When An Environmental Accident Becomes A Crime
December 21, 2010
Listen to the Story
Talk of the Nation
[30 min 19 sec]
Guests
David Uhlmann, director, environmental law and policy program, University of Michigan law school
Warren Hamel, co-chair of the SEC and white collar defense practice group, Veneble LLP
David Guest, head of the Florida office of Earth Justice
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December 21, 2010
The U.S. Department of Justice is suing BP and other companies associated with the oil spill in the Gulf of Mexico. A criminal investigation is also underway. Many activists argue disasters like the BP spill are crimes. Others argue big fines in civil cases are more effective than jail time.
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NEAL CONAN, host:
This is TALK OF THE NATION. I'm Neal Conan in Washington.
Last week, the U.S. Department of Justice announced civil suits against BP and other companies associated with the massive oil spill in the Gulf of Mexico. The government hopes to recover billions in damages for clean-up costs and for damages to natural resources, and Attorney General Eric Holder made a point to note that a federal criminal investigation is also under way.
Many advocates say that environmental disasters like the BP spill and the 1989 Exxon Valdez disaster are clearly crimes, and that senior corporate officials should face felony charges and time in prison.
But even when thousands of birds and fish die, or when toxic sludge poisons the water we drink, the government usually responds with civil suits.
How should we hold corporations accountable for environmental violations? Give us a call, 800-989-8255. Email us, talk@npr.org. You can also join the conversation on our website. That's at npr.org. Click on TALK OF THE NATION.
Later in the program, an argument to take the word hate out of the debate on gay marriage. But first, prosecution of environmental crimes. We begin with David Uhlmann, who served as chief of the Environmental Crimes Section at the U.S. Department of Justice from 2000 to 2007. He's now a director of environmental law and policy program at the University of Michigan Law School, and joins us from member station WUOM in Ann Arbor. And thanks very much for being with us today.
Professor DAVID UHLMANN (Director, Environmental Law and Policy Program, University of Michigan Law School): Thanks for having me on the show, Neal.
CONAN: And to a lot of people, the BP spill may seem like, very clearly, an environmental crime: millions of gallons of oil spilled into the ocean, countless birds and fish killed, livelihoods disrupted. Is it necessarily a crime?
Prof. UHLMANN: It is an environmental crime, and it will be prosecuted criminally by the Justice Department. It's just a matter of time before the announcement we heard last week about civil suits is followed by the announcement of an indictment and criminal charges against BP, against Transocean - and in all likelihood against Halliburton, who was left out of the civil suit.
CONAN: Yet we said in most cases, it does not rise to the level of crime, or at least federal prosecutors don't charge it as a crime.
Prof. UHLMANN: Well, I'm not sure that's correct. I mean, it's true that there has to be at least some wrongdoing for there to be a criminal prosecution. So in that sense you're right, and there have been terrible tragedies that have occurred in the past, that haven't resulted in criminal prosecution.
There was a pipeline explosion out in New Mexico a decade ago where - I think - 15 people died. There was a terrible mine slurry that burst in West Virginia and, you know, millions of gallons of waste flooded communities and streams. And neither of those were criminal cases.
But frankly, when the government sees a significant case of environmental harm, they almost always look to see whether there's a criminal case to be brought. And they're more likely to bring criminal charges in cases where there is significant harm.
CONAN: And under what laws, under what statutes are these charges brought?
Prof. UHLMANN: Well, in the case of the Gulf oil spill, the lead statute is the Clean Water Act. The Clean Water Act makes it a crime if you either knowingly or negligently discharge oil into the exclusive economic zone of the United States without a permit, in amounts large enough to create a sheen on the water.
Now, in the Gulf, we've got an oil slick the size of the state of South Carolina. So we've certainly got a sheen.
CONAN: I think we can stipulate a prima facie case.
(Soundbite of laughter)
Prof. UHLMANN: Yes, absolutely. So the only question in the Gulf, really, is: Was this intentional? I don't think it was. I don't think it's a felony violation. They didn't intentionally dump all of this oil into the Gulf.
So the question becomes: Was it negligent? And if it was negligent, then the government can bring criminal charges. And that's just not a very high threshold for them to cross - and one that I think will easily be met in the case of the Gulf oil spill.
