In a decision that may add momentum to a new trend in corporate criminal law, an Arizona court last month convicted a private construction company of negligent homicide, aggravated assault, two counts of endangerment and violating a safety standard which caused the death of an employee.

What Happened

On Oct. 24, 2001, two workers were killed by toxic gas while working on an underground sewer tank at the Mesa del Sol Golf Course near Yuma, Arizona.

A crew from the Far West Water and Sewer Company and its subcontractor, Santec Corporation of Castle Rock (CO), had been working on the tank all day, replacing pumps and other equipment. Late in the day, James Gamble, 26, a Far West employee, entered the tank to remove a plug blocking sewage while Connie Charles, his foreperson, turned on a pump running sewage into the tank through another line. Inhaling sewer gas, Gamble immediately collapsed in the tank.

Gary Lenser, 62, a Santec employee, went down the ladder to try to save Gamble, but also was overcome. A third worker, Nathan Garrett, started down to help his co-workers, but didn’t make it all the way. He inhaled gas and was incapacitated. Charles, who went down the ladder after Garrett, breathed the gas but was able to get out of the tank and call for help.

Gamble and Lenser were killed. Garrett suffered lung damage.

As a corporation, the Far West Water and Sewer Company cannot serve time in jail, but it will pay fines and may lose access to government contracts.

Far West, which was acquitted on two counts of manslaughter, is appealing its convictions. The company’s president, Brent Weidman, will be tried in February for manslaughter, aggravated assault and endangerment.

The verdicts and sentences in Arizona cut against long-established norms of federal criminal prosecution and amplify several recent decisions that arose at the state level.

Corporate Versus ‘Personal’ Liability

Traditionally, in American jurisprudence, corporate officers and directors can be liable for lapses, misrepresentations and corruption in their financial management, but they are rarely held personally liable for the deaths of employees at work, even if a death was caused by reckless or willful disregard of well-established, standard safety procedures.

Indeed, since the Occupational Safety and Health Administration (OSHA) was established in 1972, more than 200,000 Americans have died in workplace-related incidents, but only 151 were referred by OSHA to the Justice Department for criminal prosecution. However, because even a willful violation that results in death is only a misdemeanor, federal prosecutors are reluctant to devote much time or resources to these cases. As a result, over the past 34 years, only eight company officials have received jail time for federal safety violations that caused worker deaths. The longest sentence was six months.

“Since the famous Dartmouth College case of 1819, the American legal system has treated corporations as ‘persons’ under the law,” says LHSFNA Executive Director Joseph C. Fowler who, also, is an attorney. “This allows corporations to survive and operate beyond the natural lives of their founders and any of their subsequent directors or trustees. By giving corporations the status of persons, the courts have also limited the personal liability of the people who run them. These limits encourage participation and investment and, thus, play a major role in the nation’s commerce.

“However, limits on liability do not guarantee that corporate managers have no liability at all,” continues Fowler. “Sometimes, the company’s negligence in a worker’s death is so blatant and in such disregard of worker safety that justice demands criminal accountability. Recently, in such cases at the state level, we’ve seen criminal prosecutions not only of corporations but of the company’s responsible managers.”

State Criminal Prosecutions

In Dundee, Michigan, on Aug. 11, 2000 – after receiving notification that a 7600 volt energized power line ran across the east end of its construction site and that no work should be allowed in the area until the line was de-energized and moved – the J.A. Morrin Concrete Construction Company and its onsite foreman, Jim Morrin, Jr., directed a 24 year-old truck driver, Robert Sorge, into the area under the power line. Sorge dropped his first load, then pulled forward and unhitched the empty box. Morrin directed Sorge back under the power line and instructed him to raise the truck bed. When the truck bed contacted the energized wire, Sorge was electrocuted. He was pronounced dead at the scene.

