January 01, 2016

The Increasing Application of Criminal Law to Disasters and Tragedies

Denis Binder

The 1970s witnessed the application in the United States of criminal law in three new areas: environmental protection, workplace safety, and food safety. Over the last several decades a fourth area has been added to the list in both civil law and common law jurisdictions around the globe on a variety of theories: disasters and tragedies.

This article discusses the increasingly wide application of criminal law in disasters and tragedies, showcasing several examples where criminal proceedings have been used to hold corporations and their executives liable for disasters such as oil spills and mining tragedies. It also demonstrates a trend where tolerance for disasters caused by corporate malfeasance is waning, and companies that cut corners and put profit over safety or environmental protection are increasingly likely to face criminal sanctions for their behavior.

The reasons for criminal prosecutions in connection with disasters and tragedies are the same as elsewhere in the law: retribution and deterrence. Administrative fines and civil suits may not provide a sufficient deterrence to corporations and corporate executives, who can factor such fines in as a cost of doing business. Criminal prosecutions, both of corporations and the responsible employees, present higher risks and send a strong message that this conduct is unacceptable to society.

Corporations cannot be imprisoned, but they can be fined, embarrassed, placed on probation, and monitored. And corporate officers and executives can be prosecuted. A criminal prosecution has a different impact on an individual defendant than a civil lawsuit, for which liability may be covered by insurance or the employer. The humiliation of being publicly arrested, handcuffed, fingerprinted, and raising bail is a jarring experience, but it is overshadowed by the threat of imprisonment, substantial fines, and unemployment. The stress, time, and emotional price exacted during the often drawn-out criminal proceedings can consume the defendant, who may feel compelled to plead guilty when confronted by the overwhelming power of the government.

United States v. Park, 421 U.S. 658 (1975), is an early case that illustrates the perils facing corporate officials. Park was the President of Acme Supermarkets. The Food and Drug Administration warned Park of rodent infestation at Acme’s Philadelphia warehouse. The same problem subsequently emerged at its Baltimore warehouse. Both Park and Acme were indicted for violating the Pure Food, Drug, and Cosmetic Act. Park defended on the grounds that he delegated operating duties to subordinates. The Supreme Court held the Act imposes strict liability on the corporation and corporate officials if they have the authority to prevent or correct a violation of the act.

Of course, arrests and indictments do not always result in convictions or plea deals, as illustrated by the Triangle Shirtwaist Factory Tragedy a century ago. A fire broke out on March 25, 1911, on the eighth floor of the Asch Building in Greenwich Village. The exits were locked on the eighth, ninth, and tenth floors, and the workers were unable to escape the fires. One hundred forty-six died and seventy-one were injured. A jury acquitted the two owners of first- and second-degree manslaughter.

However, two, major toxic tragedies in Minamata, Japan, and Bhopar, India, set the stage for increased use of criminal sanctions in connection with environmental disasters. Chisso Corporation discharged twenty-seven tons of mercury into Minamata Bay from 1932–1968, which impacted seafood relied upon by the local fishing community. In 1953, area residents started developing methyl mercury poisoning, now called the Minamata Disease. The corporation was held liable decades later and both the President and a second executive were convicted of pollution in March 1979 and sentenced to two years in prison.

The Union Carbide subsidiary in Bhopal, India, experienced a leak of methyl isocynate on December 2–3, 1984, killing 7,000–10,000 residents and causing health problems for over 100,000 individuals. Seven former employees, including the company’s chairman, were convicted twenty-six years later on June 7, 2010, of death by negligence, and sentenced to two years imprisonment.

The saga of Warren Anderson, CEO of the corporate parent, is an object lesson for executives. He immediately flew to Bhopar to represent the company in the tragedy. He was arrested for manslaughter by the state, released on bail, and quickly flown out of the country. International warrants were issued for his arrest. He reportedly did not travel outside the United States for the remainder of his life.