CONAN: We're talking about when environmental disaster becomes environmental crime. We'd like to hear from you. How should corporations be held accountable; 800-989-8255. Email us, talk@npr.org. Jacob's(ph) calling us from Oklahoma City.
JACOB (Caller): Hi, thanks for having me.
CONAN: Go ahead, please.
JACOB: I totally disagree with the last guy. But you pretty much covered most of my - most of what I was going to say. You know, a crime - as far as I consider a crime - is willful, intentional acts, you know.
CONAN: So if a company - hypothetically - was dumping waste products into a river, that might be, you know, malice aforethought?
JACOB: Any individual, any entity. But then you brought up, you know, the actual law - as it actually is - bringing criminal negligence. And that -and you also said it pretty well there. That's a really low threshold to me. You're already - you already have a civil suit that's going to happen that's - I mean, it's pretty all-encompassing. A civil suit is not nearly the threshold for proving, you know, liability -is what's in a criminal suit.
CONAN: Preponderance of the evidence, as opposed to beyond a reasonable doubt.
JACOB: Right. So we already have this in the works. I feel like unless there's just overwhelming evidence that there was, you know, willful, criminal - somebody - you know, let's say the guy, let's say you could narrow it down to one guy responsible, and if the one guy responsible was drunk at the time, OK, criminal negligence. But other than that, you know, I don't think an accident, what by all measure that we can tell is an accident, should be prosecuted as a criminal charge. That doesn't make sense to me.
CONAN: David Uhlmann?
Prof. UHLMANN: Well, it's a great point that the caller's making. We normally associate criminal liability with intentional misconduct. So that doesn't mean you have to know that you're breaking the law, but you have to at least act intentionally.
JACOB: Right.
Prof. UHLMANN: So in this case: Did they intentionally dump oil? That would be the question that I think your caller is raising, and I think it's a fair point.
But here's what the law says. The law says that that intentional act is a felony violation of the Clean Water Act. But the law then also says that if the same discharge occurs with negligence, it's a misdemeanor violation of the Clean Water Act.
And so what the government's facing here is a law that says: If BP and the other companies were negligent, it's a crime. And if the government didn't prosecute, given the law that's available to the government, it would at least arguably send a very poor message about how we view this conduct.
And there is, I think, already in the public domain a fair amount of evidence that BP and the other companies involved were negligent - that they cut corners, that they took risks. And if they did that, and if the law says that's a crime, why shouldn't the Justice Department bring criminal charges?
CONAN: All right, Jacob, thanks very much for the call. Joining us now to share a defense attorney's perspective on the environmental crime is Warren Hamel, co-chair of the SEC and White Collar Defense Practice Group at Venable LLP, where he defends clients charged with environmental violations. But from 1997 to 2001, he served on the other side, as chief of the Environmental Crimes and Enforcement Office of the U.S. Attorney's Office for the District of Maryland. And nice to have you with us on the program today. He joins us here in Studio 3A.
Mr. WARREN HAMEL: (Co-chair, SEC and White Collar Defense Practice Group, Venable LLP): It's a pleasure to be here, Neal.
CONAN: We should note that Transocean, one of the defendants in the Department of Justice's civil suit, is one of Venable's clients. So Warren Hamel will not be able to address the BP case today. He'd prefer to do that in court, I suspect.
But in any case, you've switched sides. I wonder: Has your view of criminal - the value of criminal charges changed when you went from being a prosecutor to being a defense attorney?
Mr. HAMEL: Well, I'm not sure I would say that the value has changed, but I think that my evaluation of when it's appropriate to bring criminal charges has certainly changed.
I think when you're on the prosecution side, you do tend to see the world more in black and white. Having now worked on the defense side for eight years, both representing individuals and companies, there are gradations of culpability.
And particularly in the environmental crimes arena, that really opens up a whole host of questions - unlike, say, bank robbery, where if you're in a bank with a gun and a note, that's a crime; everyone knows it's a crime; and there's only one thing that's going to happen there as a prosecution.
In environmental crimes, there's a whole host of things that can happen -or environmental violations. You can administrative penalty, civil penalty, criminal. And so criminal really should be reserved for the worst of the worst. And the question that comes up in most of these cases is: Is this the worst of the worst?
