United States v. Ho ( 2002 )

IN THE UNITED STATES COURT OF APPEALS
FOR THE FIFTH CIRCUIT
_______________
m 01-20460
_______________
UNITED STATES OF AMERICA,
Plaintiff-Appellee-
Cross-Appellant,
VERSUS
ERIC KUNG-SHOU HO,
Defendant-Appellant-
Cross-Appellee.
_________________________
Appeals from the United States District Court
for the Southern District of Texas
_________________________
October 31, 2002
Before DAVIS, JONES, and SMITH, seq., and its regulations. The government
Circuit Judges. cross-appeals the refusal to impose two sen-
tencing enhancements. We affirm the convic-
JERRY E. SMITH, Circuit Judge: tion but vacate the sentence and remand for re-
sentencing.
Eric Ho appeals his conviction under the
Clean Air Act (“CAA”), 42 U.S.C. § 7401 et I.
Ho is a naturalized citizen who emigrated tection Agency (“EPA”) or the Texas Depart-
to Houston from the Republic of China in the ment of Health (“TDH”) of his intent to reno-
1970’s. He owns and operates a produce sup- vate a building that would involve the removal
ply company, Houston Fruitland, and a truck- and disposal of asbestos; this failure violated
ing company, Ho Ho Ho Express, Inc. He 40 C.F.R. § 61.145(b). Ho hired Manuel Es-
was convicted of failure to comply with asbes- cobedo, his sometimes handyman, to supervise
tos work practice standards, 42 U.S.C. the work, though Ho often visited the hospital
§ 7413(c)(1), and failure to give notice of in- site himself. Ho also hired Corson Tate to
tent to remove asbestos, 42 U.S.C. § 7413(c)- begin renovations in the professional building.
(2)(B).
Escobedo, in turn, hired at least ten Mexi-
A. can nationalsSSapparently in the United States
In October 1997, Ho entered negotiations illegallySSto perform the renovation and asbes-
to purchase the abandoned Alief General Hos- tos removal work. Escobedo paid the workers
pital and Professional Building in Houston. by submitting their time sheets to Ho’s ac-
During negotiations, the owner’s agent told countant, receiving and cashing a check, and
Ho’s broker, who told Ho, that a 1994 envi- paying the workers in cash.
ronmental site assessment had revealed exten-
sive asbestos in the hospital’s fireproofing; that After removing sheetrock partitions and
asbestos abatement could cost as much as ceiling tiles from the first floor of the hospital,
$400,000; and that the owner was selling the the workers, who had no experience or train-
property “as is.” The owner and Ho ultimately ing in asbestos removal, began in mid-January
agreed to a price of $700,000 instead of the 1998 to remove the asbestos-containing fire-
initial asking price of $1.1 million. The con- proofing. Neither Ho nor Escobedo told them
tract included a Commercial Property Condi- that the fireproofing contained asbestos or that
tion Statement to the effect that the property asbestos is a dangerous carcinogen, nor did
contained asbestos. Ho signed the statement, they provide the workers with adequate safety
thereby acknowledging the presence of asbes- equipment.
tos.
Against customary asbestos abatement
Ho soon contacted a project manager at practices, the workers used no water as they
Laughlin Environmental, a licensed asbestos removed the fireproofing, but only scraped off
abatement company, to obtain a bid for asbes- the fireproofing, which produced large
tos removal. The manager prepared a bid of amounts of asbestos-containing dust inside the
$325,000 to remove and dispose of all asbes- hospital. As the workers removed the fire-
tos in the two buildings. Ho quickly rejected proofing, they placed it in plastic bags. Al-
the bid as too high, so the manager offered a though they generally left the bags open and
second bid of cost plus ten percent; Ho never inside the hospital, on one occasion a worker
responded. placed several bags in an outside dumpster, but
Escobedo immediately instructed him to re-
Instead, Ho initiated his own hospital reno- trieve the bags and leave them inside the hos-
vation project in December 1997. He did not pital. The hospital remained unsealed through-
give advance notice to the Environmental Pro- out, with several open doors and windows and
2
a large hole in the second floor exterior wall. reduced this agreement to a written contract.
None of these practices complied with asbes-
tos work practice standards. See 40 C.F.R. § The workers completed the asbestos re-
61.145. moval on March 10, 1998. Ho told Tate to
wash down the inside of the hospital using a
On February 2, 1998, Tim Stewart, a build- water line outside the hospital. Unfortunately,
ing inspector for the City of Houston, visited the “water line” was in fact a pressurized gas
the hospital to investigate a complaint of reno- line.
vation work without a city permit. Stewart
observed the workers as they removed the After Tate removed the cap on the line, he
fireproofing with putty knives without water started his nearby van. The spark from the ig-
or adequate safety equipment. Stewart also nition and the open gas line caused an explo-
noted that the hospital was unsealed. He sion. The explosion burned Tate, three work-
therefore issued a stop-work order and placed ers, and the van and blew a hole in the exterior
a red tag on the main entrance to the hospital wall of the hospital.
indicating that work could not proceed with-
out a city building permit. The workers left As a result of the explosion, TDH inspec-
shortly thereafter, and Tate delivered the stop- tors Tim Hendrix and Gary Williams inspected
work order to Ho. the site on March 13, 1998. They found the
hospital unsealed, with open windows and
Ho then contacted an operations manager doors and, now, two holes in the exterior
at Alamo Environmental, a licensed asbestos walls. Fireproofing dust covered floors and
abatement company in San Antonio, for an es- shelves, and the building contained roughly
timate to remove the remaining asbestos-con- 100 open bags of fireproofing and sheetrock
taining material. The manager met Ho at the residue. Subsequent laboratory analysis of the
hospital on February 10 and sent him an esti- fireproofing indicated two to twenty percent
mate of $159,876 on February 13. Ho decided chrysolite asbestos; any material with more
not to hire Alamo Environmental but, instead, than one percent is subject to federal and state
to renew his own renovation project. regulations. The inspectors noted several
footprints leading from the hospital outdoors,
To avoid the stop-work order and further though they could not determine conclusively
inspections, Ho re-hired the Mexican workers whether the dust in the footprints was as-
and instructed them to work at night, asking bestos-containing fireproofing or harmless
one of the workers, Jaime Contreras, to super- sheetrock residue.
vise. (Escobedo had fallen ill shortly after the
stop-work order was issued.) Ho also visited Over t he next few months, Hendrix tried,
the hospital frequently and on a few occasions with little success, to get Ho to seal the hospi-
personally supervised the workers. The pace tal and complete the asbestos abatement. Ho
of the project soon dissatisfied Ho, however, initially had one of the Mexican workers place
so he began to offer the workers performance plywood over the hospital’s doors and win-
incentives to complete sections of the hospital. dows, though this measure did not adequately
Ho also hired Tate to provide supplies to the seal the hospital. Ho also obtained multiple
workers and monitor their hours; Ho and Tate estimates for the remaining abatement project.
3
He apparently did not want to pay the still- C.
sizeable cost of abatement, though he finally The district court dismissed count 5 after a
relented after much importuning by Hendrix. pre-trial hearing. At the conclusion of the
government’s case at trial, the court dismissed
The Occupational Safety and Health Ad- Count 4 with prejudice and directed a verdict
ministration (“OSHA”) ultimately initiated an of not guilty on Count 1. The jury convicted
administrative enforcement action against Ho Ho on counts 2 and 3 and acquitted him on
and two of his companies, charging violations count 6.
of the Occupational Safety and Health Act, 29
U.S.C. § 651 et seq., and its regulations. An D.
administrative law judge upheld the citations In his presentence report, the probation of-
and assessed administrative penalties against ficer recommended an offense level of 18.