The Michigan Occupational Safety and Health Administration (MIOSHA) issued citations for willful serious violations and, as required by law in fatal incidents, referred the charges to the Attorney General’s office for criminal investigation and possible prosecution.

Eventually, criminal charges were filed against both the company and its onsite foreman. Then, on July 29, 2002, the company entered a nolo contendere (no contest) plea to involuntary manslaughter and the willful serious violation felony under the MIOSHA law. At the same time, the company foreman pleaded guilty to the same felony charge.

The foreman was sentenced to 360 days in jail, plus three years probation, a fine of $1,000 and $3,600 in state fees for probation supervision.

On its manslaughter conviction, the company was sentenced to five years probation, plus 180 days of community service, $156,903 in fines and restitution and $8,100 in supervision fees. On its felony conviction, it received two years probation and $10,350 in fines.

This was the first time in Michigan history that an employer served time in jail for a workplace fatality. However, even in Michigan, the law is undecided and evolving.

Take the case of the Lanzo Construction Company. In a decision announced in January, 2005, a Michigan judge sentenced the company to two years probation and the maximum $10,000 fine for a willful serious violation felony that resulted in an employee’s death. Robert Whiteye, a pipelayer, was killed when an unsloped, unprotected, 18-foot trench in which he was working collapsed on May 24, 1999. The MIOSHA investigation determined that the company and its vice president Angelo D’Alessandro knew of the substantial risk to employees engaged in trench work, yet failed to provide the support necessary to prevent injuries.

Originally, the company and D’Alessandro were each charged with separate counts of involuntary manslaughter and the MIOSHA willful criminal violation, but the cases were prosecuted separately. D’Alessandro’s charges were dismissed before trial by the same judge who tried the company. Though she had dismissed the charges against D’Alessandro, at the company trial Judge Colleen A. O’Brien said, “The conduct of Defendant’s employees on the day of this fatality was, indeed, willful. Clearly, there was no ‘justifiable excuse’ for failing to slope, shore or otherwise protect the employees within the excavation of Lake Ravine Drive.”

Since the charges against D’Alessandro were dropped and a corporation cannot, itself, go to jail, the meaning of the judge’s two-year probation penalty was initially unclear. However, this past summer, Michigan Governor Jennifer Granholm – who, as Attorney General, originally brought the case against Lanzo – gave real meaning to the conviction when she banned the company from receiving state construction contracts for the next eight years. The company has objected to the ban, saying it should not be barred unless the on-going appeal of its conviction is denied.

Meanwhile, this past November in New York, Ken Formica, the owner of Formica Construction, was charged with manslaughter and other lesser counts after he directed an employee – Jesus Pavia – into a waterlogged, unshorn trench. Pavia was killed in its collapse. In this case, the company was not charged, but Formica’s trial will be early in 2006.

Law is Undecided

All of these cases are relatively recent and, in some, appeals are still in progress. Higher courts may overturn some of these convictions or affirm them and provide more guidance for attorneys in future prosecutions. More clarification is needed, but the increase in the number of prosecutions at the state level indicates mounting concern about persistent corporate safety failures.

In Great Britain and Australia, a similar concern has led to the introduction of national legislation that would strengthen the capacity to prosecute corporations and their management when workers are killed through criminal negligence. The laws are widely supported by health and safety professionals.

In both countries, large corporations and their officers generally avoid prosecution because their companies’ large size means the officers and their policies are seldom directly linked to workplace fatalities. The few successful prosecutions occur with small companies. Reformers believe that health and safety for employees will be much more fully embraced and pursued by corporations if the company and its officers can be successfully prosecuted when gross negligence results in worker deaths.

“We recognize that the majority of worker fatalities are not the result of gross negligence by employers or company directors,” says Fowler. “Undeniably, however, some are the result of criminal misconduct, and these should be prosecuted. Since OSHA cannot do the job, state prosecutors should take action. Such a trend may be developing. Workers, unions and corporations all have a current interest in monitoring and evaluating this possibility.”