CONAN: It is the worst - the BP case, and again, I know you can't talk about that, but can you understand the outrage of the public in, for example, an Exxon Valdez situation, saying: This terrible thing happened. Somebody has to be held responsible. If we don't hold corporations criminally responsible, you're not going to make them behave better in the future.
Mr. HAMEL: I think that's fair, and you're certainly not going to hear me advocate that there should be no criminal prosecutions. The question is really when, and under what circumstances.
Certainly, massive damage to the environment is one factor that most prosecutors would take into account; knowing and deliberate conduct, which David mentioned earlier; a history of violations, where there have been administrative penalties, but it hasn't really changed the conduct of the individual or the company; deceptive conduct - lying, cheating, stealing.
All those things, I think, add into a prosecutor's and an agent's view of a case as it develops, to push it either in the direction of a crime -a criminal prosecution - or to say well, no, this ought to really remain in the civil context.
CONAN: And David Uhlmann, let me bring you back in. You noted in a piece for the New York Times that BP's previous practices may help prosecutors bring criminal charges in this case.
Prof. UHLMANN: BP has a terrible track record. They have had violations - were criminally prosecuted for violations on the North Slope in Alaska in the late 1990s. A terrible tragedy happened at one of their refineries in Texas, killing 15 people in 2005, which also led to criminal charges.
They had yet another spill up in Prudhoe Bay of Alaska, which also resulted in criminal charges in 2007. So the Gulf oil spill is the fourth major incident involving BP, where criminal charges are under consideration.
And while those prior incidents might not be evidence that the government could use if they were ever to take this case to trial, they certainly, as Warren has suggested, inform prosecutors when they're exercising their discretion about whether to bring a particular case as a criminal matter.
CONAN: And how much does public outrage play a part in decisions as to whether to file civil or criminal charges?
Prof. UHLMANN: Well, you know, public outrage is a dicey proposition. I mean, we - I think we long ago disavowed the notion of - kind of mob rule or, you know, rounding people up in the square and putting them in the stockades.
On the other hand, one of the purposes of the criminal law is to express societal outrage, to condemn conduct that we feel is unacceptable. And clearly, this type of oil spill is unacceptable.
CONAN: We're talking about environmental crimes and punishment. How should we hold corporations accountable for environmental violations; 800-989-8255 is the phone number. Drop us an email; that address is talk@npr.org. In a few minutes, David Guest of Earth Justice will join us. This is TALK OF THE NATION from NPR News.
(Soundbite of music)
CONAN: This is TALK OF THE NATION. I'm Neal Conan in Washington.
And we're talking today about environmental crime and punishment. When does ecological disaster rise to the level of a crime? How do we hold corporations accountable; 800-989-8255. Email us, talk@npr.org.
Our guests are David Uhlmann, who is the director of the Environmental Law and Policy Program at the University of Michigan Law School, who served as chief of the Environmental Crimes Section at the U.S. Department of Justice from 2000 to 2007.
Also with us, Warren Hamel, co-chair of the SEC and White Collar Defense Practice Group at Venable LLP, where he defends clients charged with environmental violations. He served as chief of the Environmental Crimes and Enforcement Office of the U.S. Attorney's Office in the District of Maryland, 1997-2001.
And I know, Warren Hamel, you wanted to reply to that point on when does public outrage - how much of a factor does that play?
Mr. HAMEL: Yes, thank you, Neal. The point I wanted to make on that is, I think one of the most important things that prosecutors do in carrying out their duties is to, in essence, ignore public opinion because it really is the job of the prosecutor to evaluate the facts of the case, evaluate what the evidence is, and see whether it fits, beyond a reasonable doubt, the statute that makes the conduct criminal - and then to see whether it makes sense for other reasons, whether it follows all the other guidelines that a prosecutor would want to follow: punishment, general deterrence, etc.
I think it's very difficult to do that, in many instances, but it is actually one of the most important things for a prosecutor to do - is to clear his mind - or her mind - of that, and to focus on the case.
CONAN: Let's get another caller in on the conversation, Ron(ph) joining us - Ron calling from Denver.
RON (Caller): Hi there. I think that the issue of civil versus criminal - civil's not enough. And the reason I say that is because look what happened with Exxon and all the appeals, and what they ended up paying versus what they were originally supposed to pay.
