(CN) - The Supreme Court agreed Monday to consider whether a natural gas company was properly convicted and fined $18 million for storing mercury without a permit.
Southern Union, a Texas-based company, failed to convince the 1st Circuit of a procedural error last year. It claimed prosecutors violated due process and had no basis to indict under the Resource Conservation and Recovery Act.
But the Boston federal appeals court disagreed, finding that the company needed a permit to store hazardous waste and had proper notice its crimes could result in prosecution.
"Obliviousness is not a defense," Chief Judge Sandra Lynch wrote for the 1st Circuit on Dec. 22.
Lynch described how Southern Union knew that the mercury was piling up at its facility and being kept in unsafe conditions at a 12 acre complex on Tidewater Street in Pawtucket, Rhode Island.
"Here, 140 pounds of mercury became the play toy of young vandals who spread it about, including at their homes in a local apartment complex, after they spilled it around Southern Union's largely abandoned and ill-guarded Tidewater site in Pawtucket, Rhode Island," the ruling states.
Southern Union began supplying natural gas to New England customers in 2000 and stopped serving Rhode Island customers in 2006. Most of the Tidewater complex sat unused, but Southern Union used parts to store construction supplies and waste, including malfunctioning mercury-sealed gas regulators.
Homeless people and vandals took up residence at the site, which did not have security cameras, as it fell into disrepair.
After the mercury theft and spill in 2004, the company spent more than $6 million in remediation costs. Five buildings in an apartment complex were evacuated, and 150 residents were displaced for two months tested for mercury exposure.
Southern Union also contested the penalty that came with its conviction: a $6 million fine and a $12 million "community service obligation." The company claims it should only have to pay $50,000, the maximum penalty for a one-day violation.
Lynch wrote that the fine was reasonable, and the court had not determined the total number of days that Southern Union was in violation.
The Supreme Court did not comment on its decision to take up the case on Monday, as is its practice.