UNITED STATES OF AMERICA,
No. 02-2304
United States Court of Appeals For the Seventh Circuit
ARGUED JANUARY 7, 2003—DECIDED APRIL 23, 2004
Before COFFEY, ROVNER, and EVANS, Circuit Judges.
ROVNER, Circuit Judge. A jury found Ronald Snook guilty of one count of conspiring to defraud the federal
Between 1994 and 1997 Snook was the “Environmental Manager” at Clark Refining & Marketing, Inc., a petroleum refinery in Blue Island, Illinois. Prior to being Environmental Manager, Snook had worked at Clark since 1989 as an “Environmental Specialist.” Prior to that he was a partner of an environmental consulting firm. As Environmental Manager at Clark, two of his duties included ensuring the refinery‘s compliance with environmental regulations and overseeing its wastewater treatment system. Each day, Clark discharged on average over a million gallons of processed wastewater into a sewer system that flowed into a water treatment plant of the Metropolitan Water Reclamation District of Greater Chicago (District). Relevant to this appeal are the District‘s (EPA-approved) regulations of Clark‘s wastewater discharges.
The District‘s Sewage and Waste Control Ordinance prohibits Clark from discharging water with (1) a concentration of pollutants such as fats, oils, and greases of greater than 100 milligrams per liter or (2) a pH level lower than 5 or greater than 10. The ordinance requires dischargers such as Clark to self-monitor their compliance and submit reports (RD-115 reports) documenting compliance semiannually to the District. In addition, the District conducts its own periodic testing of dischargers; if it finds that wastewater violates required limits, it will issue an order to cease and desist. In such cases, dischargers such as Clark are required to submit reports (RD-114 reports) documenting that their wastewater is back in compliance. Further, and most relevant here, for both types of reports dischargers must submit all of their self-monitoring data even if it was taken in addition to the minimum requirements, and dischargers must notify the District within 24 hours whenever they become aware of any violations.
In July 2000, Snook was indicted for conspiring along with Elva Carusiello, an Assistant Manager at Clark, and Environmental Monitoring and Technologies, Inc. (EMT), a company Clark hired to test its wastewater, to selectively report testing results to the District and for failing to report violations. The indictment alleged that between 1994 and 1997 Clark had EMT test its wastewater on numerous occasions and many of the tests revealed violations; yet Snook submitted a number of RD-114 and RD-115 reports on behalf of Clark that indicated results for only six days (the minimum required) on which Clark‘s wastewater satisfied applicable standards, and he omitted any results that showed violations. In addition, the indictment alleged that Snook falsely told an inspector for the EPA that the selectively reported data was the only data Clark had collected. In January 2002, a jury found Snook guilty of conspiracy and concealing material information regarding a mаtter within the jurisdiction of the EPA.
I.
On appeal, Snook‘s primary argument is that the district court erred in excluding evidence purporting to show that
First, a preliminary matter. Although Snook argues that the evidence was relevant to all six counts, his beliefs about whether selective reporting was legal were irrelevant to count one. To convict Snook for conspiring to violate the Clean Water Act, which, in relevant part, imposes criminal penalties for “[k]nowing violations,”
As to the remaining counts, Snook‘s beliefs about whether he had to report all data and violations were relevant, but we agree with the district court that this proffered evidence was too remote—absent some evidence Snook knew about it. And even if Snook did know about the alleged past practices of Clark or EMT, the evidence still might have been properly excluded absent further evidence that he was told, trained, or otherwise led to believe that selective reporting was the proper procedure. (Perhaps he was aware of the practiсes and told they were illegal or was told or trained to do otherwise.) Thus the district court‘s apt description that “[u]nless there‘s some link-up to this defendant, all we‘re dealing with is what I believe are various inferences upon inferences of speculation.” Therefore, given Snook‘s lack of evidence that he was aware of theses practices or that he was ever told they were legal, the district court did not abuse its discretion in excluding this evidence.
II.
Snook next argues that the district court erred in allowing the government to present “other acts” evidence.
The technician‘s testimony was rather ambiguous, and therefore of limited probative value: for example, he could not be sure whether the samples actually contained hazardous materials, whether he actually showed the samples to Snook, or whether Snook was referring him to a
III.
Snook also argues that on three occasions during closing argument the government improperly commented on his decision not to testify at trial. First, after summarizing the government‘s case, the prosecutor asked, “[a]nd what is the defendant‘s response?” Second, after referring to statements made in Snook‘s opening statement, the prosecutor stated, “I‘ve heard nothing, nothing that backs up those representations.” Third, in discussing the conspiracy count, the prosecutor stated that “[a]ll you have tо find is that [Snook] agreed not to report violations, and the evidence is basically uncontroverted in that instance.”