Other early examples foreshadowed an increased use of criminal liability for companies and executives responsible for various types of disasters. For instance, the Ford Pinto litigation in the late 1970s and early 1980s foresaw the prosecution of corporations for criminal misdeeds. The exploding rear gas tank on the Pinto gave rise to substantial litigation and punitive damages. Grimshaw v. Ford Motor Co., 174 Cal. Rptr. 875 (Ct. App. 1981) ($125 million punitive damages award reduced to $3.5 million by trial judge). The Pulaski County, Indiana, prosecutor brought three claims of reckless endangerment against the company for the deaths of three teenagers. While a 1980 jury acquitted Ford, the punitive damages and criminal prosecution sent a message to companies. Paul J. Becker et al., State of Indiana v. Ford Motor Co. Revisited, 26 Am. J. Crim. Law 181 (2002).

Oil Spills

Oil spills are one area in which criminal liability is being increasingly applied to corporations for their role in disasters. The United States has experienced three significant oil spills in the last several decades and several others that have received a lesser degree of attention. Criminal prosecutions have been initiated following many of these incidents.

The Santa Barbara blowout on Platform A on January 28, 1969, was the first major oil spill in the United States that garnered national attention, followed by the Exxon Valdez grounding in Prince William Sound on March 24, 1989, and the British Petroleum Gulf blowout on April 20, 2010. The reaction to these three major spills over four decades illustrates the trend toward criminal prosecution.

In 1969, despite the widespread contamination and public attention the Santa Barbara blowout disaster attracted (some credit it with spurring the passage of the Clean Water Act (CWA)), no criminal prosecutions were brought. However, by 1989, the situation changed with the Exxon Valdez. Eleven million gallons of oil spilled into the Prince William Sound, causing extensive environmental damage. Alaska brought second-degree criminal mischief felony and three misdemeanor charges against the Exxon Valdez Captain Joseph Hazelwood. A jury acquitted him on three counts and convicted him on one misdemeanor. The appellate litigation lasted from 1992 to 1998 with the Alaska Supreme Court, ultimately holding that negligence could be the basis for criminal liability. Alaska v. Hazelwood, 946 P.2d 875 (1997). Exxon was charged with four felony and two misdemeanor counts in federal court. It pled guilty to one misdemeanor, paying $1 billion in fines and restitution. Exxon was held vicariously liable for the wrongful acts of a corporate subsidiary, believed to be a first for criminal environmental enforcement.

The BP Gulf Oil blowout on April 20, 2010, left eleven workers dead, a sunken drilling platform, and an enormous oil leak pouring into the Gulf. By the time of this disaster, there was no hesitancy in unleashing a flood of criminal liability against the culpable companies. And it had effect. BP pled guilty to felony manslaughter, paying $4 billion in criminal fines and sanctions. It faced eleven counts of felony manslaughter, one count of obstruction of Congress, and violations of the CWA and the Migratory Bird Treaty Act.

Additionally, two BP rig supervisors were charged with eleven counts of involuntary manslaughter, eleven counts seamen’s manslaughter, and one count under the CWA. David Rainey, former BP Executive Vice President for Exploration in the Gulf of Mexico, was charged with obstruction of Congress and providing false statements to law enforcement officers. He was acquitted on June 5, 2015. An engineer was charged with destroying text messages. He was found guilty on December 18, 2014, on two counts, although the conviction was later overturned and a retrial awaits. United States v. Mix, No. 14-30847, 2015 WL 3972275 (5th Cir. June 30, 2015).

Other companies that had a role in the disaster were targeted as well. Transocean Deepwater, Inc., the drilling platform owner, pled guilty on January 3, 2013, to a misdemeanor count of violating the CWA. It agreed to pay $1.4 billion in civil and criminal penalties. Halliburton, which supplied the cement that failed to plug the drillhole, was placed on three years’ probation for destroying evidence, and agreed to make a $55 million contribution to the National Fish and Wildlife Foundation. Its cement technology director pled guilty to one count of destroying evidence and was sentenced to one-year probation.

Structural Failures

Building collapses and fires are a constant source of criminal prosecutions, sometimes echoing the Triangle Shirtwaist Factory Tragedy. These types of disasters seem to have attracted the attention of criminal prosecutors earlier than environmental disasters. The examples are many and hail from around the globe.

