United States v. Charles Yi , 704 F.3d 800 ( 2013 )

FOR PUBLICATION
UNITED STATES COURT OF APPEALS
FOR THE NINTH CIRCUIT
UNITED STATES OF AMERICA , No. 11-50234
Plaintiff - Appellee,
D.C. No.
v. 2:10-cr-00793-
PA-1
CHARLES YI, AKA Jang Ho Yi,
Defendant - Appellant.
OPINION
Appeal from the United States District Court
for the Central District of California
Percy Anderson, District Judge, Presiding
Argued and Submitted
November 6, 2012–Pasadena, California
Filed January 2, 2013
Before: Alfred T. Goodwin and Diarmuid F. O’Scannlain,
Circuit Judges, and Jack Zouhary, District Judge.*
Opinion by Judge Goodwin
*
The Honorable Jack Zouhary, District Judge for the U.S. District Court
for the Northern District of Ohio, sitting by designation.
2 UNITED STATES V . YI
SUMMARY**
Criminal Law
The panel affirmed a jury conviction and sentence for
conspiracy to violate the Clean Air Act arising from the
defendant’s role as CEO of a real estate development
company that contracted to have condominium ceilings
scraped and refinished without proper asbestos disposal or
notice.
The panel held that the district court did not err in giving
or formulating a deliberate ignorance jury instruction, did not
err in applying a sentence enhancement for an offense
resulting in substantial likelihood of death or serious bodily
injury, and did not err in applying an enhancement for the
defendant’s role as an organizer or leader.
COUNSEL
Marilyn Bednarski, Kaye, McLane & Bednarski LLP,
Pasadena, California, for Defendant-Appellant.
John E. Arbab, United States Department of Justice,
Environmental & Natural Resources Division, Washington,
D.C., for Plaintiff-Appellee.
**
This summary constitutes no part of the opinion of the court. It has
been prepared by court staff for the convenience of the reader.
UNITED STATES V . YI 3
OPINION
GOODWIN, Circuit Judge:
Charles Yi appeals his conviction and sentence, assigning
error to a jury instruction, and to his custodial sentence for
conspiracy to violate the Clean Air Act. The judgment is
affirmed.
I. FACTS
Yi was the CEO of Millennium Pacific Icon Group, a real
estate development company. In April 2004, Millennium
purchased Forest Glen, a 204-unit condominium complex,
after Yi and some of his Millennium associates did a walk-
through of the property.
Joseph Yoon, Millennium’s Forest Glen project manager,
testified that Yi commented during the walk-through that he
was certain the ceilings contained asbestos because of the age
of the building. Yi’s sister, Sheri Yi Hill, was also present at
the walk-through. Hill testified that she discussed the
ceilings with Yi and the two decided not to touch the ceilings
because they assumed the ceilings contained asbestos, which
would be costly to remove.
Yi signed a purchase offer for Forest Glen that included
a due diligence clause allowing time to review environmental
materials and to conduct an environmental review. The seller
provided a due diligence binder that included two Phase I
environmental reports and an “Operations and Maintenance
Plan for Asbestos-Containing Materials” (“The O&M Plan”).
The reports contained test results showing the presence of
asbestos in the ceilings. The O&M Plan incorporated the test
4 UNITED STATES V . YI
results and stated that it was developed to minimize exposure
to the release of asbestos fibers. Yoon testified that he
presented the due diligence binder to Yi and identified its
contents. Yoon also testified that Yi asked another employee
to assess the diligence materials with respect to the building’s
physical condition, including the environmental aspects. The
employee prepared a handwritten summary. Yoon testified
that he typed the summary into a one-page document and
handed it to Yi.
According to Yoon, Yi subsequently instructed him to
secure a bid for removing the asbestos from the Forest Glen
ceilings. Yoon contacted Sky Blue Environmental in June
2004, and ultimately received a $437,000 proposal for
asbestos abatement. Yoon testified that Yi indicated he
would not pursue the abatement because he felt it was
unnecessary for selling the units. Yoon also testified that Yi
rejected a later bid to install drywall over the ceilings, which
would have cost anywhere from $1,800 to $2,800 per unit.
Millennium employee Timothy Yu testified that Yi said
asbestos abatement would be too expensive.
After Millennium purchased Forest Glen, an agent for
Millennium’s insurance carrier visited the property, observed
ceiling material on the ground, and took a sample to test for
asbestos. The agent later emailed Millennium employee
Andrew Lavaux, stating that the test showed 1% asbestos. Yi
testified that he was told the sample came back “negative,”
but Lavaux testified that he never told Yi the sample was
asbestos-free. Lavaux also testified that he never heard
anyone else tell Yi that the sample was asbestos-free.
