## Facts

- James Ming Hong acquired and operated a wastewater treatment business in Richmond, Virginia, later known as Avion Environmental Group.
- Hong avoided formal corporate titles but exercised substantial control: he controlled finances, negotiated the facility lease, participated in equipment purchases, maintained an office on-site, and was treated by employees as the key decision-maker.
- Avion lacked an adequate system to treat incoming wastewater consistent with its permit and local discharge limits.
- Hong purchased a carbon-filter treatment system he knew was not designed to handle completely untreated wastewater.
- Employees informed Hong that the system was clogging and that additional pre-filtration was required; Hong inspected the system at least once, but no additional filtration was installed.
- Avion discharged untreated or inadequately treated wastewater into the city sewer system in violation of its discharge permit.
- The government charged Hong personally with 13 misdemeanor counts of negligent Clean Water Act violations under 33 U.S.C. § 1319(c)(1)(A), relying on a responsible corporate officer theory.
- A federal magistrate judge convicted Hong, imposed imprisonment, and imposed a substantial fine; the district court affirmed the convictions and imprisonment but vacated the fine and limited any reimposed fine on 12 counts to $25,000 per count.
- Hong appealed; the United States cross-appealed the reduction of the fine.

## Issues

1. Whether sufficient evidence supported treating Hong as a responsible corporate officer for Clean Water Act misdemeanor liability despite lacking a formal officer title.
2. Whether sufficient evidence supported a finding that Hong negligently violated the Clean Water Act by failing to prevent or correct the unlawful discharges.
3. Whether the district court erred in limiting the permissible fine per count and vacating the magistrate judge’s original fine under the Clean Water Act’s statutory fine provisions.

## Decision

- The Fourth Circuit affirmed Hong’s convictions and term of imprisonment.
- The court held the evidence supported responsible corporate officer liability because Hong had actual authority over operations and finances relevant to compliance and the power to prevent or correct the violations.
- The court held the evidence supported criminal negligence because Hong continued operation with an obviously inadequate treatment system after repeated notice of deficiencies and failed to authorize reasonable corrective measures.
- On the government’s cross-appeal, the Fourth Circuit vacated the district court’s order reducing the fine and remanded for reimposition of the magistrate judge’s original fine, concluding the district court misinterpreted the applicable statutory maximum fine.

## Legal Principles

- Responsible corporate officer liability under the Clean Water Act can rest on actual authority and control over compliance-related operations; formal corporate titles are not required.
- A responsible corporate officer may be criminally liable for Clean Water Act misdemeanor violations when, despite the power to prevent or correct violations, the officer fails to act with reasonable care.
- Operating an inadequate wastewater treatment system and allowing continued permit violations after notice of deficiencies can constitute criminal negligence under 33 U.S.C. § 1319(c)(1)(A).
- Sentencing courts must apply the Clean Water Act’s fine provisions as written; erroneous caps that understate the allowable aggregate fine for multiple counts require correction on appeal.

## Conclusion

The Fourth Circuit sustained misdemeanor Clean Water Act convictions against a de facto corporate decision-maker under the responsible corporate officer doctrine, found sufficient proof of negligence from continued operation of a known-inadequate treatment system, and reinstated the original fine after ruling that the district court applied an incorrect statutory maximum.


United States v. Hong, 242 F.3d 528 (4th Cir. 2001)