U.S. v. Ho (5th Cir. 2002)
Parties: United States (Plaintiff- Appellee) vs. Ho (Defendant- Appellant)
Procedure: District Court of Texas convicted Ho for failure to comply with asbestos work practice standards and failure to give notice of intent to removes asbestos. Ho now appeals to the Fifth Circuit Court.
Issue: Whether laws under which defendant was convicted exceed Congress's authority under the Commerce Clause.
Facts:Ho entered into negotiations to purchase an abandoned Hospital. During negotiations Ho was informed that a 1994 environmental site assessment had revealed extensive asbestos in the hospitals fire proofing. Because asbestos abatement could cost as much as 400k, the price of property was reduced and Ho signed statement acknowledging presence of asbestos. After obtaining bid for asbestos removal that was too expensive (for Ho). Ho initiated his own hospital renovation project without giving notice to EPA or Texas Department of Health. Workers hired had no experience in asbestos removal and none of their practices complied with asbestos work practice standards. After an inspector informed Ho his practices were illegal and delivered a stop work order, Ho again decided not to hire an asbestos removal company and renewed his own renovation project, instructing workers to work at night. After removal was completed one of the workers went to use a water line to wash down the interior but instead opened a gas line that caused an explosion. As a result, inspectors went to the site found open windows, residue, and footprints leading out. Inspectors were unsuccessful in getting Ho to seal hospital and complete asbestos work and subsequently charged him.
Holding: Affirmed. Congress had the authority under the substantial effects doctrine of the Commerce Clause to enact the sections of Clean Air Act that defendant challenges.
Reasoning: For purposes of the Commerce Clause the court assumes that no asbestos escaped the hospital (charges of releasing asbestos into the ambient air were dismissed by the district court). The government concedes that the only way it can justify the application of the work practice standard is through the aggregation of the substantial effect test. Therefore the Court held that when aggregated, similar violations could substantially affect the interstate commerce for asbestos removal services and the interstate market for commercial real estate. The Court goes through the Lopez-Morrison steps indicating that asbestos removal is a commercial activity in the economy and Ho's activities were driven by commercial considerations. Finding a direct and apparent relationship between standards for asbestos removal and interstate commerce. Ho's activities gained him a commercial advantage on licensed abatement companies, deprived companies of business opportunities and posed a threat to the interstate commercial real estate market. The court makes sure to establish two limiting principles: that it applies only to commercial activity and there is presence of a national market in the regulated activity.
Dicta: The court goes through the pertinent CAA statutes explaining why asbestos is regulated on a work practice standard rather than emission (not emitted through a conveyance). Congress can enact this statute under the Commerce Clause under three broad categories of Lopez (channels, instrumentalities, and substantial effect). Under the substantial effect test, Congress can regulate purely intrastate activities either because the commercial activity substantially affects interstate commerce, or through the "aggregation principle" from Wickard. The aggregation principle involves an intrastate commercial activity that while by itself is too trivial, when aggregated with similar and related activity, can substantially affect interstate commerce.
Parties: United States (Plaintiff- Appellee) vs. Ho (Defendant- Appellant)
Procedure: District Court of Texas convicted Ho for failure to comply with asbestos work practice standards and failure to give notice of intent to removes asbestos. Ho now appeals to the Fifth Circuit Court.
Issue: Whether laws under which defendant was convicted exceed Congress's authority under the Commerce Clause.
Facts:Ho entered into negotiations to purchase an abandoned Hospital. During negotiations Ho was informed that a 1994 environmental site assessment had revealed extensive asbestos in the hospitals fire proofing. Because asbestos abatement could cost as much as 400k, the price of property was reduced and Ho signed statement acknowledging presence of asbestos. After obtaining bid for asbestos removal that was too expensive (for Ho). Ho initiated his own hospital renovation project without giving notice to EPA or Texas Department of Health. Workers hired had no experience in asbestos removal and none of their practices complied with asbestos work practice standards. After an inspector informed Ho his practices were illegal and delivered a stop work order, Ho again decided not to hire an asbestos removal company and renewed his own renovation project, instructing workers to work at night. After removal was completed one of the workers went to use a water line to wash down the interior but instead opened a gas line that caused an explosion. As a result, inspectors went to the site found open windows, residue, and footprints leading out. Inspectors were unsuccessful in getting Ho to seal hospital and complete asbestos work and subsequently charged him.
Holding: Affirmed. Congress had the authority under the substantial effects doctrine of the Commerce Clause to enact the sections of Clean Air Act that defendant challenges.
Reasoning: For purposes of the Commerce Clause the court assumes that no asbestos escaped the hospital (charges of releasing asbestos into the ambient air were dismissed by the district court). The government concedes that the only way it can justify the application of the work practice standard is through the aggregation of the substantial effect test. Therefore the Court held that when aggregated, similar violations could substantially affect the interstate commerce for asbestos removal services and the interstate market for commercial real estate. The Court goes through the Lopez-Morrison steps indicating that asbestos removal is a commercial activity in the economy and Ho's activities were driven by commercial considerations. Finding a direct and apparent relationship between standards for asbestos removal and interstate commerce. Ho's activities gained him a commercial advantage on licensed abatement companies, deprived companies of business opportunities and posed a threat to the interstate commercial real estate market. The court makes sure to establish two limiting principles: that it applies only to commercial activity and there is presence of a national market in the regulated activity.
Dicta: The court goes through the pertinent CAA statutes explaining why asbestos is regulated on a work practice standard rather than emission (not emitted through a conveyance). Congress can enact this statute under the Commerce Clause under three broad categories of Lopez (channels, instrumentalities, and substantial effect). Under the substantial effect test, Congress can regulate purely intrastate activities either because the commercial activity substantially affects interstate commerce, or through the "aggregation principle" from Wickard. The aggregation principle involves an intrastate commercial activity that while by itself is too trivial, when aggregated with similar and related activity, can substantially affect interstate commerce.