In September 2005, unit sales at Forest Glen began to
slow and evidence showed Yi became concerned about the
UNITED STATES V . YI 5
slowdown in November 2005. Yoon testified that Yi
instructed him to draw up a contract to have the condominium
ceilings scraped and refinished, and on January 16, 2006,
Millennium contracted to have the ceilings scraped. The
agreed-upon price broke down to $1,500 per unit for the first
ten—less per unit than either the previously rejected bid for
asbestos abatement or for installing drywall over the ceilings.
The contractor, Rudys Palacios, testified that no one informed
him that the ceilings contained asbestos. Palacios hired four
or five men to do the scraping. They wore no special clothing
to protect against asbestos exposure and only “white masks.”
He also stated that powdery ceiling material was simply
placed into bags and wheelbarrows before being thrown into
dumpsters.
A state inspector, Larry Israel, testified that the work site
was one of the worst he had ever seen and that ceiling
material was blowing everywhere: public walkways,
sidewalks, driveways, and around the dumpsters.
Yi testified that he did not remember being shown the
due diligence binder; he never read either environmental
report; and he did not believe Forest Glen’s ceilings
contained asbestos because one of the Millennium managers
had told him that the insurance agent’s asbestos test “came
[back] negative” for asbestos. According to Yi, he was not
shown the actual test results; he simply trusted the manager.
As to the abatement work, Yi testified that he was not
involved in choosing the ceiling-scraping crew, and did not
know who made the choice or how it was made.
Yi also offered testimony about the closing documents,
claiming he did not read the due diligence paragraph and its
reference to environmental review. According to Yi, he read
6 UNITED STATES V . YI
and complied with the “Good Faith Deposit” provision of
KeyBank’s conditional letter of interest, but specifically did
not read the immediately preceding “Environmental”
provision which called for an environmental report. He also
said he did not read any portion of the ultimate loan
agreement with KeyBank despite signing it. Yi then denied
reading an email sent to him containing items needed prior to
closing the loan—specifically denying that he read the
email’s reference to the requirement of a Phase I
environmental report. He also denied reading an email sent
to him the day of closing in which KeyBank stated it needed
the O&M Plan to be in place to close the loan.
II. THE DELIBERATE IGNORANCE INSTRUCTION
Yi argues that the district court erred in giving a jury
instruction on deliberate ignorance, asserting that it was not
warranted because the facts shown at trial did not support a
finding of deliberate ignorance. The district court instructed
the jury using the Ninth Circuit model instruction:
You may find that the defendant acted
knowingly if you find beyond a reasonable
doubt that the defendant:
1. was aware of a high probability that there
was asbestos in the ceilings at Forest Glen
Condominiums, and
2. deliberately avoided learning the truth.
You may not find such knowledge, however,
if you find that the defendant actually
believed that there was no asbestos in the
UNITED STATES V . YI 7
ceilings at the Forest Glen Condominiums, or
if you find that the defendant was simply
careless.
A district court’s decision to give a particular jury instruction
is reviewed for abuse of discretion. United States v. Heredia,
483 F.3d 913, 921 (9th Cir. 2007) (en banc). An instruction’s
substance is reviewed de novo. Id. An instruction is
appropriate if it is “supported by law and has foundation in
the evidence.” Id. at 922. As such, “the district court must
view the evidence in the light most favorable to the party
requesting it.” Id. If a party requests alternative instructions,
the district court considers them separately to “determine if
the evidence could support a verdict on either ground.” Id.Willful blindness is inconsistent with actual knowledge,
and thus a deliberate ignorance instruction is appropriate only
where “the jury could rationally find willful blindness even
though it has rejected the government’s evidence of actual
knowledge.” Id. Deliberate ignorance contains two prongs:
(1) a subjective belief that there is a high probability a fact
exists; and (2) deliberate actions taken to avoid learning the
truth. Global-Tech Appliances, Inc. v. SEB S.A., 131 S. Ct.
2060, 2070 (2011).
Regarding the first Global-Tech prong, testimony from
Hill, Yoon, and Yi himself supports an inference that Yi was
aware of a high probability that the Forest Glen ceilings
contained asbestos. Both Hill and Yoon testified that Yi
commented on the likelihood that the Forest Glen ceilings
contained asbestos during their initial walk-through. Yi’s 16-
year experience in property management bolsters the
evidence that he suspected the ceilings contained asbestos, as
the age of the Forest Glen building and the ceiling’s physical
8 UNITED STATES V . YI
appearance would, according to both Hill and Yi’s own
testimony, have put a person experienced in property
management on notice of the likelihood that it contained
asbestos. While he argues that the insurance company’s
supposedly negative test allayed his suspicions, that inference
need not be drawn when viewing the evidence in the
government’s favor. Thus, there was sufficient evidentiary
support for the first Global-Tech prong.