The Fifth Amendment prohibits prosecutors from inviting jurors to draw adverse inferences from a defendant‘s decision not to testify by commenting, either directly or indirectly, on that decision. United States v. Mietus, 237 F.3d 866, 871 (7th Cir. 2001); United States v. Robbins, 197 F.3d 829, 835 (7th Cir. 1999). Indirect comments are improper if either the prosecutor manifestly intended to refer to the defendant‘s silence or a jury would naturally and necessarily take the comments to be a remark on that silence. Mietus, 237 F.3d at 871. Comments that government evidence is unrebutted are improper only if the defendant was the only person who сould have rebutted the evidence. Id. If the prosecutor‘s statements are improper, we determine whether the defendant was prejudiced, or whether the statements rendered the trial so unfair as to deny the defendant due process. Robbins, 197 F.3d at 836.
The context of the first two statements reveals that the prosecutor was commenting on Snook‘s case rather than on his decision not to testify. The first
The third statement is a closer call. The prosecutor‘s comment that Snook‘s decision to selectively report was “basically uncontroverted” would be inappropriate if Snook were the only person who could refute the point. But this was not the case. Snook‘s counsel could have, for example, tried to show that the documents Snook submitted did report all the available data or that others submitted the data without his knowledge. Moreover, Snook never chal-lenged whether he selectively reported; his theory was that he believed it to be legal. So the prosecutor was more likely referring to this fact rather than Snook‘s silence. Consistent with this is the prosecutor‘s statement immediately before that, on the conspiracy count, the government need not prove Snook knew the practice was illegal. But even if this, or the other two statements, crossed the line and were improper, Snook was not prejudiced because of the overwhelming evidence of his guilt, as discussed above. See Mietus, 237 F.3d at 873; Xiong, 262 F.3d at 676.
IV.
Finally, Snook challenges the district court‘s decision to impose a two-level increase in offense level for abusing a position of trust.
The district court imposed the increase after finding that Snook occupied and abused a position of trust with respect to his victims, the District and the public, based on the responsibilities given to Snook in his job and under the statute, and his potential to affect health and safety. Snook contends that he occupied a position of trust with respect to Clark but not to the District or the public. We disagree. The Clean Water Act is public-welfare legislation and the victims of violations are the public. United States v. Technic Servs., Inc., 314 F.3d 1031, 1049 (9th Cir. 2002). As Environmental Manager at Clark, Snook was given discretion to devise Clark‘s wastewater treatment and testing systems, as well as to decide when
AFFIRMED.
UNITED STATES OF AMERICA, Plaintiff-Appellee, v. RONALD SNOOK, Defendant-Appellant.
No. 02-2304
United States Court of Appeals For the Seventh Circuit
COFFEY, Circuit Judge, dissenting. I agree with the majority‘s presentation of the facts at issue, and I concur with the majority‘s decision to affirm Snook‘s conviction. However, I cannot join the majority‘s decision to affirm Snook‘s sentence, because, notwithstanding the majority‘s assertion to the contrary, I do not agree that Snook occupied a “position of trust” (as that term is used in the Guidelines) vis-à-vis the public. Thus, it would be entirely improper to apply the
The district court enhanced Snook‘s sentence pursuant to
If the defendant abused a position of public or private trust, or used a special skill, in a manner that significantly facilitated the commission or concealment of the offense, increase by 2 levels. This adjustment may not be employed if an abuse of trust or skill is included in the base offense level or specific offense characteristic.
As delineated in the commentаry to the Guidelines, the phrase “position of trust” “refers to a position of public or private trust characterized by professional or managerial discretion (i.e., substantial discretionary judgment that is ordinarily given considerable deference).”
In the case before us, the trial judge found that Snook, as the Environmental Manager at a private petroleum refinery (Clark), held a “position of trust” vis-à-vis the public.1 Moreover, the court concluded
As set forth under Sеction 3B1.3, the “abuse of trust” enhancement applies only where a defendant possessed the requisite level of discretion, and, further, where that discretion was “entrusted to the defendant by the victim.”
United States v. Broderson, 67 F.3d 452, 456 (2d Cir. 1995) (emphasis added). That is, the “position of trust” determination is assessed “from the perspective of the victim.” United States v. Hathcoat, 30 F.3d 913, 919 (7th Cir. 1994).
