The U.S. Court of Appeals for the Second Circuit ordered a new trial Wednesday for an asbestos abatement company and two of its principals, finding that “evidentiary errors and prosecutorial misconduct infected every stage” of the first trial.

“Impropriety permeated the proceedings here,” the judges ruled in United States of America v. Certified Environmental Services, 11-4872(L).

The panel vacated the convictions of Certified Environmental Services (CES) of Syracuse and of Nicole Copeland, its former technical services manager, and Elisa Dunn, its former air monitor and field supervisor.

CES was accused of failing to properly monitor the air around dozens of asbestos abatement projects in the Syracuse area between 1999 and 2006 as required under Clean Air Act and state laws.

The appeals court found errors that were prejudicial to the defendants at nearly every turn of the four-week trial in 2010 in Utica, beginning with the prosecution’s improper vouching for the truthfulness of its witnesses during opening statements to “impermissibly” suggesting during rebuttal summations that a finding of guilt would have “consequences.”

In between, the appeals court said Northern District Judge David Hurd didn’t do enough to curb the prejudicial comments of the prosecution and improperly prohibited the defendants from arguing to the jury that they acted in good faith by following what they thought were prevailing state standards for asbestos abatement.

“Under the circumstances, we are compelled to conclude that the totality of the government’s misconduct in this case, combined with the district court’s erroneous exclusion of evidence favorable to the defense, denied the defendants their right to a fair trial,” Judge Jed Rakoff wrote for the circuit.

Rakoff noted that the government conceded in its appeal that “prosecutors committed multiple instances of misconduct throughout the trial” but, nevertheless, had urged the appeals judges to uphold the convictions.

CES, Copeland, Dunn and another employee, Sandy Allen, were found guilty by a jury of charges including conspiring to aid and abet Clean Air Act violations and mail fraud.

CES was sentenced by Hurd to five years of probation, fined $20,000 and ordered to pay restitution of $117,000. Copeland received five years of probation, no fine and a $23,000 restitution order. Dunn and Allen received time served for when they were processed by U.S. marshals, no fine and told to pay $6,000 in restitution.

The circuit ordered the convictions of CES, Copeland and Dunn vacated. It further ordered that the sentences of Allen and a fourth defendant, Frank Onoff of a CES contractor on some of the projects who was ordered to pay $4,000 in restitution, be vacated and their cases remanded to the Northern District court for resentencing.

The circuit said that Assistant U.S. Attorney Craig Benedict, in his opening statement, improperly “bolstered” the veracity of the government’s witnesses by describing the cooperative agreements that several of them made with prosecutors in exchange for their testimony. Rakoff said the rule is that the prosecution may not bolster its witnesses until those agreements are challenged by the defense on cross examination.

Rakoff cited several examples where Hurd tried to deter Benedict from such conduct, though the prosecutor repeatedly returned to the same topic. At one point, Hurd warned the prosecutor, “Stay away from all of those witnesses. They will be on the stand. The jury can decide their credibility at that time, and we don’t need any more statements from you about their credibility or lack thereof. Do you understand?”

Benedict said he did, and he apologized to the jury and the court, according to the Second Circuit ruling.

Rakoff said the prosecutor also improperly vouched for the truthfulness of the prosecution’s witnesses. He quoted Benedict as telling jurors about his witnesses, “Their obligation is to tell the truth,” a statement to which the defense objected and Hurd sustained the objection.

The circuit said Benedict was permitted to make comments in his rebuttal summation that an asbestos removal company that worked with CES had been punished for its handling of contaminated debris, telling the jury “you don’t know anything about that” case and “we can’t go into it.”

Rakoff said those comments improperly referenced facts not in evidence to impugn CES.

The circuit also said Benedict impermissibly suggested to jurors that their verdict would have “consequences” to CES and to protect the public.

“While the criminal justice system as a whole strives to achieve such protection and deterrence, the jury role in that process is specifically and singularly focused, not on the possible ‘consequences’ of a verdict, but on whether the government has sustained its burden to prove guilt beyond a reasonable doubt,” Rakoff wrote.

The circuit said Hurd should also have allowed CES and its employees to argue that air quality testing they performed on some of the jobs they were accused of mishandling were based on their understanding of state laws. CES should have been allowed to present evidence of why the company believed it was acting in good faith—including a 2006 advisory memo from the state Department of Labor on when to employ enhanced air monitoring techniques—and as an explanation of how it went about its work, Rakoff said.

“While this may not be the only way, or even the best way, to read the guidance, the defendants were entitled to present their reading to the jury,” Rakoff wrote.

Judges Reena Raggi and Susan Carney joined in the ruling. Rakoff, a Southern District judge, was sitting by designation on the panel.

Daniel French, who is of counsel to Hiscock & Barclay in Syracuse, represented CES along with Hiscock partner Gabriel Nugent.

French, a former U.S. attorney for the Northern District, said Wednesday that he did not know if the prosecutor’s office would seek to retry the defendants.

“One of the most important obligations of a prosecutor is to conduct himself fairly and ethically,” French said in an interview. “In this case, it did just not occur.”

Copeland was represented by Brian Fischer, a partner at Jenner & Block in Manhattan, and firm associates Matthew Cipolla and Carl Wedoff. Donald Kinsella, formerly of Stockli Slevein & Peters in Albany, also represented Copeland.

Dennis Schlenker of Albany represented Dunn.

James McGraw of Syracuse represented Allen.

Benedict and John Duncan, an assistant U.S. attorney who acts as a spokesman for the Northern District, did not return calls seeking comment Wednesday.