Ho and his companies in excess of $1 million.1 First, he grouped, as two or more acts
connected by a common criminal objective or
B. part of a common scheme or plan, the convic-
In October 2000, the grand jury issued a tions for failure to give notice of intent to re-
nine-count superseding indictment against Ho move asbestos and failure to comply with as-
and Escobedo. Count 1 charged them with bestos work practice standards. U.S.S.G.
conspiracy to violate the CAA in violation of § 3D1.2(b). Second, he began with a base of-
18 U.S.C. § 371. Count 2 charged Ho with a fense level of 8. U.S.S.G. § 2Q1.2(a). Third,
failure to give notice of intent to renovate a fa- he recommended a six-level enhancement for
cility involving the removal of asbestos mate- repetitive discharge of asbestos into the envi-
rial in violation of 42 U.S.C. § 7413(c)(2)(B). ronment. U.S.S.G. § 2Q1.2(b)(1)(A). Fourth,
Count 3 charged Ho with failure to comply he recommended a four-level enhancement for
with asbestos work practice standards in vio- Ho’s role as an organizer or leader of an ex-
lation of 42 U.S.C. § 7413(c)(1). Count 4 tensive criminal scheme. U.S.S.G. § 3B1.1(a).
charged Ho with failure to notify the appropri- These enhancements resulted in a recom-
ate agency of a release of asbestos in a viola- mended total offense level of 18, for a sentenc-
tion of 42 U.S.C. § 9603(b). Count 5 charged ing range of 27-33 months.
Ho with a knowing release of asbestos into the
ambient air, which placed another person in The government objected to the PSR’s fail-
imminent danger of death or serious bodily in- ure to include an upward enhancement based
jury in violation of 42 U.S.C. § 7413(c)(5)(A). on the workers’ alleged status as “vulnerable
Count 6 charged Ho with making a false and victims.” U.S.S.G. § 3A1.1(b). Ho objected
material statement to OSHA and the Depart- to the enhancements and requested a down-
ment of Labor in violation of 18 U.S.C. ward departure on several grounds.
§ 1001. The remaining three counts charged
Escobedo with various crimes. At the sentencing hearing, the district court
calculated a total offense level of 10. The
court accepted the base offense level of 8.
The court did not add the six-level enhance-
1
The TDH initiated similar proceedings under ment for repetitive discharge of asbestos into
state law. Ho settled by paying $44,000 in civil the environment, because it concluded that the
penalties.
4
government had not proven discharge by a Section 112 of the CAA, 42 U.S.C. § 7412,
preponderance of the evidence. The court also authorizes the Administrator of the EPA to
declined to add the four-level enhancement, publish a list of hazardous air pollutants and to
because it concluded that the criminal activity establish emission standards for them. These
was not “otherwise extensive” under§ 3B.1.1- standards are known as “national emission
(a), but the court added the two-level enhance- standards for hazardous air pollutants,” or
ment for leadership of a small criminal activity NESHAP’s.
under § 3B1.1(c). The court rejected all other
requests for enhancements or departures. Section 112(b), 42 U.S.C. § 7412(b),
establishes an initial statutory list of hazardous
II. air pollutants, of which asbestos is one, and di-
Ho contends that the laws under which he rects the EPA to update the list periodically.
was convicted exceed Congress’s authority Section 112(c) , 42 U.S.C. § 7412(c), directs
under the Commerce Clause, U.S. CONST. art. the EPA to identify each “source category”
I, § 8, cl. 3. Guided by the recent landmark that emits a particular hazardous air pollutant.
cases of United States v. Lopez, 514 U.S. 549 Section 112(d), 42 U.S.C. § 7412(d), directs
(1995), and United States v. Morrison, 529 the agency to promulgate NESHAP’s to
U.S. 598 (2000), we disagree. regulate the emission of hazardous air pollut-
ants from these source categories. These
At the outset, we stress the limited holding provisions are the primary means to regulate
of this opinion. We do not confront a facial emissions of hazardous air pollutants under the
challenge to the Clean Air Act, but only an as- CAA.
applied challenge to the work practice stan-
dard provision, 42 U.S.C. § 7412(h), and the Section 112(h)(1), 42 U.S.C. § 7412(h)(1),
reporting provision, 42 U.S.C. § 7414(a), of however, authorizes the EPA to adopt work
the CAA and their implementing regulations, practice standards instead of emission stan-
40 C.F.R. § 61.145. We thus have neither dards “if it is not feasible in the judgment of
occasion nor authority to rule on the constitu- the Administrator to prescribe or enforce an
tionality of other provisions of the CAA or emission standard for control of a hazardous
other implementing regulations, which we air pollutant.”2 Because asbestos often is not
must leave for another day when they are “emitted through a conveyance designed and
properly presented. constructed to emit or capture [it],” 42 U.S.C.
§ 7412(h)(1)(A), but rather through building
We begin by reviewing the relevant sections
of the CAA and their implementing regula-
tions. Next, we examine some first principles 2
“For purposes of this section, if it is not feas-
of Commerce Clause jurisprudence. We then
ible in the judgment of the Administrator to pre-
analyze the reasoning in Lopez and Morrison. scribe or enforce an emission standard for control
Finally, we explain why, under this reasoning, of a hazardous air pollutant or pollutants, the Ad-
Congress had the authority to enact the sec- ministrator may, in lieu thereof, promulgate a . . .
tions of the CAA that Ho challenges. work practice . . . standard . . . which in the
Administrator’s judgment is consistent with the
A. provisions of subsection (d) or (f) of this section.”
42 U.S.C. § 7412(h)(1).
5
demolition and renovation sites, the EPA the asbestos work practice standard therefore
adopted a work practice standard for handling imposes an elaborate reporting requirement on
asbestos in these sites, 40 C.F.R. §§ 61.145, owners or operators of a building renovation
61.150.3 This work practice standard does not site. 40 C.F.R. § 61.145(b). The heart of this
apply generally to any building containing any requirement is that the owner or operator must
asbestos, but only to buildings containing cer- give the EPA timely notice (usually ten days)
tain specific kinds and large amounts of asbes- of intent to begin asbestos removal. Again, we
tos. 40 C.F.R. §§ 61.145(a), 61.150. The could continue with the details of this
parties do not dispute that the hospital con- requirement, but Ho admits that he did not
tained the regulated kind and amount of asbes- give notice.
tos or, therefore, that the work practice stan-
dard covered the hospital.4 Section 113, 42 U.S.C. § 7413, contains
administrative, civil, and criminal enforcement
The asbestos work practice standard regu- mechanisms for the asbestos work practice
lates, in minute detail, the handling of asbestos standard and the notice requirement. Ho was
in building renovation sites. 40 C.F.R. convicted under two of these criminal en-
§ 61.145(c). For example, material containing forcement provisions. Section 113(c)(1), 42
asbestos must be wetted during removal, kept U.S.C. § 7413(c)(1), imposes criminal
sufficiently wet after removal to prevent the penalties on “[a]ny person who knowingly
release of asbestos fibers, and stored in leak- violates any . . . requirement or prohibition of
tight containers until properly disposed. A . . . section 7412 of this title, . . . including a
foreman or management-level officer, trained requirement of any rule . . . promulgated or
in complying with these work practice approved under such section[.]” Section 113-
standards, must be present at any site before (c)(2)(B), 42 U.S.C. § 7413(c)(2)(B), imposes
workers may handle material containing criminal penalties on [a]ny person who
asbestos. We could give more details of the knowingly fails to notify or report as required
numerous requirements, but it is enough to say under this chapter.”
that Ho admits he did not comply with the
asbestos work practice standard. We now summarize this complicated statu-
tory and regulatory framework before address-
Section 114(a), 42 U.S.C. § 7414(a), also ing the Commerce Clause. The affirmative le-
authorizes the EPA to adopt reporting gal duties Ho violatedSS(1) failure to follow
requirements to ensure compliance with a proper work practice standards while
work practice standard. Pursuant to § 114(a), removing asbestos and (2) failure to give
notice of intent to remove asbestosSSappear in
the asbestos work practice standard, 40 C.F.R.
3
§ 61.145. The EPA adopted the work practice
The asbestos NESHAP also contains § 112(d)
standard under §§ 112(h) and 114(a) of the
emission standards for source categories that emit
CAA, 42 U.S.C. §§ 7412(h), 7414(a). The
asbestos. See, e.g., 40 C.F.R. § 61.142.
government prosecuted Ho for these violations
4
Ho, of course, disputes that the work practice under § 113(c)(1), (c)(2)(B) of the CAA, 42
standard can cover the hospital constitutionally, U.S.C. § 7413(c)(1), (c)(2)(B). Ho now
but that is a different question we address infra challenges these sections as applied to him.
part II.D.