Moreover, recognizing the fiduciary nature of the “trust” relationships set forth as examples in the commentary—i.e., attorney/client, bank executive/bank client, and doctor/patient relationships—courts have emphasized that, to qualify as a “position of trust,” “[t]he guideline enhancement requires more than a mere showing that the victim had confidence in the defendant. Something more akin to a fiduciary function is required.” United States v. Brunson, 54 F.3d 673, 678 (10th Cir. 1995) (emphasis added); see, e.g., Mabrook, 301 F.3d at 510 (noting that a defendant‘s fiduciary duty vis-à-vis the investors in his company placed him in a position of private trust). Thus the victim must have placed the defendant in a position where he or she is performing a “fiduciary function,” or exercising discretion over the victim‘s affairs. See Varity Corp. v. Howe, 516 U.S. 489, 504 (1996). Indeed, it is worth noting that “every example of an abuse of trust in the Commentary . . . involves a victim entrusting an agent or employee with discretion.” Broderson, 67 F.3d at 456.
Applying these principles to the instant case, it is clear that Snook did not occupy a “position of trust” vis-à-vis the public, for the simple reason that he did not serve in a fiduciary (or even quasi-fiduciary) capacity with respect to his victim, the public. One cannot be a fiduciary without first being placed in that position by the claimed beneficiary of the relationship. Lopacich v. Falk, 5 F.3d 210, 213 (7th Cir. 1993) (“In order to establish evidence of a fiduciary relationship, the plaintiff must show [first] that she reposed confidence in the defendant . . . .“). The public did not place Snook in the position of Environmental Manager, and thus “entrust” him to comply with the Clean Water Act‘s reporting requirements. Snook was not a government employee, and thus could not be considered or classified as a public servant by nature of his employment.
The fact that the District‘s regulatory regime involved an element of self-reporting duty оn the part of Clark (and Snook, as Clark‘s agent) does not change this result. Although Snook may have been responsible for certifying Clark‘s water quality reports to the District in accordance with the CWA, “whatever ‘trust’ [the public or the district] placed in [Snook] was based [entirely] on the explicit commands of [the CWA and related regulations].” Id. Thus, Snook had bare legal and statutory obligations to the public in general, as does any private citizen who files a tax return or drives a vehicle on public roadways, but nothing more.
If any party in this scenario was a fiduciary of the public‘s environmental welfare and health safety, it was the District Office or district officer (not Clark or Snook), insofar as the District was ultimately responsible for ensuring Clark‘s compliance with applicable regulations. The District (or the district officer in command) performed numerous unannounced inspections of Clark‘s water discharge to ensure its compliance—anywhere from two to seven tests per year during the years 1993 through 1996. See Tr. at 209-210, 217-18. And, whenever Clark was found not to be in compliance, the District issued cease and desist orders to Clark to enforce compliance. Id. at 230. Indeed, the fact that the District monitored Clark‘s discharge levels annually—some two to seven times per year—to assure compliance belies the Government‘s claim that it was Clark, and not the District, who was trusted to comply with the CWA and attendant regulations.
The majority disagrees, arguing that because the District does not have the resources to fully monitor or ensure Clark‘s compliance with the CWA, Clark (and Snook, as its officer) occupied a “position of trust” vis-à-vis the public. See Opinion at 9 (“Snook was given discretion to . . . decide when to conduct [water] testing [and] although the District did periodically conduct its own testing, it was for the most part dependent on the data that Clark reported.“). But this is true of many regulatory frameworks—the IRS, for example, certainly does not have enough resources to audit every defaulting and defrauding taxpayer annually. Thus, if we extend the majority‘s reasoning to the IRS arena, then every corporate executive who certifies a corporation‘s tax return to the IRS occupies a “position of public
Certainly, this would be an absurd result, for a corporate officer who is a private employee of a private corporation, is not a “fiduciary” or agent of the public (even though his fraudulent reporting may do significant harm to the public by imposing a heavier burden on other taxpayers). Equally absurd is the notion that a research scientist who discovers a wonder drug that is approved by the Food and Drug Administration (“FDA“), but is later discovered to have dangerous side effects, could be subject to a Section 3B1.3 “position of public trust” enhancement. Under the majority‘s expansive reading, such a scientist who may have negligently performed his research, would have abused a “position of public trust” in reporting his findings to the FDA, even though the FDA is the entity ultimately responsible for ensuring that the public is safe from dangerous pharmaceuticals.
