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United States v. Margiotta

United States District Court, D. Montana, Billings Division

September 13, 2019




         On August 26, 2019, Defendant Peter Margiotta filed a motion to dismiss Count 2 from the indictment for failure to state an offense (Doc. 90), along with a motion to strike surplusage from the indictment (Doc. 92) based on his legal theories in his motion to dismiss. Margiotta argues the USA cannot bring a criminal charge under the Clean Air Act's (CAA) general duty clause, 42 U.S.C. § 7412(r)(1). (Doc. 90 at 7.) He also argues the general duty clause and its corresponding enforcement provision, § 7413(c)(1), are unconstitutionally vague. (Doc. 90 at 9.) On September 9, 2019, the USA filed its response to both motions. (Doc. 99.) For the following reasons, the Court denies Margiotta's motions.

         I. Background

         The indictment the USA filed alleges Margiotta was the president and director of Custom Carbon Processing, Inc. ("Custom Carbon"). (Doc. 1 at 2.) In 2012, under Margiotta's direction, Custom Carbon began construction of the Michels Disposal Well and Oil Reclamation Facility ("Michels Facility") near Wibaux, Montana. Id. The Michels Facility was designed to process unrefined, non-saleable slop oil into saleable pipeline standard crude oil and to dispose of saltwater or production water generated during oil and gas production. Id. at 3. The indictment alleges that at the Michels Facility, Custom Carbon, under Margiotta's direction, housed several pieces of equipment open to the atmosphere that allowed "hazardous and flammable hydrocarbon vapors to vent out of the processing equipment and outside the building." Id. The Michels Facility lacked industry-standard "explosion-proof wiring, lighting, and equipment suitable for a facility that is subject to releases of flammable hydrocarbon vapors." Id. at 4.

         The indictment further alleges that in July 2012, Margiotta and Mark Hurst, Custom Carbon's project manager, opened the Michels Facility for oil processing operations before the implementation of appropriate electrical wiring, ventilation, and other safety measures. Id. Hurst sent Margiotta an email at that time stating, "The control panels must be moved asap with the explosion proof wiring. We also run the risk of killing someone, not only our operators but also customers." Id. at 4-5. By October, a foreman for Custom Carbon warned Margiotta and Hurst a natural gas condensate the facility began accepting shipments of-intended to help thin and process the slop oil-was ineffective in the operations and was creating "a dangerous situation due to its highly volatile and flammable nature." Id. at 5. The foreman allegedly attempted to refuse shipments of the natural gas condensate, but Hurst directed the foreman to accept them. Id. In December 2012, vapors from a shipment of the natural gas condensate reached an ignition source and caused an explosion, injuring three employees. Id. at 5-6.

         The USA filed charges against Custom Carbon, Margiotta, and Hurst, alleging: 1) conspiracy to violate the CAA, 42 U.S.C. §§ 7413(c)(1), 7413(c)(5), and 7412(r)(1); 2) knowingly violating the CAA's general duty clause, §§ 7413(c)(1) and 7412(r)(1); and 3) knowingly releasing into the ambient air a hazardous air pollutant listed under § 7412 with the knowledge that it placed another in imminent danger of death or serious bodily injury, § 7413(c)(5). (Doc. 1 at 7-11.)

         II. Standards of Review

         Margiotta contends Count 2 of the indictment fails to state an offense and the CAA's general duty clause and § 7413(c) are unconstitutionally vague. Therefore, he urges the Court to dismiss Count 2.

         The indictment must be "a plain, concise, and definite written statement of the essential facts constituting the offense charged" Fed. R. Crim. P. 7(c)(1). The indictment must also "set forth each element of the crime that it charges." Almendarez-Torres v. United States, 523 U.S. 224, 228 (1998). The test is "not whether it could have been framed in a more satisfactory manner, but whether it conforms to minimal constitutional standards." United States v. Awad, 551 F.3d 930, 935 (9th Cir. 2009) (internal quotations omitted). The indictment "must be read in its entirety and construed with common sense and practicality." Id. (internal quotations omitted). "On a motion to dismiss an indictment for failure to state an offense, the court must accept the truth of the allegations in the indictment in analyzing whether a cognizable offense has been charged." United States v. Boren, 278 F.3d 911, 914 (9th Cir. 2002).

         "[W]hether or not a statute is unconstitutionally vague must be assessed in the context of the particular conduct to which it is being applied." Donovan v. Royal Logging Co., 645 F.2d 822, 831 (9th Cir. 1981) (quoting United States v. Dacus, 634 F.2d 441, 444 (9th Cir. 1980)). On its face, a statute is unconstitutional if it "fails to provide a person of ordinary intelligence fair notice of what is prohibited, or is so standardless that it authorizes or encourages seriously discriminatory enforcement." United States v. Kilbride, 584 F.3d 1240, 1257 (9th Cir. 2009) (quoting United States v. Williams, 553 U.S. 285 (2008)). A statute is vague as applied "if it failed to put a defendant on notice that his conduct was criminal." Id.

         III. Discussion

         Section 7413(c)(1) imposes criminal penalties for knowingly violating certain provisions of the CAA, including § 7412: "Any person who knowingly violates ... section 7412 of this title ... shall, upon conviction, be punished by a fine pursuant to Title 18 or by imprisonment for not to exceed 5 years, or both." Section 7412(r)(1), commonly referred to as the CAA's general duty clause, states the objective of the regulatory scheme is to prevent and minimize the consequences of accidental releases of extremely hazardous substances. It therefore imposes the following general duty:

The owners and operators of stationary sources producing, processing, handling or storing such substances have a general duty in the same manner and to the same extent as section 654 of title 29 to identify hazards which may result from such releases using appropriate hazard assessment techniques, to design and maintain a safe facility taking such steps as are necessary to prevent releases, and to minimize the consequences of accidental releases which do occur.

Section 7412(r)(1).

         29 U.S.C. § 654, part of the Occupational Safety and Health Act (OSH Act) to which 42 U.S.C. § 7412(r)(1) refers, imposes the general duty on an employer to "furnish to each of his employees employment and a place of employment which are free from recognized hazards that are causing or are likely to cause death or serious physical harm to his employees." 29 U.S.C. § 654(a)(1). The statute also imposes a specific duty on an employer that they ...

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