6
B. engine for federal regulatory and criminal
As did the Court in Lopez, so too do “[w]e statutes in the latter two-thirds of the
start with first principles.” Lopez, 514 U.S. at twentieth century. See Lopez, 514 U.S. at
552. The Constitution creates a federal 552-556 (describing the doctrinal history of
government of limited and enumerated the Commerce Clause). The Court explained
powers, id., and in particular a Congress of in Lopez that NLRB v. Jones & Laughlin Steel
limited and enumerated powers. The Article I Corp., 301 U.S. 1 (1937) (upholding the
Vesting Clause confirms this proposition, National Labor Relations Act), United States
vesting in Congress “[a]ll legislative powers v. Darby, 312 U.S. 100 (1941) (upholding the
herein granted.” U.S. CONST. art. I, § 1. This Fair Labor Standards Act), and Wickard v.
clause necessarily implies that some legislative Filburn, 317 U.S. 111 (1942) (upholding the
powers are not “herein granted,” foremost Agricultural Adjustment Act of 1938),
among them “the police power, which the “ushered in an era of Commerce Clause
Founders denied the National Government and jurisprudence that greatly expanded the
reposed in the states.” Morrison, 529 U.S. at previously defined authority of Congress under
618 and n.8. that Clause.” Lopez, 514 U.S. at 556.
“This constitutionally mandated division of Yet, “even these modern-era precedents
authority ‘was adopted by the Framers to en- which have expanded congressional power un-
sure protection of our fundamental liberties. der the Commerce Clause confirm that this
Just as the separation and independence of the power is subject to outer limits.” Id. at 556-
coordinate branches of the Federal 57. Indeed, even in Jones & Laughlin Steel,
Government serve to prevent the accumulation 301 U.S. at 37, the Court emphasized that the
of excessive power in any one branch, a Commerce Clause “may not be extended so as
healthy balance of power between the States to embrace effects upon interstate commerce
and the Federal Government will reduce the so indirect and remote that to embrace them,
risk of tyranny and abuse from either front.’” in view of our complex society, would
Lopez, 514 U.S. at 552 (quoting Gregory v. effectually obliterate the distinction between
Ashcroft, 501 U.S. 452, 458 (1991) (citations what is national and what is local and create a
omitted)). completely centralized government.”
Among the legislative powers the This alarming and dangerous prospect, and
Constitution did grant to Congress is the the concomitant need to identify judicially en-
power “to regulate Commerce with foreign forceable limits on the Commerce Clause,
Nations, and among the several States, and seem to have been a motivating force behind
with the Indian Tribes.” Art. I, § 8, cl. 3.
Though seldom used in the nineteenth century,
the Commerce Clause5 became the chief
5 (...continued)
It would be more accurate to speak of the
“Interstate Commerce Clause,” because the phrase tion between interstate and intrastate commerce.
“Commerce Clause” wrongly ignores the distinc- See Lopez, 514 U.S. at 587 n.2 (Thomas, J.,
(continued...) concurring). We defer to convention, however.
7
the Supreme Court’s recent jurisprudence.6 precise formulations, and in the nature of
Without any judicially enforceable limits and things they cannot be.” Id. at 567. In Lopez
with inevitable political pressures, the and Morrison, however, the Court helpfully
Commerce Clause all too easily would become clarified the legal standards to be applied in a
the general police power denied to Congress constitutional challenge to a statute under the
by the Constitution. Commerce Clause.
Morrison and Lopez therefore reaffirm our 1. In Lopez, the Court restated the “three
longstanding duty to enforce the limits of the broad categories of activity that
Commerce Clause. Naturally, “[d]ue respect Congress may regulate under its
for the decisions of a coordinate branch of commerce power.” Id. at 558. “First,
Government demands that we invalidate a con- Congress may regulate the use of the
gressional enactment only upon a plain show- channels of interstate commerce.” Id.
ing that Congress has exceeded its (citing Heart of Atlanta Motel, Inc. v.
constitutional bounds.” Morrison, 529 U.S. at United States, 379 U.S. 241, 256-67
607. At the same time, however, the (1964); United States v. Darby, 312
constitutionality of any statute, including a U.S. 100, 114-15 (1941)). This
statute enacted under the Commerce Clause, category includes the regulation of
“is ultimately a judicial rather than a legislative highways, railroads, air routes,
question, and can be settled finally only by [the navigable rivers, and
Supreme] Court,” and initially by the lower telecommunications networks. See
federal courts. Id. at 614.7 United States v. Robinson, 119 F.3d
1205, 1210 (5th Cir. 1997). The
C. category also “reaches the ‘misuse’ of
The Supreme Court’s Commerce Clause the channels of interstate commerce.”
jurisprudence sometimes has yielded vague Bird, 124 F.3d at 673. For example,
and uncertain legal standards. As the Court within this category Congress has
explained in Lopez, “[t]he Constitution regulated the interstate transport or
mandates this uncertainty by withholding from shipment of stolen goods, 18 U.S.C. §
Congress a plenary police power that would 2314; kidnaped persons, 18 U.S.C. §
authorize enactment of every type of 1201; prostitutes, 18 U.S.C. § 2421
legislation.” Lopez, 514 U.S. at 566. Legal and illegal lottery tickets, The Lottery
standards for the Commerce Clause “are not Case, 188 U.S. 321 (1903).
6
“Second, Congress is empowered to
See Morrison, 529 U.S. at 615-18; Lopez, regulate and protect the instrumentalities of
514 U.S. at 565-68; see also United States v. Bird, interstate commerce, even though the threat
124 F.3d 667, 676-78 (5th Cir. 1997) (explaining
may come only from intrastate activities.”8
the need for a “limiting principle” in Commerce
Clause jurisprudence).
7 8
See also Marbury v. Madison, 5 U.S. Lopez, 514 U.S. at 558 (citing Perez v. United
(1 Cranch) 137, 177 (1803) (“It is emphatically the States, 402 U.S. 146, 148-50 (1971); The Shreve-
province and duty of the judicial department to say port Rate Cases, 234 U.S. 342 (1914); Southern
what the law is.”). (continued...)
8
When Congress regulates within this category, One fairly certain principle is that the sub-
it must “ensure that, in fact, a particular stantial effect test allows Congress to regulate
‘threat’SSwhether posed by an interstate or in- purely intrastate activities. The Supreme
trastate activitySSactually threatens persons or Court has “upheld a wide variety of
things with a plain and clear nexus to interstate congressional Acts regulating intrastate
commerce.” Bird, 124 F.3d at 674. Char- economic activity where [it has] concluded
acteristic examples of regulation in this that the activity substantially affected interstate
category include destruction of an aircraft, 18 commerce.” Id.. The Court in Lopez did not
U.S.C. § 32, and theft from interstate purport to disturb the settled rule that
shipments, 18 U.S.C. § 659. See Lopez, 514 “[w]here economic activity substantially
U.S. at 558 (citing Perez, 402 U.S. at 150). affects interstate commerce, legislation
regulating that activity will be sustained.” Id.