Seeking to avoid this extension of their logic, the majority would limit application of the public trust enhancement to criminal activities that implicate issues of “public health.” However, it is unclear on what basis the majority makes this distinctiоn, for no “health and welfare” distinction is to be found anywhere in the text of the Sentencing Guidelines themselves.2 Indeed, nothing in the Sentencing Guidelines suggests that the public trust enhancement should apply in a different manner when issues of health and safety are concerned—and yet that is the exact distinction the majority reads into the Guidelines in the instant opinion. See Opinion at 9-10 (noting that the “public trust enhancement” would not apply to ordinary private citizens who failed to abide by self-reporting requirements (such as taxpayers), but that it does apply to citizens such as Snook because Snook violated “regulations [that] apply to mattеrs that directly and significantly affect the public‘s health and safety.“).
Moreover, save for the First Circuit‘s opinion in United States v. Gonzalez-Alvarez, 277 F.3d 73, 81-82 (1st Cir. 2002), no other circuit court (including the Seventh Circuit) has extended the public trust enhancement to private individuals who work in industries that are regulated to protect the public health but this is exactly what the majority has chosen to do by announcing the “public health” distinction it sets forth today. In fact, the Ninth Circuit expressly rejected such a distinction in United States v. Technic Services, Inc., 314 F.3d 1031 (9th Cir. 2002), noting that, while the importance of health and safety laws may “heighten the amount of interest the public has in [citizens abiding by such laws],” such fact alone ”do[es] not [establish] the relational kind of interest that is required to find a position of public trust” under the Guidelines. Technic Services, 314 F.3d at 1050 (emphasis added).
Indeed, the position of trust inquiry focuses not on the nature of the statute violated by the defendant, but rather on whether or not a ” ‘fiduciary or personal trust relationship exist[ed]’ with [the victim], and [whether] the defendant t[ook] advantage of the relationship to perpetrate or conceal the offense.’ ” United States v. Caplinger, 339 F.3d 226, 237 (4th Cir. 2003) (quoting United States v. Koehn, 74 F.3d 199, 201 (10th Cir. 1996)). Thus, for a defendant to have occupied a position of trust with the public, he must have worked as an agent or employee of the government, or held some other fiduciary-type position vis-à-vis the government or the public, and this was not the case in the factual situation before us.3 See, e.g., United States v. Kuhn, 345 F.3d 431, 437 (6th Cir. 2003) (holding that the Superintendent of a city‘s water treatment plant held a position of publiс trust because he was a “government employee, charged with the safe and efficient operation of a wastewater treatment operation“); Technic Services, 314 F.3d at 1050 (concluding that the secretary of a government contractor in charge of asbestos clean-up did not hold a position of public trust, because he had “no trust relationship with the government by virtue of government employment; nor was he a public officer with a ‘special’ or quasi-fiduciary relationship to particular members of the public because of duties to protect their health; nor did he hold a position in which the public directly delegates duties and places the public welfare in the incumbent‘s hands“); United States v. White, 270 F.3d 356, 372-73 (6th Cir. 2001) (holding that an employee of the local Water District held a position of trust vis-à-vis the public, because customers of the Water District “granted the District substantial discretion . . . as to how to provide [their drinking water]” and that such “quasi-fiduciary trust relationship . . . [was] imput[able]” to the District employee); Broderson, 67 F.3d at 452 (holding that employee of government contractor did not occupy position of trust vis-à-vis the government, for in his negotiations with the government, he was bound not by fiduciary obligations, but by the Truth in Negotiations Act and the Federal Acquisition Regulations). But see Gonzalez-Alvarez, 277 F.3d at 81 (concluding that a dairy farmer held a position of
No matter how egregious a defendant‘s conduct, Section 3B1.3‘s abuse of trust enhancement may not be applied against him unless he occupied a position of trust vis-à-vis the victim, and abused that position of trust to facilitate his crime. In the factual situation presented to us, the fact that Snook was not employed by the government (but, rather, a private oil refinery), together with the fact thаt Snook‘s environmental reports submitted to the District were “monitored” by the District through random sampling (some two to seven times per year) reveals that Snook did not have a fiduciary or personal trust relationship with the victim, the public (or the victim‘s fiduciary, the District). Thus, the Section 3B1.3 public trust enhancement does not apply. For this reason, the sentencing court‘s application of the public trust enhancement to Snook was clearly erroneous; I would reverse the imposed sentence and remand for resentencing.