United States v. Chemical & Metal Industries, Inc.
2012 U.S. App. LEXIS 7741
| 5th Cir. | 2012Background
- C&MI recycled hazardous compounds for clients including Honeywell; a Honeywell employee, Delvin Henry, died July 30, 2003 from toxins released by a container C&MI mislabeled as non-toxic.
- A federal grand jury in the Middle District of Louisiana charged C&MI with illegally storing hazardous waste (Count I) and negligent endangerment resulting in death (Count II).
- In January 2010, C&MI pled guilty to Count II in exchange for dismissal of Count I and waived its right to appeal except for punishment above the statutory maximum or ineffective assistance claims.
- At sentencing, the district court adopted PSR findings, noted Honeywell’s separate related proceedings, and sentenced C&MI to two years’ probation, a $1,000,000 fine, and $2,000,000 restitution.
- C&MI appeals the amount of the fine and the restitution as exceeding statutory authorization, arguing the appellate waiver does not bar review and that the district court failed to prove pecuniary loss.
- The Fifth Circuit modifies the fine to $500,000, vacates the restitution award, and affirms the judgment as modified.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether the restitution order exceeded statutory authorization and was appealable | CMI argues the appellate waiver does not bar review of restitution; there was no loss finding. | United States contends the waiver allows challenge only to punishment above max; restitution is reviewable as part of sentence. | Restitution cannot stand; vacated. |
| Whether the fine exceeded the statutory maximum and required pecuniary loss proof | CMI contends the $1,000,000 fine was improper absent pecuniary loss findings. | Government concedes error in applying the higher fine without loss evidence. | Fine reduced to $500,000. |
| Appropriate remedy when the original sentence exceeds statutory limits and evidence is lacking | Remand for new evidentiary proof is improper; the record lacks loss evidence. | Remand with guidance to prove loss should be allowed. | Remand not required; restitution vacated and fine reduced; judgment affirmed as modified. |
Key Cases Cited
- United States v. Norris, 217 F.3d 262 (5th Cir. 2000) (restitution cannot exceed victim losses; illegal sentence if exceed)
- United States v. Middlebrook, 553 F.3d 572 (7th Cir. 2009) (restitution requires loss finding; improper without loss evidence)
- United States v. Hudson, 483 F.3d 707 (10th Cir. 2007) (appeal of sentence issues under waiver framework)
- United States v. Shabazz, 633 F.3d 342 (5th Cir. 2011) (de novo review of whether sentence exceeded statutory maximum)
- United States v. Archer, 671 F.3d 149 (2d Cir. 2011) (avoid introducing new evidence on remand in certain reversal scenarios)
- United States v. Whitelaw, 580 F.3d 256 (5th Cir. 2009) (plain-error review when defendant fails to object in district court)