## Facts

- Thomas E. Iverson, Sr. founded CH2O, Inc., a chemical blending company, and served as its president and board chair.
- CH2O began cleaning returned chemical drums for reuse; the cleaning generated contaminated industrial wastewater.
- A local sewer authority declined to accept CH2O’s wastewater after testing showed excessive metal content.
- The government presented evidence that Iverson personally discharged wastewater and directed employees to discharge it at multiple locations, including CH2O property lacking sewer access and sewer drains at properties Iverson owned (an apartment complex and his home).
- Although Iverson “officially retired” before the drum-cleaning operation began at the warehouse, evidence indicated he continued to receive money from CH2O, conduct business at the facility, direct employees, and appear as president on official documents.
- Evidence suggested the discharges continued until CH2O arranged off-site disposal and later installed on-site treatment.
- A jury convicted Iverson in federal district court of four counts of violating water-pollution laws and one count of conspiracy to violate the Clean Water Act (CWA) or Washington regulations; he appealed.

## Issues

1. Whether the district court misinterpreted the CWA and related state and municipal provisions governing prohibited discharges and permit/authorization requirements.
2. Whether the CWA and incorporated state/municipal provisions were unconstitutionally vague as applied to Iverson.
3. Whether the jury was improperly instructed on “responsible corporate officer” criminal liability under the CWA.
4. Whether the district court abused its discretion by admitting evidence of Iverson’s prior industrial-waste discharges.

## Decision

- The Ninth Circuit affirmed Iverson’s convictions.
- The court upheld the district court’s interpretation of the governing statutory and regulatory scheme.
- The court rejected Iverson’s vagueness challenge as applied.
- The court held the responsible-corporate-officer jury instruction correctly stated the law under the CWA.
- The court held the admission of prior-discharge evidence was not an abuse of discretion.

## Legal Principles

- Environmental criminal liability under the CWA may extend to a corporate officer who knew of unlawful discharges and, by virtue of position, had authority and capacity to prevent or promptly correct the violation but failed to do so.
- Responsible-corporate-officer liability does not require proof that the officer personally operated the polluting equipment or had an express corporate duty over the specific operation, so long as knowledge and power to prevent/correct are shown.
- An as-applied vagueness challenge fails where the statutory/regulatory scheme gives a person of ordinary intelligence reasonable notice of what is prohibited, particularly when the defendant received direct notice that the wastewater was unacceptable for discharge.
- Evidence of prior similar discharges may be admitted for non-propensity purposes (including knowledge, intent, and absence of mistake) when its probative value is not substantially outweighed by unfair prejudice.

## Conclusion

The Ninth Circuit affirmed Iverson’s Clean Water Act and related convictions, holding that a corporate officer can be held criminally responsible when he knows of illegal discharges and has the authority and capacity to prevent them, and upholding rejection of an as-applied vagueness challenge and admission of prior-discharge evidence to prove knowledge and intent.


United States v. Iverson, 162 F.3d 1015 (9th Cir. 1998)