“Finally, Congress’ commerce authority in- at 560.
cludes the power to regulate those activities
having a substantial relation to interstate com- A regulation of intrastate commercial activ-
merce, i.e., those activities that substantially ity can satisfy the substantial effect test in two
affect interstate commerce.” Id. at 558-59 ways. First, it can reach intrastate commercial
(citing Maryland v. Wirtz, 392 U.S. 183, 196 activity that by itself substantially affects inter-
n.27 (1968); Jones & Laughlin Steel, 301 U.S. state commerce. Jones & Laughlin Steel is a
at 36-38 (1937)). The Court acknowledged in case in point. A steel company challenged an
Lopez that its “case law has not been clear order of the NLRB that it had engaged in un-
whether an activity must ‘affect’ or fair labor practices at a steel mill. Jones &
‘substantially affect” interstate commerce in Laughlin, 301 U.S. at 22. The company con-
order to be within Congress’ power to tended that the NLRB’s order violated the
regulate it under the Commerce Clause.” Id. Commerce Clause because it amounted to
at 559. The Court firmly concluded, though, congressional regulation of a wholly intrastate
that “the proper test requires an analysis of economic activity. Id. at 40-41. The Court
whether the regulated activity ‘substantially rejected this argument, because “the stoppage
affects’ interstate commerce.” Id. of those [steel manufacturing] operations by
industrial strife would have a most serious
Thus, this third category is often known as effect upon interstate commerce . . . . It is
the “substantial effect” test. Although it is the obvious that it would be immediate and might
most expansive categorySSor perhaps because be catastrophic.” Id. at 41. Thus, the Court
it is the most expansiveSSit has generated the upheld the order as a valid regulation of
most controversy and uncertainty.9 intrastate commercial activity, i.e., labor
relations at a steel mill, which alone
substantially affects interstate commerce.
8
(...continued)
Second, the regulation can reach intrastate
Ry. v. United States, 222 U.S. 20 (1911)).
9
Compare id. at 584-602 (Thomas, J., con-
9
curring) (arguing that the substantial effect test (...continued)
lacks a constitutional basis) with id. at 615-31 (Breyer, J., dissenting) (arguing for a more gener-
(continued...) ous application of the substantial effect test).
9
commercial activity that by itself is too trivial police power. Thus, in Lopez, 514 U.S. at
to have a substantial effect on interstate 564, the Court expressly rejected such
commerce but which, when aggregated with reasoning.
similar and related activity, can substantially
affect interstate commerce. This rule has In fact, as we have observed, the need for
come to be known as the “aggregation” some judicially enforceable limit on the
principle, which reached its zenith in Wickard, aggregation principle seemed to motivate the
“perhaps the most far reaching example of analysis in Lopez and Morrison. The Court
Commerce Clause authority over intrastate therefore has identified four “significant
activity.” Lopez, 514 U.S. at 560. The farmer considerations” for Congress’s power to
in Wickard grew wheat on his small farm. invoke the aggregation principle to regulate
Wickard, 317 U.S. at 114. Under the wholly intrastate activities. Morrison, 529
Agricultural Adjustment Act of 1938, he was U.S. at 609.
entitled to a quota of about eleven acres of
wheat, but he grew about twenty-three acres, The Court first identified these
which he used for seeding, feeding, selling, and considerations in Lopez, which held that the
home consumption. Id. at 114-15. The Gun-Free School Zones Act of 1990, 18
Secretary of Agriculture assessed a penalty U.S.C. § 922(q)(1)(A), which made it a federal
against him for exceeding his quota. Id. at crime knowingly to possess a firearm in a
115. The Court upheld the penalty because, school zone, exceeded Congress’s authority
though the farmer’s “own contribution to the under the Commerce Clause. The Court re-
demand for wheat may be trivial by itself . . . emphasized these considerations in Morrison,
his contribution, taken together with that of which held that the civil remedy provision of
many others similarly situated, is far from the Violence Against Women Act, 42 U.S.C.
trivial.” Id. at 127-28. Wickard thus stands at § 13981, which created a federal civil remedy
the head of “cases upholding regulations of for victims of sex-based violence, also
activities that arise out of or are connected exceeded Congress’s authority under the
with a commercial transaction, which viewed Commerce Clause. We examine these four
in the aggregate, substantially affects interstate considerations with a view to the scope of the
commerce.” Lopez, 514 U.S. at 561. aggregation principle.
Whether and how Congress may apply the The first consideration is the economic or
aggregation principl e are controversial commercial nature of the regulated intrastate
questions. The pitfalls are apparent. For activity. In Lopez, the Court seemed to re-
example, any imaginable activity of mankind strict the aggregation principle to economic
can affect the alertness, energy, and mood of activity, which did not include gun possession
human beings, which in turn can affect their in a school zone. Lopez, 514 U.S. at 559-61.
productivity in the workplace, which when Morrison clarified Lopez somewhat on this
aggregated together could reduce national point, explaining that “[w]hile we need not
economic productivity. Such reasoning would adopt a categorical rule against aggregating
eliminate any judicially enforceable limit on the the effects of any noneconomic activity in or-
Commerce Clause, thereby turning that clause der to decide [Morrison], thus far in our
into what it most certainly is not, a general Nation’s history our cases have upheld
10
Commerce Clause regulation of intrastate States v. Kallestad, 236 F.3d 225, 229 (5th
activity only where the activity is economic in Cir. 2000).
nature,” which sex-based violence most
certainly is not. Morrison, 529 U.S. at 613 Thus, Congress may not add the words “in-
(emphasis added). Thus, it remains an open terstate commerce” to every statute and expect
question, as yet unsettled by the Supreme the courts meekly to comply. In any event,
Court, whether the aggregation principle neither § 922(q)(1)(A) nor § 13981 contains a
extends to non-economic activity.10 jurisdictional element to restrict its scope or
justify use of the aggregation principle.
The second consideration is a jurisdictional
element in the challenged statute that “might The third consideration is congressional
limit its reach to a discrete set of [regulated in- findings regarding the regulated intrastate ac-
trastate activities] that additionally have an ex- tivity’s substantial effects on interstate
plicit connection with or effect on interstate commerce. This consideration is the least
commerce.” Lopez, 514 U.S. at 562. A important when determining whether Congress
jurisdictional element may ensure that a may invoke the aggregation principle. In
statute, as applied, substantially affects Lopez, 514 U.S. at 557 n.2, the Court noted
interstate commerce.11 that “[s]imply because Congress may conclude
that a particular activity substantially affects
To be sure, though, Morrison clarified that interstate commerce does not necessarily make
a jurisdictional element is not sufficient to es- it so.” (Citation omitted.) By the same token,
tablish the constitutionality of a challenged the Court noted that “Congress normally is not
statute: “Such an element may establish that required to make fo rmal findings as to the
the enactment is in pursuance of Congress’ substantial burdens that an activity has on
regulation of interstate commerce.” Morrison, interstate commerce.” Id. at 562.
529 U.S. at 612 (emphasis added). We
therefore have held that a “jurisdictional In other words, congressional findings are
element is not alone sufficient to render [a neither necessary nor sufficient for Congress
challenged statute] constitutional. That to invoke the aggregation principle, but merely
argument . . . has no principled limit.” United are helpful insofar as they aid the courts in
identifying a substantial effect on commerce
“even though no such substantial effect [is]
10
We recognize that Bird seems to contradict visible to the naked eye.” Id. at 563.
this conclusion. “After WickardSSand its reaffirm- Although § 922(q)(1)(A) contained no
ance in LopezSSthere can be no question that findings, the Court’s deeds in Morrison
Congress is able to regulate noncommercial, in- backed up its words in Lopez, because the
trastate activity that substantially affects interstate Court rejected reams of findings collected after
commerce.” Bird, 124 F.3d at 676. Yet, we de-
years of legislative inquiry as insufficient to
cided Bird before the Supreme Court decided
support § 13981. Morrison, 529 U.S. at 614-
Morrison.
15.
11
A jurisdictional element also may establish
that a statute comes within the first or second cat- The fourth and final consideration is the de-
egory of Commerce Clause regulation identified in gree of attenuation between the regulated in-
Lopez. Morrison, 529 at 613 n.5.
11
trastate activity and the substantial effect on where the alleged relationship between the
interstate commerce. This consideration espe- regulated intrastate activity and the substantial
cially is designed to impose some judicially en- effect on interstate commerce is so attenuated
forceable limit on the aggregation principle that it would justify all regulation, i.e., would
and to prevent the Commerce Clause from be- turn the Commerce Clause into a general po-
coming a general police power. lice power. To do so would erase “the
distinction between what is truly national and
In Lopez, the government argued that dis- what is truly local.” Lopez, 514 U.S. at 567-
crete instances of gun possession in a school 68 (citing Jones & Laughlin Steel, 301 U.S. at
zone, when aggregated, increased the costs of 30).
crime and reduced national productivity. Lo-
pez, 514 U.S. at 563-64. The Court rejected D.
the cost-of-crime rationale for aggregation, With these standards in mind, we uphold, as
because it would allow Congress to regulate a valid exercise of Congress’s commerce
“all activities that might lead to violent crime, power, the provisions of the CAA under which
regardless of how tenuously they relate to in- Ho was convicted. We review the con-
terstate commerce.” Id. at 564. Likewise, the stitutionality of a federal statute de novo.