Echoing the tragedy at the Triangle Shirtwaist Factory, in 1991, a fire killed twenty-five workers and injured fifty-five in Hamlet, North Carolina, in a chicken processing plant. The doors were locked from the outside and the windows boarded up, trapping the workers. The owner, his son, and the plant manager were charged with negligent manslaughter on March 13, 1992. The owner pled guilty to twenty-eight counts of involuntary manslaughter on September 15, 1992. He was sentenced to nineteen years, of which he served four. The charges were dropped against the other defendants.

Structural failures also show how corporate criminal prosecution has become an international trend. In a similar incident, 121 died and sixty were injured when a fire broke out at the Jilin Baoyuanfeng Poultry Slaughterhouse in Julin Province, China, on June 2, 2013. The emergency exits again were blocked. The owner, general manager, and eleven local officials were arrested. Thirty-five government officers and company executives were transferred to judicial authorities for prosecution, and seventy-four officials received disciplinary sanctions. The company’s chairman was sentenced to nine years for not ensuring workplace safety, and the general manager received four years for installing substandard equipment. The local fire chief and his deputy were sentenced to prison for failing to carry out safety inspections and falsifying information after the fire.

Similarly, a fourteen-story building under construction imploded in Baku, Azerbaijan, on August 28, 2007. Twenty construction workers perished. The director and three officers of the company were arrested, along with the head of the city government department for apartments and cooperative buildings on abuse-of-power charges. The foundation was only designed to support nine stories, but no approval was given for the final design.

The eight story Rana Plaza building collapsed on April 24, 2013, in Davar, Bangladesh, resulting in the deaths of 1,136 textile workers and over 2,000 injuries. Arrests immediately ensued, and forty-two indictments were issued on June 5, 2015, for “culpable homicide.” Eighteen people were also indicted for building code violations by adding extra floors to a five story building. The building was constructed of substandard materials. The indicted include the building’s owner, five owners of textile plants in the building, and over a dozen national and local government officials, including the mayor, who oversaw building safety and inspections.

Seven died on March 14, 2006, when the Kaloku Dam burst on the island of Kauai in Hawaii. The owner of the Dam was indicted on seven counts of manslaughter and reckless endangerment. He pled guilty to one count of reckless endangerment on July 18, 2013, and was sentenced to seven months in prison on October 15, 2014. His company pled guilty to seven manslaughter charges and paid $350,000 in fines.

Thus, across multiple international jurisdictions, negligent corporate activities causing death due to structural failures are resulting in often stiff criminal sanctions.

Mining Disasters

Fires, explosions, and cave-ins are a constant risk in underground coal mining. These risks used to be tolerated, even when tragedy struck, but recently unsafe mining conditions resulting in harm have been the subject of criminal prosecution. For instance, an April 5, 2010, explosion at the Upper Big Branch Coal Mine in Montcoal, West Virginia, killed twenty-nine miners. Don Blankenship, CEO of the parent company, Massey Energy, was indicted on November 12, 2014, on four counts, including conspiracy to impede mine safety officials and conspiracy to violate mine safety standards. David Segal, The People v. The Coal Baron, N.Y. Times, Sunday Business (June 21, 2015). A former mine superintendent pled guilty to criminal charges in the case in March 2012 for conspiring to impede the Mine Safety and Health Administration (MSHA) investigation. Alpha Natural Resources acquired Massey in 2011 and paid $209 million in criminal penalties for the Montcoal disaster.

This was not Massey’s first criminal sanction regarding mine safety. The Aracoma Alma Mine #1, also a Massey enterprise, experienced a fatal fire on January 26, 2006. Two miners died from carbon monoxide exposure. Four mine foremen pled guilty on July 20, 2010, for failure to conduct escapeway drills.

North of the border, similar sanctions have also been used for mine-related disasters. A Westway Mine explosion and fire in Plymouth, Nova Scotia, Canada, on May 9, 1992, resulted in the death of twenty-six miners. The mine owner and four managers were charged on October 5, 1992, with twenty-six counts of criminal negligence and manslaughter. The company went bankrupt in 1993 and the charges were dropped against the individual defendants in 1999.

