of this section, an individual . . . may be fined not more than
the greatest of—
(1) the amount specified in the law setting forth the
offense; [or]
...
(5) for a Class A misdemeanor that does not result in
death, not more than $100,000[.]
...
(e) Special rule for lower fine specified in substantive
provision.—If a law setting forth an offense specifies no fine or
a fine that is lower than the fine otherwise applicable under this
section and such law, by specific reference, exempts the offense
from the applicability of the fine otherwise applicable under this
section, the defendant may not be fined more than the amount
specified in the law setting forth the offense.
18 U.S.C.A. § 3571 (emphasis added). In short, § 3571 provides that the
maximum possible fine for a Class A misdemeanor of the type commit-
ted by Hong is $100,000 unless the statute of conviction—here, 33
U.S.C.A. § 1319(c)(1)—specifically precludes application of the alterna-
tive fine provision. Section 1319(c)(1) does not specifically preclude
application of § 3571.
10 UNITED STATES v. HONG
"commentary in the Guidelines Manual that interprets or explains a
guideline is authoritative unless it violates the Constitution or a fed-
eral statute, or is inconsistent with, or a plainly erroneous reading of,
that guideline." Stinson v. United States, 508 U.S. 36, 38 (1993).
Here, we perceive no conflict between the guideline and the commen-
tary. Rather, application note 5 explains the import of § 5E1.2(c)(4),
namely, that the guidelines impose no limit on the maximum fine
when the offense of conviction allows a fine per day of violation. We
therefore vacate the fine and remand for reimposition of the fine ini-
tially imposed by the magistrate judge.
V.
In sum, we conclude that Hong was properly held criminally
responsible for his role in failing to prevent Avion’s violations of the
CWA and that the 36-month sentence imposed on Hong did not vio-
late the Eighth Amendment. Accordingly, we affirm Hong’s convic-
tions and sentence. Because the district court erred in concluding that
the maximum fine for each of Counts Two through Thirteen was
$25,000, we vacate the fine and remand for reimposition of the origi-
nal fine.
AFFIRMED IN PART, VACATED IN PART,
AND REMANDED