Court rejected the national productivity Kallestad, 236 F.3d at 227.
rationale, because it would allow Congress to
regulate any activity related to economic pro- Ho feverishly insists that the government
ductivity including, for example, “marriage, di- never proved that asbestos was released from
vorce, and child custody.” Id. Such rationales the hospital into the ambient air, which
left the Court “hard pressed to posit any necessarily means that no asbestos from the
activity by an individual that Congress is hospital polluted interstate air. Yet, the
without power to regulate.” Id. government did not need to prove that Ho
polluted the ambient air to convict him.
In Morrison, the Court rejected similar ar-
guments about the alleged substantial effects Indeed, we may assume arguendo, for pur-
of sex-based violence, when aggregated, on poses of the Commerce Clause analysis, that
employment, production, transit, and con- no asbestos escaped the hospital, because Ho
sumption. Morrison, 529 U.S. at 614-16. If was not convicted of releasing asbestos into
Congress could regulate sex-based violence the ambient air; the district court dismissed this
because of these effects on interstate count after a pre-trial hearing. Instead, Ho
commerce, it could regulate all violence, was convicted of failure to comply with the
because sex-based violence, as a subset of all asbestos work practice standard and failure to
violence, certainly has a smaller effect than give notice of intent to remove asbestos. 42
does all violence. Id. at 615. This kind of U.S.C. §§ 7412(h), 7414(a); 40 C.F.R.
attenuated reasoning is “unworkable if we are § 61.145. The conviction rest on purely
to maintain the Constitution’s enumeration of intrastate activities, no doubt, but Jones &
powers.” Id. at 615. Laughlin Steel and Wickard long ago
established, and Lopez and Morrison recently
Lopez and Morrison, therefore, foreclose reaffirmed, that Congress may regulate wholly
congressional use of the aggregation principle intrastate activities that substantially affect in-
12
terstate commerce. dard. We apply the Lopez-Morrison con-
siderations to answer in the affirmative.
The government concedes that the
application of the asbestos work practice First, the regulated intrastate activity, as-
standard to Ho can be justified only under the bestos removal, is very much a commercial ac-
substantial effect test. The standard does not tivity in today’s economy. It is a booming
regulate the channels of interstate commerce industry, given the hazardous nature of
or prohibit the interstate shipment of a good or asbestos and its seeming ubiquity in older
commodity through these channels. Nor does buildings. There is nothing inherently criminal
it seek to protect the instrumentalities of or a or disfavored about asbestos removal; in fact,
thing or person in interstate commerce. Thus, it might be considered a public service, and
if the conviction is to be sustained, “it must be many reputable and certified businesses exist
under the third category as a regulation of an solely to remove asbestos from contaminated
activity that substantially affects interstate buildings.
commerce.” Lopez, 514 U.S. at 559.
Both the state and federal governments li-
Furthermore, the government concedes that cense businesses and individuals in the field.
the asbestos work practice standard can satisfy Most, if not all, asbestos removal projects have
the substantial effect test only through the ag- a commercial purpose, because handling toxic
gregation principle. The government does not carcinogens is not something many people
seriously contend that Ho’s isolated violation enjoy for its own sake. Unless the owner of an
of the work practice standard at a single asbestos-containing building needs to renovate
renovation site could, by itself, have a the building or demolish it for use of the land
substantial effect on interstate commerce. on which it sits, he is very likely to let sleeping
Instead, the government argues that similar dogs lie and not incur the costs or dangers of
violations, when aggregated, could asbestos removal.
substantially affect the interstate market for
asbestos removal services and the interstate Moreover, Ho’s activities were driven by
market for commercial real estate.12 commercial considerations. He voluntarily so-
licited bids from two such businesses, which
Thus, this case presents the limited question returned sizable six-figure bids for the hospital
whether the aggregation principle extends to project. Although Ho declined these bids as
violations of the asbestos work practice stan- too costly, he hired the Mexican workers to
remove the asbestos, which itself was a
commercial transaction. Additionally, the en-
12
tire project occurred in a building that Ho re-
Ho protests that the government did not ad-
cently had purchased for $700,000. Had he
duce this argument at trial. It is true that the gov-
ernment defended the asbestos work practice stan-
not wanted to use the hospital for commercial
dard in the district court based primarily on the ef- purposes, he would not have paid such a hefty
fects of interstate pollution. Yet, the record ade- sum, solicited the bids for asbestos removal, or
quately supports the government’s theory urged on hired the workers to remove the asbestos on
appeal, and we may affirm for any reason sup- the sly. We can say with confidence, then, that
ported by the record. LLEH, Inc. v. Wichita Coun- asbestos removal in this case, unlike gun
ty, 289 F.3d 358, 364 (5th Cir. 2002).
13
possession in a school zone or sex-based vio- do not even begin to satisfy the stringent stan-
lence, is a commercial activity. dards of Morrison for the use of congressional
findings.
Second, the asbestos work practice
standard does not contain any kind of Likewise, the parties have not pointed us to
jurisdictional element. Neither § 112(h) nor § any relevant or helpful passages from the leg-
114(a) of the CAA, 42 U.S.C. §§ 7412(h), islative histories of the CAA, and we have not
7414(a), restricts the EPA’s authority to discovered any such passages on our own re-
promulgate work practice standards with a view. As so often happens, Congress seems to
jurisdictional element. Unsurprisingly, the have assumed its power to regulate however it
EPA did not limit the scope of the asbestos desires. Yet, congressional findings, as we
work pract ice standard by means of any kind have explained, are neither necessary nor suf-
of jurisdictional element. 40 C.F.R. § ficient to sustain a regulation. The same holds
61.145.13 for a lack of congressional findings, especially
where the substantial effects on interstate com-
Third, Congress included no congressional merce are “visible to the naked eye.” Lopez,
findings regarding the substantial effects that 514 U.S. at 563.
asbestos removal may have on interstate com-
merce. Section 101, 42 U.S.C. § 7401, speaks Most importantly, the relationship between
generally to the harmful effects of air pollution the asbestos removal in violation of the work
and states the purposes of the CAA. A few practice standard and interstate commerce is
passages from § 101 refer cursorily to what not attenuated, but direct and apparent.
might be considered aspects of interstate Congress had a rational basis to find not only
commerce.14 These brief passages, however, that a national market exists for asbestos
removal services, but also that Ho’s activities
would injure this market. See Groome Res.
13
As we have observed, however, a juris- Ltd., LLC v. Parish of Jefferson, 234 F.3d
dictional element is not decisive in Commerce 192, 203 (5th Cir. 2000).
Clause analysis. Though a jurisdictional element
may limit the scope of a statute to intrastate ac- By violating the asbestos work practice
tivities substantially affecting interstate commerce, standard, which imposes costly duties on per-
the absence of such an element will not undermine sons and businesses engaged in asbestos re-
a statute where the regulated activity in fact moval, Ho gained a commercial advantage on
substantially affects interstate commerce, just as it licensed abatement companies. Whereas these
will not save a statute where the regulated activity companies must spend hundreds of thousands
does not substantially affect interstate commerce. of dollars on projects like Ho’s, Ho was able
14
See, e.g., 42 U.S.C. § 7401(a)(2) (stating
that“the growth in amount and complexity of air
pollution brought about by . . . industrial de- (...continued)
velopment . . . has resulted in mounting dangers to ground transportation); § 7401(b)(1) (stating that
the public health and welfare, including injury to a purpose of the CAA is “to protect and enhance
agricultural crops and livestock, damage to and the the quality of the Nation’s air resources so as to
deterioration of property, and hazards to air and promote the public health and welfare and the
(continued...) productive capacity of its population”).