Turning to the second Global-Tech prong, if the jury
could infer that Yi was aware of a high probability that the
ceilings contained asbestos, it also could infer that Yi
engaged in a deliberate pattern of failing to read documents
that might clarify whether asbestos was in fact present. The
jury would not be required to believe Yi’s argument that he
was very busy, that he trusted all of his subordinates to read
everything for him, or even that he was told the insurance
company’s test had come back “negative” for asbestos. The
evidence regarding Yi’s real estate experience and pattern of
failing to read documents common to real estate transactions
supports a finding that Yi deliberately avoided learning the
truth about whether the Forest Glen ceilings contained
asbestos.
Yi attempts to analogize this case with some that have
found the evidence could not support finding deliberate
ignorance. See, e.g., United States v. Baron, 94 F.3d 1312(9th Cir. 1996), overruled by Heredia, 483 F.3d 913. But
those cases are factually distinguishable, with records very
different from the record here.
Yi also argues that the instruction itself was legally
flawed. He primarily takes issue with the term “simply
careless.” Yi argues that instructing a jury that it may not find
UNITED STATES V . YI 9
knowledge where a defendant is “simply” careless leaves the
door open for some other level of carelessness. But Heredia
makes clear that the Ninth Circuit model instruction is
appropriate “and there is little reason to suspect that juries
will import [recklessness or negligence] concepts, as to which
they are not instructed, into their deliberations.” 483 F.3d at
924. The district court did not err in giving or formulating
the deliberate ignorance instruction.
III. THE GUIDELINE SENTENCE
We review de novo the district court’s interpretation of
the Sentencing Guidelines. United States v. Holt, 510 F.3d
1007, 1010 (9th Cir. 2007). Factual determinations at
sentencing are reviewed for clear error, and the application of
the Guidelines to the facts is reviewed for abuse of discretion.
Id. “Clear error is not demonstrated by pointing to
conflicting evidence in the record.” United States v. Frank,
956 F.2d 872, 875 (9th Cir. 1991). Instead, “[a] finding of
fact is ‘clearly erroneous’ when, although there is evidence to
support it, the reviewing court is left with the definite and
firm conviction that a mistake has been committed.” Harries
v. United States, 350 F.2d 231, 235 (9th Cir. 1965).
Here, the district court calculated Yi’s total offense level
as 31 under the Guidelines. In reaching that level, the court
applied, and Yi now challenges, two enhancements: a nine-
level enhancement for committing an environmental offense
that “resulted in a substantial likelihood of death or serious
bodily injury,” § 2Q1.2(b)(2); and a four-level enhancement
for being “an organizer or leader of a criminal activity that
involved five or more participants,” § 3B1.1(a). The
enhancements resulted in a sentencing range of 108–135
months. However, the court granted several downward
10 UNITED STATES V . YI
departures, resulting in a final sentencing range of 51–63
months. Ultimately, the court sentenced Yi to 48 months.
A. Substantial Likelihood of Death or Serious Bodily
Injury
We look to whether the district court’s application of a
nine-level increase for an offense resulting in a substantial
likelihood of death or serious bodily injury was supported by
clear and convincing evidence. See United States v. Staten,
466 F.3d 708, 720 (9th Cir. 2006). Clear and convincing
evidence creates a conviction that the factual contention is
“highly probable.” Colorado v. New Mexico, 467 U.S. 310,
316 (1984).
Evidence presented at trial showed that the work crew
removing the Forest Glen ceilings did not wear proper
respirators, were exposed to dry ceiling material, and that on-
site dust far exceeded industry-recommended levels of
asbestos. The evidence at sentencing, aside from the actual
on-site conduct, came primarily from an EPA letter
discussing chrysotile—the form of asbestos present at Forest
Glen. The letter supports finding that chrysotile is
carcinogenic. Contrary to the defense expert’s report, the
EPA letter noted a lack of evidence to support using different
toxicity factors for different types of asbestos. Even if the
evidence did support this approach, it would not disturb the
EPA’s baseline conclusion that chrysotile is a carcinogen.
Moreover, studies cited in the letter support finding increased
risk of lung cancer, mesothelioma, asbestosis, and cancer of
the pleura from exposure to the chrysotile form of asbestos.
UNITED STATES V . YI 11
In addition to the EPA letter, the district court also
appeared to rely on United States v. Pearson, 274 F.3d 1225(9th Cir. 2001), where this court wrote:
The federal government has recognized
asbestos as a health hazard and it is generally
accepted that exposure to asbestos can cause
mesothelioma, asbestosis, lung cancer; and
cancers of the esophagus, stomach, colon, and
rectum. Pearson’s noncompliance with the
work practice standards created a substantial
likelihood that workers would be exposed to
life-threatening asbestos fibers.
Id. at 1235 (citation omitted). Yi argues that Pearson
involved a different type of asbestos and is therefore
inapplicable. However, the opinion makes no such legal
distinction. In sum, the combined evidence of the removal
crew’s on-site conduct and the potential harm from inhaling
any form of asbestos places the district court’s finding outside
the realm of clear error.
