The Supreme Court today decided to take up the issue of whether a jury had to play a role in deciding how much money a natural gas distribution company should pay for illegally storing mercury in a Rhode Island facility.
Southern Union Co. was convicted of one violation of the Resource Conservation and Recovery Act (RCRA) for storing mercury at a Pawtucket, R.I., site between 2002 and 2004.
Although a jury deliberated on the question of the company's guilt, it was U.S. District Judge William Smith of the District of Rhode Island who imposed a total of $18 million in fines and fees based in part on how many days the mercury was illegally stored.
The company claims that, following the logic of a 2000 Supreme Court decision on the role of juries, the jury should have decided how many days Southern Union was in violation of the law. Under RCRA, the company faced a financial penalty of up to $50,000 a day.
In its 2000 Apprendi v. New Jersey decision, the Supreme Court held that juries, not judges, have to decide on any facts that lead to an enhanced criminal penalty.
The government said in its indictment that the company was in violation for 762 days, meaning there was a maximum fine of $38.1 million.
The judge ultimately imposed a $6 million fine and a $12 million community service fee. On the Apprendi issue, Smith said the jury had found the company to be in violation for the entire period, which gave him the leeway to impose the penalty.
At trial, Southern Union had unsuccessfully maintained that the mercury had not been abandoned and was therefore not a waste product. Rather, it was being stored safely, the company said, so it could be recycled, which would not be a violation of the law.
The mercury only became problematic when vandals broke into the facility and spilled some of the substance, which led to an expensive remediation process.
In December 2010, the 1st U.S. Circuit Court of Appeals upheld the conviction, ruling that Apprendi did not apply to financial penalties.
Southern Union's attorney, veteran Supreme Court advocate Carter Phillips of the Sidley Austin firm, said the court should take the case because the appeals court ruling "conflicts with the clear holding in Apprendi." Several other appeals court have concluded that Apprendi does apply to financial penalties, he added.
"By granting the petition, this court would provide meaningful guidance concerning whether Apprendi applies to the imposition of criminal fines," Phillips wrote.
Southern Union has the backing of the U.S. Chamber of Commerce, which filed a brief urging the justices to take the case.
In response, Solicitor General Donald Verrilli queried the company's analysis of other cases, saying that there is no conflict within the federal courts of appeal.
He noted that a subsequent 2009 Supreme Court decision that addressed the same issues as Apprendi, Oregon v. Ice, made it clear that Apprendi is not intended to lead to an expansion of the jury's role beyond what it has historically done.
Traditionally, juries "did not find facts governing the imposition of criminal fines," Verrilli wrote. "Instead, common-law judges had unfettered discretion to set the amount of criminal fines."
The government also argued that even if the judge was mistaken, the error was harmless because "no jury could have reasonably concluded that Southern Union illegally stored the mercury for less than 120 days ... the period necessary to support the $6 million fine."
In an email, Phillips said it was "satisfying to see" that the justices had not bought what he portrayed as the government's "quite strained" effort to avoid Supreme Court review.
The court will likely hear arguments in the case, Southern Union Co. v. United States, in March.
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