14
scrape bySSliterally and figurativelySSat a cut activity also serves as a limiting principle.15
rate of barely more than $20,000 plus supplies.
His activities also deprived licensed abatement We therefore conclude the Commerce
companies of a promising business Clause analysis by re-emphasizing the limited
opportunity. These substantial effects on the nature of our holding. We uphold only the
asbestos removal market are direct, not sections of the CAA authorizing the asbestos
attenuated, and they justify use of the work practice standard, 42 U.S.C. §§ 7412(h),
aggregation principle in the narrow situation 7414(a), and the work practice standard itself,
presented by this case. 40 C.F.R. § 61.141. We express no opinion
on the constitutionality of other sections of the
Moreover, once aggregated, Ho’s activities CAA or their implementing regulations, or, for
posed an threat to the interstate commercial that matter, of other environmental laws.16
real estate market. His illicit asbestos removal
project likely would reduce the number of III.
companies providing asbestos removal servic- Ho challenges the refusal to include an in-
es. Fewer companies means that conscientious terstate commerce jurisdictional element in the
property owners would have more trouble jury instructions for each count. He argues
locating licensed abatement companies and that the jurisdictional element is necessary
likely would have to pay higher prices for the wherever a prosecution pushes the outer
services o f remaining companies. bounds of the Commerce Clause. Reviewing
Furthermore, Ho would gain a commercial the court’s jury instructions for abuse of dis-
advantage over conscientious property owners cretion, Cooper Indus., Inc. v. Tarmac
who must pay these higher prices for asbestos Roofing Sys., Inc., 276 F.3d 704, 714 (5th Cir.
removal.
By holding that Congress may aggregate vi- 15
See Perez, 402 U.S. at 154-57 (national
olations of the asbestos work practice standard market for commercial credit); Wickard, 317 U.S.
to satisfy the substantial effects test, we do not at 127-28 (national market for wheat); Bird, 124
cede a general police power to Congress or F.3d at 678 (national market for abortion services).
abdicate our responsibility to enforce limits on
16
the Commerce Clause. Far from it, for our “The Commerce Clause [is] broad enough to
holding today has two important limiting permit congressional regulation of activities caus-
principles. ing air or water pollution, or other environmental
hazards that may have effects in more than one
First, it applies only to a commercial State.” Hodel v. Va. Surface Mining & Re-
activity, not to any activity whatsoever that clamation Ass’n, Inc., 452 U.S. 264, 282 (1981).
Lopez and Morrison do not challenge this prin-
might have detrimental environmental effects.
ciple, though they also do not exempt environmen-
The Supreme Court has long upheld the tal regulations from Commerce Clause scrutiny.
aggregation a class of commercial activity. Though we note that the principle seems to require
Morrison, 529 U.S. at 613. Second, the interstate effects before Congress may regulate for
presence of a national market in the regulated environmental problems, we have no occasion to
analyze the principle in this case, because the
asbestos work practice standard is a valid
regulation of a commercial activity.
15
2002), we disagree. IV.
Ho challenges the jury instruction on the
Ho cites United States v. Threadgill, 172 count for failure to give notice of intent to re-
F.3d 357 (5th Cir. 1999), for the proposition move asbestos. In summary, he argues that
that Lopez requires an interstate commerce § 113(c)(2)(B), 42 U.S.C. § 7413(c)(2)(B),
jurisdictional element because his prosecution which imposes criminal penalties on “[a]ny
pushed the outer bounds of the Commerce person who knowingly fails to notify or report
Clause. Unfortunately for Ho, we expressly as required by under [the CAA],” requires not
rejected this proposition in Threadgill. Id. only knowledge of the presence of asbestos,
(“[T]he defendants essentially argue that Lopez but also knowledge of the CAA’s notice re-
has created a new jurisdictional element in all quirement. The government, on the other
federal prosecutions of individual conduct. . . hand, contends that it only needed to prove
. We are not persuaded.”). Moreover, the knowledge of the presence of asbestos.
text of the CAA does not support Ho’s
position, because, unlike many other federal The district court agreed with the
criminal statutes, it does not contain a government and instructed the jury that “[i]t is
jurisdictional element that the government not necessary that the Government prove the
must plead and prove. See, e.g., 18 U.S.C. § Defendant actually knew of the notice
2421. This omission is a legislative choice, not requirement.” Although we usually review
a constitutional defect. failure to give a requested jury instruction for
abuse of discretion, Cooper Indus., 276 F.3d
At best, Ho falls back on a more general at 714, we review this question of statutory
passage from Threadgill, 172 F.3d at 372: interpretation de novo, United States v. Adam,
“Whether a defendant’s conduct has a 296 F.3d 327, 330 (5th Cir. 2002). The
‘substantial effect on interstate commerce’ is a district court’s instruction was correct, be-
question that only becomes relevant when the cause § 113(c)(2)(B) does not require knowl-
statute at issue, or the facts of the case, cast edge of the notice requirement.
doubt on Congress’ ability to use the
Commerce Clause to regulate the charged We need refer only to the venerable maxim
conduct.” We held that this rule did not apply that “Ignorance of the law is no defense.” It is
in Threadgill because the crimes of gambling as much a part of “our national culture” as are
and unlawful structuring of banking the Miranda warnings. Dickerson v. United
transactions were “purely commercial States, 530 U.S. 428, 443 (2000). Our
activities.” Id. Unlike the situation in Lopez criminal laws typically express this maxim with
and like that in Threadgill, however, neither the “knowing” degree of scienter. The
the asbestos work practice standard nor the Supreme Court recently has explained in more
facts of this case cast doubt on Congress’s lawyer-like fashion that “the term ‘knowingly’
ability to regulate Ho’s conduct. The district does not necessarily have any reference to a
court therefore did not err in refusing Ho’s culpable state of mind or to knowledge of the
requested instruction. law . . . . ‘[T]he knowledge requisite to
knowing violation of a statute is factual
knowledge as distinguished from knowledge of
16
the law.’”17 This maxim is so strongly several sound reasons to apply the long-
embedded in our legal system that “unless the standing principle.
text of a statute dictates a different result, the
term ‘knowingly’ merely requires proof of First, other circuits have trenchantly
knowledge of the facts that constitute the interpreted the term “knowingly” in §
offense.” Bryan, 524 U.S. at 193 (footnote 113(c)(1) to require knowledge of facts, not
omitted) (emphasis added). law.18 The phrasing of the two subsections is
identical, and t he same terms in a statute
This general rule applies with especial force should be interpreted in the same way.
to laws regulating hazardous substances. In Sullivan v. Stroop, 496 U.S. 476, 484 (1990).
United States v. Int’l Minerals & Chem. Second, the text of § 113(c)(2)(B) does not
Corp., 402 U.S. 558 (1971), the Court upheld “dictate” a contrary result. Bryan, 524 U.S. at
a conviction of a knowing failure to show 193. Third, this and the other circuit courts
shipping papers of a corrosive liquid. The have held that the term “knowingly” in other
government offered no proof that the environmental statutes means only a
defendant knew of the shipping paper knowledge of facts, not law.19
regulation. The Court rejected the challenge,
however, because the defendant had Fourth, though the notice requirement is
knowledge of the factual elements of the somewhat technical or administrative, the
offense, which was all the statutory scienter of CAA as a whole is “a public welfare statute,
a knowing violation required. Id. at 562-64. involving a heavily regulated area with great
The Court further stated that where ramifications for the public health and safety.”
“dangerous or deleterious devices or products Baytank, 934 F.2d at 613 (citation omitted).
or obnoxious waste materials are involved, the Consequently, failure to give notice of
probability of regulation is so great that asbestos removal is “a type of conduct that a
anyone who is aware that he is in possession of reasonable person should know is subject to
them or dealing with them must be presumed stringent public regulation.” Id. (citing and
to be aware of the regulation.” Id. at 565. distinguishing Liparota v. United States, 471
U.S. 419, 433 (1985)). In these circumstanc-
Although neither this court nor other circuit
courts have interpreted the scienter required
18
by § 113(c)(2)(B), we see no reason to depart See United States v. Weintraub, 273 F.3d
from the longstanding principle that 139 (2d Cir. 2001); United States v. Tomlinson,
“knowingly” means knowledge of underlying No. 99-30020, 1999 U.S. APP. LEXIS 16758 (9th
facts, not law. To the contrary, we observe Cir. July 16, 1999) (unpublished); United States v.