Similarly, mine disasters overseas have also seen criminal prosecutions of company officials. China filed criminal charges in the March 31 and April 1, 2012, Babao Coal Mine series of explosions. Fifty-three deaths and twenty injuries resulted. The deputy manager of the mine and four Chinese officials were arrested.

In New Zealand, twenty-nine miners and contractors died in a series of explosions that wracked the Pike River Mine in November 2010. The mining company, contracting company, and the CEO of the mining company were indicted. The contractor pled guilty, the mining company entered receivership, and charges were dropped against the CEO for lack of evidence.

Three hundred one miners in Soma, Turkey, died in a coal mine explosion on May 13, 2014. Forty-five prosecutions followed, including the general manager and the mine’s operations manager. First-degree murder charges were brought against the former board chairman and seven other senior officers.

These recent examples show that industries overseeing dangerous activities where workers’ deaths and disasters used to be overlooked are now being subjected to closer scrutiny and criminal prosecutions when things go wrong.

Other Environmental Contamination

Major environmental disasters have also seen corporations and executives criminally prosecuted for their involvement. A telling example is the operation of the vermiculate mine in Libby, Montana. From 1919 to 1990, the mine created health risks to the miners and also to the residents who were exposed to the asbestos containing vermiculate wastes. As a result, the company and seven executives were indicted under the Clean Air Act (CAA) for discharging asbestos in the air. They were accused of knowingly endangering the residents of Libby and concealing information about the health hazards. However, none of the defendants was convicted (see United States v. W.R. Grace & Co., 434 F. Supp. 2d 879 (D. Mont. 2006).

In contrast, two recent environmental spills have given rise to successful criminal prosecutions even though no human lives were lost. A Duke Energy stormwater pipe burst on February 2, 2014, spilling 39,000 tons of sludge and slurry into the Dan River. Subsequent investigations revealed problems at five Duke facilities. Duke pled guilty on May 14, 2015, to nine criminal counts of unpermitted discharges and maintenance issues. It agreed to pay $68.2 million in fines and restoration costs and an additional $34 million for community service and mitigation problems. It received five years probation with an environmental compliance program and a court appointed monitor to ensure compliance.

Likewise, when a Freedom Chemical Corporation storage tank located at its facility in Charleston, West Virginia, sprang a leak on January 4, 2014, no lives were lost. Yet, chemicals drained into the Elk River and then entered the local water company’s intake pipes about one-and-a-half miles downstream, contaminating the water supply for 300,000 residents in the seven counties around Charleston and shutting down the public water supply for days.

Gary Southern, former president of the company, pled not guilty to violating the CWA and bankruptcy fraud. Another former executive was charged with violating the CWA. Two former officers pled guilty to unlawful discharges. William Tis, the former secretary, said: “I don’t believe I have committed a crime, but I am pleading guilty.”

The former plant manager and the environmental and regulatory manager of the plant also pled guilty to a misdemeanor of negligently discharging a pollutant into the river. The main claim against the six officers and owners was that they “failed to execute their authority to ensure that Freedom operated . . . the facility in a reasonable and environmentally sound manner.” In short, they placed cost controls over safety and environmental protection, and that led to criminal sanctions.

Transportation of Oil

An oil train derailed at 1:15 a.m. in Lac-Megantic, Canada, on July 6, 2013. Forty-seven died in the ensuing inferno. The corporation, train engineer, operations manager, and a third employee were indicted by the provincial government on forty-seven counts of criminal negligence, as was the Canadian subsidiary of the railroad. The federal government filed criminal charges on June 22, 2015, against six individuals and two corporations for violations of the Railway Safety Act and the Fisheries Act. The six individuals included the train’s engineer, the company’s CEO, the operations manager, the assistant transportation manager, the safety director and the general manager of operations. The engineer was alleged to have improperly set the hand brakes, and the railroad had a history of safety problems.

An underground Pacific Gas & Electric natural gas pipeline in San Bruno, California, exploded on September 9, 2010, in a fireball, causing eight deaths and destroying thirty-eight homes. The utility was initially indicted on twelve counts, including failure to maintain proper records, followed by a superseding indictment on sixteen counts.