And as far as the criminal negligence goes - I mean, this was an item that broke. This was something that broke. And if you make something, it can be broken. And these companies knew that this steel could break. And none of them had a plan. None of them knew how to fix their own stuff. Who could say that isn't negligence or criminal negligence?
CONAN: Well, getting back to the Exxon Valdez case, David Uhlmann, I think that was, in the end - what, $125 million?
Prof. UHLMANN: A hundred and twenty-five million in criminal penalties and then also a very large -nearly a billion dollars - in what's called natural resource damages. So compensation to the government for harm to the environment.
CONAN: And was that - and that's, I think, in terms of the $125 million, the largest criminal penalty that anybody's ever had to pay in this country.
Prof. UHLMANN: The largest criminal penalty for violating the environmental laws was the $125 million paid in the Exxon case. The largest penalty ever paid for any violation, any criminal violation of U.S. law, was just over a billion dollars, paid by Pfizer last year for marketing fraud, for one of its chemicals. And I'd suggest that the criminal fine in the BP case is going to blow that number out of the water.
CONAN: And I wanted to ask you, Warren Hamel: The idea that if you make something, you ought to be able to fix it if it suffers disasters - is that part of the theory of negligence?
Mr. HAMEL: Well, it's certainly part of the theory, and I think therein lies the real danger of it. And I think one of the things that's important to this conversation is to step away, for a moment, from the Exxon Valdezes and the current matter with BP, and think about what are the vastly larger and more numerous instances of environmental violations that could, if pushed, be made into an environmental negligence criminal case but frankly, are just screw-ups.
Someone just did something, didn't pay attention to their job, didn't do the right thing. You could prosecute them criminally, but you really wouldn't want to. And you wouldn't want to for two reasons: one, because you don't want to criminalize sort of garden variety - just mistakes that people make; and secondly, having actually experienced this myself as a prosecutor, I did prosecute a criminal negligence case many years ago. And at the end, the jury was hung, and the jury came out afterwards and said: You proved your case, but we want to know why this is a federal criminal case. These people just made a mistake.
And so there's an aspect of the program - you know, using the U.S. Department of Justice to criminalize negligent conduct - there is a little bit of pushback, even in juries in Maryland, against taking that kind of a very aggressive attitude.
CONAN: I wanted to - and Ron, thanks very much for the call. I wanted to read part of a note that we got from Jim Moore, currently general council, corporate compliance officer at a large, U.S.-based chemical company, Huntsman Corporation. It was convicted of environmental crimes, and two of its managers at an East Texas plant were charged and convicted.
And he wrote: Compliance with the very complicated system of environmental regulation we've adopted in the U.S. is extremely difficult. Operation of a single chemical plant can involve, literally, hundreds of thousands of compliance and non-compliance opportunities every day.
Many of those opportunities involve human activity, where employees either can do the right thing or not. Thus, a culture of compliance, of doing the right thing, is as essential as having a comprehensive compliance management program. Both are needed.
My personal view is that it's important to our regulatory system for regulators and prosecutors to have both civil and criminal penalties at their disposal to deal with violations in that respect.
In any case, let's bring another voice into the conversation. David Guest, he heads the Florida office of Earth Justice - a national, nonprofit environmental law firm - he joins us by phone from his office in Tallahassee. Nice of you to be with us today.
Mr. DAVID GUEST (Earth Justice): My pleasure.
CONAN: And we've talked a lot about the legal regime that most often determines how the government responds to pollution, other kinds of violations. Do those laws, do you think, go far enough?
Mr. GUEST: I definitely don't. One big, conceptual issue that I think people are missing is that our Supreme Court now treats corporations as individuals. They have free-speech rights. They can hand over unlimited political contributions. And in every respect, constitutionally, they seem to be treated as individuals.
And I don't understand why that context doesn't mean that for criminal penalty purposes, they should not also be treated as individuals so that when they commit a grave crime - which happens frequently - that they get their corporate charter removed for eight years, the same way that somebody who went to prison would lose their freedom for eight years.
CONAN: That would effectively put them out of business.
Mr. GUEST: Well, it would mean - the same way if somebody went to jail for eight years. I mean, if you were a doctor, you would have a hard time getting back into your practice. But if you want a criminal sanction that has some deterrence, and if you're going to treat corporations as individuals with individual rights, they should have individual responsibilities, too.
CONAN: I wonder, David Uhlmann, if you had a response to that?