Buckley, 934 F.2d 84 (6th Cir. 1991).
19
See, e.g., United States v. Kelley Tech. Coat-
17
Bryan v. United States, 524 U.S. 184, 192 ings, Inc., 157 F.3d 432, 436 (6th Cir. 1998)
(1998) (quoting Boyce Motor Lines Inc. v. United (RCRA); United States v. Ahmad, 101 F.3d 386,
States, 342 U.S. 337, 345 (1952) (Jackson, J., dis- 390 (5th Cir. 1996) (Clean Water Act); United
senting)); see also United States v. Baytank States v. Laughlin, 10 F.3d 961, 966-67 (2d Cir.
(Houston), Inc., 934 F.2d 599, 613 (5th Cir. 1991) 1993) (CERCLA); United States v. Buckley, 934
(stating that “‘knowingly’ means no more than that F.2d 84, 88-89 (6th Cir. 1991) (CERCLA);
the defendant knows factually what he is doing”). Baytank, 934 F.2d at 613 (RCRA).
17
es, because we decline Ho’s invitation to use was improperly promulgated. Applying the de
ambiguous legislative history to interpret the novo standard of review,21 we disagree.
plain meaning of the statutory text, see Sale v.
Haitian Ctrs. Council, 509 U.S. 155, 169-70 The CAA bars Ho’s procedural challenge
(1993), we conclude that § 113(c)(2)(B) re- to the 1990 rulemaking that amended the defi-
quires only knowledge of the underlying fac- nition of “facility.” First, § 307(b)(1), 42
tual elements and does not impose on the gov- U.S.C. § 7607(b)(1), requires any challenge to
ernment the legal duty to give notice.
Ho plainly had knowledge of the underlying
(...continued)
factual elements of § 113(c)(2)(B), and in
means any institutional, commercial, or industrial
particular of the presence of asbestos. The structure, installation, or building (excluding apart-
preceding owner of the hospital informed Ho ment buildings having no more than four dwelling
that it contained asbestos. Ho sought an esti- units).” 40 C.F.R. § 61.141 (1988). Under the
mate for removal costs from a licensed current definition,
asbestos abatement company, then specifically
tried to avoid those costs by hiring untrained Facility means any institutional, commer-
and unlicensed workers. Ho also received a cial, public, industrial, or residential struc-
stop-work order, from the city, that should ture, installation, or building (including any
have alerted him to the presence of asbestos structure, installation, or building containing
even if he had not already known that the condominiums or individual dwelling units
hospital contained asbestos. operated as a residential cooperative, but
excluding apartment buildings having four
or fewer dwelling units); any ship; and any
Ho nevertheless ignored the order, sought
active or inactive waste disposal site. For
a second estimate from a licensed asbestos
purposes of this definition, any building,
abatement company, and continued the remov- structure, or installation that contains a loft
al project. In sum, the jury instruction stated used as a dwelling is not considered a
the correct legal standard of scienter, and the residential structure, installation, or build-
evidence more than adequately supported a ing. Any structure, installation, or building
jury finding that Ho acted with knowledge of that was previously subject to this subpart is
the underlying factual elements. not excluded, regardless of its current use or
function.
V.
Ho contends that his conviction is based on 40 C.F.R. § 61.141 (2002). We need not, and do
an improperly promulgated regulation. The not, address whether this regulation applies to an
asbestos work practice standard applies to individual residence. See Jones v. United States,
Ho’s activities only if the hospital satisfies the 529 U.S. 848 (2000).
regulatory definition of “facility,” 40 C.F.R. 21
In a challenge to agency rulemaking, we usu-
§ 61.141. The EPA amended this definition in ally look to the Administrative Procedure Act, 5
1990,20 and Ho argues that the amendment U.S.C. § 551 et seq., for the standard of review,
but the CAA bars review of the regulation in this
case, so we apply the de novo standard of review,
20
Under the pre-1990 definition, “Facility which is customary for questions of law. Cox v.
(continued...) City of Dallas, 256 F.3d 281, 288 (5th Cir. 2001).
18
a rulemaking under §§ 112 and 113 to be filed interpretations of the sentencing guidelines de
in the District of Columbia Circuit. Title 40 novo. United States v. Roberts, 203 F.3d 867,
C.F.R. § 61.141 is such a rule, so venue is im- 869 (5th Cir. 2000).
proper in the courts of this circuit. Second,
§ 307(b)(1) also requires any challenge to be A.
filed within sixty days of a final agency rule- The government sought a six-level sentence
making. The amended definition became final enhancement for an “ongoing, continuous, or
on November 20, 1990, 55 Fed. Reg. 48406, repetitive discharge, release, or emission of a
years before Ho challenged its validity. Thus, hazardous or toxic substance or pesticide into
the amended definition is “not subject to ju- the environment.” U.S.S.G. § 2Q1.2-
dicial review in civil or criminal proceedings.” (b)(1)(A). The court declined, holding that the
42 U.S.C. § 7607(b)(2). phrase “into the environment” required proof
of a discharge outside t he hospital, which it
The ruling in Adamo Wrecking Co. v. held the government had not established. The
United States, 434 U.S. 275 (1978), does not government argues on appeal, as in the district
aid Ho. There, the Court permitted an other- court, that the phrase “into the environment”
wise untimely challenge under § 307(b)(1) on includes indoor air and, in any event, that it
the question whether the disputed regulation proved a discharge of asbestos outside the
was in fact an “emission standard.” Id. at 285. hospital. Because we conclude that the
The Court specifically forbade the lower government sufficiently proved, for purposes
courts, on remand, from considering whether of sentencing, a discharge outside the hospital
the agency had “complied with appropriate regardless of the meaning of “into the
procedures in promulgating the regulation . . . environment,” we reserve the interpretive
[or] any of the other familiar inquiries which question and assume only arguendo that
arise in the course of an administrative review § 2Q1.2(b)(1)(A) requires proof of a discharge
proceeding.” Id. Ho does not dispute that 40 outside the hospital.
C.F.R. § 61.141 was promulgated under
§§ 112 and 113. Adamo therefore does not The district court clearly erred by ruling
apply.22 that the government did not prove that Ho’s
activities resulted in a discharge of asbestos
VI. outside the hospital. “A factual finding is
The government appeals the refusal to en- clearly erroneous ‘when although there is evi-
hance Ho’s sentence for (1) repetitive dis- dence to support it, the reviewing court on the
charge of asbestos into the environment and entire evidence is left with the definite and firm
(2) leadership in an extensive criminal activity. conviction that a mistake has been
When reviewing a sentence, we review committed.’” United States v. Cooper, 274
findings of facts for clear error and F.3d 230, 238 (5th Cir. 2001) (quoting United
States v. Hill, 42 F.3d 914, 918 (5th Cir.
1995)). The record leaves us with just this
22
We also observe that the hospital satisfies the conviction.
pre-1990 definition of “facility” because Ho
purchased it and removed the asbestos for com- The court based its ruling on three main
mercial purposes, and the definition did not exclude factual findings. First, the workers removed
previously abandoned buildings.