Natural Disasters

Liability in the wake of recent disasters also shows that corporations and corporate officials are being prosecuted for making planning decisions where people have been placed in the way of natural harms that can be foreseen. These examples raise a host of interesting questions, including the following: With climate change bringing sea level rise, increased flooding, more frequent and intense forest fires, and other hazards, are corporations likely to face prosecution when they knowingly or recklessly place people in the way of predictable harms from a warming climate?

Telling examples have occurred overseas. France has barred development in specified coastal zones to protect residents from the impact of natural disasters. Cyclone Xynthia struck the French coast on February 28, 2010, killing twenty-nine and flooding hundreds of homes in the neighboring villages of La Faute-sur-Mer and L’Aiguillon-sur-Mer. The homes were built in a “red zone,” where construction should have been barred. The mayor, a town councilor and her son, and the owner of a building company were charged with manslaughter. The mayor was sentenced on December 7, 2011, to four years in prison. The official in charge of building permits received two years and her son eighteen months for not ensuring that the seawall was being monitored.

A swarm of small earthquakes struck the L’Aquila, Italy, area from 2008 into early 2009. A special meeting of experts was held in L’Aquila to publicly discuss the risks. A devastating 6.3 earthquake struck L’Aquila one week later on April 4, 2009, killing 309, and over 1,100 were severely injured. Six scientists and a public official at the conference were indicted in 2010 for manslaughter for criminal negligence in inadequately assessing the risks of earthquakes. They were found guilty in October 2013 after a year-long trial. Their prosecutions set off international controversy.

The convictions of the six scientists were reversed on October 10, 2014, but the conviction was affirmed for the public official who said at the public meeting that “there was no danger.” Another Italian scientist said the trial “pushed scientists in Italy to become latter-day Cassandra, always erring on the side of catastrophe.” Elizabeth Kolbert, Aftershock: The Criminal Convictions of Italian Geologists for Failing to Predict a Tremor Has Been Overruled, Smithsonian, June 1, 2015, at 36, 40.

While not a workplace disaster, another case involving a lab tragedy at the University of California Los Angeles sent shock waves through the academic research community. In 2008, a lab assistant mishandled a highly flammable chemical, which ignited when it came into contact with the open air. She died from her burns. The graduate student had received inadequate training and supervision, and thus was wearing a sweatshirt rather than a protective vest. The Los Angeles district attorney filed three felony counts against UCLA and four against the supervising professor for violations of the state’s safety codes. UCLA settled in 2012 and the professor in 2014, keeping the attention focused on lab safety for half a decade.

These cases portend the potential for criminal liability for corporations and decision makers who allow development or activity in areas that are at risk of flooding, forest fires, or other natural catastrophes that have a degree of predictability.

Conclusion

Most accidents, disasters, and tragedies—natural or human—involve some degree of human error, which in turn can give rise to criminal prosecutions. The global trend is for increasing criminal prosecutions, especially with disasters resulting in the loss of human lives or significant environmental harms. Not all cases involve a loss of life, as an increasing focus of criminal prosecutions is on the environmental or economic harm inflicted by disasters. Parent corporations have been penalized for the wrongful acts of their subsidiaries. A few cases, especially the UCLA lab tragedy and the L’Aquila Earthquake, sent tremors through the scientific community.

Prosecutions are not limited to those directly involved in causing the disaster, but often extend to those involved in the response as well as corporate officers and others whose derelictions in office helped create the risk. Additionally, there is a trend toward holding corporations and individuals accountable for putting people in the way of predictable natural disasters, something that may accelerate as climate change increases the severity and frequency of disasters like floods and forest fires.

These cases sometimes involve speedy justice, but other cases can drag on for years, if not decades, letting the Sword of Damocles dangle over the defendants, both individuals and corporations. As we learn more about the risks and our tolerance of disasters continues to wane, corporations and their officers may face even greater risks in the future when they venture into businesses where disasters are inevitable and severe.

Denis Binder

Mr. Binder is a professor at Chapman University's Duke E. Fowler School of Law. He may be reached at dbinder@chapman.edu.