Whether Graceâ€™s conduct in obstructing the NIOSH study is inadmissible, pursuant to Count I, Conspiracy by Christopher Orman
In August 1980, the Mine Safety and Health Administration(MSHA) asked the National Institute of Safety and Health (NIOSH) to conduct a study of the health hazards of vermiculite mines. Originally, NIOSH planned on conducting the test at the O.M. Scott plant. However, NIOSH feared the test at the plant would be skewed by the presence of competing hazardous substances. NIOSH then informed Grace it wanted to perform its test in Libby.
As a result, Grace representatives began to orchestrate excuses to tell NIOSH for not conducting the test in Libby. First, Grace told NIOSH the testing would be inaccurate because of the high asbestos levels in Libby, which would overshadow any numerical data specifically concerning vermiculite. Next, Grace told NIOSH there had been plenty of deaths due to lung cancer in Libby and that a â€śstudy would thus yield little or new light.â€ť At which point, Grace distributed a memo that it planned to slow NIOSH down, lobby with congressmen and the legislature, and â€śactively turn off the sources of pressureâ€ť facing the company. Throughout the process, Grace maintained the study was a â€śwaste of manpower and timeâ€ť because the affects of vermiculite, at least in Libby, were clearâ€”it was extremely hazardous.
Despite the attempts, NIOSH completed its study of Libby workers, and the conclusions were published in various peer reviewed journals.
1. The First Amendment Defense
Grace, in its motion in limine, claims the memo and conduct taken against NIOSH is protected by the 1st Amendment. The 1st Amendment of the U.S. Constitution states, â€śCongress shall make no law â€¦ abridging â€¦ the right of the people â€¦ to petition the Government for a redress of grievances.â€ť In current case law, the clause grants an individual the freedom to be heard by lawmakers through effective lobbying and actions taken against the governmentâ€™s conduct. However, the 1st amendment does not protect the right to defraud the government.
According to Grace, in not allowing NIOSH to conduct its study, it was simply using its petitioning power by making NIOSHâ€™s job more difficult. Therefore, the memo was nothing more than a corporate â€śflexing of musclesâ€ť with that power.
If the actions taken by Grace were simply under the petitioning power, then they were not acts to conceal but constitutionally protected conduct. Restated in another way, they did not constitute actions which were reactive and to conceal, but were proactive. After all, Grace appeared to acknowledge to NIOSH it knew about the dangers of asbestos.
Because the 1st amendment applies, Grace contends the evidence is not relevant and therefore should be inadmissible. For evidence to be admissible, it must be relevant. FRE 402. However, the court must consider whether the relevance of the evidence is substantially outweighed by unfair prejudice or confusion. FRE 403. Unfair prejudice has been defined as â€śan undue tendency to suggest decision on an improper basis, commonly, though not necessarily, an emotional one.â€ť
To Grace, the conduct undertaken was not to perpetuate conspiracy, but within its constitutional rights. Using the conduct, which was a display of constitutional authority, as proof of conspiracy, is inconsistent. Therefore, the conduct and memo are not relevant to a conspiracy proceeding.
3. The Governmentâ€™s logical response: â€śJust let the fact finder make that determination.â€ť
How the evidence could be conceived or understood does not dictate relevance and therefore admissibility. The government clearly articulates the common rule that when evidence can have two potential meanings, the evidence cannot be excluded entirely. Here, a fact finder could find the memo and the conduct taken by Grace to clearly reflect a corporation using its 1st Amendment protections. However, a juror could just as easily find the conduct and memo reflect a conspiracy. Therefore, this falls within the purview of the fact finder.
In docket #670, Judge Molloy denied Graceâ€™s motion. However, the 1st amendment argument will certainly play a role in the criminal proceedings. However, Graceâ€™s 1st amendment has several flaws: (1) the corporation did not actively petition the government, and (2) the corporation did not show any conduct which would directly mirror the 1st amendment case law regarding petitioning. The government can easily counter with the rule â€śthe right to petition does not include the right to defraud.â€ť
EPA Cleanup: The Evidentiary Implications of the 9th Circuit Appeal
by Christopher Orman
When reading W.R. Grace’s appeal to the 9th circuit for being charged $54 million in asbestos cleanup costs for its conduct in Libby, the big question is, what was Grace’s goal in appealing a summary judgment proceeding which appears obviously in favor of the government? While the easy answer is money, the goal may have been to change the EPA’s characterization of the cleanup for evidentiary purposes. Grace likely hoped the type of action, if characterized differently, then evidence of Graceâ€™s prior bad act would be attenuated at trial.