Yi’s arguments to the contrary are unpersuasive. First, he
contends the government failed to provide an expert to
establish the foundation for the enhancement. But there is no
such requirement. Second, Yi contends the district court
improperly rejected his own expert’s testimony. But the
district court both considered and permissibly gave little or no
weight to the defense expert’s opinion. Yi attempts to
compare this case to United States v. Altman, 901 F.2d 1161,
1165 (9th Cir. 1990), but there the district court refused to
hear the proffered expert testimony. The record here clearly
reflects that the district court considered the expert report.
12 UNITED STATES V . YI
Yi’s more forceful contention is that the district court
should have given his expert’s opinion more weight.
Generally, the trier of fact is entrusted with discretion in
weighing evidence. See In re Rains, 428 F.3d 893, 902 (9th
Cir. 2005). There is no reason to believe the district court
abused its discretion, even assuming it largely discounted the
expert opinion. The expert report can be summed up as
stating: (1) chrysotile is different in form from other types of
asbestos; (2) chrysotile is less “toxic”; (3) the Forest Glen
work crew wetted down ceiling materials while working; (4)
the work crew wore respirators; (5) the ceilings contained less
than 10% chrysotile; and (6) the work crew’s low level of
exposure combined with the supposed lower toxicity of
chrysotile resulted in an insufficient likelihood of death or
serious bodily injury. However, the contrary evidence
detailed above entitled the district court to weigh all the facts
and reject the expert’s opinion.
Yi also complains that the district court improperly
discounted the report based upon the expert’s lack of medical
or molecular biology training. But the district court’s inquiry
into training merely created a basis for discounting the
expert’s medical opinions as to toxicity and likelihood of
harm. This was well within the district court’s discretion.
The only seemingly uncontroverted statement in the expert
report, that chrysotile is different in form from other types of
asbestos, did not require the district court to adopt the
expert’s opinion as to likelihood of harm. The district court’s
failure to give the expert opinion more weight was not an
abuse of discretion and the ultimate finding was not clear
error.
UNITED STATES V . YI 13
B. Organizer or Leader Role
The district court also found that Yi fit the role of an
organizer or leader calling for a four-level increase. That
finding requires evidence “that the defendant exercised some
control over others involved in the commission of the offense
or was responsible for organizing others for the purpose of
carrying out the crime.” United States v. Ingham, 486 F.3d
1068, 1074 (9th Cir. 2007) (emphasis omitted) (citing United
States v. Avila, 95 F.3d 887, 889 (9th Cir. 1996)). It must be
supported by a preponderance of the evidence. Avila, 95 F.3d
at 889. This finding is also reviewed for clear error. United
States v. Ponce, 51 F.3d 820, 826 (9th Cir. 1995).
Numerous facts support the role enhancement. Yi’s
conviction plus substantial evidence at trial support the
conclusion that he knew the ceilings contained asbestos.1
Testimony showed that Yi was heavily involved in decision-
making with regard to Forest Glen, particularly given the
inexperience of Millennium project managers and Yoon in
particular. Evidence showed: Yi earlier instructed Yoon to
seek bids for asbestos abatement; Yi rejected abatement bids;
Millennium employees awaited Yi’s ultimate approval prior
to removal; and Yi instructed Yoon to draw up the contract
for ceiling scraping. These facts support a permissible
inference that Yi directed the ceilings be scraped, approving
both the expenditure and the work itself, rather than simply
placing his signature on a check made out to the contractor.
The district court did not clearly err in finding by a
1
Even if the jury only found Yi guilty under a deliberate ignorance
theory, that finding is legally equivalent to knowledge. United States v.
Jewell, 532 F.2d 697, 702–03 (9th Cir. 1976).
14 UNITED STATES V . YI
preponderance of the evidence that Yi was an organizer or
leader.
Yi paints the district court’s finding as the result of an
improper “but for” test. It would be improper to find that Yi
organized or led a criminal activity merely because the
activity could not have been completed but for his knowledge
and participation. United States v. Lopez-Sandoval, 146 F.3d
712, 717 (9th Cir. 1998); United States v. Harper, 33 F.3d
1143, 1151 (9th Cir. 1994). At the sentencing hearing,
defense counsel explained that Yi was required to approve
expenditures over a few thousand dollars, at which point the
district judge asked, “[m]y question is if [Yi] doesn’t okay it,
we’re [not] here today. There’s nobody else that made this
decision. He was the final arbiter; correct?” Defense counsel
agreed.
This colloquy shows the enhancement was not based on
on the necessity of Yi’s involvement as the check signer, but
rather on Yi’s direction or control. The district court did not
apply an incorrect legal test, and the application of the role
enhancement was proper.
AFFIRMED.