Southern Union Gets U.S. High Court Hearing on $6 Million Fine

The U.S. Supreme Court today agreed to consider Southern Union Co. (SUG)’s appeal of a $6 million criminal fine imposed after a jury found it had illegally stored liquid mercury.

Southern Union contends that, under the Constitution, a federal judge couldn’t impose a fine that large without a specific jury finding about how long the mercury was stored in a company building in Pawtucket, Rhode Island.

Prosecutors said Southern Union, the pipeline operator being acquired by Energy Transfer Equity LP (ETE), improperly stored mercury-sealed gas regulators from customers’ homes. Company workers allegedly put the regulators in kiddie pools and the liquid mercury in various containers including a milk jug and a paint can.

Youths broke into the brick building in 2004, found the liquid mercury and spilled it around the building and at their apartment complex.

A jury found Southern Union guilty of storing the mercury without a permit. A trial judge then imposed a $6 million fine, plus $12 million in community service obligations.

Southern Union contends that, based on the jury’s finding, the maximum fine is the $50,000 the company would have to pay under a federal environmental law for a single day’s violation.

The case will test the reach of recent Supreme Court rulings bolstering the constitutional right to a jury trial. The Supreme Court has said juries must make any factual findings that increase the maximum possible prison sentence. The question in the latest case is whether that reasoning applies to criminal fines.

The case is Southern Union v. United States, 11-94.

To contact the reporter on this story: Greg Stohr in Washington at gstohr@bloomberg.net.

To contact the editor responsible for this story: Mark Silva at msilva34@bloomberg.net.

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