Prof. UHLMANN: Well, you know, I respect where David's coming from, and I understand the concern about holding corporations responsible for their misconduct. And I certainly agree that corporations should be vigorously prosecuted when they commit criminal violations of the law.
That said, I think David's wrong in two respects. First of all, corporations are prosecuted frequently for environmental violations. They are prosecuted criminally. In fact, there have been more criminal prosecutions for environmental violations than any other area of corporate crime.
And second, the idea that we put companies out of business, in effect, is advocating not jail time for corporations - we can't send corporations to jail. What David, intentionally or not, is advocating is the death penalty for corporations.
If you revoke a corporate charter, you've killed the corporation. And so that, I think, would go too far, although I certainly agree that we want to hold corporations responsible the same way we hold individuals responsible. And that's, in fact, what I think we do under the environmental laws today.
CONAN: I wanted to ask Warren Hamel to come in here. There's a point that a lot of people make - that sometimes, when corporations commit violations - and perhaps not rising to the criminal level, but violations and regular violations - they look at the cost-benefit analysis and say: You know, it's easier to pay $5,000 every time we do this thing rather than fix the cause. And they just budget that and so therefore - say, you know, there's no point, that the fining system is just simply not penalty enough.
Mr. HAMEL: Well, that's certainly something that one hears quite a bit. And I think if the circumstances are such that a company has a long history of committing environmental violations, maybe has been tagged with administrative fines - $5,000, $10,000 - and it becomes, in essence, cheaper for them to pay the fines than fix the problem, that - I think - is when government prosecutors will look at, for instance, going into a full-fledged civil case not only to get penalties, but also to bring injunctive relief and impose a consent decree on the companies so that the court, in essence, would supervise their environmental compliance.
And if that doesn't work, or perhaps if the violations are so egregious, then maybe they go directly to a criminal prosecution. I think that is a very common way of looking at, you know, sort of the system if it's not functioning properly in that first instance.
CONAN: And David Guest, we've been talking with somebody who was responsible for the U.S. Attorney's Office in Maryland, and somebody who was responsible at the Justice Department. You're there, down in Tallahassee. Are similar policies pursued as vigorously on the state level?
Mr. GUEST: No, they aren't. You have, essentially, no criminal prosecutions at the state level. And what happens - that was alluded to earlier, by David - is that you have fines for offenders that are supposed to be deterrents. But when you look at the scale of the corporate assets and the scale of the fines, even criminal penalties, what you see is that they aren't really deterrents at all.
And the crispest example that you can think of is BP, where they have a series of repeat, major violations - one after the other after the other -and they don't ever get enough of a sanction so there's a real deterrent. BP was like the drunken driver that got convicted four times, paid the fine, and got back out on the road with a bottle. Our system isn't working.
CONAN: Well, David Uhlmann, again, Warren Hamel can't address the BP case, but we'll ask you to address it.
Prof. UHLMANN: Well, I think David makes a fair point that BP didn't get it after the first three felony prosecutions of the company. Or, I'm sorry, the first two were felonies; the third was a misdemeanor prosecution. So I think that point is well-taken. I also think David's right when he says that there's not an awful lot of environmental criminal prosecution at the state level. Most of the prosecution is at the federal level.
So it's a fair question to ask about BP, whether we've done enough in the past to get their attention. And I think, clearly, the answer is: We didn't. But I think the Gulf oil spill has gotten their attention. I mean, they're going to pay...
CONAN: Oh, I think you're right about that.
(Soundbite of laughter)
Prof. UHLMANN: Yeah. I mean, they're going to pay a multibillion-dollar criminal fine. They're going to pay a multibillion-dollar civil penalty. They've already agreed to pay $20 billion to victims of their misconduct. They'll pay a multibillion-dollar natural resource damage claim. I mean, these are numbers that are staggering, and that few companies in the world could afford to pay. BP can afford to pay those amounts, but they're going to hurt. And they're going to bring a change to how this company does business. They just have to.
CONAN: Warren Hamel?
Mr. HAMEL: Now, not speaking directly about BP, but I just wanted to say that I think that the issue of state enforcement of environmental crimes is sort of a state-to-state matter. And there are, certainly, states like Maryland, that have a long history of a pretty robust environmental enforcement program. And the thing to keep in mind is that the state can do things that the federal government can't do. The federal government does not have a general solid-waste statute.