19
only one bag of fireproofing from the hospital, inspector, recounted that he also observed
and even then immediately retrieved the bag. airborne fireproofing dust inside the hospital
Second, the court concluded that the when he inspected it on March 13, 1998.
government had not proven that wind had
blown asbestos out of the unsealed hospital. Moreover, Hendrix testified that all the
Third, the court concluded that the doors and many of the windows to the hospital
government had not established that dust were o pen. At the OSHA civil proceeding,
tracked outside the hospital by workers was Hendrix also said that the hospital was “open
asbestos instead of innocuous sheetrock . . . with the wind blowing through it.”24 Wil-
residue. Though the first finding is correct, liams, another TDH inspector, testified that he
the overwhelming weight of contrary evidence took a sample of dust from the frame of an ex-
cannot support the second and third findings terior door and that the sample contained two
or the court’s ultimate conclusion. percent chrysolite asbestos. Finally, Wiest, a
certified asbestos removal contractor, inspect-
An avalanche of facts supports the ed the hospital on April 3, 1998, and observed
government’s modest argument: that asbestos an airflow through the unsealed doors and
must have escaped the unsealed hospital windows and through the hole caused by the
during the asbestos removal.23 This conclusion explosion.
intuitively stands to reason, because the
hospital was never sealed, much less properly Photographs of the scene show that the
sealed as required by regulation, 40 C.F.R. § bags of removed fireproofing, though inside
61.145, during seven weeks of asbestos the hospital, were open and unsealed, allowing
removal. any breeze to blow the fireproofing out of the
bag. Another photo shows fireproofing dust
Yet, there is much more. Testimony at trial on or near an open exterior door. A third pho-
supports this conclusion. Stewart, a building to shows a large hole in the second floor ex-
inspector for the city, testified that he observed terior wall, though which workers frequently
airborne fireproofing dust inside the hospital threw debris into a dumpster on the ground
when he inspected it on February 2, 1998. He below. A fourth photograph shows dusty
further stated that the hospital had no footprints just outside an exterior door of the
containment system that day to prevent the hospital. Although the court stated that this
dust from escaping. Hendrix, a TDH picture is as consistent with sheetrock residue
tracks, this is no different from saying that the
photograph is as consistent with fireproofing
23
dust tracks, which is more consistent with the
Ho incorrectly contends that the government
impermissibly relies on the presentence report
(“PSR”) for this argument. The government cites
24
the PSR, but only for the conclusion that asbestos Ho objects to this testimony, but “sentencing
escaped the hospital; the facts behind this con- proceedings do not offer criminal defendants the
clusion appear in the record. And, in any event, a same procedural safeguards as trials.” United
PSR is admissible as evidence for sentencing pur- States v. Goldfaden, 959 F.2d 1324, 1330 (5th
poses, though it may not be used to support a con- Cir. 1992). Furthermore, Ho gives no reason why
viction on appeal if the defendant objects to the Hendrix’s testimony at the OSHA proceeding
PSR. Cooper, 274 F.3d at 239. should be deemed unreliable.
20
other evidence. discharge, the facts in the instant case are
equally strong as those in Chau.
Finally, we come to the remarkable fact of
the explosion on March 10, 1998, which was The government has proven an asbestos
strong enough to blow a hole in the exterior discharge by a preponderance of the evidence,
wall of the hospital. Surely an explosion which is all that is required at the sentencing
strong enough to move mortared bricks was phase. Because the district court clearly erred
also strong enough to move fine, loose by holding otherwise, we vacate and remand
fireproofing dust. And, as with the other for re-sentencing.
openings on the exterior wall, Ho’s failure to
seal this new hole after the explosion obviously B.
allowed more fireproofing dust to escape. The government sought a four-level
sentence enhancement for Ho’s status as “an
This evidence, when considered as a whole, organizer or leader of a criminal activity that
leaves no doubt that asbestos escaped the involved five or more participants or was
unsealed hospital continuously and repeatedly otherwise extensive.” U.S.S.G. § 3B1.1(a).
throughout the removal project.25 We find The court instead imposed a two-level
support for this conclusion in United States v. enhancement under § 3B1.1(c), concluding
Chau, 293 F.3d 96, 99-100 (3d Cir. 2002), that Ho’s criminal activity did not involve five
affirming an enhancement for repetitive or more participants and was not otherwise
discharge under § 2Q1.2(b)(1)(A). The record extensive.
in Chau showed that the defendant had
disturbed asbestos inside a building and moved The only question is the meaning of
open bags of asbestos outside the building. “otherwise extensive.” The government must
Chau, 293 F.3d at 100. Although the court establish three elements for a § 3B1.1(a)
was affirming a finding of repetitive discharge, enhancement: (1) Ho was an organizer or
rather than reversing a finding of no repetitive leader of a criminal activity, (2) that involved
at least one other criminally responsible
“participant”26 and (3) that ‘involved at least
25
Ho mistakenly argues that the government five participants or was otherwise extensive.’
must prove “actual environmental contamination.” Section 3B1.1(c) also requires the first two
This phrase comes from application note 5 to elements, but not the third. Thus, when it
U.S.S.G. § 2Q1.2. We held in Goldfaden that note imposed the two-level enhancement under §
5 presumes contamination if the government 3B1.1(c), the court found that Ho was an
proves discharge. Goldfaden, 959 F.2d at 1331.
These terms are not synonymous. A “dis-
26
charge” refers to the movement of hazardous or In United States v. Gross, 26 F.3d 552 (5th
toxic substances, whereas “contamination” refers Cir. 1994), we held that § 3B1.1 does not apply
to the environmental effect of a discharge. Ho and unless the criminal activity involved at least two
the government disagree only on the discharge criminally responsible “participants.” Application
question. The record supports the government, not note 1 to § 3B1.1 defines a “participant” as “a per-
Ho or the district court, on the discharge question, son who is criminally responsible for the com-
so contamination is presumed according to note 5 mission of the offense, but need not have been con-
and Goldfaden. victed.”
21
organizer and Escobedo was a criminally example, that “a fraud that involved only three
responsible “participant.” Ho does not appeal participants but used the unknowing services
these findings, nor does the government of many outsiders could be considered
contend that the Mexican workers were extensive.” Thus, a criminal activity is
criminally responsible “participants.” Thus, “otherwise extensive” if it involved five or
we consider only whether the district court more people who “contributed to the success
properly interpreted the phrase “otherwise of the scheme.” Davis, 226 F.3d at 360.
extensive.” Moreover, we repeatedly have held that “[i]n
deciding whether a scheme was otherwise
We usually review determinations under extensive, the district court must take into
§ 3B1.1 for clear error,27 but we apply the de account all persons involved during the course
novo standard here because the court of the entire offense.” Id. (emphasis added)
misinterpreted the phrase “otherwise (citation omitted); Glinsey, 209 F.3d at 396.
extensive.” The parties do not dispute the
factual matter of Ho’s conduct, but rather the The court erred by interpreting the phrase
legal meaning of the phrase “otherwise “otherwise extensive” in § 3B1.1(a) to refer to
extensive.” Although the district court was the nature of the criminal organization, as dis-
somewhat opaque, it apparently interpreted tinguished from the number of participants and
this phrase to require an ongoing criminal persons involved.28 We therefore vacate and
organization of a kind that would justify an remand for new sentencing in light of the
upward departure (as distinguished from an proper and longstanding interpretation of that
enhancement) under application note 2. We phrase.
review this legal interpretation of the guideline
de novo. Roberts, 203 F.3d at 869. For the foregoing reasons, the judgment of
conviction is AFFIRMED, and the judgment
This interpretation misreads application of sentence is VACATED and REMANDED
note 3 and ignores settled Fifth Circuit for proceedings consistent with this opinion.
precedent. Note 3 directs that “[i]n assessing
whether an organization is ‘otherwise
extensive,’ all persons involved during the
course of the entire offense are to be
considered.” Note 3 is binding on the federal
courts, Stinson v. United States, 508 U.S. 36
(1993), and instructs the court to examine
number of persons involved in the activity, not
the nature of the criminal organization.
Indeed, note 3 continues to state, by way of 28
Of course, Ho was convicted of failure to
comply with the asbestos work practice standard
and failure to give notice of intent to remove as-
27
See, e.g., United States v. Davis, 226 F.3d bestos. Thus, he alone committed the specific
346, 360 (5th Cir. 2000) (reviewing for clear er- unlawful acts. Yet, these acts presuppose the un-
ror); United States v. Glinsey, 209 F.3d 386, 396 lawful asbestos removal activity, which involved
(5th Cir. 2000) (same). more than five persons.
22