The United States brought suit, under the Comprehensive Environmental Response, Compensation, and Liability Act(â€śCERCLAâ€ť), against W.R. Grace for $54 million spent on removing asbestos from Libby. Judge Molloy granted partial summary judgment to the government. Grace appealed the decision. Oral argument in the 9th Circuit was heard just two days after the government unsealed its criminal case against Grace.
In their appeal, Grace admitted to being responsible for the costs of cleanup. However, Grace argued two grounds for reversing Judge Molloy=s decision which are applicable here: (1) the EPA erroneously characterized the clean-up action as “removal” rather than “remedial”(consistent with the EPA applying for Libby to be placed on the National Priorities List(NPL) and thus receiving superfunding for a remedial action); and (2) even if the cleanup was a “removal” type, neither of the exceptions to exceed the $2 million or a 12 month statutory period were met.
The differences between a “removal” and “remedial” action are urgency and necessity. To determine the differences and construct an appropriate definition, the 9th Circuit first analyzed the statutory definitions of both “removal” and “remedial.” However, the statutory definitions of “removal” [42 U.S.C. sec. 9601(23)] and remedial [42 U.S.C. sec. 9601(24)] are almost identical and seemingly overlap. The two definitions are actually distinguished by the eight factors the EPA uses to determine whether a “removal action” is necessary. 40 C.F.R. sec. 300.415(b)(2). A “removal action,” in contrast to a “remedial action,” does not require the site being included on the National Priorities List; a time consuming process. Furthermore, in a removal action, the EPA must find a level of exposure and risk of contamination where action must occur immediately to prevent from migrating. Case law reiterates the C.F.R. definition: if the EPA acts quickly to respond to the emergency, then it constitutes a removal type action.
After determining the definition of “removal” the court then had to consider the character of the cleanup. The EPA’s characterization of the cleanup as “removal” was accurate given the nature of the contamination. Outside of the elementary school, testing revealed asbestos levels of 3% to 8%. U.S. v. W.R. Grace & Co., 429 F.3d 1224, 1231 (9th Cir.2005).A test of the Rainy Creek road showed asbestos concentrations of up to 5%. Id. The EPA uses a 1% cut-off for asbestos, contending that even levels below 1% can be hazardous and pose inhalation risks. Id. Furthermore, the degradation of the vermiculite posed risks just with standard foot traffic. Id. These concerns established the urgency necessary to initiate a removal action. As the court concluded, Athe EPA had no choice but to undertake an aggressive “removal action” of an expansive scope.
For Grace to have been charged $54 million for a “removal action,” rather than the statutory $2 million or a 12 month period, a regulatory exemption had to apply. Pursuant to 42 U.S.C. sec. 9604(c)(1), the EPA cannot continue beyond 12 months or $2 million unless the E.P.A. finds “(i) continued response actions are immediately required to prevent, limit or mitigate an emergency, (ii) there is an immediate risk to public health…; or (iii) such assistance will not otherwise be provided on a timely basis.” The EPA found all three applied to the situation in Libby. At that time, the risks were immediate, immediate action was necessary, and it did not appear as though any other public aid would be provided.
Considering the nature of a “removal action” and the bar necessary to meet the exceptions, Grace’s appeal may be premised on F.R.E. 404(b) applications in the criminal proceedings. Rule 404(b) states, “evidence of other crimes, wrongs, or acts…[are] admissible for other purposes, such as proof of motive, opportunity, intent, preparation, plan, [or] knowledge.” Therefore, while a prior proceeding or act, cannot be admitted for character, it can be admitted to establish mental state but only where mental state is at issue. U.S. v. Hamilton, 684 F.2d 380 (6th Cir. 1982).
In the Grace criminal proceedings, the question of whether the corporation and its officers acted “knowingly,” a mental state determination, is at issue. In the government=s proposed jury instruction, docket no. 717:
An act is done knowingly if the defendant under your consideration is aware of the act and does not act through ignorance, mistake, or accident.
The government is not required to prove that the defendant knew that his acts or omissions were unlawful. It is not necessary for the Government to prove that the defendants had knowledge of the law or regulations governing asbestos.(p.34).
The government could use the EPA case and ruling, of a prior act, to aid in establishing mental state by revealing the prevalence of the contamination. The fact the EPA characterized this as a removal action and not a remedial action can be used to show what a high level of contamination Grace had to “knowingly” realize existed in Libby.
If Grace had been successful in its appeal, the specific time-sensitivity and degree of contamination would be obviated with the statutory definition of “remedial.” Gone would be courtroom references to “immediate risk to public health” or “emergency” which are directly defined by the federal regulations. Tactically, Grace hoped to lessen the language which could be used against them, eliminating at least one piece of evidence the government could use in proving mens rea.