So, for instance, if there's a tire dump that's burning, the feds really can't do anything about that, but the state can and the state will. There are, certainly, wetlands and waters that may not fall under the federal standard or under federal jurisdiction. And once again, the state certainly has jurisdiction over all of its waters and wetlands. And so I think there - for those who want to urge, you know, additional prosecutions, sort of supporting your state attorney generals in those actions is the way to go.
CONAN: Warren Hamel is with us, co-chair of the SEC and white collar defense practice group at Venable LLP. Also with us, David Guest, who heads the Florida office of Earth Justice; and David Uhlmann, who's now director of environmental law and policy program at the University of Michigan Law School. You're listening to TALK OF THE NATION, from NPR News.
And let's see if we can get another caller on the line. Let's go to Todd, Todd with us from Berkeley Springs in West Virginia.
TODD (Caller): Yes. My comment - the first part of it - is to the former prosecutor. One thing you keep saying is, you know, after so many violations, that maybe we should start looking into criminal charges. How many violations, you know, are we supposed to go to before we have another major disaster? How many times, you know, should these companies be able to get away with, you know, destroying, you know, the planet? I don't understand why, you know, your jury came back and said that the, you know, they didn't understand why you were, you know, pursuing charges against these people, criminal charges...
CONAN: Who just made a mistake. Yeah.
TODD: Yeah. Because they made a mistake, but, you know, we couldn't say our economy right now will just - you know, people making a lot of mistakes, but we know that it was greed. The penalties aren't enough, you know, to stop the actions.
CONAN: Well, as I - forgive me, I'm not a lawyer, and I don't even play one on the radio. But if a criminal charge were brought against an oil company for an oil spill, their previous actions in other cases would not be admissible in that case - am I correct, Warren Hamel?
Mr. HAMEL: That would depend. Certainly, the government would want very much to try and bring that evidence in to show that this - that the current spill was not a mistake or accident...
CONAN: But part of a pattern of...
Mr. HAMEL: It's part of a pattern, etc. - that's a particular kind of evidence that some courts will allow. And in certain cases, the defense would, obviously, vigorously oppose that evidence coming in. But stepping back from the court case itself, the point is: To what extent does that play into the decision of a prosecutor to bring criminal charges or not?
CONAN: As opposed to civil charges.
Mr. HAMEL: Yes. And, you know, the fact is - I mean, here's the problem. You simply can't prosecute every environmental violation as a criminal case. Far too many resources go into it. The standards are too high and frankly, not every violation is a criminal case. Many of them are, if not negligence, just bad luck. And so that happens. And if you look at the numbers and kinds of enforcement actions across the country, the vast, overwhelming majority are sort of low-level, small and not criminal. They do save the worst actors for criminal prosecution.
CONAN: David Guest - and, Todd, thanks very much for the call - I wanted to ask you another question, though. It seems when criminal charges - be they misdemeanors or felonies - are brought, it seems to be somebody who has taken an actual action, somebody on the oil platform, for example. These are not necessarily the corporate higher-ups - very rarely are.
Mr. GUEST: No, they're not. This is David Guest. And I think that in the criminal context, if you see an engineer of a freight train that's text-messaging his girlfriend, screaming down the tracks at 65 miles an hour, he's an underling, but he's an agent of the railroad. And the railroad needs to be made accountable for the conduct of its employees. If the railroad's a person, it's responsible for everybody that's working for it.
CONAN: David Frank - David Guest, rather, thank you very much for your time today. We appreciate it.
Mr. GUEST: Thank you.
CONAN: David Guest heads the Florida office of Earth Justice. And our thanks as well - we mentioned Warren Hamel, who served as chair of the Environmental Crimes and Enforcement Office of the U.S. Attorney's Office for the District of Maryland in the past; and David Uhlmann, who served as the chief of the Environmental Crimes section at the U.S. Department of Justice from 2000 to 2007. We thank you both very much for your time today. Appreciate it.
Prof. UHLMANN: Thank you, Neal.
Mr. HAMEL: You're welcome, Neal.
CONAN: Coming up, an argument that there's no room for the hate card in the debate over gay marriage. Stay with us for that.
I'm Neal Conan. It's the TALK OF THE NATION, from NPR News.
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